The Merger Of Daimler Benz With Chrysler Finance Essay - Free Essay Example

Sample details Pages: 7 Words: 2032 Downloads: 6 Date added: 2017/06/26 Category Finance Essay Type Research paper Did you like this example? Over the recent past, the motor industry has faced a lot of mergers between companies in the bid to get more clients and internationalize their horizons. The well planned mergers have arguably led to relative success while those that might have omitted some vital factor have had to contend with the pain of getting into detrimental losses. Examples of such mergers include the partnership between Ford and Jaguar, GM and Saab, Ford and Mazda or even the BMW and the rover. Only a few companies like Toyota and VW have been able to acquire and maintain their clients through solo efforts (Bruner et. Al., 1998, p. 13). However, the most outspoken and widely renowned automobile story is the hopefully planned, yet ill-fated, merger between Chrysler and Daimler which resulted in great losses by both companies. It is based on their failed merger that this case study is going to highlight various aspects like the strengths, weaknesses, risks, opportunities, challenges and the extent of success of the Chrysler and Daimler project. Don’t waste time! Our writers will create an original "The Merger Of Daimler Benz With Chrysler Finance Essay" essay for you Create order Even before the 1998 merger, both Daimler and Chrysler had to face surmountable challenges ranging from stiff market competition, diversification of products and services, global recession among many other factors. Nevertheless, through their hardworking leaders and ingenious contribution from various innovative individuals, both companies were able to stay afloat of the murky waters of the automobile industry. By the end of 1997, both companies had already reestablished themselves as dominant forces in automobile dealership with Daimler being in the German frontline while Chrysler having a lions-share of the American market (Milne Reed, May 15, 2007). It is however from the growing competition from other automobile companies, the need to expand markets into international horizons, the need to share the vast potentiality and expertise from both companies that Jrgen Schrempp-the CEO of Daimler- and Robert Eaton-Chryslers CEO-saw the need to form a merger. Bruner et. Al., (1998, p. 17) opines that in such a merger; companies agreed to exchange of stocks which ultimately led to formation of one new superior company. This posed great possibilities for companies for example; it could enhance saving of costs through elimination of redundant mechanisms, improve the quality of products and services based on the uniqueness of technologies, expand territorial conquest for the involved parties, increase employment of people residing in the place where the company is to be incepted among others. So in spite of the high numbers of documented failures; Chrysler and Daimler were greatly determined towards forming a merger and recording good outpu t (p. 17-24). As explicated later, this determination and hope backfired on them as they faced greater challenges that led to the downfall of two of the most revered automobile companies in the whole world. 1 i) To what extent is it fair to say that the merger of Daimler-Benz with Chrysler was a logical realization of the stated strategy of either company? Very little can be shown for the immense positivity and hope that Daimler and Chrysler when their merger began. Apart from a slight increase in the GDP rates in both Germany and the U.S, much of the merger results were considered as one of the most devastating partnerships of all time. Of course there were little positive mobility in terms of development of new products and services. Mackintosh Milne (2005) exemplify this by citing the increased sales and profits between the year 2000 and 2003 that resulted from the 300c saloon. However, cumulatively, the products were not able to give returns as earlier projected by the planners. In fact, there were not even enough returns to cater for the huge amount of money that were pumped into the project (Bruner et. Al., 1998, p. 42-44). Mackintosh Milne (2005) additionally say that in the latter years of the merger, there was a relative increase in employment which greatly boosted the economic status of both Germany and U.S.A. The duo further document that this merger was resulted in the opening up of more trading fronts for vehicles, spare parts as well as other vital automobile accessories which relatively boosted the financial output of the Chrysler-Daimler partnership. 1 ii)To what extent is it fair to say that the merger of Daimler-Benz with Chrysler was a relevant response to any of the principal issues emerging from a SWOT analysis of either company conducted at the end of 1997? In spite of the relatively increased profit margins of both Daimler and Chrysler, both companies were facing surmountable challenges that greatly required the formation of a merger. This is going to be analyzed below based on the SWOT analysis i.e. the Strengths, Weaknesses, Opportunities and Threats/Risks. a) Strengths As of 2007, both companies were dominant in their respective states. The formation of a merger would therefore not only increase their domination locally but also open international fronts for more market and sales of their various products and services. The merger also offered a chance to further the strength of the companies in terms of developing new products and services which was very vital for an increase in profit margins. Lastly, both companies were strong in terms of their technical expertise. By merging, both of the companies had the chance to learn from one another, incorporate their unique skills and invent new strategies or systems of operation even as they worked to further the common goal of ensuring the overall growth of the company as a unified entity. b) Weaknesses According to LEX column (1997), merging the companies would mean that new designs that incorporate technology from both Chrysler and Daimler. This was greatly inhibiting since both companies had previously tried redesigning or remodeling new products based on the new technology but ended up failing. The prospects of succeeding this time round were therefore seen as being quite limited (Simonian, 