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MGT 440 International Business Term Project THE DAIMLERCHRYSLER COMMERCIAL VEHICLES DIVISION Prepared for Dr. Jameel Qazi
By Fahad Hariri Mansour Dusogy Ibrahim M. Al-Andijani
Section # 1
table of content .
Executive summary .
Design Development: In the past. which are. Argentina. who had a significant accomplishment in his work experience. Thoes overseas operation were uninvolved in setting the strategic direction. In more development. This leads to not discuss the global issues and cross regional economies. Brazil. and Mexico. the vehicle design complemented by several changes.History of DaimlerChrysler: Management: Dr. The organization was completely fragmented by region. which becomes common in the design of motor vehicles. they often reduce dramatically the number of parts in each vehicle and secondly the CVD shifted to more cross-functional and cross-regional integration in the design process. which organized the operation in the US. ran 40 weekly meeting per year with the heads of the European truck. and power train units only which not include any of the overseas heads. and change the organization structure of the overseas to unity. van. where CVD had subsidiaries and operations in Canada. who was the CEO of Daimlerís US to be the head of the unit. Lauk¶spredecessor. His new position on CVD placed him on the management board which give him power to manage and change the strategy and direction of the corporate. This development carried the designers to attempted to identify . he applied the same concept to South America into one unit called CV Latin America. CVD moved to Platform design process. After that. Canada and Mexico into one single unit called CV NAFTA and choses Jim Hebe. Kurt Lauk was appointed in August 1996 head of Daimler-Benzí commercial vehicles division (CVD). US.Lauk believed that strong units could compete effectively with considerable autonomy to respond to their own unique market conditions that would enable the CVD to realize global scale economies to take the advantage of the worldwide integration to improve and develop their operation. Lauk saw the fragmentation of CVD as major problem. bus.
passenger cars 2. Commercial vehicles 3. Integrated services division ( IT. telecommunications services both to internal and external customers ) The Commercial Vehicle Division Products: The CVD manufacture and sell different level of heavy and large vehicles. locally responsive and valued. Stakeholders: Daimler-Benz Product Group: The Group consisted of four divisions: 1. Aerospace 4.the features of a vehicle that would meet customer needs in multiple regions. Turkey. and reduce the number of parts in each vehicle. which are: y y y y y Vans Trucks Buses The powertrain And selected components for these various vehicles. This process helped the manufacturer to realize global economies of scale. financial. and South America Mercedes Trucks Europe and South America Mercedes NAFTA Buses where Freightliner Mercedes and Setra and Sterling . which are used to be the fundamental base of the vehicle to be used to customize parts to particular regions. Vans Manufacture Country Product Brand Europe.
850 billion Competitors: DaimlerChrysler face large competition in the commercial vehicle sector from other companies and organizations which straggle to lead the market these competitors are: y y y y y y y Navistar Telco Ashok Leyland Volvo PAZ Hyundai Toyota y y y y y y y Dongfeng Motors Group Scania MAN Daewoo General Motors Isuzu Mitsubishi y y y y y y y Nissan Diesel Iveco Renault Ford Dennis Dandong Auto. which converted the CVD from been unprofitable in 1996 to triple its profit in 1998.Production Assembly time Customization Automated Less than a day Less Automated and by hand How long High level of Tens of thousands More than 300 Built by hand Two weeks Most Thousands Customized Production capacity Hundreds thousands Models few Organization CVD Profit: Changing in organization management and the design process impacted on the manufacturing performance and profitability. Works Ikarus .295 billion DM 1. 1996 Revinue Profit ( gain / loss ) DM 31.7 billion DM -376 million 1997 DM 39.1 billion DM 481 million 1998 DM 45.
CV Latin America In addition to these six business units. (See Exhibit 2 for unit sales by product and region. (See Exhibits 3 through 8 for market share information for various regions and product segments. and organization and information management.y Changzhou Bus Factory y Neoplan (Auwarter) (all automobile companies) more companies look the internet Competition: CVD Concerns: Lauk reviewed several concerns on CVD operation success The CVD consisted of six business units: 1. product and production planning. CV NAFTA 6. Power Train Unit 5. Buses Europe 4.) SWOT analysis: Daimler-Benz S . there were three central divisional functions: strategic planning.) Sales in Asia came primarily from the European divisions. Vans Europe 3. Trucks Europe 2.
luxury car brands are not independent. y DM covered a much broader range than its competitors although it remains as a kind of ³transportation company´ T y Japanese rivals producing similar quality & technology with lower costs y Number of brands increasing in luxury segment y Over capacity in world economy y Unsuccessful attempt of Mercedes with ³Smart´ brand ± trying to expand outside its traditional target segment y Consolidating Industry .y y y y W Being sold in more than 200 countries Mercedes is one of the strongest global brands Regarded as the best engineered cars in luxury cars sector Lean Manufacturing Systems y Diversification process into a technology concern didn¶t produce anticipated synergy. y European truck division produced heavy losses. y Due to small production volume of Mercedes-Benz. suppliers transfer innovations to competing brands y R&D cost-on-turnover was far above the industry average y Basically a German manufacturer with huge factories O y Except for niche players.
is the leanest manufacturer. y It has the best cost effectiveness ± time-to-market design & development times set world standards. y A ³fast follower´ in technology.NAFTA markets thus cannot expand beyond North American Free Trade Area O y Crysler is focused only on cars & light trucks.Chrysler ± SWOT S y Crysler has been fighting for survival.S. y It had been to the edge of bankruptcy twice. e-commerce. y Its position in car segment is weakening. Big three. y Market leader in minivans and sport utility devices. thus is a strong y competitor. y Rapid dissemination of electronic systems in cars leading Crysler to be an assembler more than a manufacturer thus weakening position in value creation chain. T y Target of a hostile takeover battle by its largest shareholder. y Successful in market due to trendy and fashionable design y Mostly bought technology from suppliers W y Crysler is the smallest and most vulnerable of U. . y It lacks of management depth & products suited to non. car management companies. y Emerging distribution systems in US car industry like megadealers.
. Suggest a comprehensive plan for improvements. potential markets for future expansion etc. markets served. com. industry. y Do the industry analysis in view of the Porters five factor model. Identifying the stake holders. y Identify the current strategy and the flaws or shortcomings in that strategy. y Do the SWOT analysis in detail. products. y Competition was catching up for minivans ans sport utility vehicles y There should be a good detailed analysis.y Any decline in US economy could hit Crysler harder than the larger Big Three rivals and the Japanese competitors.
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