Disclaimer: This is an example of a student written essay.
Click here for sample essays written by our professional writers.

Any opinions, findings, conclusions or recommendations expressed in this material are those of the authors and do not necessarily reflect the views of UKEssays.com.

Daimler Benz SWOT Analysis

Paper Type: Free Essay Subject: Marketing
Wordcount: 3183 words Published: 6th Jun 2017

Reference this


On the 7th may 1998 world’s two of chief Car Company German Daimler-AG and the united state of America base Chrysler Corporation announced merger of equal and it was the world biggest merger in the history of automotive industry. New company to be called as Daimler-Chrysler, this will be the world’s fifth largest car manufacturing company with combine revenue of worth USD 130 billion, join profit of worth USD 7 billion and total employee work force around 420,000 throughout the world. Two companies were integrate with one common mission to become a world venture that by 2001 and become most successful and treasured automotive and transportation product and service provider. Company will accomplish this by constantly delighting their customers with the quality and innovation of products and services, resulting from the excellence of their processes, through their work force and unique portfolio of strong brands.

Get Help With Your Essay

If you need assistance with writing your essay, our professional essay writing service is here to help!

Essay Writing Service

Background of Daimler Benz, Gottileb Daimler was the first who develop engine with Wilhelm Maybach in 1889 and then he formed a company in 1993 called ‘The Daimler Motor Syndicate Ltd.’ after UK patent right to Daimlers’ engine in 1991.After that Daimler merged with Karl Benz’s Benz & Cie to form Daimler-Benz built cars under the name Mercedes Benz. Daimler Benz cars have high respected, advanced cars by technologically and always forces on development of car engine. Some of the well known cars of Daimler Benz are Smart, S-400 hybrid, The2009 Mercedes Benz S-class, Mercedes Benz E-Class with new 23% fuel saving and very well know Maybach with standard for the high end luxury segment. Daimler Benz is not only associated with luxury car but also transportation, electronics, consumer appliances, locomotives and IT services as well.

Background of Chrysler Corporation, Chrysler Corporation was founded by Walter p Chrysler on June 6, 1925, when the Maxwell Motor Company (est. 1904) was reorganized into the Chrysler Corporation. The Chrysler was a 6 cylinder automobile, design to provide more comfort car with very affordable rate which wasn’t though by the buyers. Chrysler had design car with that many features which wasn’t provide by any other at that time and Chrysler ridged rim tire technology was adopted by worldwide. Some of the well known brands of the Chrysler are Chrysler, Jeep, Dodge, Global electric motorcars (GEMCAR).

Part 1:

Swot Analysis of Daimler Benz:

Strength: Dominated to quality of engine, and strong and luxurious international brand, with new production unit in Brazil and other emerging market. Share price of the company is high with high acquisition value. Strong product range like SLK, smart, Mercedes, Maybach.

Weakness: high labour cost and decline unit production in big luxury cars, flexibility is very limited of board.

Opportunities: More production unit and dealers available worldwide. Exploit synergies $1.4 to 3 billion. Enter in to fast on the rise market and get chance to more manufacture outside Germany.

Threats: Saturation of European market. Overcapacity of industry. Affect luxury brand and loosing leadership in technology market. (Appendix 1- Figure 1)

SWOT analysis of Chrysler Corporation:

Strength: good position in particulate segment like minivan, SUVs, jeep. Chrysler has good engineering culture also leading in cheap cars production and short production cycle.

Weakness: one of the top players in North America very sensitive economic cycle. Probably less valuable in share market. Not investing in research and development segment.

Opportunities: long term collision with no harmful impact, Manufacturing outside USA, Exploit synergies $1.4 to 3 billion. Excellent deal for shareholders.

Threats: saturation from North American market. Industry overcapacity.

(Appendix 1-Figure 2)

(Bruner,R , 2004)

Part 2:

Culture difference of Germany and American

The author Benjamin (2009) is of the view that culture is directly influence by history of the country. Author has explained both cultures with difference ethics on the base of work.

Pragmatism: Americans are more practical then German and also goal oriented compare to German. German meeting are very long and they like to discuss on each and every point in depth, while Americans meeting are short and they don’t discuss on minor topics.

Flexibility: German are not flexible they are more loyal with their company and they work for same company for decades job security is high in German company as well. American is looking for job ladder. Americans are very flexible about their jobs, shows readiness to change job for better opportunities.

Informality: Americans are friendly, informal, self confident. American first name from very beginning which is less common in German culture. Informal atmosphere in very common in German it might give the wrong impression about their hierarchical structure and business behaviour because it much more prescribed and strict.

Practical experience: German want to minimise the risk in advance, because of that they are focused on education and qualification. American believes in equality while German believes in practical experience or proven expertise on job than by education and academic background.

Job security: American laid off without warning, job security is also less in American culture. Main thing about American culture is that superior and personage performance, the more sheltered this person’s job will be. In Germany member of staff are highly encouraged to deliver best result and have remarkably positive approach to work.(Benjamine,2009) German work system is different by position between white and blue collar employee (Hofstede & Hofstede, 2005)

Corporate Culture of German and American.

