...mostly related to the cultural differences, the management of the companies, communications and misunderstanding in a lot of aspects. Besides that, is the merger between these two massive companies is the best strategies? 3.0 TOOL USED CAGE analysis is used in this problem solving. CULTURE Different personalities appeared because basically, after the recent aggressive change The Board of Management, Daimler can be said as a assertive and committed company where totally unlike Chrysler that tend to be little less rigid and sometimes can be flexible and go off on tangents. Their working lifestyle also showed obviously different for Daimler which they embraced formality and hierarchy while Chrysler favored open collars, and free-form discussion. There were also language barriers that happened between the affiliations when practically all the German executives spoke English while none of the Americans spoke German. In an effort to improve the chances of integration triumph, Chrysler invited employees to take culture training as they consider that culture training is more crucial than language training. Besides that, the distinction in business culture specifically in power distance also occur when Daimler-Benz managers were rewarded based primarily on the profit...
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...competitors increase in quality, technology, and innovation): i. Daimler – felt pressure to merge, ranked 15th largest automaker (only above Volvo & Porsche) ii. Chrysler – lack management depth, new products, and has small oversee market penetration c. Avoid consolidation due to global overcapacity d. Cope with changing marketplace and technology, such as the Internet e. Remain competitively priced by reducing cost (implementing “platform” design across DaimlerChrysler) f. Was it really “a merger of equals”? What went wrong? (see table and reference #2 – Muller, 2001) Issues faced by DaimlerChrysler after 1998 merger: a. How to leverage “soft” assets, such as Intellectual Capital in the form of Knowledge Management? b. How to resolve cultural differences between Daimler and Chrysler c. How to convince executives, managers, and staff to be open and remain loyal d. How can knowledge management be used to smooth the merger process * See reference #4 (Robb, 2003) for similarities between related KM acquisitions and mergers e. Is there enough resources or reason to adopt Knowledge Management * See Table A for comparison of companies that adopted KM Transfer of resources and capabilities: a. Economies of Integration: reduce costs and improve quality b. Economies of scope: obtaining synergies from transfer of core competencies i. Chrysler – known for innovation in design and marketing knowledge ii. Daimler – has brand equity and state-of-the-art engineering in R&D iii. Sharing of distribution...
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...http://articles.latimes.com/2009/jan/21/business/fi-fiat21 Fiat and Chrysler sign alliance plan January 21, 2009|Ken Bensinger By taking a stake in Chrysler, Fiat may be providing a glimpse of the future of the auto industry, one that's a lot more global -- and where everybody scratches each other's back. The deal, announced as a letter of intent Tuesday, is not final but would give the Italian automaker a 35% stake in Chrysler, as well as access to Chrysler's U.S. manufacturing facilities and huge distribution network. In exchange, Chrysler would be able to sell its larger vehicles in Fiat's international dealerships and to add much-needed small, fuel-efficient cars to its fleet using Fiat's small engine and transmission technology. As such, it's a partnership that could, in theory, lead to Italian-engineered, U.S.-built Fiats being sold as Dodges at a dealership near you, and Mexican-made Dodges sold as Fiats in France. "I would love to sell Alfa Romeos or Fiats or Fiats badged as Dodges," said Jon Gray, owner of Orange Coast Chrysler Jeep Dodge in Costa Mesa. The partnership is the leading example of the business model du jour in the auto industry, one in which companies trade their strengths with competitors to cover their own weaknesses in the hope that both come out stronger. "Maybe the future for the industry consists in a series of alliances," said Thomas Klier, who, as a senior economist at the Federal Reserve Bank of Chicago, has studied the auto business...
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...Running Head: THE STRUGGLE OF CHRYSLER The Struggle of Chrysler Valerie Steinmetz Pete Rohlman Kelly Jane McLaughlin Cardinal Stritch University College of Business and Management Rich Bruce, Instructor Business Communication January 28, 2010 Over the past ten years, America has had many historic moments. With planes flying into the World Trade Center to the election of our first African-American president, the American public has had much to be excited about and to fear. In more recent history, the American economy has been the main topic. From the Fall of Wall Street, crashing of the housing market, to the fall of the American Automakers. The government has stepped in to save the private market and attempt to restore life to what was once a corner stone in America. Chrysler was one of many companies to be bailed out by the government during 2008. This is a look at where Chrysler started to where they are today. The Chrysler name doesn’t mean much to residents of Kenosha. The auto plant has been called by many names since 1900, when Thomas Jeffery bought a bicycle factory and started mass-producing vehicles. These vehicles had two groundbreaking innovations: steering wheels and front-mounted engines. Historians say it was in Kenosha, not Detroit that cars began “to look like cars.” Vehicles jokingly referred to as Kenosha Cadillacs, were small, inexpensive, and sometimes, homely looking Ramblers. (Nichols...
