Реферат: Crisler Corporation. Senior thesis

--PAGE_BREAK--Short summary of current position of DaimlerChrysler
Companyownership:European, U.S. and other international investors own DaimlerChrysler; there are approximately one billion shares outstanding.  65% is made up of European investors.

Global Stock:DCX ordinary shares are traded on the New York and Frankfurt stock exchanges as well as nineteen other major stock exchanges worldwide.

Group Headquarters:Stuttgart, Deutschland, and Auburn Hills, Michigan, USA.

Chairmen:  Robert J. Eaton and Jurgen E. Schrempp

Management Board:Consists of fourteen members, including the two chairmen and the heads of the operation and functional divisions.

Supervisory Board:Consists of ten shareholders’ representatives and ten employees’ representatives.  The Supervisory Board appoints the Board of Management and approves major company decisions.

Market Capitalization:Currently about EUR 80 billion (March 1999) 

Investments:1999-2001: EUR 46 billion to be invested in the future of DaimlerChrysler

Automotive Sales:4.5 million units in 1998 (Passenger Cars and Commercial Vehicles)

Employees:  466,900 at the end of 1999

Manufacturing Facilities: in 34 countries.

Global Brands:Mercedes-Benz, Chrysler, Plymouth, Jeep, Dodge, Smart, Freightliner, Sterling, Setra, Airbus, Eurocopter, Ariane, Debis and others.

Product sold: More than 200 countries
Official Language:English
Financial Reporting: US-GAAP accounting with earnings reported quarterly. 

Reasons for merging and new opportunities.

In 1998, at the Detroit Auto Show, the  idea of cooperation of Daimler-Benz and Chrysler Corporation was born. Schrempp, Chairman of Daimler-Benz and Eaton, chairman of Chrysler Corporation, began negotiations about possible combination of two large automobile manufacturers.  “We are leading a new trend we believe will change the future, the face of the industry,” Eaton said five months later when the deal was announced. 

The two chairmen acknowledged that the merger would not be easy.  Their own study of transnational mergers suggested that 70 percent failed to achieve the kind of success that had been anticipated. 

As a result of the long series of negotiations, a new company named Daimler-Chrysler was established.  The company would manufacture not only cars, but commercial trucks, trains and rockets as well.

The goal of the merger was to create a company that would be able to stand better against other world leading car producers like General Motors, Ford, Nissan, Volkswagen, Toyota andso forth. 

With the  creation of a new company, both of the old components were going to benefit from the following:

·        Decreased R&D expenses per production unit

·        Confluence of technologies of both firms

·        Double strength in total

·        Opportunities in new markets

·        Decrease in price of materials bought from suppliers

Opportunities in new markets

Both Chrysler Corporation and Daimler-Benz operate in quite saturated markets (in terms of their current products).  In order for them to grow, they will have to carry on those overseas markets, which means development of products in accordance with preferences of the new markets.

Developing new products for a different market segment or establishing an additional brand might have implications for the positioning of the existing product range.  Penetration into completely new market segments for both companies would involve both high costs (new offices, stores, and advertisement programs) and substantial risks for the companies.

     Another method for successful penetration and establishment in new markets is co-operation with another manufacturer who already has a successful brand and products in place in the segments where it is represented.  In this way, the existing product portfolio could be broadened without any risk to each company’s brand identity and its associations of exclusiveness.

Daimler-Benz is well-known and recognized in Europe and USA for its high-quality cars and has firm customers; however, the opportunities are limited.  The newly industrializing countries in Latin America and Asia, on the other hand, offer good prospects for growth—starting from a low level—to the premium products segment.  To penetrate these fast-growing markets on any scale, however, it would be necessary to launch new, low-priced products, possibly combined with the creation of a new brand name.  The new direction will certainly require new funds and the company might not be able to handle this hard task alone.  Another possible problem of penetrating the new markets in Latin America and Asia is, was the establishment of new offices, stores, research of new customer’s’ tastes, and advertisement.  To cope with this obstacle to its success, DaimlerChrysler seeks companies in those areas for possible merger, like Daywoo, Mitsubisi and so forth. 

Chrysler has not penetrated the European market very deeply.  It certainly will be a good opportunity for Chrysler Corporation to start cooperation with Daimler-Benz in order to penetrate the European market without additional costs for opening its offices and stores. 

At the same time, Chrysler has very a good market in North America and can facilitate Daimler-Benz’s deep penetration into that market with a new program of minivan production.

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