...- Lessons in Post-Merger Integration - Jan Daniel Laufhütte 2304958 Individual Written Case Study Report in Strategic Management IHS-3-422 London South Bank University 17/12/2003 Table of Contents List of Figures................................................................................. i Introduction ................................................................................... 1 1. The changing world automobile industry .............................. 1 2. Reasons for mergers and acquisitions .................................. 3 2.1. 2.2. Daimler-Benzs’ motives..................................................................... 3 Chryslers’ motives ............................................................................. 5 3. The Post-Merger Integration Structure................................... 7 3.1. 3.2. 3.3. Preparations for the merger .............................................................. 7 Integration Structure of DaimlerChrysler......................................... 7 Expected Synergies ........................................................................... 8 4. Cultural Issues ......................................................................... 9 4.1. 4.2. 4.3. Daimler-Benz’s Culture...................................................................... 9 Chrysler’s Culture ............................................................................ 10 Key Integration Problems and Post-Merger Business Culture ....
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...DaimlerChrysler I. Vision and strategy of Jurgen Schrempp for conducting merger: a. To create a company that would combine the Mercedes’ engineering with Chrysler’s marketing and design savvy to develop a vehicle to be sold anywhere in the world b. Increase market share (diminished by competitors increase in quality, technology, and innovation): i. Daimler – felt pressure to merge, ranked 15th largest automaker (only above Volvo & Porsche) ii. Chrysler – lack management depth, new products, and has small oversee market penetration c. Avoid consolidation due to global overcapacity d. Cope with changing marketplace and technology, such as the Internet e. Remain competitively priced by reducing cost (implementing “platform” design across DaimlerChrysler) f. Was it really “a merger of equals”? What went wrong? (see table and reference #2 – Muller, 2001) Issues faced by DaimlerChrysler after 1998 merger: a. How to leverage “soft” assets, such as Intellectual Capital in the form of Knowledge Management? b. How to resolve cultural differences between Daimler and Chrysler c. How to convince executives, managers, and staff to be open and remain loyal d. How can knowledge management be used to smooth the merger process * See reference #4 (Robb, 2003) for similarities between related KM acquisitions and mergers e. Is there enough resources or reason to adopt Knowledge Management * See Table A for comparison of companies that adopted KM Transfer of resources and capabilities: a. Economies...
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...Introduction In May, 1998, Daimler-Benz1 and Chrysler Corporation,2 two of the world's leading car manufacturers, agreed to combine their businesses in what they claimed to be a "merger of equals." The DaimlerChrysler (DCX) merger took approximately one year to finalize. The process began when Jurgen Schrempp3and Robert Eaton4 met to discuss the possible merger on January 18, 1998. After receiving approval from a number of groups, (Refer Exhibit I), the merger was completed on November 12, 1998. The merger resulted in a large automobile company, ranked third5 in the world in terms of revenues, market capitalization and earnings, and fifth6 in the number of units (passenger-cars and commercial vehicles combined) sold. DCX generated revenues of $155.3 billion and sold 4 million cars and trucks in 1998. Schrempp and Eaton jointly led the merged entity, as co-chairmen and co-CEOs. | | DCX sources were confident that the new company was well poised to exploit the growth opportunities offered by the global automotive market in terms of geographical and product segment coverage. (Refer Exhibit II for Daimler Benz and Chrysler's product ranges) | However, analysts felt that to make the merger a success, several important issues needed to be addressed. The most significant of these was organizational culture. German and American styles of management differed sharply. A cultural clash would be a major hurdle to the realization of the synergies identified before the merger. To minimize this...
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...Strategic Management- DaimlerChysler Assignment WordCount: 2413 Taking into account the changing strategic and competitive environment of the automobile industry in the 1990s, identify and evaluate Daimler-Benz and Chrysler’s objectives in the merger. How well was the pre-acquisition planning handled? Daimler-Benz was a German car corporation founded by Gottlieb Daimler and Carl Benz, when both engaged in a merger in 1926. Daimler-Benz started off manufacturing automobiles, motor vehicles and internal combustion engines, agreeing that all factories would use the brand name ‘Mercedes Benz’. Daimler-Benz was later recognised for producing luxury cars. Chrysler on the other hand was the third largest US based car maker and was founded by Walter Chrysler in 1925. Chrysler manufactured cars, minivans, sport-utility vehicles and trucks. Daimler-Benz and Chrysler merged in 1998 forming DaimlerChrysler. This was the biggest merger in history. The Strategic environment is referred to the direction and scope of an organisation over the long-term: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations (Johnson and Scholes). Competitive environment is the immediate competitive context in which an organisation or enterprise operates in (www.palgrave.com). The automobile industry in the 1990’s had accelerated during the last half of the decade due to the...
