Strategic Failure at Daimler-Chrysler Assignment

Strategic Failure at Daimler-Chrysler - Assignment Example From the works of Blasko, Netter and Sinkey (2000), there were very many strategic plans that were set to make sure that the merger worked. The strategic issue was that the companies were to use their strengths to work together and create a formidable collection of products for the customers. Ju ¨rgen Schrempp had indicated that what was being created was the greatest and historic merger that would automatically change the face of the automotive industry (Bill & Stertz, 2001, p. 92). The strategies were aimed at the merger shaping the capacity of the industry. Looking at the factors that led to consolidation of the boards of the two companies into signing the ‘marriage’ agreement, there was a misconception that would haunt the outcomes later. The deep set strategic misconception that highly led to a negative was a misconception that the industry was to go through a transformative consolidation in which other companies would survive as smaller competitors in the market. This was proved wrong with the successful growth of mergers like Renault-Nissan. Secondly, there was the misconception that the two companies would complement each other’s strengths in the market in terms of quality production, type of product and market segmentation. However, it was found that they would not necessarily rule the market due to a miscalculation that was mistaken. Based on technical know-how and sharing, the two companies were to realise, as per the financial strategies a total of $1.4 billion in the first year of operations. These were far high misconceptions and, as far as the depth of their contribution to the failure is concerned, it was a deep set problem which saw a creation of strategies without considering the market economies and diseconomies. Depth of Mismanagement According to Krebbs (2007), the marriage between Daimler and Chrysler was doomed to fail right from the start because of three reasons. He alleges that much as the conditions were of the idea that they would share much of the resources, Chrysler was purchased, treated as such and the whole process was a scum. Therefore, the issue as to what extent management caused the failure of the union includes failure from the initial strategies. The union was based on ego and therefore the more the management profited from it, the better. This was not good for the company and other stakeholders. It wasn’t an issue of compatibility but personal satisfaction. Secondly, Krebbs still assert that there was no commitment in the marriage in which case the German side viewed it as very temporary (Krebbs, 2007, p. 3). This caused laxity in its contributions to the whole management process. The relationship is also said to lack vision for the future. After the merger, top management also merged and there were single positions created. In autumn of 2000, the CEO of DaimlerChrysler announced that he had initially wanted that Chrysler be a subsidiary to the union (Pooley, 2005, p. 29). This was a very strong indication that there was absolutely lack of will in the management of the two companies and therefore everybody affiliated to Chrysler became reluctant to continue service in the union. Therefore, the management had