Corporate structure of both companies is very different Daimler Benz typical German company with traditional top- down management, detailed decision making with long hour meeting and discuss on all topics. Management structure is also bureaucratic and hierarchical. German are not risk taking and formal as well. Other thing which is completely different from American is they allow smoking, beer and alcohol on work place while American are not like that, they very strict about smoking and alcohol on work place.

Corporate structure if American Chrysler is different from Daimler Benz. Chrysler allows mid level manager to take decision and all resolution is fast and discuss on key issues. Team oriented work force and comparatively informal as well. America corporate structure is mainly success driven.

As per Geert Hofstede Dutch psychologists who carry out one best culture study in the management, on IBM’s operations in 70 countries around the world. Hofstede divide culture in to four dimensions. (Appendix 2, figure 1)

Power Distance: culture dimension compute that degree to which less powerful member of organization and institutions accept that fact that power is not distributed uniformly. Graph explains that from the position of Germany and US that the difference in power distance is not distribute equally. US have more autocratic management and less employee contribution in decision making.

Uncertainty avoidance is the degree to which members of society with more uncertainty and risk with uncomfortable feeling. High priority place has high uncertainty like Japan, France, and Argentina, while countries like USA, India, and Denmark have low uncertainty.

Individualism when people are more concern about their family and themselves rather than other. In this dimension US come on the top and other countries are then after. UK, Canada, Denmark, Germany member of all this country are not care about them self like USA, they are more loyal to their organization rather than themselves.

Masculinity is the value attributed to success, assertiveness, and material success( Japan, Mexico, Germany) as contrast to the stereotypical effeminate value of relationships, modesty, caring, and the quality life(Sweden, Denmark), according to Hofstede.

(Rugman, A et al,2009)

From the above four dimensions two main dimension are very useful which Power distance against the degree of individualism. These reflect some general stereotype of the countries included with clear grouping of UK, US and Australia as highly individualistic and less hierarchical with small power distance compare to other Mexico, Panama, and Thailand at other extreme level of power distance.

The above figure 1 was given by author Hofstede in 1983, then after in 2001 he revised that, European countries planning system are not fix it varies depend upon scope and outcome and gave new diagram. (Appendix 2, Figure2)

Part 3:

“Some mergers are never meant to be

Daimler paid $36 billion for Chrysler–then the hottest U.S. auto maker. But huge losses, botched product introductions, spiralling costs, and a demoralized U.S. workforce have wiped out $60 billion in market value” (Business week, 2000)

When Daimler Benz and Chrysler Corporation were merge at that time they come across with strategy for different region and production, but once they act on it they found so many problems with production, communication, decision making, and they

The first year of 1999 DaimlerChrysler made a good profit and sales revenue 12% and sold 3 million Chrysler, and jeep, dodge more than any other years of history. Luxury cars sales also gone up company sold more than a million Mercedes Benz.

DaimlerChrysler went good for 2 years, than after US arm stagger. Chrysler US loss $530 million in third quarter. Jeep and Dodge sales go down and fail to deliver on cost saving range. Less support getting from management staff. Head of Chrysler made reorganization of United State subsidiary and close down 6 plants with loss of 26,000 jobs. Total revenue of Daimler Chrysler decreased by 6% from 2000. While the Company has aim to increase their revenue increase in their annual report of 2000 depend up on their high level of order and positive business trend. (Annual Report, 2000)

Company want to get the advantage of luxury car but at first half of the year 2005 Mercedes car Group shows decline in profit, revenue generated by that particular group was €942 million which was €1342 I first half of year 2004 (Appendix 3, figure 1).

Daimler Chrysler strategy was to get most out of from SUV, minivan, cost saving product from Chrysler group but Chrysler group also didn’t perform well in first half of 2005 and total profit was -3%. First quarter of 2004 shows profit of € 824 million and which decline and reached at €796 in first quarter of 2005 (Appendix 3, figure 2).

Chart shows total revenue and Net profit of the DaimlerChrysler Group and individual Chrysler Group during the year 2003 till 2005. Revenue of DaimlerChrysler Group hasn’t shown that remarkable profit throughout the two year between $44.3billion to $ 46 Billion. Revenue of Chrysler group also not affected and remains constant throughout two years. Net profit and operating Profit was affected much and shows remarkable decline during year 2003 to 2005 (Appendix 3, figure 3).

Stock price of the Daimler Chrysler was shrunk during year 2000 to 2005

(Appendix 3, figure 4).

Daimler Chrysler merger was failed because of the main reason Culture clash; neither Daimler nor Chrysler had provided Culture workshop to their work force. Culture training can certainly help work force to mould them self in to the merger company. Most interesting thing was that the merger took place in just couple of month meeting while, for the company like Daimler Benz and Chrysler which are big name in their own region need more meeting and needs to understand their culture in depth. During announcement of merger they haven’t mention about culture as well (Video of press conference merger, 1998).

German and American first noticeable thing is culture. Both the cultures are very different and need more training for staff to act on it. Though both companies are car making but the product range are very different Daimler are very well known for its luxury and comfort cars like Maybach, Mercedes Benz, fuel saving technology cars and on other hand Chrysler is famous for its cost efficient car like jeep, dodge. There are other problems as well like, all meeting held at high level only senior manager are meet only none of the ground level staff or work force get chance to understand other company.