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...Case Study 3 The 2009 Chrysler-Fiat Strategic Alliance 1. What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry? When it comes to dealing with worldwide economic recession, grave steps have to be taken in order to ensure the survival of businesses, as too many livelihoods depend on it. Also, due to the investments that shareholders make, and the wide array of other businesses that the company would affect, it puts a lot of pressure on the board or the people running the company to make sure that they survive the bad times and emerge victorious. For Chrysler, it was a major setback when Daimler decided to withdraw its partnership and give its 80 per cent stake to Cerberus for less than 1/4th of the price they bought it for. Chrysler was doing badly, and although known as the “Number Three” car in North America, it was not able to keep up and had to declare bankruptcy and was told to form a strategic alliance with a company as a part of the Obama Administration rescue plan. Fiat has had its own share of ups and downs, but in the European market it has proven to be successful. It withdrew itself from the North American market in the nineteen eighties as it could not keep up there. But now, with its strategic alliance with Chrysler, it can benefit by entering into the North American market without having to push too much as Chrysler is already a well-known brand there. The Strategic Alliance was definitely very...
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...ECON254 THEORY OF THE FIRM. TUTORIAL 5. GROWTH, MANAGERIAL THEORIES OF THE FIRM AND THE ECONOMICS OF MULTINATIONAL ENTERPRISE. 1. Dunning’s Eclectic Theory. Read the following short case study and use Dunning’s eclectic paradigm to explain why IBM has decided to pull out of production of PCs at Zelenograd and revert to exporting. Hint: Dunning’s paradigm argues that firms will set up overseas operations where three conditions hold: • The firm has Ownership advantages – things the firm is able to do particularly well relative to its rivals • There are Locational advantages – there are good reasons why the overseas location is more favourable than supplying from the home country • There are Internalisation advantages – good reasons why the firm will run it’s own overseas operation rather than contracting a third party to produce the good under licence IBM Pulls out of Zelenograd. IBM is considering bending its production of personal computers at Zelenograd, near Moscow, blaming changes in the Russian tax regime for undermining the economic rationale for manufacturing computers locally compared to importing them. Other Western computer manufacturers are also complaining that tax breaks granted to Russian trading groups with connections in the Kremlin have undermined the local market’s price structure. The decision is a serious setback to Russia’s attempts to attract foreign direct investment and reflects the unpredictable business...
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...Table of Contents Executive Summary …..….…………………………………………………………………………………………………………………………1 Harley-Davidson’s Competitive Advantages ..………………………………………………………………………………………….2 Symbol of Innovation and Toughness ……………………………………………………………………………………….…2 Uniqueness and Distinction …………………………………………………………………………………………………………2 Facing Challenges ………………………………………………………………………………………….…….……………………..3 Future Sustainability ……………………………………………………………………………………………………………………3 Vulnerability ……………………………………………………………………………………………………………………………….4 Challenges of the 21st Century ………………………………………………………………………………………………………………….4 Strategies to Address the Challenges ………………………………………………………………………………………….5 Short-Term Strategies as Harley Matures ……………………………………………………………………………………6 Long-Term Survival ……………………………………………………………………………………………………………………..7 DaimlerChrysler Automotive Group …………………………………………………………………………………………………………8 Business Strategies ……………………………………………………………………………………………………………………..8 Production Issues ………………………………………………………………………………………………………………………..9 Harley-Davidson’s Transformation ……………………………………………………………………………………………10 Why DaimlerChrysler Fell ………………………………………………………………………………………………………….11 Ford Motorcycles ………………………..…………………………………………………………………………………………………………12 Strategies ……….…………………………………………………………………………………………………………………………12 Customer-Perceived Value …..…………………………………………………………………………………………………..13 Extension of the...
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...reasons for failure of projects are identified and recommendations are given to ail failing projects. First case study is about British Petroleum which is oil and Gas Company had to face situation which was not just critical but new for any oil company. The incident occurred due to explosion in the deep-water horizon while BP technical staff was trying to drill a well. Moreover, BP was not able to stop oil flow for three months. Second case is about Chrysler and Fiat. Both were automobile companies and had to face failure. Marchionne was the one who saved both companies. The main focus of this case is merger of these two companies and the challenges faced by CEO due to organizational change after merger. Third case study is about Millennium Dome, one of the controversial projects in the history of construction projects because of number of reasons. With the help of case study we will be able to learn the causes of failure of this project. Further recommendations to ail failure are given. Key Words Project Failure, British Petroleum, Chrysler and Fiat, Millennium Dome, Success. embark upon more initiatives than they probably should, causing over worked and often unhappy team members....