1987). Again, the German market tended to be freer as opposed to the U.S market which was quite rigid in terms of the policies governing sales, marketing and circulation of money. This, therefore, made it difficult for the formation of a unified cash-flow system that was accommodative of both ends. c) Opportunities As stated earlier, this merger would open a vista of opportunities for the expansion of market bases, inception of new products, joining of superior technologies and even creating employment opportunities. d) Threats Mackintosh Milne (2005) say that such a merger would pose threats like the facing out of some unique designs in the name of creating new ones, lack of independence amongst the companies, overcapacity of equipment, development of unstable products and services based on the incorporation of numerous technologies among many others. Similarly, there was the risk of competition amongst the partners in the bid for who gets the lions share of profits or benefits from the company. This would in turn inhibit positive growth of the partners. 3. Do you believe that management was slow to identify, or to respond to, the problems which emerged at Chrysler from 2000 onwards? If so, what do you think was the reason for the delayed reaction? It would be subjective to ultimately vest the problems faced by Chrysler on the management. This is because all the people in the organization had a part to play; and their failure meant that the management would also no be able to ardently perform its job. On the flipside, I still believe that the management had a huge role to play and their laxity in terms of identifying or responding to the withstanding problems hugely affected the outcome of the organization. The reasons for the delayed reaction might have been because of: Firstly, the partnership between Chrysler and Daimler ensured that both parties had a say on the managerial issues. In order for a decision to be passed, both parties had to consult one another. It is only after a consensus was reached that a decision move was able to be made. This process was quite tiresome and involved many bureaucratic steps that hugely devoured the available time thus leading to the laxity. Secondly, different managerial factors played differently in various regions. This means that the problem faced by one Chrysler branch did not necessarily mean that the other was affected. This disparity therefore dragged the pace at which problems were discovered or even rectified by those in the management. Thirdly, some implementation procedures were quite advanced and needed to be first tested on a pilot basis. As a result, the process of implementation was snail-paced since full implementation could only take place once it was tested and proven on a small scale basis. Consequently, a lot of time was consumed in the processes. Finally, some problems were not easily identifiable by the management. For example, if a new vehicle was taken for a test drive, it was upon those who tested it to notify the management of any problems witnessed. Failure to do so by the testers therefore means that; the management does not get to know of the problem and thus not able to solve it. In such cases, the problem might even go unnoticed even to the point of the car being launched and then the blames coming back later to the management who were not necessarily aware of the problem. 4. Do you believe that management was slow to take the decision to sell off a controlling interest in Chrysler? Again, if so, what do you think is the reason for any delay? Here, I believe-and therefore strongly oppose- the argument that the management procrastinated in selling off the controlling interest in Chrysler. Taking into account Simonian (1987) sentiments, the management could not make such an apt decision just because they were facing difficulties; in the previous times, Chrysler faced similar difficulties and through their patience, they were able to come out victoriously. In this case too, their patience was justified. In addition, market conditions are subject to constant changes. And based on the vibrancy in the automobiles industry, it is very vital to give an opportunity for all the vital factors to first play out before making a decision to sell or buy something. It is only when you have reached your irreducible minimum that professionalism dictates you to make a change. This is the same scenario witnessed in the case of Chrysler; the management had to take time first and try all its options before throwing the towel on the battle for success and increase in profits. When making a sale, it is also important not just to look at the prospects of getting rid of a product or service, it is vital that you also factor in the prospects of getting a considerable and worthwhile amount from your sale. Even in the case of selling something at a throw away price-like in the instance of Chrysler-, some modicum amount of positive earnings has to be realized by the seller. In spite of going below their targeted mark, Milne and Reed (2007) cite the sale of shares by Chrysler to Cerberus as a good deal that positively changed the automobile environment in the United States (Simonian, 1997). Yet still, it is important to note that selling of vital company shares can only be done in consultation with the (major) stakeholders of the company. Prior to their approval, the management is as good as silent since its opinion will not really matter. This is exhibited by the deal between Chrysler and Cerberus which was only possible after a go ahead from the shareholders and the investors. Shortly, it is inherent to note that the merger did not live up to the expectation of its founders. A lot of technical know-how, money, expertise and time was put into it but very little was realized. The many cases in courts-some not yet even solved to date-attest of the misdoings of both Chrysler and Daimler in the management of their merger. On a positive note though, several other developing-and developed-countries have learnt from Daimler and Chryslers mistake and have ended up with success in their mergers. So instead of just blanketing the whole issue of merger, it is highly recommended that more research and trials are done into mergers so as to ensure future success to those who would like to use this risky yet rewarding partnership.

