Student Number: 1001055476

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Assignment Title: Chrysler-Daimler Speech

Course Code: RSM 2023 - 2015

Course Title:Strategic Change and Implementation

Section #: 1 2 3 4 5

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Professor Name: Brian Golden

1001055476

Crafting a Vision at Daimler-Chrysler

Chrysler is proud of its ability to provide mode of transport to millions of Americans who otherwise might not have been able to afford the same. Chrysler doesn’t just make cars, or minivans, or trucks, but it enables the Americans who are parents and want to pick their kids from school every day, who are small farmers and wish to carry their produce to the farmer’s market, and those part time workers who are going to buy their first car with their own limited salaries. In sum, Chrysler fulfils dreams of an average American. Daimler-Benz on the other hand is for those who can settle with nothing but the best in class. For our customers (Daimler-Benz), we don’t sell cars – we sell commemoration of their achievements in life, symbols of victory. If the companies are diametrically opposite in what they do, how they do, and whom they serve, why the management thinks that these two companies are a match in heaven. They can leverage each other’s strengths and their combined value would surpass the sum of individuals to an exponential level. Or, in fact would not be an exaggeration to say that whatever both these companies have achieved so far could only be preserved and their lead extended only if these two organizations work together than in isolation. Here are my 3 reasons why I on the behalf of management thinks so:

1) Common Purpose and sense of community: The skeptics are right suggesting that the cultures of both the organizations are different, however there is huge sense of purpose in both the organizations. They wish to serve their core customers high quality products. Both the organizations are a community in the true sense of the word. We all think that lasting relationships matter, and we share some basic beliefs: People are the biggest asset of both the organizations.

2) Timing of the market: Market is going through a consolidation phase. We are in a period of auto manufacturing which defies all limits and crosses all borders, in which everything works with everything else, everywhere, all the time. It's a world where solution matter most, where size makes a difference, and where success will depend upon our ability to align ourselves to function in a seamless way to answer our customers' every need. Other companies are indeed driving fundamental changes in customer requirements. Competition is at all-time high, and buying a vehicle is no more a one-shot offer rather a repeated event. The person who starts with a Chrysler car, in a few year, dreams to upgrade himself to a segment in which none of Chrysler car exists. The duration of getting the dream of such a customer fulfilled is getting shorter and shorter due to rising income levels all over the world. Once Chrysler lose the customer from his offerings, he lose the customer permanently. And, so does his friends and family. This is a dangerous preposition for Chrysler as we are noticing the increasing trend of luxury car sales. In this overtly competitive market, timing is everything. Association with Daimler-Benz would allow Chrysler to offer a high-end vehicle to its customers with the same promise of quality and access.

3) Complementarity in our products and markets: It is very rare in the history of car manufacturing that two companies are coming together who are leaders in what they do yet are competing with different set of competitors in different segments, and different marketplaces. The uniqueness in our level-playing field would allow us to serve two markets with one vision and direction, with two set of products that are inherently different in the needs that they serve. The decision of working together would make this one firm agile and at the same powerful. We would be able to harness each other’s strength in their local markets, thereby reducing the cost of sales and marketing, leveraging economies of scale and scope. Yes, the difference in compensation structure as well as risk of redundancy are undeniable, but the scope of leveraging a common synergy and be the market leader far outweighs those risks. Management’s job is not to prevent risk but to build the capability to recover when failures occur. It must be safe to tell the truth. We must constantly challenge all of our assumptions and search for the flaws that

could destroy our common purpose. We have had a chance to test whether our principles and practices are transferable, and our findings have informed us that this opportunity is not a choice but a necessity for both these firms to flourish.

To end myself, I would like to quote Steve Jobs while Pixar run by him was merging with Disney, which in a way has similar set of challenges and opportunities that we at Chrysler-Daimler face:

If you give a good idea to a mediocre team, they will screw it up; if you give a mediocre idea to a great team, they will either fix it or throw it away and come up with something that works.

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