Lumongsod, Mary Nida S.

CE – 3B
Engineering Management TTh 9:20 – 10:20 AM

1. What is your assessment of Daimler-Benz’s operations in so many different fields?

Daimler-Benz is a massive company. They have divided their industry into two sections. One
is an engineering service, and the other is a financial service. They had a lot of success in the
world of industry because of Mercedes Benz. In Europe, North America, and Latin America, it
had a solid competitive position. They were quite successful in this industry. However, they were
dissatisfied with their other three firms. As a result, we should infer that Mercedes Benz
performs satisfactorily, while AEG Daimler-Benz Industries, Aerospace Group, and
InterServices Group perform poorly.

2. Should the various groups operate autonomously? What kinds of activity should be
centralized?

Only the finance activity can be centralized if they do not work autonomously. However, if
they allow the operation to continue, the losers will continue to pile up. As a result, in my
opinion, Daimler-Benz's groups should run autonomously because the activities of these four
groups bear no resemblance. The first organization, "Mercedes-Benz," produces passenger cars
as well as commercial trucks. The second organization, "AEG Daimler-Benz Industries," is
involved in the rail systems, microelectronics, heavy diesel engines, energy system technology,
and automation industries. Thirdly, the Aerospace group operates airplanes, a space system, and
propulsion systems. Finally, the "Inter-Service Group" includes banking services, insurance
brokerage, and other services. As a result, it appears that they have little resemblance in their
business areas and can run independently.

Daimler-Benz's mission, and vision should be centralized. They will discover that their
coworkers from common groups are working toward a common goal in a manner that is
convenient for them.

3. Daimler-Benz is best known for its Mercedes-Benz car. What do you think Daimler
bought AEG in the first place and why did it venture into the aerospace and
InterServices businesses?

The goal of these acquisitions was to create a global integrated high-tech group. Daimler
Benz went through many stages of growth in order to diversify their business. Their third
business was an aerospace group that included airplanes (the company owns more than a third of
the Airbus consortium), space systems, defense and civil systems, and propulsion systems.
Finally, the Interservice Group was formed, which included the system bus, financial services,
insurance brokerage, trading, marketing services, mobile communications services, and real
estate management.

Diversification in the eyes of Daimler Benz:

 Risk distribution
 Make returns more consistent.
 Avoiding Timing Mistakes
 Several sources of revenue

4. Given the apparent mistakes in acquiring nonautomotive businesses, what should

Jurgen Schrempp do now?

Jurgen Schrempp should reassess their groups and determine whether or not a particular
group should be eliminated. He should also prioritize Mercedes-Benz, which is a significant
contributor to their profits, and create other groups around it. Mr. Shrempp could then establish a
department for the entire company, allowing him to have a vision and control over their groups.