Competitive Environment Analysis

Five forces of the competition model Threat of New Entrants The threat of new entrants is very low in the automobile industry. Bargaining Power of Suppliers The bargaining power of suppliers is very low. Bargaining Power of Buyers The bargaining power of the buyers is moderately high. Threat of Substitute Products There are not many substitute products for automobiles. Intensity of Rivalry among Competitors Rivalry among the competitors is very strong is this industry.

The Market
- Anyone who drives a nice vehicle is thought to be wealthy . - Sales cannot keep growing up. - Legislation do not limit a lot manufacturers. - No substitutes can power on this market. - No place for new entry. The company - Daimler Chrysler covers strong brands - DaimlerChryslers first hydrogen-powered car using fuel cell So, YES, the Automobile Industry is going to be profitable again and again

Daimler Group:

Maybach Mercedes Benz Smart

Chrysler group:
Dodge Chrysler Jeep Mopar DaimlerChrysler truck group: Mercedes Benz Freightliner Fuso Sterling trucks Western star trucks Thomas Setra Orion

Chrysler (the low cost market )competitors are :

Ford, GM, Honda, Toyota, Nissan, Mazda, Hyundai, KIA, Volkswagen.

Daimler (high cost market) competitors are: BMW, Volvo, Audi, Lexus, Infinity, Cadillac, Acura, Jaguar, Aston Martin

 Automakers had been losing money. After 9/11/2001 sales of cars and trucks dropped dramatically
Mitsubishis sales were Chryslers sales were Mercedes sales were 2003 - 20% -5% -2%

Environmental Trends
Global Challenges in the Automotive Industry Stagnating demand Legislation (environment , safety, others) Raw material and energy costs Exchange and interest rates Competition Global overcapacity Moving targetseveryone optimizing or restructuring Global game (for example , aggressive Asian companies, new entrants) Segmentation and polarization (low cost vs. premium) Complex alliances, partnerships .

Increase of competition Market saturation Decrease of demand Japanese advantage of shorter new product development Desire for lower cost and increasing flexibility

Summary: Attractiveness of External Environment

Daimler Chrysler is committed to achieve consumer satisfaction among all global auto manufacturers because of the engineering excellence, innovative products, and superior service.

 How to differentiate themselves from global competition in a meaningful, sustainable manner. Growth of Asian automobile market Developing innovative vehicles that appeal to consumers How to remain profitable in the future

 Daimler-Benz luxury vehicles had captured less than 1% of the American markets. Chrysler's primary reason for teaming with Daimler-Benz is to extend its international reach Reduce total research and development costs

 Lack of Diversification Feel the Need to Refurbish Older Lines to Stay Competitive Smaller Share of the Market than Ford or GM

 Reducing production costs : Establishing collaboration to develop new cars Increasing competition between manufacturers Delocalizing production where labor cost is lower or increasing automation Creating joint ventures for component production

SWOT Analysis

Strengths
Merger combined two strong companies . Savings resulting from economies of scale . Company does more than just autos . Daimler has outstanding reputation . Chrysler was a very cost - effective company A leader in innovation . Record revenues and increasing market share .

Strong existing product brands . Strong research and development . true global reach; dominant truck maker in the world; high-value products; large margins on Mercedes vehicles; reputation for quality; commitment to new technology; high stake in new technology and high value of higtechnology property rights (IPR); world-class styling capability at Chrysler.

Weakness
continuing losses at Chrysler; current less positive image of Chrysler regarding quality; high-cost base in Germany; low volume sales for top range brands e.g. Maybach; Merger combined two different company cultures ( European and American ). DaimlerChrysler brand is unknown and difficult to define . DaimlerChrysler products do not bear the company name . Companys broad holdings are still seen as separate entities, not as parts of DaimlerChrysler .

Opportunities
new markets in China and Asia; new technologies, such as fuel cells; further opportunities for consolidation; opportunities to import more Chrysler vehicles into Europe; reduction of cost base at Chrysler through new agreement with UAW Union. Merged company should be able to expand markets, particularly into Asia .

 Safety failures at Ford should open door for DaimlerChrysler . Innovation will lead to new products on the market . A hybrid car, which is very environmentally friendly, will be launched soon . Creating a DaimlerChrysler corporate brand identity . Innovative car ideas .

Threats
Has been an extended period of time without corporate communications . Globally, the general population knows little about this corporate merger . DaimlerChrysler does not yet have a corporate brand identity . Over 68 percent of the company's profits come from automotive brands; this is a threat if the market takes a downturn . Size of company will demand a varied marketing program loss of market share to rivals, i.e. BMW and Lexus; loss of productivity; current low-stock value of the group, compared