Presented To: Prof. Nasir Riaz

Presented By: Zohaib BashirYasmeen SadiqSaadat AliJawad Abdul Khaliq

Chrysler's primary goal is to achieve consumer satisfaction. We do it through engineering excellence, innovative products, high quality and superior service. And we do it as a team.

Chrysler Mission Statement

Chrysler was founded in 1925 The founder was with the provide advance

technology in cars This thinking helped Chrysler and build a

2nd position in US market. Chrysler hold this position from 1936 to 1949

In late 1950’s it was tagged as ME TOO company

In late 1970’s as poor cash company In 1980 there are just two options whether

go for bankruptcy or loan form Government

Chrysler History

Car Models

1931 Plymouth

1936 Chrysler Airflow

1955 Imperial

Basic problem: failed to provide products according to the requirements of customer

Never able to achieve profits more than 3 to 4 percent of sales

Low fuel efficient cars Supplier strikes effects production of

company Conflicting interests of top management Inventory remain in stock 100 days of sale

Critical Issues Faced by Crysler

Porters Five ForcesHIGH MODERATE LOW

Barriers to entry

.

Bargaining power of supplier

.

Bargaining power of buyer

.

Rivalry among existing firms

.

Threat of substitutes

.

Financial analysis

Strengths◦ Use of computer system which cuts $60 Million from

Chrysler’s average inventory◦ Chrysler covers 90% of domestic market share◦ Dealer network was expanded and strengthened at cost

of nearly $100 million◦ Segmented there product to make a regional selling

base on color, style, design and model◦ Scheduled its production based on its computerized

modeling called “sales bank” ◦ 1965 they hire experts to redesign its product design

with new technological development

SWOT Analysis

Weaknesses◦ Poor relationship with dealers, suppliers and the American

consumer◦ They management is very weak in decision making◦ Chrysler has operational problems and high costs.◦ Are behind in R&D and announced they would be

introducing an electric vehicle in three to five years when most of their competition will have them sooner.

◦ They do not have a really cheap small fuel efficient car right now

◦ The overall quality of the product is good but not at industry average

◦ Tagged as “me too” company ◦ Company was “cash poor” and having huge operational

loses

SWOT Analysis

Opportunities◦Demand of small cars rapidly increasing◦Consumers are starting to become interested in

buying alternative fuel sources.◦Creating a company brand identity◦Innovation should lead to new products on

market◦New innovation can compete with others◦Cut health-care costs◦Cut jobs and move production overseas◦Shrink brand line

SWOT Analysis

Threats◦Have to face both Government and market

pressure◦Market was volatile and complicated by the

increasing penetration by the imports◦Size of the market demand a varied marketing

plan◦Still did not have a corporate brand identity

SWOT Analysis

SO Strategies ST Strategies

Retrenchment: shrink product line by using

computerized systems (S1, O7)

Downsizing: by cutting jobs and extra expenses

in health care with the help new systems

(S6,05,O6)

Product development: manufacturing fuel

efficient cars (S2, S4, O1, O9)

Divestiture: those production line who are not

selling in there segments should closed to save

costs (S4,T1)

WO Strategies WT Strategies

Divestiture: sell units who are even not

meeting break even points (W3, W7,O6)

Downsizing: weak management should

remove to cut cost (W2,O5,O6)

product development: improve R & D,

and move to international market

(W4,O2,O9)

Divestiture: sell units who are even not

meeting break even points (W1,W3,T1)

Product development: manufacturing

fuel efficient cars( W5,T2)

EFE MatrixKey External Factors Weight Rating Weighted

ScoreOpportunities

1.   Demand of small cars rapidly increase 0.1 4 0.42.   Consumers taste changes 0.06 3 0.183.   Creating a company brand identity 0.07 3 0.214.   Innovation should needed 0.06 4 0.245.   Cut health-care costs 0.08 4 0.326.   Cut jobs and move production overseas 0.11 3 0.337.   Shrink brand line 0.12 3 0.368.   Recapture market share and be more

competitive0.09 2 0.18

9. Concentrating on smaller more fuel efficient cars

0.07 2 0.14

Threats1.Have to face both Government and market

pressure0.04 1 0.04

2.Market was volatile and complicated by the increasing penetration by the imports

