Daimler Chrysler 9.30 Section

7/27/2019 Daimler Chrysler 9.30 Section

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Daimler ChryslerSaidi Isaac

Ron SparksCandace Stocker

Jeron Wright


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Daimler Chryslers Position

Daimler Chrysler is committed to achieveconsumer satisfaction among all global automanufacturers because of our engineeringexcellence, innovative products, and superiorservice.


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The External Environment


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External Analysis

Economic Factors Social Factors

Political Factors Technological Factors Ecological Factors


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Industry Analysis


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Porters Five Forces Model


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Competitor Profiles

Toyota


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Competitor Profiles

GM Ford


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Value-Chain Analysis

Primary activities Secondary activities

Strength and Weakness Competitive advantage


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Primary activities

Inbound Logistics Marketing and Sales Service marketing communications


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Secondary Activities

Human Resources Management Technology Development Firm Infrastructure


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Strengths And Weakness

Strong Brand names Broaden it with models Perfect fit and leaders Negative view of Mercedes


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Competitive Advantages

Wide variety of vehicles Mercedes strong characteristics


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SWOT Analysis


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Core Issue Automakers had been losing money. After 9/11/2001 sales of cars and trucks

dropped dramatically Mitsubishis sales were 20% Chryslers sales were 5% Mercedes sales were 2%

2003


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Core Issue (cont.)

How to differentiate themselves from globalcompetition in a meaningful, sustainablemanner.

Growth of China automobile market Developing innovative vehicles that appeal to

consumers How to remain profitable in the future


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SWOT Summary

S: W:

O: T:


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Financial Analysis


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World Ranking

01000000200000030000004000000

50000006000000700000080000009000000

GM FORD TOYOTA-DAIHATSU

VOLKSWAGEN DAIMLER-CHRYSLER

Auto Manufacturer

U n i t s

2000 World Ranking2001 World Ranking

2002 World Ranking2003 World Ranking


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Employment

In 1998, the average annual number of employees totaled 433,939

Peaked in 2000 at 463,561 By 2002, the average dropped to a mere

370,677 From 1998 to 2000, 92,884 people lost their

jobs This equates to 25% of DaimlerChrysler

employee force


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Net Income

From 1998 to 2003 DaimlerChrysler onlyexperienced a loss in net income within 2001

In 2000 the company had nearly a gain of 7.89billion

In 2001 this amount totaled a whoppingnegative 662 million

Causes and effects


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Stock Prices

Trends Factors

Economic conditions


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Market Conditions

Terrorist attacks Capital funding

Acquisitions within the industry


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Ford Profitability Ratio

2003 2002 2001

Profit Margin 0.00357 -0.007 -0.042

Turn Over 0.00156 -0.003 -0.062

Return on Investment (ROI) .000557% .00242% .26%

Return on Equity (ROE) .0151% .128% 2.95%

Toyota-Daihatsu

Profitability Ratio

2003 2002 2001

Profit Margin 0.0205 0.0278 0.0294

Turn Over 0.0133 0.0154 0.01211


Return on Equity (ROE) .0634% .0863% .070%

Daimler Chrysler

Profitability Ratio

2003 2002 2001

Profit Margin 0.0033 0.032 -0.0044

Turn Over 0.0025 0.0251 -0.0032



General Motors

Profitability Ratio

2003 2002 2001

Profit Margin 0.0208 0.0093 0.00339

Turn Over 0.0085 0.0047 0.0018



Profitability Ratio


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Daimler Chrysler

Leverage Ratio

2003 2002 2001

Total Debt-Total Assets Ratio 0.539 0.5354 0.556

Long-term debt to Equity Ratio 2.12 2.275 2.241

General Motors

Leverage Ratio

2003 2002 2001



Ford

Leverage Ratio

2003 2002 2001



Toyota-Daihatsu

Leverage Ratio

2003 2002 2001



Leverage Ratio


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Strategic Scenario


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LONG TERM OBJECTIVE

Number one automobile manufacturer in theworld


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BEST CASE SCENARIO

Not to separate Operation Groups: Mercedes units

Chrysler units Mitsubishi units


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WORST CASE SCENARIO

Separation of the groups Sale of Chrysler units

loosen a mega-merger Money for Promotional


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MOST LIKELY SCENARIO

Separation of operations units Mercedes unit from

Chrysler unit and Mitsubishi unit


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WHY

Maintain Mercedes position Profit for Innovation Costly to maintain and sustain other Have stronger brand image Succeed and Survive in the competitive

markets


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Corporate Level

Strategies


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Alternative I: Reorganization

Expected Benefits Winning Against the Competition Drawbacks


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Expected Benefits

Units work cross-divisionally to maximizestrengths

Allows for the transfer of information,innovation, and expertise

Cost-saving strategies Feasibility


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Winning Against the Competition

Variety Increased attractiveness Stronger vehicle designs Extra kickers


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Drawbacks

Negative view towards Mercedes Decrease in sales for Mercedes A way around these implications


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Alternative II: Restructuring

Expected Benefits Pros Cons


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Expected Benefits

Fixes Mercedes quality issue Increases the Mercedes brand image Helps DaimlerChrysler


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Pros

Power of Mercedes Generated profits A focus to improve


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Cons

Relying to much on Mercedes Holding up both ends Mercedes could still have quality issues How to reduce these


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Business Level Strategic

Alternatives


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SBUs

Mercedes Car Group Chrysler Group Commercial Vehicles Services (DaimlerChrysler Bank) Other Activities (MTU Aero Engines,

Mitsubishi Motors, European AeronauticDefense and Space Company (EADS)


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Generic Strategies

Differentiation Low-Cost


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Evaluation of Business Level StrategiesDifferentiation

Pros High level of customer loyalty Charge premium for product Possible increase in revenue Reach wider target market

Cons Companies imitate Consumers view changes Difficult to charge premiums


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Evaluation of Business Level Strategies

Lower Cost Leader

Pros Lower prices Higher profit margin Increase in revenue

Cons Companies imitate Technology changes Bases for cost leadership

erode


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Grand Strategies

Product Development Market Development Innovation


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Preferred Strategic Choice

Long-term Objective Corporate Level Strategy Business Level Strategy

Daimler Chrysler 9.30 Section

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