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...2008 Collapse of Chrysler Melinda A. Dobson MGT 435 Organizational Change Robert Hamamoto November 18, 2011 The 2008 Collapse of Chrysler Beginning in the late half of 2008, a global recession hit the economy of the United States. With a combination of several years of declining automobile sales and the limited availability of credit led to a more widespread crisis in the United States auto industry in 2008 and 2009. Soon after the dramatic decline in sales, the U.S automaker, Chrysler, requested emergency loans from the government in order to stay afloat. In 2009, Chrysler’s situation had gotten worse and was faced with imminent bankruptcy and liquidation. With that being said, I would like to discuss the changes that have been implemented to Chrysler, identify new changes that still need to be implemented and assess the effectiveness of the change and the potential benefits of the new changes. Chrysler is an American automobile manufacturer that has built automobiles since 1925 and was the second largest automaker between 1936 and 1949. After a merger with Daimler-Benz Corporation in 1998, Chrysler was part of the German based DaimlerChrysler now known as Daimler AG. Chrysler suffered from poor management and lack of investment until 2007 when the company was sold to Cerberus Capital Management. Under DaimlerChrysler, the company went by the name of “DaimlerChrysler Motors Company LLC,” with its U.S operations referred to as the “Chrysler Group.” Then Daimler-Benz...
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...A decline in sales isn't the only big problem facing Chrysler Group LLC. Another, according to Chief Executive Sergio Marchionne, is the almost in grained tendency to react to falling sales by slashing pnces. In Detroit, "there's almost a fanatical, maniacal interest in [market] share," Mr. Marchionne told reporters Monday on the opening day of the North American International Auto Show. But rarely, he added, has heavy discounting in pursuit of high volumes helped automakers generate profits in the long term .... For the past seven months, the 57-year-old Italian-born Canadian has been working to shake up Chrysler and move the company away from old ways that forced it into bankruptcy reorganization last year. He has ousted several veteran executives, flattened its bureaucracy, and, according to people who have worked closely with Mr. Marchionne, injected an element of fear into its ranks. One of the more frustrating problems for Mr. Marchionne has been the use of heavy rebates and other incentives to maintain sales-an issue that has plagued General Motors Co. and Ford Motor Co.over the years. Last July, for example, when the U.S. government offered as much as $4,500 in "cash for clunkers" rebates, Chrysler's sales chief at the time, Peter Fang, drew up a plan to offer an additional $4,500 from Chrysler, two people familiar with the matter said .... But when Mr. Marchionne found out about it, he was furious, these people said. In an August meeting with Mr. Fang and his sales...
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...Part 1: before 2009 CHRYSLER: Chrysler is an American automobile manufacturer founded by Walter Chrysler in 1924. Since 1928, the company has introduced two low and medium price brands- Plymouth and DeSoto. The company became popular in America. These are the car brands that Chrysler makes such as Dodge Ram, Chrysler 300, Dodge Avenger, Grand Caravan, Charger, Sebring, and Ram. Some of these vehicles/brands have given Chrysler some success within the auto manufacturing market of the United States. However, the company has consistently been behind both General Motors and Ford Motor Company in regards to their reputation. Therefore, Chrysler has been called the “number three” auto manufacturing company in the U.S. due to their mediocre product quality and lack of technology compared to their competitors. Chrysler mainly focused on producing full sized cars, which required a lot of oil. In the 1970s, their sales declined significantly as a result of the oil embargo of 1973, where the price of oil increased; therefore, consumer demand decreased. In 1998, Chrysler merged with Daimer-Benz and was called DaimlerChrysler AG. In 2006, Chrysler Group reported a net loss of $1.5 billion because of competition and changing markets. In 2007, Daimler sold its 80 percent stake in the company to Cerberus Capital Management LP. Daimler paid 36 billion dollars to acquire Chrysler, but sold its stake to Cerberus for only 7.4 billion dollars. So, at that time, Daimler lost 29 billion...
