CHAPTER 8 note 1 
CHAPTER 8 CROSS-BORDER ALLIANCES AND STRATEGY IMPLEMENTATION
Opening Profile: The Daimler-Chrysler AG Global Alliance
The $92 billion merger of Daimler-Benz and Chrysler to form Daimler-Chrysler Akteingesellschaft represents a triumph of the global economy and the end of car companies as national emblems of industrial might. The two CEOs announced that they expect immediate growth opportunities by using each other’s facilities, capacities, and infrastructure. DaimlerChrysler expects to realize benefits of DM 2.5bn ($1.4bn) through the exchange of components and technologies, combined purchasing power, and shared distribution logistics. They expect further synergies to accrue by sharing know-how in engineering and manufacturing.
Implementing the merger will be no picnic. These are two giant industrial companies with a total of 421,000 employees. The senior management will have 18 members drawn from both companies. While Chrysler’s past problems have turned it into a lean, profit-focused organization, Daimler has been content with profit margins of 2% compared with Chrysler’s 6.5%.
I. Strategic Alliances
Strategic alliances are partnerships between two or more firms which decide they can better pursue their mutual goals by combining their resources—financial, managerial, technological—as well as their existing distinctive competitive advantages. Alliances—often called cooperative strategies—are transition mechanisms that propel the partners’ strategy forward in a turbulent environment faster than would be possible for each company alone. Alliances typically fall under one of three categories:
Joint Ventures: Two or more companies create an independent company; an example is the Nuumi corporation, created as a joint venture between Toyota and General Motors, which gave GM access to Toyota’s manufacturing expertise and provided Toyota with a manufacturing base in the U.S.
Equity strategic alliances: Two or more partners have different relative ownership
Opening Profile: The Daimler-Chrysler AG Global Alliance
The $92 billion merger of Daimler-Benz and Chrysler to form Daimler-Chrysler Akteingesellschaft represents a triumph of the global economy and the end of car companies as national emblems of industrial might. The two CEOs announced that they expect immediate growth opportunities by using each other’s facilities, capacities, and infrastructure. DaimlerChrysler expects to realize benefits of DM 2.5bn ($1.4bn) through the exchange of components and technologies, combined purchasing power, and shared distribution logistics. They expect further synergies to accrue by sharing know-how in engineering and manufacturing.
Implementing the merger will be no picnic. These are two giant industrial companies with a total of 421,000 employees. The senior management will have 18 members drawn from both companies. While Chrysler’s past problems have turned it into a lean, profit-focused organization, Daimler has been content with profit margins of 2% compared with Chrysler’s 6.5%.
I. Strategic Alliances
Strategic alliances are partnerships between two or more firms which decide they can better pursue their mutual goals by combining their resources—financial, managerial, technological—as well as their existing distinctive competitive advantages. Alliances—often called cooperative strategies—are transition mechanisms that propel the partners’ strategy forward in a turbulent environment faster than would be possible for each company alone. Alliances typically fall under one of three categories:
Joint Ventures: Two or more companies create an independent company; an example is the Nuumi corporation, created as a joint venture between Toyota and General Motors, which gave GM access to Toyota’s manufacturing expertise and provided Toyota with a manufacturing base in the U.S.
Equity strategic alliances: Two or more partners have different relative ownership