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Case Study Assignment - Essay Example

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Daimler Chrysler is loosing grounds as a leading car manufacturer, as evidenced in decreasing sales, loss of market shares and costly quality control issues. The marriage between the two companies has not, as was the intent, rescued' the ailing U.S., Detroit-based, automobile manufacturer but has, instead, adversely impacted Daimler's own market reputation and position…
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Case Study Assignment

Download file to see previous pages... The automobile manufacturing industry is globalised by its very nature. Several industry analysts and marketing scholars have affirmed the aforementioned, arguing that with very few exceptions, car manufacturers look towards the global market, identify segments therein and seek to create a niche for themselves within that expansive, borderless market (Dickson-Simpson, 2007; Schweinsberg et al., 2007; Van Acker and Uludag, 2007). It is a globalised industry due to the universal nature of its product, the fact that not all countries have a domestic automobile manufacturing industry, and that variant and divergent consumer cost, design and quality requirements cannot be satisfied by a limited number of manufactures (Dickson-Simpson, 2007; Schweinsberg et al., 2007; Van Acker and Uludag, 2007). In other words, the very nature of the industry, product, market trends and consumer demands have determined this as a global and globalised industry. Consequently, being a global industry, the survival of firms within is dependant upon the accurate identification of the industry's threats and opportunities and the extent to which a company's operations are, themselves, globalised.
The imperatives of Daimler Chrysler's evolving into a truly global automobile manufacturer may be established through a detailed industry analysis using Porter's Five Forces. Proceeding first with the factor of rivalry, one finds that within the context of this industry rivalry is extremely high and is intensifying as a direct outcome to the formation of horizontal alliances between budget and high-end manufacturers for the explicit purpose of cutting down on costs. Not only is rivalry intense but it is intensifying due to the emergence, not only of new industry players but of alliances which may be identified as a bid by smaller firms to become market leaders. For example, Fiat is allying itself with Tata, an Indian automobile manufacturer, fir the explicit purpose of supplying developing markets with the much demanded cheap/economy automobiles. Similarly, GM is forming an alliance with Daewoo for the production of an economic Chevrolet model in South Korea. The implication here is that even in the absence of direct mergers and takeovers, manufactures are teaming up for the design and manufacture of models as would expand their existing market shares in particular automobile market segments.
As one looks towards Daimler, one finds that it has not, in its marriage with Chrysler, embraced the imperatives of globalisation for the purpose of maximising its competitive edge. Chrysler is not a manufacturer of budget automobiles and its production costs are high. It is, furthermore, just as the case with Daimler, centred in an industrialised market. This means that the aforementioned marriage has not expanded Daimler's global market presence and has certainly not allowed it to cut down on production costs and to venture into different segments of the automobile market. In other words, whereas competitors are forming alliances which facilitate the realisation of the latter mentioned goal, thereby giving them a competitive advantage over rivals, Daimler has not. Within the context of the stated, it falls short of being a global company, despite its presence in the global market place.
As regards the second of Porter's Five Forces, the global nature of the industry has made the threat ...Download file to see next pagesRead More
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