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...(referencebusiness.com) General Motors is one of the world's largest auto manufactures. . It was the world’s largest car maker from 1931 to 2008, when it was surpassed by Toyota (newyorktimes.com). The company was founded in 1908, and today manufactures cars and truck domestically and internationally. For most of the 20th century, General Motors was the biggest company in the industry worldwide. It not only led in automotive innovations, but it helped to define the new bureaucratic multinational corporations that shaped the post-war economy. Chrysler Chrysler LLC, for years America's third-biggest automaker, is a U.S. automobile manufacturer headquartered in the Detroit suburb of Auburn Hills, Michigan. Chrysler was first organized as the Chrysler Corporation in 1925. Chrysler and its subsidiaries were part of the German based DaimlerChrysler AG due to a merger in November 1998 (http://en.wikipedia.org/wiki/Chrysler). The Chrysler brand includes Mercedes-Benz, Freightliner, Sterling, Setra, and Western Star...
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...Beijing Jeep Co. and The WTO 1 In May 2000, the Beijing Jeep Corporation, Ltd. (BJC) faced one of the most challenging periods of its relatively short. China is going to entry into the World Trade Organization (WTO) In order to join the WTO, China had to agree to liberalize its financial markets. It also had to allow for more foreign investment in firms engaged in electronic commerce, entertainment, travel and tourism and other industries. In addition, trade tariffs had to be reduced on a wide range of agricultural and manufactured products – including a reduction in the tariffs on imported automobiles from one hundred per cent to twenty-five per cent by 2006 that would lower the entry barriers to Chinese automotive industry. The company had also spent many years cultivating relationships with senior government officials–what the Chinese refer to as guanxi–to help it achieve its objectives. And since over forty per cent of its product’s content was produced in China, BJC had operated as a local manufacturer under heavy protection from imports for all of its short life. The political and economic climate in China was still undergoing a major transformation begun in 1978. China planned to achieve ‘socialist modernization’ through economic reform and opening up to the outside world. Jeep was the second most recognizable foreign brand name in China, The situation was particularly attractive for Jeep as China was perhaps the world's...
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...Chrysler and Daimler merger case 1) in 1998 the worldwide car market is growing (from 46 million in 1993 to 52 million in 1997), but more and more competitor are present in this business market in a worlwide level. In the 90's the incumbent competitors are threatening by the emergence of Korean manufacturers ( Hyundai, Kia ), because the firm are offering cheap and good quality cars. the emerging firms in the 90's are from Asia, where the work force is cheaper than in westerners country, in this way these firms can offering a high quality product ( Lexus, Infinity, etc) for an affordable price. Thus High end firms as Mercedes, BMW, are threatened by those firms. In this way to face with the competition most of companies are shifting their production toward developing countries for reducing their cost and compete in a better way with these emerging firms. Moreover according to some analysts there would be a reduction from 39 current producers to 20 major companies. That would be because of the high competition that would be especially due to present in the market. Furthermore each year the plant capacity exceeded demand of cars by15 million vehicles, thus the profitability of the firms is reduced, and that affect on the long term financial health of the different firms. Finally the industry is stroke by several mergers and acquisitions, which reinforce the competition in the markets. 2) In my point of view the merger make sense, because in a competitive market firms face...
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...Shifting Gears in the Auto Industry Question One Prior to taking over Chrysler, Fiat was an international business – exporting cars out of Italy to other countries and engaging in joint ventures around the world, including an extremely unprofitable partnership with GM in 2005. The brand had a negative reputation in the United States, and it was senseless for the brand to invest resources in the American car market. By 2006, however, Fiat was turning a profit, and in 2009, the company was named one of Fortune magazine’s most admired companies and became Europe’s third-largest car company and the ninth largest in the world. As Fiat experienced this massive success, transforming into a true multinational business became a viable option. Purchasing the struggling Chrysler brand was a logical way for Fiat to truly become a part of the American automobile market and become a multinational company. Instead of merely exporting cars to the US or entering a joint venture with a US automobile maker, Fiat is able to have full operations in the United States using Chrysler’s existing resources. The merger was practical for both brands, as Chrysler desperately needed resources, and by buying out Chrysler, Fiat gained access to Chrysler’s network of distribution channels in the United States and the brand recognition of Chrysler. As a multinational business, Fiat will still be able to adapt product offerings and strategy for each country, but will have better access to the markets of each...
