Case Study Description of DaimlerChrysler: The Post-Merger Integration Phase
Provides an inside view on how the former Daimler-Benz and Chrysler companies organized their integration efforts following their May 1998 merger, the first truly transatlantic merger in history and, at the time, the largest ever. As such, this merger presents an unusually broad array of management issues that were both unprecedented in scope and rather unique, ranging from cross-cultural management and global strategy and implementation to international M&A alliances and change management. Describes a journey that started during the early 1980s, until the events that preceded the Daimler-Chrysler merger, outlining the key strategic, organizational, and execution challenges facing both companies.
Swot Analysis of "DaimlerChrysler: The Post-Merger Integration Phase" written by Piero Morosini, George Radler includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merger Daimler facing as an external strategic factors. Some of the topics covered in DaimlerChrysler: The Post-Merger Integration Phase case study are - Strategic Management Strategies, Cross-cultural management, Globalization, Mergers & acquisitions, Strategy execution and Organizational Development.
Some of the macro environment factors that can be used to understand the DaimlerChrysler: The Post-Merger Integration Phase casestudy better are - – competitive advantages are harder to sustain because of technology dispersion, increasing transportation and logistics costs, digital marketing is dominated by two big players Facebook and Google, there is increasing trade war between United States & China, central banks are concerned over increasing inflation, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
cloud computing is disrupting traditional business models, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of DaimlerChrysler: The Post-Merger Integration Phase
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DaimlerChrysler: The Post-Merger Integration Phase case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merger Daimler, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merger Daimler operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of DaimlerChrysler: The Post-Merger Integration Phase can be done for the following purposes –
1. Strategic planning using facts provided in DaimlerChrysler: The Post-Merger Integration Phase case study
2. Improving business portfolio management of Merger Daimler
3. Assessing feasibility of the new initiative in Organizational Development field.
4. Making a Organizational Development topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Merger Daimler
Strengths DaimlerChrysler: The Post-Merger Integration Phase | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merger Daimler in DaimlerChrysler: The Post-Merger Integration Phase Harvard Business Review case study are -
Organizational Resilience of Merger Daimler
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Merger Daimler does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High switching costs
– The high switching costs that Merger Daimler has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Merger Daimler are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Low bargaining power of suppliers
– Suppliers of Merger Daimler in the sector have low bargaining power. DaimlerChrysler: The Post-Merger Integration Phase has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merger Daimler to manage not only supply disruptions but also source products at highly competitive prices.
Ability to recruit top talent
– Merger Daimler is one of the leading recruiters in the industry. Managers in the DaimlerChrysler: The Post-Merger Integration Phase are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Analytics focus
– Merger Daimler is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Piero Morosini, George Radler can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Merger Daimler has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DaimlerChrysler: The Post-Merger Integration Phase Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Operational resilience
– The operational resilience strategy in the DaimlerChrysler: The Post-Merger Integration Phase Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Superior customer experience
– The customer experience strategy of Merger Daimler in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Diverse revenue streams
– Merger Daimler is present in almost all the verticals within the industry. This has provided firm in DaimlerChrysler: The Post-Merger Integration Phase case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Innovation driven organization
– Merger Daimler is one of the most innovative firm in sector. Manager in DaimlerChrysler: The Post-Merger Integration Phase Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Merger Daimler is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Weaknesses DaimlerChrysler: The Post-Merger Integration Phase | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DaimlerChrysler: The Post-Merger Integration Phase are -
High cash cycle compare to competitors
Merger Daimler has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Skills based hiring
– The stress on hiring functional specialists at Merger Daimler has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Merger Daimler supply chain. Even after few cautionary changes mentioned in the HBR case study - DaimlerChrysler: The Post-Merger Integration Phase, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merger Daimler vulnerable to further global disruptions in South East Asia.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study DaimlerChrysler: The Post-Merger Integration Phase, in the dynamic environment Merger Daimler has struggled to respond to the nimble upstart competition. Merger Daimler has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Products dominated business model
– Even though Merger Daimler has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - DaimlerChrysler: The Post-Merger Integration Phase should strive to include more intangible value offerings along with its core products and services.
