daimler chrysler saidi isaac ron sparks candace stocker jeron wright
Post on 18-Dec-2015
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TRANSCRIPT
Daimler Chrysler’s Position
• Daimler Chrysler is committed to achieve consumer satisfaction among all global auto manufacturers because of our engineering excellence, innovative products, and superior service.
External Analysis
• Economic Factors• Social Factors• Political Factors• Technological Factors• Ecological Factors
Value-Chain Analysis
• Primary activities• Secondary activities• Strength and Weakness • Competitive advantage
Strengths And Weakness
•Strong Brand names •Broaden it with models•Perfect fit and leaders •Negative view of Mercedes
Core Issue
• Automakers had been losing money. • After 9/11/2001 sales of cars and trucks
dropped dramatically – Mitsubishi’s sales were 20%– Chrysler’s sales were 5%– Mercedes’ sales were 2%
2003
Core Issue (cont.)
• How to differentiate themselves from global competition in a meaningful, sustainable manner.
• Growth of China automobile market• Developing innovative vehicles that appeal to
consumers• How to remain profitable in the future
World Ranking
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GM FORD TOYOTA-DAIHATSU
VOLKSWAGEN DAIMLER-CHRYSLER
Auto Manufacturer
Uni
ts
2000 World Ranking
2001 World Ranking
2002 World Ranking
2003 World Ranking
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
Net Income
• From 1998 to 2003 DaimlerChrysler only experienced a loss in net income within 2001
• In 2000 the company had nearly a gain of 7.89 billion
• In 2001 this amount totaled a whopping negative 662 million
• Causes and effects
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 Investment (ROI) .0272% .0428% .0356%
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
Return on Investment (ROI) .000825% .08032% .01408%
Return on Equity (ROE) .004265% .43% .0748%
General Motors
Profitability Ratio
2003 2002 2001
Profit Margin 0.0208 0.0093 0.00339
Turn Over 0.0085 0.0047 0.0018
Return on Investment (ROI) .01768% .00434% .00061%
Return on Equity (ROE) .314% .236% .001%
Profitability Ratio
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
Total Debt-Total Assets Ratio 0.9429 0.9794 0.9365
Long-term debt to Equity Ratio 10.755 29.636 8.439
Ford
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.3865 0.376 1.053
Long-term debt to Equity Ratio 1.629 2.434 1.729
Toyota-Daihatsu
Leverage Ratio
2003 2002 2001
Total Debt-Total Assets Ratio 0.5377 0.4929 0.4814
Long-term debt to Equity Ratio 0.6688 0.7238 0.7217
Leverage Ratio
BEST CASE SCENARIO
• Not to separate Operation Groups:• Mercedes units• Chrysler units • Mitsubishi units
WORST CASE SCENARIO
• Separation of the groups • Sale of Chrysler units• loosen a mega-merger• Money for Promotional
MOST LIKELY SCENARIO
• Separation of operations units• Mercedes unit from• Chrysler unit and• Mitsubishi unit
WHY
• Maintain Mercedes position• Profit for Innovation• Costly to maintain and sustain other• Have stronger brand image• Succeed and Survive in the competitive
markets
Expected Benefits
• Units work cross-divisionally to maximize strengths
• Allows for the transfer of information, innovation, and expertise
• Cost-saving strategies• Feasibility
Winning Against the Competition
• Variety• Increased attractiveness • Stronger vehicle designs• Extra kickers
Drawbacks
• Negative view towards Mercedes• Decrease in sales for Mercedes• A way around these implications
Expected Benefits
• Fixes Mercedes quality issue• Increases the Mercedes brand image• Helps DaimlerChrysler
Cons
• Relying to much on Mercedes• Holding up both ends• Mercedes could still have quality issues• How to reduce these
SBUs
• Mercedes Car Group• Chrysler Group• Commercial Vehicles• Services (DaimlerChrysler Bank)• Other Activities (MTU Aero Engines,
Mitsubishi Motors, European Aeronautic Defense and Space Company (EADS)
Evaluation of Business Level Strategies
DifferentiationPros
– 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
Evaluation of Business Level StrategiesLower Cost Leader
Pros
– Lower prices– Higher profit margin– Increase in revenue
Cons– Companies imitate– Technology changes– Bases for cost leadership
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