Daimler-Chrysler's Strategy

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1. What are the strengths and weaknesses of Daimler-Chrysler’s strategy? There are several strengths of Daimler-Chrysler’s strategy. First, it has strong competitors amongst the automotive market, so from the merger, both companies will reduce the intense competition in the market and this will increase the market share in the worldwide automotive industry. The acquisition and merger between two parties in worldwide market share will help them to expand the technology transfer between the countries, and this will increase the efficiency and effectiveness of productions, directly will reduce the cost of production amongst the car makers. Second, the strategy of Daimler-Chrysler will enhance the decreasing of human capital usage. When the usage of human capital is reduced, it will help the company to reduce its cost of staffs as both companies are work together. This help the companies to enabling the effectiveness and efficiency amongst the staffs and directly it will improve the quality of their product as there is not many staff involve in the production, thus quality control amongst the staff is high. Reducing in human capital cost also will enable the companies to focus their fund into other strategy in order to increase the revenues. Besides, the company will have a chance to create a new brand in the market share of the same industry. So, will allow them to create a new strategy in their operations and this might give an opportunity to increase their sales and revenues. So, finally they are able to achieve the success with minimum investment.

However, there are several weaknesses of Daimler-Chrysler’s strategy. First, it is absolutely will not develop its own car as it will use the name of other worldwide companies as the strategy to enhance the sales and revenue in worldwide market. Their brand name will no longer used in this strategy. Second is, it has a high potential threat from Mitsubishi and Hyundai as both of them are the major players in the Asian market. As from the case study, Daimler-Chrysler is number five in the worldwide automotive production, thus it is better for this company to enhance their market expansion into Europe market and not too focus on East Asian market. Finally, the pricing issue in the Asian market that need to be considered by this company. They need to depth research about at what price range in order to penetrate the East Asian market and whether it is worth for them to put the lower price for their product in East Asian market as the production cost for the product already higher.

2. How should DaimlerChrysler-Mitsubishi brand itself in Asia? First of all, the companies should hold on the existing brand in market in order to control the channel conflict. They also need to consider of choosing the flexible sales channels to play on existing brands. Besides, they also need to practice the ‘Japanese Strategy’ in the East Asian market. Based in this strategy, the important things are the companies need to understand and concern about the communities’ cultures, the range of communities’ affordable price, the favourite’s products size, and colours and so on. So, that only they will attract the people to buy their products in East Asian.

3. What cultural issues will DaimlerChrysler have to overcome to succeed with its strategy? The cultural issues that DaimlerChrysler have to overcome in order to succeed with it strategy is about the long-term consumer’s background in East Asia such as their educations, religions, geographical factors, demographical factors, purchasing power of the consumers and so on. They need to know and understand the consumer’s preference in East Asia is based on lifestyle.

QUESTIONS AND ANSWERS

1. Does adapting the promotion of its motor vehicles to suit country’s culture make sense for Honda? Yes, Honda should adapt the promotion of its motor vehicles that suits the country’s culture because each country in Europe...
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