No frontier risks strategy
– After analyzing the HBR case study DaimlerChrysler: The Post-Merger Integration Phase, it seems that company is thinking about the frontier risks that can impact Organizational Development strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
High bargaining power of channel partners
– Because of the regulatory requirements, Piero Morosini, George Radler suggests that, Merger Daimler is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Need for greater diversity
– Merger Daimler has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Increasing silos among functional specialists
– The organizational structure of Merger Daimler is dominated by functional specialists. It is not different from other players in the Organizational Development segment. Merger Daimler needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merger Daimler to focus more on services rather than just following the product oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study DaimlerChrysler: The Post-Merger Integration Phase has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Merger Daimler 's lucrative customers.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the DaimlerChrysler: The Post-Merger Integration Phase HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Merger Daimler has relatively successful track record of launching new products.
Opportunities DaimlerChrysler: The Post-Merger Integration Phase | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study DaimlerChrysler: The Post-Merger Integration Phase are -
Creating value in data economy
– The success of analytics program of Merger Daimler has opened avenues for new revenue streams for the organization in the industry. This can help Merger Daimler to build a more holistic ecosystem as suggested in the DaimlerChrysler: The Post-Merger Integration Phase case study. Merger Daimler can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Organizational Development industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Merger Daimler can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Merger Daimler can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Merger Daimler in the consumer business. Now Merger Daimler can target international markets with far fewer capital restrictions requirements than the existing system.
Better consumer reach
– The expansion of the 5G network will help Merger Daimler to increase its market reach. Merger Daimler will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Merger Daimler to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Merger Daimler to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Merger Daimler has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Merger Daimler in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Organizational Development segment, and it will provide faster access to the consumers.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Organizational Development industry, but it has also influenced the consumer preferences. Merger Daimler can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Merger Daimler can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Merger Daimler can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DaimlerChrysler: The Post-Merger Integration Phase suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Merger Daimler can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, DaimlerChrysler: The Post-Merger Integration Phase, to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
Leveraging digital technologies
– Merger Daimler can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Merger Daimler is facing challenges because of the dominance of functional experts in the organization. DaimlerChrysler: The Post-Merger Integration Phase case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Threats DaimlerChrysler: The Post-Merger Integration Phase External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DaimlerChrysler: The Post-Merger Integration Phase are -
Stagnating economy with rate increase
– Merger Daimler can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Merger Daimler in the Organizational Development sector and impact the bottomline of the organization.
High dependence on third party suppliers
– Merger Daimler high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Merger Daimler.
Consumer confidence and its impact on Merger Daimler demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merger Daimler with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Merger Daimler can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study DaimlerChrysler: The Post-Merger Integration Phase .
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study DaimlerChrysler: The Post-Merger Integration Phase, Merger Daimler may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Organizational Development .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Merger Daimler will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Easy access to finance
– Easy access to finance in Organizational Development field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Merger Daimler can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Environmental challenges
– Merger Daimler needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Merger Daimler can take advantage of this fund but it will also bring new competitors in the Organizational Development industry.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Merger Daimler business can come under increasing regulations regarding data privacy, data security, etc.
Technology acceleration in Forth Industrial Revolution
– Merger Daimler has witnessed rapid integration of technology during Covid-19 in the Organizational Development industry. As one of the leading players in the industry, Merger Daimler needs to keep up with the evolution of technology in the Organizational Development sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of DaimlerChrysler: The Post-Merger Integration Phase Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study DaimlerChrysler: The Post-Merger Integration Phase needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study DaimlerChrysler: The Post-Merger Integration Phase is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study DaimlerChrysler: The Post-Merger Integration Phase is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of DaimlerChrysler: The Post-Merger Integration Phase is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Merger Daimler needs to make to build a sustainable competitive advantage.
