International Case Study On The Restructuring of Daimler- Benz

Q1. What is our assessment of Daimler-Benzs operations in so many different fields?

Diversification of the companys business. Aimed to become an integrated high-tech group. Unprofitable business groups. No vision and long-term strategy. Indistinct image in the industry. Complex and centralized organization structure.

Q2. Should the various groups operate autonomously? What kinds of activities should be centralized?

YES
The operations of the groups are different. This will allow them to respond flexibly to the challenges of worldwide competition.

Activities that are should be centralized:

Proper business plan Proper decision-making Long term business strategy Long term profitability

Q3. Daimler-Benz is best known for its Mercedes-Benz cars. Why do we think Daimler bought AEG in the first place and why did it venture into the Aerospace and InterServices businesses?

Why Daimler bought AEG:

Why did it venture into:

To diversify their business To enter into railroad sector To use AEGs automation products To enter into production of electric products

Aerospace
To enter into aircraft engineering To become an integrated hightech group

InterServices
To enter into service industry To facilitate customers of other groups To broaden their reach

Q4. Given the apparent mistakes in acquiring nonautomotive businesses, what should Jurgen Schrempp do now?

Sell off the major loss-making units Concentrate on automotive production Have a proper business vision Set long-term strategy Emphasize on medium and long-term profitability Simplify the organization structure and decentralize