CASE STUDY ANALYSIS

GROUP 3 COURSE ID MGT 490 SECTION - 2

NAME TANZIRAL ZAHARA ZABIN FARJANA AHMED

ID 1030323 1020720

NUJHAT MORSHED
TAIYBUNNESSA WORTHI

1030458
1020690

 Chryslerone

of the largest automobile

companies in U.S.
Acquired

Dodge Brotherssame

timeestablished Plymouth and DeSoto divisions.

Lee

Iacocca was brought in as COOpromoted

to CEOcredited for returning the company to

its profitable statecost cutting measures.

 But

again in 2008Chrysler was hit hard due to

automobile industry crisis

Billions

of dollarsgiven by the U.S government as

loansprevent it from shutting down.

Chryslerfiled for

Chapter 11 bankruptcy

reorganization on April 30, 2009.

Societal Environment:

World War I widely affected the prevalent business situation.

Environmental pollution and rising gas prices. The oil crisis of the 1970s resulted in a high demand for fuelefficient cars.

Many companies adopted merging as a strategy to recover their losses.

Economic depression played an important role to aggravate the situation.

Task Environment:
American

companies facing competition from foreign car manufacturersHonda, Toyota.. going globalChrysler expanded into Europe and formed Chrysler Europe by acquiring the UK-based Rootes Group, Simca and Barreiros. went for better quality cars..

Industry

People

Corporate Structure:

Chrysler LLC started DeSoto and Plymouth divisions. After they merged with Daimler Benz AG in 1998became a division of DaimlerChryslerdid not have any representative on the DaimlerChrysler board of management. Significantly different cultures of the two companiesAmericans valued efficiency, empowerment, creativity.Germans followed more of a bureaucratic culture. Difference in pay packages.. way of working stylesboth the companies differed significantly.

Corporate Culture:

Corporate Resources:
Quality-related issues dented the brand image of their cars Company could not invest enough money in research and development Global financial crisis affected Chryslers sales badly Emphasized on manufacturing passenger cars..like the Dodge Caravan Suspended the incentive bonuses, merit increases, and eliminated retiree life insurance benefits. They did not have enough resources to stay competitive with the market

Managed to continue its existence all these yearswent throughundesirable situations 1970s financial crisisbankruptcy Existenceproveshas the strength to stay afloatfor their past performances(Chrysler Six, Firepower later became popular as HEMI engine, many other innovations)managed to get financial aids Hascapabilityto face challengesemerge from difficult situations

2010global corporate advertising campaignto restore its confidencead showed the strengthit is believedcampaign will deliver all the objectives

Lack of Innovation and Poor R&Dlateness in launching new designs and modelsdecline in salesdemandhigh debtcompetitors gained consumer attentionChrysler went downcould not invest enough money in R&D department.

Poor Quality and Global PositioningU.S Auto Task Force commentedChryslers products have historically underperformed in terms of qualitymoreoverthe low demandsalesdisadvantage to develop a new global product development processnegative impact on global positioning

High Leveragelow demandsalesless profitabilityhigh debtaltogether increases leverage

Ownershipof different entitiesconflictsdifficulties in decision makinganalysts expressed concernsjointly owned by U.S GovernmentCanadian GovernmentOntario GovernmentUAWFiat Poor Business StrategyPoor managemente.g, during 1970sfuel prices went upconsumers preferred fuelefficient cars which Toyota and Honda were concentrating on providingbutChryslers focus remained on SUVs and trucks.merge with Daimler failed miserably

 Low

Demand and Lack of Financial Resourceslow demandcausing declining salesprofitabilityled to instability in the working capitalnot enough availability of funds for operations in the company

 Alliance

with Fiatshown strategic and financial benefits to the stakeholdershelp develop Chryslers possibility planentrance to the competitive fuelefficient vehicle platformsdistribution capabilities in key growth marketssignificant cost-saving opportunitiessucceed in a global auto industrystatement from Chryslerhelp create or preserve more than 5000 manufacturing jobs

Government

Supportgiving financial aids to get out of bankruptcycondition of forming alliance with Fiatalso beneficial for Chrysler

 Competitorsstrong

competitors in the automobile manufacturing companiesToyotaHondaetcstill holding significant grounds on the market Technologycompetition to get more intensecompetitors will continue to come up with innovative modelsconcepts

Advance

 Financial

problem Poor strategy management Lack of innovation

Strategy 1 Discontinue some Production of models. Reduce cost, employee benefits, human resource, suppliers and distributors. Reduce warranty facility. Sell non earning assets. Sell some assets to invest in R&D department and cover leverage.

Strategy 2 Discontinue the production of some models. Reduce cost, some employee benefits, human resource, suppliers and distributors. Sell non earning assets. Give factories or machineries for rent.

Recommendation Strategy 1 Strategy 1 would focus more on product development and bankruptcy risk, whereas, Strategy 2 concentrates more on liquidation.

Restructure the company new programs and budgets Take profitable decisions in low cost Create production efficiency

Set

Try to reduce the bankruptcy risk and other liability

Hire new employees Invest in profitable areas

Customer satisfaction
Reduce production cost and warranty cost Give more facilities in research and development

Managers

evaluate the process Resolve the problems Measuring employees performance Match with the company standard performance Need good communication with employees Evaluate working satisfaction