• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Daimler-Chrysler: A Cultural Mismatch

Extracts from this document...

Introduction

MKT 3311 INTERNATIONAL & GLOBAL MARKETING Module Leader: Dr Samar Faten Baddar Daimler-Chrysler: A Cultural Mismatch Silvesta Ese - Imajemite 2311778 Hajot Deooray 2217461 Ozzy Executive Summary: The merger of Daimler-Benz (the manufacturer of Mercedes-Benz) (Germany) and the Chrysler Corporation (USA), is classed as a cross-culture merger. A cross-cultural merger is the process of two companies from different backgrounds and with different practices were joined together to form one successful company. There were many different reasons why a cross-culture merger is not successful. Daimler-Chrysler failed to analyse both companies before they went ahead with the merger. The main reason that their merger was not successful was that the German way of business and the American ways differ profoundly. Both companies should have been analysed to examine their strengths and weaknesses, in regards to their practice. The communication between both companies lacked and therefore no common ground was found. A merger is the process of two or more entities combining into one for the hope of increasing market share. This process can be achieved by a company merging with or acquiring their competitors. This process has become quite common over the years. Differences in culture, language, and business practices can prove a liability. In most cases, mergers are claimed to be a partnership of two equal businesses but this may not always be the cases. Some companies may acquire companies that are under-performing in a mutual market. Companies may indulge in such a process to increase customer share or to avoid costly marketing battles. Co-CEO of Daimler Chrysler stated that the deal was never expected top be a merger but more Daimler-Benz were acquiring Chrysler. Looking can the histories of both Daimler-Benz and Chrysler, Its clear to see that Daimler Benz were the bigger company as Mercedes-Benz's are manufactured in no less than 13 different countries including Thailand, UK, and Argentina. In regards to sales revenue Daimler- Benz outperformed Chrysler as the Chrysler Corporation Had experienced hard times in the early 1990's. ...read more.

Middle

Several years after the merger, we can say that majority of solutions were not effective and have to be solved in a better way as they contributes to separate the two companies. The integration must continue as the process to form a "Welt AG" is not complete. This merger is still controvert as today Schrempp is accused of cheating on the real nature of the merger to avoid to pay a higher price to work with Chrysler. Daimler Chrysler also acquired 34% of Mitsubishi in order to conquer the Asian Market. But we can wonder how can Shrempp get along with three companies when he was not able to deal with two. Question 2 Harjot Deooray 2217461 Many a cross culture merger has failed because proper attention was not given to the differences in cultures between the two companies. What issues should be addressed to make cross culture merger a success? This section of the report will be aimed at looking into cross-culture mergers, specifically at what's important to make such merger successful. A merger is a combination of two companies into one larger company. A merger can resemble a takeover but result in a new company name (often combining the names of the original companies) and in new branding. The merger of Daimler-Chrysler is known as a cross-culture merger, which means that the joining of two different ways of corporate cultures were put together to form one successful unit. In a merger, 'culture' is more than making the people from both partners work together smoothly. The development of a new, shared culture is a critical factor for a successful merger. Daimler-Chrysler was formed in 1998 by the merger of Daimler-Benz (the manufacturer of Mercedes-Benz) (Germany) and the Chrysler Corporation (USA). The transaction was announced on May 7, and took place on November 12. The company produces cars and trucks under the brands Chrysler, Dodge, Jeep, Mercedes-Benz, Smart, and MayBach, among others. ...read more.

Conclusion

Looking at both of the company's successes over the years, it would be fair to suggest that Mercedes Benz was the bigger brand according to global sales revenues, Product range, Mercedes had much more manufacturing plants globally compared to that of Chrysler. However, Chrysler was up and company and they may have believed that on present form they were as big as Mercedes. The issue of control was another important aspect of the merger. Initially when the companies had come together, Jurgen Schrempp (CEO of Daimler- Benz) and Robert Eaton (CEO of Chrysler) both led the entity as co- CEO's. This would suggest that the merger was indeed a partnership. It is important to notice that when Chrysler under- performed in 2000, their president, James P Holden, was replaced with Dieter Zetsche from Germany. A few senior Chrysler executives had already left by this point and it was becoming apparent that more German executives were joining Chrysler in senior positions. Not all mergers are the combination of two equal companies. The bigger company of the entities involved may see their role as acquiring the small entity. Likewise, the smaller company may see the merging process as a way of gaining company growth by tying themselves to a bigger company. One company may always be bigger than the other. In regards the case between Daimler Chrysler, Daimler may have seen the vision of acquiring Chrysler for the motive of further market growth and profit as Chrysler was beginning to show potential growth. Recommendation: The Daimler-Chrysler merger should have begun with a strategy, to decide if they wanted to combine the two different cultures, or start off with one brand new one. To do this they should have analyzed the existing cultures, to establish the similarities and the differences. The two different practices could have worked in certain aspects of the company, if the merger was thought out thoroughly then they could have stuck with certain ways. Any gaps that were noticeable should have been filled so that no hostility was left between the two. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our University Degree Marketing section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related University Degree Marketing essays

  1. Strategic Mkt for the North Face

    From the analysis, it is clear that with regards to products and market recognition, North Face is well positioned for success with product line of skiwear. However, management has been extremely ineffective, destroying value for their shareholders. With limited on financial, North Face is currently a "dog" in the market.

  2. The merger of BMW and Rover.

    Within four years, BMW started to make losses of up to 3 million dollars per day. From January 1998 to 1999, Rovers sales halved and in 1999 they lost 780 million pounds.19 It became apparent Rover could not be saved.

  1. Marketing Dissertation. An investigation of Celebrity Endorsement, with particular focus on the long-term ...

    Needless to say, recruiting professional to participate in a free academic interview was proving to be extremely difficult to do. Only one person replied to my e-mail and agree to participate in an interview. The researcher then tried to adopt a snowball sampling source, but was even more unsuccessful here and therefore had to settle for only the single interview.

  2. Chapter Notes on Marketing Management by Philip Kotler 10th Edition

    By not matching it, the leader will have to rescind the increase. In non homogeneous product markets, a firm has more latitude. The firm needs to consider the following issues: (1) why did the competitor change the price? Is it to steal the market or to utilize excess capacity, to

  1. The Body Shop and the successes and failures of their strategy - Executive summary

    Many of these companies operate on an international scale. Industry & Company Performance The Cosmetics & Toiletries Industry The cosmetics and toiletries industry as a whole is experiencing steady growth in sales and profits. Over a period of three years between 1994/97, sales have increased by an average of 9% per year and profits have risen by an average of 2% per year.

  2. David Beckham and Sport In Business (Marketing).

    Following the much publicised 'boot' incident with Alex, Ferguson of late, Manchester United shares fell by 2%. United whose stock market value is �440, want to use Beckham's appeal to win more fans in the US when they tour there later this year: Along with his Manchester United captain Roy Keane, David Beckham enjoys the highest salary in English Football.

  1. Product Liability.

    The ethical issue becomes more difficult when we look at it from our "real world" ethical standpoint. It is difficult deciding who should absorb the risk and the cost. Even though it may be ethical for MDC to stop making the old style wallboard, the company may be at a huge disadvantage because other companies are still producing it.

  2. Caterpillar Mitsubishi case study

    The program was able to achieve manufacturing space by 28% through plant closings and achieved savings by simpler manufacturing processes. However, the 15%-20% cost cutting goal by 1990 was seen to be delayed by one year, in 1987 (the achieved cost cutting rate was 7% then).

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work