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Chrysler Corporation- Negotiations
Chrysler Corporation- Negotiations
What is the situation faced by this company? Chrysler is faced with the major decision on whether to have a possible merger or deep strategic alliance with Daimler-Benz. This American car producer is looking to expand its global reach with a Daimler, and create synergies that will positively affect both businesses. Both operate in separate markets and have separate skills sets that could potentially complement each other. This possible marriage could be very good for their shareholders in the long term. Chrysler has excellent market share in the U.S, but has limited exposer outside the U.S, in comparison to Daimler. Chrysler was absent from the European market for years and since they have been reintroduced into the market in the 1990s they have been facing some trouble establishing any kind of leadership position in the minivan market that they almost exclusively dominate in the United States. By the late 90’s they had only .7 percent of the overall European market share in Europe. This union with an established European company could open doors that otherwise would not be there without the help from Daimler-Benz. What are the strengths and weaknesses of the company and those of its counterparty? Chrysler: Strengths:
• Dominate the minivan market in North America- (Dodge Caravan/Plymouth Voyager is the world’s most successful minivan)
• Jeep has exceptional name brand recognition
• Short cycle of concept-to-market for new products
• Low development costs, efficient plants, good supplier relations, creative styling.
• Their cost saving effort SCORE (supplier cost reduction effort) -(Suppliers were offered the long term contract, involved in product design, and were encouraged to make cost-saving suggestions) Weaknesses:
• Lack of vertical integration
• Limited International presence (Absent from
Chrysler Corporation- Negotiations
What is the situation faced by this company? Chrysler is faced with the major decision on whether to have a possible merger or deep strategic alliance with Daimler-Benz. This American car producer is looking to expand its global reach with a Daimler, and create synergies that will positively affect both businesses. Both operate in separate markets and have separate skills sets that could potentially complement each other. This possible marriage could be very good for their shareholders in the long term. Chrysler has excellent market share in the U.S, but has limited exposer outside the U.S, in comparison to Daimler. Chrysler was absent from the European market for years and since they have been reintroduced into the market in the 1990s they have been facing some trouble establishing any kind of leadership position in the minivan market that they almost exclusively dominate in the United States. By the late 90’s they had only .7 percent of the overall European market share in Europe. This union with an established European company could open doors that otherwise would not be there without the help from Daimler-Benz. What are the strengths and weaknesses of the company and those of its counterparty? Chrysler: Strengths:
• Dominate the minivan market in North America- (Dodge Caravan/Plymouth Voyager is the world’s most successful minivan)
• Jeep has exceptional name brand recognition
• Short cycle of concept-to-market for new products
• Low development costs, efficient plants, good supplier relations, creative styling.
• Their cost saving effort SCORE (supplier cost reduction effort) -(Suppliers were offered the long term contract, involved in product design, and were encouraged to make cost-saving suggestions) Weaknesses:
• Lack of vertical integration
• Limited International presence (Absent from