With the merger, both profitable automobile companies, will have the opportunity to benefit from the potential of each other. They had both identified opportunities to increase sales, to create new markets for both while being able to expand their markets in new countries, to reduce purchasing costs and to realize enconomies of scale. The synergy would drive to product integration and ensure sharing of innovation, knowledge, technologies and ideas. At the time of the merger, Daimler Benz had close to 1% of the American Market, which Chrysler could aid them with this problem. Chrysler also wanted to enter into the European market, which Daimler Benz could help sell Chrysler products at their distribution centers in Europe. Mutually, the two companies expected to exploit on retail sales, purchasing, distribution, product design and research and development. And last but not least, Chrysler’s Dream Team was an attribute that could be beneficial to the merger. It could work as an innovative addition to Daimler Benz to help them find ways to expand a limited Daimler Benz market.
2. What were the issues/problems encountered after the merger.
One of the main problems with the merger was the cultural clash between management and work styles. Even thou they had fairly equal number of members of the board of management, the integration efforts lacked between the Americans and the Germans. They clearly had differences in management styles, processes, cultures and work styles, which resulted in an abyss between the two. Other issue encountered was the mocking and thought from Daimler Benz that Chrysler was low quality and poor in technology. This rejection reflected in a tangible manifestation of the growing separation when Daimler refused to offer Chrysler vehicles at their distribution centers for fear of ruining their image. This had been an essential key in planning for