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...DODGE DURANGO 2014 DODGE DURANGO 2014 MARKETING II Name: Tran Thanh Long ID: 1357030 Class: Tuesday Morning MARKETING II Name: Tran Thanh Long ID: 1357030 Class: Tuesday Morning Content: I/ EXECUTIVE SUMMAR II/ SITUATION ANALYSIS: 1. Dodge’s history 2. Product history 3. Describe Dodge Durango 2014 4. Product evaluation A. Industry analysis and Industry trend B. Product differentiation C. Sale history D. SWOT 5. Target market 6. Marketing objectives A. Need satisfying objective B. Long and short term sale market III/ ADVERTISING OBJECTIVES: 1. Product concept 2. Target market - Detailed description of target audience: Relationship between target market and target audience 3. Communication media 4. Advertising message I/ EXECUTIVE SUMMARY: Have you ever felt the power of a horse when you rode it? Imagine a herd of horses as they run through an open plain. You do not want to ride a herd of horses on the street, now you just need the new 2014 Dodge Durango. In this planner, you will be seeing, imagining and experiencing the unique way Dodge advertises using lower cost but still attracting more potential consumers of Dodge brand and Paramount Pictures, also you will get the information about the new Dodge Durango. "But for the most part, the Durango remains a stylish, aggressive-looking truck with available V-8 power, plenty of towing ability, and some new fuel-economy technology lurking...
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...Running Head: THE FAIL & SUCCESS MERGER HRM587 – Managing Organizational Changes January 18th, 2015 Chrysler, Fiat and GM are OEM automotive producers. Both GM and Chrysler are considered one of the top automotive companies being GM number one and Chrysler who is lagging behind Toyota and Ford as the number four OEM automotive producers. However all three GM, Chrysler and Fiat were struggling to maintain and gain more market share. It was definitely a competitive in trying to gain more market share between GM and Chrysler. Fiat who is also an Italian OEM automotive producer also had its issue as well in keeping market share in Italy. Fiat also had their own issues in Italy with trying to stop the bleeding of losing money to where the Italian government had to bail them financially back in the day as well. So anyone would think that a merger between either of these companies could serve to be a win-win for both. But that only happen in one scenario. With both GM and Fiat struggling to hold market share in there perspective regions they decide to hold talks about the two companies merging. Sometime in 2000, GM and Fiat decided to enter into a joint venture or some may call it entering into an alliance. GM had acquire a 20% stake in Fiat and Fiat had acquired only 6% of GM. (GM Pays to Walk Away, 2005) GM entered into this alliance to try a save their Latin American Division from declining sales and Fiat entered into this alliance to try...
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...& Kinicki, A.2013). The main observable artifact that Chrysler had, and the reason Mr. Marchionne was in distress was about, was the way manager Fong doubled rebates in order to make profit from the dealership sales. This approach was part of the culture that led the company to diminished lucrativeness. Another observable artifact came with the changes Mr. Marchionne implemented, such as his weekly meetings with his staff. Espoused values can be defined as the normal standards in which a company conducts business. A few of the espoused values mentioned in the text are, “the margins and vehicle quality needed to improve and better control over pricing was imperative” (Kreitner & Kinicki, 2013, p.87). Mr. Marchionne went to Chrysler to change these values to make the company profitable again; Basic assumptions are the values of a company that have not been followed and begin to represent the company’s behavior (Kreitner & Kinicki, 2013, p.87). Mr. Marchoinne implemented major changes at Chrysler by expelling executives, removing its bureaucracy and adding fear to the workforce. How is Mr. Marchionne trying to improve the PE fit of his direct reports? PE fit is defined as the compatibility between an individual and a work environment that occurs when their characteristics are well matched (Kreitner & Kinicki, 2013, p.87). Mr. Marchoinne felt that he needed to take drastic measures in order to pull Chrysler out of its downward spiral. In order to improve the PE...
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...Your Name Your Name August 1st, 2012 Michael Manley Chrysler Group P.O Box 3895 San Diego, CA 92173 Dear Mr. Manley: I am applying for your Multicultural Marketing position with the job number 996296 that was advertised on the career section of your website. I am 2 months away from receiving my Bachelor of Science degree from Cetys Universidad in Marketing Administration. With the knowledge and skills I have learned through my career, and my previous experience working in the marketing area has led me to believe that I am qualified to work in the Multicultural Marketing position. I have always had a strong interest in cars, but in the past 3 years I discovered the capabilities of 4x4 trucks and the thrill of going off road, that was when I became a Jeep Wrangler enthusiast. I have always liked the way the Jeep brand uses advertising to create a sense of attachment between people and their cars. I have previously worked in the Advertising and Market Research area on my University, and I strongly believe that the experience that I’ve obtained during the time that I worked for my school could be applied on the job position that you’re requesting. Since a lot of the work that I had to do was intended to be printed an also distributed, I had to be sure of not making any mistakes, and I believe that is an ability that Jeep Company seeks in their employees. Some of my advertising job qualified to be shown through the three campuses of Cetys Universidad, and that...
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