Author learn from this merger that first when two different culture are getting merge, at that time work force who are going to be direct in contact with other work force need culture training , so they can work more efficiently. Try to get both workforces in contact so they can be mix with each other. Company has to concentrate on minor issue as well, which can be come out after long term of gathering.

Part 4:

The two largest automobile producers, GM and Ford, also had taken similar approaches as Chrysler, although in a less important fashion than DaimlerChrysler’s merger. In 1998, GM already owned a 100% equity stake in Opel, which produced about one-quarter of all German vehicle output, and a 49% equity stake of Isuzu, the ninth largest Japanese automobile manufacturer. Also, Ford owned a 35% equity stake in Mazda, the fifth largest Japanese automobile manufacturer, and 100% equity stakes in Jaguar and Aston Martin, both are small but valued UK automobile manufacturers.

After the merger of Daimler-Benz and Chrysler, GM increased its investment in Suzuki Motors of Japan to 10% in September 1998, and acquired a 21% equity stake in Fuji Heavy Industries, makers of Subaru automobiles, of Japan, and acquired a 100% equity stake in Saab of Sweden in January 2000. Ford also acquired Volvo’s (Sweden) passenger car division in 1999. Furthermore, GM announced its intentions to acquire a 21% equity stake in Fiat, which is sixth in market share, on March 13th in 2000.

However, after all this GM, the largest automobile manufacture in the world, still holds only a 4% market share in Asian Pacific region, but a 20% share of the world market and around 9.5% share of the European market. Automobile sales earnings of GM and Ford in Asia are minus $218 million for GM and plus $133 million for Ford respectively. These amounts are not very exciting when compared with almost $6 billion income for each company’s automobile sales. (Figure 1)

Part 5

Chrysler after May 2007:

Chrysler sold to American private equity firm Cerberus Capital Management LP is bought 80.1 % of Chrysler in May 2007, for $7.4 billion. Then after day by day and year by year Chrysler had decline in it annual sales figure (Appendix 5-Figure 1) and in recession period of 2008 it file for bankruptcy. American government had pass legislation that all manufacturing unit of Chrysler has to shut and worker will still get paid for that and only documentation will carry out. Chief of Chrysler Mr. Robert Nardelli step down and company emerge for bankruptcy.

New Chrysler will be look like, Fiat will take 20% stake, and if performance target will be met than it will be 51% by 2016 and if Chrysler will paid government loan. Treasury will have 8% stake and union run VEBA will 55% stake and government of Canada will have combine 2% stake in the company.

Daimler will give up remaining stake in Chrysler and Cerberus is current owner with 80.1% stake.

Chrysler bondholder will get $2 billion for forgiving its $6.9 billion debt.(BBC report,2009)

Daimler after May 2007:

Daimler is still leading in world most valuable automobiles brand like Mercedes Benz, Maybach, Smart, Freightliner, Western start, Setra and Thomas Built buses.

The company is listed on the stock exchanges in Frankfurt, New York and Stuttgart (stock exchange abbreviation DAI). In 2008, the Group sold 2.1 million vehicles and employed a workforce of over 270,000 people; revenue totalled €95.9 billion and EBIT amounted to €2.7 billion. Daimler is an automotive Group with a commitment to excellence, and aims to achieve sustainable growth and industry-leading profitability. (Annual Report at glance, 2008)

Appendix 1

SWOT Analysis of Daimler Benz as an individual,

Strength Internal Weakness

Luxury brand and premium legacy.

German’s good organization

Diesel engine technology, quality strength

Strong dealer in Europe, Latin America, North America.

Limited growth potential.

Hardly flexible.

Culture difference

Economy of scale ( more production unit and more production)

New distribution network

Incline management


Chances to lose technological leadership

Affect to luxury brand like Maybach or Mercedes Benz


Opportunities External Threats

Figure 1

SWOT Analysis of Chrysler Corporation:

Strength Internal Weakness

Lowest manufacturing cost

Large number of quality production in minivan, SUV

Engineering culture

Third largest American partner and sensitive to economy

Unending Financial weakness

Perhaps undervalued in share market.

Good deal for share holders

Going to enter in new market Europe and Latin America and Asia.

Get opportunity to manufacture outside United state of America.


Aggressive take-over.


Opportunities External Threats

Figure 2

Appendix 2

Figure 1

Figure 2

Appendix 3

Figure 1

Figure 2

Figure 3

Figure 4

Appendix 4

Acquisition Activities in GM and Ford Motor




Before 1998

Opel AG





Suzuki Motor



Fuji Heavy Industry



Saab Automobile AB








Before 1998





Aston Martin


In 1999



In May 2000

Land Rover


Figure 4


Cite This Work

To export a reference to this article please select a referencing stye below:

Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.
Reference Copied to Clipboard.

Related Services

View all

DMCA / Removal Request

If you are the original writer of this essay and no longer wish to have your work published on UKEssays.com then please: