DaimlerChrysler AG - The Making of a New Transnational Corporation

Essay by lalidaUniversity, Master'sA-, February 2004

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DaimlerChrysler AG - The Making of a New Transnational Corporation

Strategic alliances and joint ventures are the fashionable issues among the auto manufacturers because of the pressures of cost and global competitive. In the auto manufacturing industry, hundreds of partnerships and alliances have formed all over the world. The aims of cooperative arrangements are used for market entry and distribution networks, also, for creating joint R&D and manufacturing for benchmark competitors and future survival.

The merger between Daimler Benz AG and Chrysler Corporation was the biggest industrial merger in history and created a group that ranked fifth worldwide in automotive production and third on a financial level. Products and corporate culture were different among two companies. Daimler Benz AG was a well established German company, specialized in luxury cars with several other activities. While Chrysler was an American company well rooted in the mini-vans and sport-utility vehicles (SUVs) segments. Both companies believe that this merger would bring the benefit to them.

This paper aims to analyze the reasons behind the merger and the situations after merger. Did the merger bring the success or failure to DaimlerChrysler AG?

I. Company overview

Daimler-Benz AG was the largest industrial corporation in Germany. The early successes in the automotive sector put them in a competitive position. The company established the foundation of an automaker that would produce one of the best luxury brands in the world. Products of Daimler-Benz AG has reputation in its high quality and performance, as well as its rigid safety standards. The company sought limited globalization beyond its automotive exports and remained mostly in Europe because of its rigid corporate environment.

Chrysler Corporation was an American company, the third largest auto maker in North America, behind GM and Ford. The targeted customers were mostly in America. Company often had...