Mercedes Benz Case Study Solution

DaimlerChrysler AG

Problem definition :-

When Germany's Mercedes-Benz announced it merger with US Chrysler , the vision was of creating a Global Automobile Company by combing the Mercedes engineering with Chrysler's marketing and design savvy to develop an automobile that can be sold anywhere in the world. With a main objective of increasing their market share through removing competitors and technology innovation and to cope with the changes in the marketplace and technology .

But this Merger proved to be a disaster as they never the realised the importance of management culture in an organisation which led to clash of corporate culture between American and German automobile manufacturing firms, differences in strategies and no synergy

The main problem that the Mercedes - Benz would have faced if they had remained a niche player selling 'world cars' to the luxury market worldwide , would be the stiff threat of competitions from the Japanese automobile industry as they produced luxury cars of good quality at cheaper rates with added features. Another problem would be the decline automobile sector. They won't be able to earn more profits if they are marketing their products in only one segment.

Question 2 What were the key approaches to Fords model of Globalization and Internationalization?

The key Characteristics of Fords approach to Globalization

• Introduced Assembly line leading to mass production which resulted in low cost production , high volume and rapidly expanded its markets

• Set up Sales branch in France , further expanding its market to European countries.

• Establishing factories in different continents to capture the markets.

• Exports or/ and Joint venture for production facilities to meet the local demand where government policies were keeping the company from developing wholly owned

They were concentrated on small scale manufacturer of automobiles. Then later they ventured into truck manufacturing and were top in their domestic market. They had faced many problems at that time World War 2 and also labor problems in Japan. They got orders for thousands of trucks from US defense department for support of Korean war. They got huge amount from that order and which they used for making cars. They also got huge support from US industries and had adopted good practices which the US companies followed. They were focusing on resolving employee issues by giving life time employment and hence the productivity and commitment of the workers towards Toyota increased . Toyota concentrated on mass production with less cost of production . This helped them to make more money. They started to export it US but they have faced many regulatory issues. The oil crises helped in making their fuel efficient car more attractive . They decided to do joint venture with GE motors, this helps to solve the problems. Later they were producing cars for the US market and they followed the Japanese strategies and valued their American workers