Case Study Description of DaimlerChrysler Post-Merger Integration (A)
Describes the background, process, and aftermath of the merger between Daimler-Benz of Germany and Chrysler Corp. of America. Describes the economic structure and trends of the world automobile industry at the turn of the century as well as the individual histories and strategies of the two firms. Further describes the process and key issues in the merger negotiations. Lastly, an extensive description of the post-merger integration plan, approach, and implementation is provided, along with an explanation of the merger's impact on the performance and strategy of the combined company.
Authors :: Richard F. Meyer, Michael G. Rukstad, Peter J. Coughlan, Stephan A. Jansen
Swot Analysis of "DaimlerChrysler Post-Merger Integration (A)" written by Richard F. Meyer, Michael G. Rukstad, Peter J. Coughlan, Stephan A. Jansen includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Merger Merger's facing as an external strategic factors. Some of the topics covered in DaimlerChrysler Post-Merger Integration (A) case study are - Strategic Management Strategies, Mergers & acquisitions, Negotiations and Strategy & Execution.
Some of the macro environment factors that can be used to understand the DaimlerChrysler Post-Merger Integration (A) casestudy better are - – increasing transportation and logistics costs, wage bills are increasing, customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, there is backlash against globalization, increasing energy prices, there is increasing trade war between United States & China,
increasing commodity prices, supply chains are disrupted by pandemic , etc
Introduction to SWOT Analysis of DaimlerChrysler Post-Merger Integration (A)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in DaimlerChrysler Post-Merger Integration (A) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Merger Merger's, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Merger Merger's 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 Post-Merger Integration (A) can be done for the following purposes –
1. Strategic planning using facts provided in DaimlerChrysler Post-Merger Integration (A) case study
2. Improving business portfolio management of Merger Merger's
3. Assessing feasibility of the new initiative in Strategy & Execution field.
4. Making a Strategy & Execution topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Merger Merger's
Strengths DaimlerChrysler Post-Merger Integration (A) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Merger Merger's in DaimlerChrysler Post-Merger Integration (A) Harvard Business Review case study are -
Operational resilience
– The operational resilience strategy in the DaimlerChrysler Post-Merger Integration (A) 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.
Ability to recruit top talent
– Merger Merger's is one of the leading recruiters in the industry. Managers in the DaimlerChrysler Post-Merger Integration (A) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Organizational Resilience of Merger Merger's
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Merger Merger's does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Innovation driven organization
– Merger Merger's is one of the most innovative firm in sector. Manager in DaimlerChrysler Post-Merger Integration (A) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Training and development
– Merger Merger's has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in DaimlerChrysler Post-Merger Integration (A) 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.
Highly skilled collaborators
– Merger Merger's has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in DaimlerChrysler Post-Merger Integration (A) HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Cross disciplinary teams
– Horizontal connected teams at the Merger Merger's 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.
Sustainable margins compare to other players in Strategy & Execution industry
– DaimlerChrysler Post-Merger Integration (A) firm has clearly differentiated products in the market place. This has enabled Merger Merger's to fetch slight price premium compare to the competitors in the Strategy & Execution industry. The sustainable margins have also helped Merger Merger's to invest into research and development (R&D) and innovation.
Digital Transformation in Strategy & Execution segment
- digital transformation varies from industry to industry. For Merger Merger's digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Merger Merger's has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Successful track record of launching new products
– Merger Merger's has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Merger Merger's has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Low bargaining power of suppliers
– Suppliers of Merger Merger's in the sector have low bargaining power. DaimlerChrysler Post-Merger Integration (A) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Merger Merger's to manage not only supply disruptions but also source products at highly competitive prices.
Effective Research and Development (R&D)
– Merger Merger's has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study DaimlerChrysler Post-Merger Integration (A) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses DaimlerChrysler Post-Merger Integration (A) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of DaimlerChrysler Post-Merger Integration (A) are -
High bargaining power of channel partners
– Because of the regulatory requirements, Richard F. Meyer, Michael G. Rukstad, Peter J. Coughlan, Stephan A. Jansen suggests that, Merger Merger's 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.
