• 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

    Another foreseeable problem is the ability of the suppliers to stop supplying to TNF for non-payment. It is difficult to manage its suppliers who will be able to stop supplying the company, especially when the company encountered financial problems. Bargaining power of buyers: Consumers are now more demanding and even more knowledgeable.

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

    Another example is that after five years of employment with the company, employees and franchisees are granted a six-month sabbatical. Almost all employees and franchisees use this period to take part in volunteer work abroad. Customers The Body Shop's dedication to customer care is instrumental in further implementing its social responsibility.

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

    LG, 18 The respondent below gave another example, specifying that they would purchase tennis equipment from a tennis player, but only tennis equipment, and not non-sporting products. "When he [Federer] does rackets and things like that, but everything else I wouldn't, it has to be tennis stuff" BR, 18 Further

  2. Global Branding stratergy group report for Lego.

    Asian consumers and it has much to lose if it does not accelerate its effort to establish in Asian countries. Asia has been the world's main engine of growth for the past three decades and its consumers' rising purchasing power represents a significant market for LEGO.

  1. A critical analysis of cross cultural celebrity endorsement: David Beckham

    This can be done by investigating the use and impact of David Beckham, among others, as an endorser in several diametrically different countries or regions. This brings into context cultural and global issues relating to the following issues. (1).How celebrity endorsements work (2).

  2. Target Corporation Brand Building

    The company segments the market by offering a wide range of products that are beneficiary to the consumer. The company is constantly evolving through changing tastes and trends of consumers. The creativity and vision is shown through the extraordinary merchandising and promotion.

  1. Free essay

    Luxury Cars

    "The Cayman S responds precisely and immediately to every command" which emphasise smooth running of the car. (www.creativeclub.co.uk) Before car companies decide to position themselves they go through three stages: market research, identification of attributes and ideal level of luxury product.8 After completion of stages it is important to draw perceptual map of luxury car market.

  2. AN ANALYSIS OF THE ROLE OF BRANDING STRATEGY(dissertation)

    The purpose of this chapter is to explore the theories and concepts of branding, branding strategy and international market entry strategy in order to provide a theoretical basis for the empirical research to be carried out in the following chapters.

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