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...IBS Center for Management Research The Fall of MG Rover This case was written by K. Yamini Aparna, under the direction of Vivek Gupta, IBS Center for Management Research. It was compiled from published sources, and is intended to be used as a basis for class discussion rather than to illustrate either effective or ineffective handling of a management situation. 2005, IBS Center for Management Research. All rights reserved. To order copies, call +91-8417-236667/68 or write to IBS Center for Management Research (ICMR), IFHE Campus, Donthanapally, Sankarapally Road, Hyderabad 501 504, Andhra Pradesh, India or email: info@icmrindia.org www.icmrindia.org BSTR/166 The Fall of MG Rover “Rover’s demise must give us all pause for thought about how we have failed to protect our once magnificent manufacturing industry and why…”1 - Editorial, Daily Express, April 16, 2005. “The death of a factory and the end of a great tradition… the suspects...British Aerospace, BMW, the Government, Phoenix Four…”2 - Sean O'Grady, The Independent, April 26, 2005. MG ROVER SEEKS BANKRUPTCY In its lifespan of over a century, MG Rover Group Limited (MG Rover), one of the oldest and largest automobile manufacturers in the UK, went through countless mergers, takeovers and partnerships. The last merger negotiations the company went through before it folded up, took place in June 2004. This time MG Rover was negotiating with China‟s Shanghai Automotive Industrial Corporation (SAIC)3 to sell...
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...cultural strength improves corporate performance. I Discuss the effect of organizational culture on business ethics. I Compare and contrast four strategies for merging organizational cultures. I Identify five strategies to strengthen an organization’s culture. McShane−Von Glinow: Organizational Behavior, Second Edition Part Four Organizational Processes Organizational Culture © The McGraw−Hill Companies, 2002 C arly Fiorina is taking Hewlett-Packard back to the future by reformulating the California-based technology company’s legendary culture, known as the H-P Way. “The H-P Way is about innovation; trust and respect and integrity; contribution to community; and performance,” says Fiorina, H-P’s first CEO hired from outside the company. The problem, she argues, is that employees have distorted these values over the years. “The H-P Way has been misinterpreted and twisted as a gentle bureaucracy of entitlement instead of a performance-based meritocracy.” To reinstate a more performance-based culture, Fiorina launched the “Rules of the Garage,” a set of cultural values with symbolic reference to the Palo Alto garage where founders William Hewlett and David Packard started the company in 1939. To reinforce these values, Fiorina introduced a customer-focused bonus system,...
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...ROBERT F. HARTLEY • Cindy Claycomb 12th Edition T W E L F T H E D I T I O N MARKETING MISTAKES AND SUCCESSES Robert F. Hartley Late of Cleveland State University Cindy Claycomb Wichita State University VICE PRESIDENT & EXECUTIVE PUBLISHER SENIOR EDITOR PROJECT EDITOR EDITORIAL ASSISTANT ASSOCIATE DIRECTOR OF MARKETING MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR PRODUCT DESIGNER SENIOR PRODUCTION MANAGER ASSOCIATE PRODUCTION MANAGER PRODUCTION EDITOR COVER DESIGNER George Hoffman Franny Kelly Brian Baker Jacqueline Hughes Amy Scholz Kelly Simmons Marissa Carroll Harry Nolan Allison Morris Janis Soo Joel Balbin Eugenia Lee Kenji Ngieng This book was set in 10/12 New Caledonia by Aptara®, Inc. and printed and bound by Courier/Westford. The cover was printed by Courier/Westford. This book is printed on acid-free paper. Founded in 1807, John Wiley & Sons, Inc. has been a valued source of knowledge and understanding for more than 200 years, helping people around the world meet their needs and fulfill their aspirations. Our company is built on a foundation of principles that include responsibility to the communities we serve and where we live and work. In 2008, we launched a Corporate Citizenship Initiative, a global effort to address the environmental, social, economic, and ethical challenges we face in our business. Among the issues we are addressing are carbon impact, paper specifications and procurement, ethical...
