Analysis of Daimler-Chrysler
Analysis of DaimlerChrysler
Two of the world's most profitable car manufacturers, Daimler-Benz and Chrysler Corporation have agreed to combine their businesses in a merger of equals. The transaction has created a global automotive corporation ranked in the world's top car makers in terms of revenues, market after General Motors, Ford… The new company is called. It is leading by the Chief Executive Officer (CEO) Juergen E. Schrempp. It will be uniquely positioned to exploit the growth opportunities of the global automotive market in terms of geographical and product segment coverage. For example, Chrysler can improve its sells in Europe and Daimler-Benz in North America. With Daimler-Benz's non-automotive businesses, automotive electronics operations, DaimlerChrysler is a leader in transportation. First, I will talk about DaimlerChrysler environment, in 2001 then I will speak about its capability with a SWOT analysis and at last but not least, I will recommend a future strategy.
The environment of DaimlerChrysler can be studied with a PEST analysis.
Political:
The Government’s role is to stimulate the car industry, yet impose controls over the use of cars in order to provide an acceptable national infrastructure and the demanded perception of freedom. Governments can support carmakers because they provide jobs. For example, the United States (US) Government rescued Chrysler Corporation with a special Federal Loan Guarantee Program. Car makers have to deal with national governments about environment and security policies. DaimlerChrysler AG is organized under the laws of the Federal Republic of Germany.
Economic:
It’s the time for mergers. If companies want to stay alive, they have to grow fast and mergers are a good way. It’s the motto “eat or be eaten”. Car prices in European Union are likely to fall as the Euro. Europe’s single currency will create greater price transparency. It will probably increase the merger mania. Economists and auto industries expect a slowdown in auto sales. Competition for market share is rising and put increased pressure on prices and margins. Price of fuel can disadvantage companies. Today we are faced with a great degree of overcapacity in the car industry running at 25%.
Social:
During the last century, the car has transformed the lives of people in developed countries, providing a new degree of freedom and new opportunities for work and leisure. DaimlerChrysler has mainly a position in three automotive markets: Europe, North America and Asia. These three markets are composed by a rich population. They can buy car easily. DaimlerChrysler sells a large range of products which touches all the class of the society. We can also say that the population changes: it becomes older and more single. European and US markets are good for DaimlerChrysler because it’s a source of national pride for Americans to buy Chrysler and for Germans to buy Mercedes. The United States of America (USA) and Germany are the most powerful countries in the world. The growth rate for motor industry in Europe is between 2% and 3%.
Technological:
DaimlerChrysler must take care about new fuel which can change car making. It must also take care of the [next page]