0.05 2 0.1

3.Size of the market demand a varied marketing plan

0.1 2 0.2

4.Still did not have a corporate brand identity 0.05 1 0.05TOTAL 1   2.75

Competitive Profile MatrixSr. No

Critical Success Factors Chrysler Ford GM

    Weights

Rating

Score

Rating

Score

Rating

Score

1 Better Cost Control 0.1 2 0.2 2 0.2 2 0.22 Market Share 0.13 1 0.13 2 0.26 3 0.393 Financial Position 0.12 2 0.24 3 0.36 4 0.484 Strong Research and

Development 0.11 2 0.22 3 0.33 3 0.33

5 Effective Supply Chain Management 0.1 2 0.2 3 0.3 3 0.3

6 Technologically up to the marks of production process

0.12 4 0.48 2 0.24 3 0.36

7 Economies of Scale in whole business operations.

0.12 2 0.24 4 0.48 3 0.36

8 Better customer relations and loyalty 0.09 2 0.18 3 0.27 4 0.36

9 Global Expansion 0.11 2 0.22 2 0.22 3 0.33  TOTAL 1 2.11 2.66 3.11

IFE MatrixKey Internal Factors Weight Rating Weighted

scoreStrengths

1.   Use computerized systems 0.09 3 0.272.   Capture 90% domestic market share 0.1 3 0.3

3.   Strengthened dealer network 0.06 2 0.124.   Product segmentation on regional base

0.07 3 0.21

5.   “sales bank” 0.12 2 0.24

6. New technological development 0.07 1 0.07Weakness

1. Poor relationships with stakeholders

0.04 2 0.08

2. Weak decision making 0.06 1 0.06

3. Operational problem, high cost 0.1 2 0.2

4. Weak research and development 0.1 1 0.15. Don’t have small and fuel efficient cars

0.1 2 0.2

6. Tagged ME TOO company 0.03 1 0.03

7. Cash poor company 0.06 1 0.06TOTAL 1   1.94

SPACE MATRIXRATING

SFINANCIAL STRENGTH Ratings

Working capital 3.0

Cash flows 3.0

Liquidity 3.0

Risk involve in business 4.0

Return on investment 3.0

Total 16

INDUSTRY STRENGTH Ratings

Financial stability 2.0

Capacity utilization 3.0

Resources utilization 2.0

Ease of entry into market 3.0

Growth potential 3.0

Total 13

SPACE MATRIXRATING

SENVIRONMENTAL STABILITY Ratings

Rate of inflation -4.0

Technological changes -4.0

Demand variability -4.0

Competitive pressure -4.0

Barriers to entry into market -3.0

Total -19.0

COMPETITIVE ADVANTAGE Ratings

Product life cycle -3.0

Market share -2.0

Product quality -2.0

Technological know how -4.0

Control over supplier & distributor -5.0

Total -16.0

CONCLUSION◦ FS Average is = 16.0 / 5 = 3.2◦ ES Average is = -19.0 / 5 = -3.8◦ CA Average is= -16.0 /5 = -3.2◦ IS Average is = 13.0 / 5 = 2.6

Directional X-axis: 2.6 + (-3.2) = -0.6

Directional Y-axis: 3.2 + (-3.8) = -0.6

BCG Matrix

Internal External Matrix

GSM

Matrix Analysis

Alternative Strategies SWOT SPACE BCG IE GSM COUNT

Forward Integration

Backward Integration

Horizontal Integration

Market Development

Market Penetration

Product Development X 1

Concentric Diversification X 1

Conglomerate Diversification X 1

Retrenchment X X X X X 5

Divestiture X X X X X 5

Downsizing X 1

Liquidation X X X 3

Cut costs immediately. For the reason to reduce its expenses and at its current position Chrysler has to adopt retrenchment.

By adopting this strategy Chrysler can be in position to keep its financial up to breakeven point.

Cut health-care costs, Cut jobs and move production overseas, Shrink brand line, sell non productive units etc

As loan has been sectioned by Government for Chrysler Corporation and retrenchment also help to cut unnecessary expenses so it will definitely help Chrysler to overcome its financial. Chrysler can be reinvent itself.

Strategic Recommendations