Case Study Strategy Development in the Global Automotive Industry - Essay Example

Even as the automobile industry continues to grow, it is evident that the market is becoming more competitive by the day, and this has forced many manufacturers to reduce their costs of production, look for new markets, reduce the time for the production for development of a new product, also there has been the need to form mergers and alliances with other business partners and create more newer and innovative design and content. Thus the companies are giving more to its customers for less. With the need for ‘basic’ cars rising within the American and European markets there has been very little room for profits hence the profit margin has been small.

Automobile industries have realized that one of the answers to improving profit margins is partnering, and this has led to the sharing of architectures and components. The merger of the automobile companies has forced consumers to choose from an ever reducing market. This has been brought about by three main factors; strong brands are increasingly important, manufacturers need to enter difficult markets and the cost of technology keeps rising. The best example of a merger is that of Daimler-Benz’s acquisition of Chrysler.

The Daimler Benz company pulled off what seems to be the biggest takeover in history when it acquired Chrysler Corporation, which is the smallest of the three biggest American automobile companies. This acquisition brought together several companies such as Jeep, Mercedes, Chrysler and Dodge Truck. Through this the company has produced savings from buying and purchasing, staff recruitment and finance. Sharing of the different aspects of the two companies is increasing as the two companies continue to come together.

It seems that the Daimler Chrysler company seems to have stopped trying to blend the two companies, thereby reducing the chances of the company becoming a super-giant automobile company. It is a well known fact that Chrysler has the most productive and efficient