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...BUSINESS STRATEGY OTHER ECONOMIST BOOKS Guide to Analysing Companies Guide to Business Modelling Guide to Business Planning Guide to Economic Indicators Guide to the European Union Guide to Management Ideas Numbers Guide Style Guide Dictionary of Business Dictionary of Economics International Dictionary of Finance Brands and Branding Business Consulting Business Ethics Business Miscellany China’s Stockmarket Dealing with Financial Risk Future of Technology Globalisation Guide to Financial Markets Headhunters and How to Use Them Successful Mergers The City Wall Street Essential Director Essential Economics Essential Finance Essential Internet Essential Investment Essential Negotiation Pocket World in Figures BUSINESS STRATEGY A Guide to Effective Decision-Making Jeremy Kourdi THE ECONOMIST IN ASSOCIATION WITH PROFILE BOOKS LTD Published by Profile Books Ltd 3a Exmouth House, Pine Street, London ec1r 0jh www.profilebooks.com Copyright © The Economist Newspaper Ltd 2003 Text copyright © Jeremy Kourdi 2003 All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the publisher of this book. The greatest care has been taken in compiling this book. However, no responsibility can...
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...workforce, overtime, part-time, subcontracting * Recovery and diversification * The short-term future seemed positive, but the popularity of Japanese car forced it to diversify * Working as an OEM Cameron did little to be innovative * Alex brought in a team of designers, concentrating on developing products with a wider ‘non-automotive’ market appeal * The first year no progress, Alex lured away a key engineer from the Canadian firm, and mid-2003, developed its own line of flexible couplings * Marketing the new product * Hired eight field sales representatives, stress product quality, service and speed of delivery, but not price. * Financing plant capacity * Increasing sales of flexible couplings required a new separate plant, but the financial position is not strong enough to support it * Foreign markets * Took a European Patent * A licensing opportunity * Meet foreign customer, McTaggart in 2004 * Can’t build the market in Britain on the basis of shipments from America, since the large transaction & transportation cost * A license with McTaggart might be a good way of achieving swift penetration of the UK market via MT’s sales force. * 2% licensing fee include a free tech flow-back clause * Mixed views, good...
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...www.it-ebooks.info www.it-ebooks.info E L E V E N T H E D I T I O N MARKETING MISTAKES AND SUCCESSES 3 0 T H A N N I V E R S A RY Robert F. Hartley Cleveland State University JOHN WILEY & SONS, INC. www.it-ebooks.info VICE PRESIDENT & PUBLISHER EXECUTIVE EDITOR ASSISTANT EDITOR PRODUCTION MANAGER PRODUCTION ASSISTANT EXECUTIVE MARKETING MANAGER ASSISTANT MARKETING MANAGER MARKETING ASSISTANT DESIGN DIRECTOR SENIOR DESIGNER SENIOR MEDIA EDITOR George Hoffman Lise Johnson Carissa Doshi Dorothy Sinclair Matt Winslow Amy Scholz Carly DeCandia Alana Filipovich Jeof Vita Arthur Medina Allison Morris This book was set in 10/12 New Caledonia by Aptara®, Inc. and printed and bound by Courier/Westford. The cover was printed by Courier/Westford. This book is printed on acid-free paper. Copyright © 2009, 2006, 2004, 2001, 1998, 1995, 1992, 1989, 1986, 1981, 1976 John Wiley & Sons, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning or otherwise, except as permitted under Sections 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc. 222 Rosewood Drive, Danvers, MA 01923, website www.copyright.com. Requests to the Publisher for permission should...
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...The European Journal of Development Research Vol. 20, No. 1, March 2008, 31–55 Staying alive in the global automotive industry: what can developing economies learn from South Africa about linking into global automotive value chains? Justin Barnesa and Mike Morrisb * Benchmarking and Manufacturing Analysts, and PRISM, School of Economics, University of Cape Town, Cape Town, South Africa; bPRISM, School of Economics, University of Cape Town, Cape Town, South Africa, and School of Development Studies, University of KwaZulu-Natal The insertion of the South African automotive industry into the global mainstream of vehicle manufacturing highlights a number of valuable analytical lessons for developing country automotive economies. The global value chains that dominate the automotive industry have fostered substantial upgrading within the South African automotive industry but pervasive international trends also limit the opportunities for value addition and more substantial increases in vehicle output. Key trends in this regard relate to tightening market conditions in the developed economies into which South African vehicle producers and automotive component manufacturers supply, excess global production capacity and the emergence of new low cost production locations principally in Asia. The benefits to the South African automotive industry of engaging in global value chains are clear but the long term sustainability and development of the industry remain in question. The importance...
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