Increasing silos among functional specialists
– The organizational structure of Merger Merger's is dominated by functional specialists. It is not different from other players in the Strategy & Execution segment. Merger Merger's needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Merger Merger's to focus more on services rather than just following the product 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 Merger's supply chain. Even after few cautionary changes mentioned in the HBR case study - DaimlerChrysler Post-Merger Integration (A), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Merger Merger's vulnerable to further global disruptions in South East Asia.
Skills based hiring
– The stress on hiring functional specialists at Merger Merger's 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.
Slow decision making process
– As mentioned earlier in the report, Merger Merger's has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Merger Merger's even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study DaimlerChrysler Post-Merger Integration (A), it seems that the employees of Merger Merger's don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Workers concerns about automation
– As automation is fast increasing in the segment, Merger Merger's needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study DaimlerChrysler Post-Merger Integration (A), is just above the industry average. Merger Merger's needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Capital Spending Reduction
– Even during the low interest decade, Merger Merger's has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Merger Merger's is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study DaimlerChrysler Post-Merger Integration (A) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Low market penetration in new markets
– Outside its home market of Merger Merger's, firm in the HBR case study DaimlerChrysler Post-Merger Integration (A) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities DaimlerChrysler Post-Merger Integration (A) | 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 Post-Merger Integration (A) are -
Buying journey improvements
– Merger Merger's can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. DaimlerChrysler Post-Merger Integration (A) 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.
Better consumer reach
– The expansion of the 5G network will help Merger Merger's to increase its market reach. Merger Merger's 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.
Developing new processes and practices
– Merger Merger's can develop new processes and procedures in Strategy & Execution industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Manufacturing automation
– Merger Merger's can use the latest technology developments to improve its manufacturing and designing process in Strategy & Execution segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Strategy & Execution industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Merger Merger's 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 Merger's 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.
Using analytics as competitive advantage
– Merger Merger's has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study DaimlerChrysler Post-Merger Integration (A) - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Merger Merger's to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Building a culture of innovation
– managers at Merger Merger's can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Strategy & Execution segment.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Merger Merger's can use these opportunities to build new business models that can help the communities that Merger Merger's operates in. Secondly it can use opportunities from government spending in Strategy & Execution sector.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Merger Merger's can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Creating value in data economy
– The success of analytics program of Merger Merger's has opened avenues for new revenue streams for the organization in the industry. This can help Merger Merger's to build a more holistic ecosystem as suggested in the DaimlerChrysler Post-Merger Integration (A) case study. Merger Merger's can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
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 Merger's in the consumer business. Now Merger Merger's can target international markets with far fewer capital restrictions requirements than the existing system.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Merger Merger's can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Learning at scale
– Online learning technologies has now opened space for Merger Merger's to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats DaimlerChrysler Post-Merger Integration (A) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study DaimlerChrysler Post-Merger Integration (A) are -
Stagnating economy with rate increase
– Merger Merger's 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.
Shortening product life cycle
– it is one of the major threat that Merger Merger's is facing in Strategy & Execution sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Merger Merger's with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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 Merger's.
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 Post-Merger Integration (A), Merger Merger's may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Strategy & Execution .
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Merger Merger's in the Strategy & Execution industry. The Strategy & Execution industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
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 Merger's 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.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Merger Merger's needs to understand the core reasons impacting the Strategy & Execution industry. This will help it in building a better workplace.
Regulatory challenges
– Merger Merger's needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Strategy & Execution industry regulations.
Increasing wage structure of Merger Merger's
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Merger Merger's.
Environmental challenges
– Merger Merger's 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 Merger's can take advantage of this fund but it will also bring new competitors in the Strategy & Execution industry.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
High dependence on third party suppliers
– Merger Merger's 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.
Weighted SWOT Analysis of DaimlerChrysler Post-Merger Integration (A) 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 Post-Merger Integration (A) 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 Post-Merger Integration (A) 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 Post-Merger Integration (A) 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 Post-Merger Integration (A) 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 Merger's needs to make to build a sustainable competitive advantage.