The Cost Of Opportunity Cost - 1108 Words

Opportunity cost can be defined as the price of a substitute that might be forgone in order to pursue an assured action. The forgone cost. Opportunity cost can also be defined as the best forgone alternative in a scenario where a decision had to be made between some many mutually exclusive or inclusive alternatives (Mankiw, 2009). Simply put opportunity cost is what one is missing out when they make a choice. I could be watching a game of European Soccer or watching a rerun episode of Game of Thrones, but I am doing this assignment, that’s the opportunity cost of doing my assignment. Attending a four-year full-time college has its various opportunity costs, but people still end up attending them. College in America is an expensive investment. The average cost of college is an estimate of $30,000 for a student in a private college while it is approximate $8,000 for a student in a public college as a state resident and approximately $22,000 for an out of state student attending a public college. An average student ends up paying $4,000 in tuition fee. Therefore, the cost of college is $4,000 plus the foregone income the student incurred instead of pursuing employment. Say the student could have gotten a job that pays $8,000 per annum. Then the actual cost of the student partaking in a full-time college schedule would be $12,000 i.e. $4,000 of college fee added to the foregone $8,000 income from employment. To some people, the opportunity cost of going to college is far muchShow MoreRelatedBenefits Of Opportunity Cost For Opportunity Costs1391 Words   |  6 Pagesavailable resources. Hence, to fulfil one wish, we give up another which in economics is termed as the opportunity costs. Due to limited resources and due to unavailability, individuals and society are forced to incur opportunity costs. Opportunity cost is the second best alternative that one gives up. Due to the limitations of resources, human chooses the most viable options as per the benefits and costs. The diagram above shows the Production Possibility Curve. It shows the levelRead MoreCosts and Opportunity Cost Essay1849 Words   |  8 PagesRonald Coase noted,â€Å"The cost of doing anything consists of the receipts that could have been obtained if that particular decision had not been taken.† For example, the opportunity set for this Friday night includes the movies, a concert, staying home and studying, staying home and watching television, inviting friends over, and so forth. The opportunity cost of taking job A included the forgone salary of $102,000 plus the $5,000 of intangibles from job B. Opportunity cost is the sacrifice ofRead MoreOpportunity Cost1518 Words   |  7 PagesOpportunity Cost Paper If you could understand and apply one key concept in economics that would most affect the decisions you make in both your personal and professional life, it would be opportunity cost. That is a bold statement; therefore, you must understand why and how this statement is true. First, you must understand a definition: opportunity cost is the value of a resource in its next best use. These thirteen words are so deceptively simple that to many these words defy understandingRead MoreOpportunity Cost750 Words   |  3 PagesClass Serial No- 4. Economics Assignment- Opportunity Cost Lets start with a small introduction to the topic Opportunity Cost. Opportunity cost is the cost of any activity measured in terms of the value of the next best alternative forgone (that is not chosen). It is the sacrifice related to the second best choice available to someone, or group, who has picked among several mutually exclusive choices. The opportunity cost is also the cost (as a lost benefit) of the forgone productsRead MoreEssay On Opportunity Cost888 Words   |  4 PagesStarting A Business: Opportunity Cost The business-failure rate at 90 percent, which fluctuates when factoring in industry type, deters most entrepreneurs. For this, it is imperative to evaluate the overall opportunity cost when deciding to become a business owner. To produce a strong business plan, one must consider the following— the studying and surveying of the desired business’s market, legal requirements, start-up costs, and the business’s operations. Study the Market Deciding what businessRead MoreThe Opportunity Cost Of Relationships797 Words   |  4 PagesThe Opportunity Cost of Relationships In this article, the author Chrissie Deist described about what people have to give up to get what they want. This is called the opportunity cost. He also illustrated an example of this with apples and oranges. Moreover, the opportunity cost does not always have to be financial cost. Deist did mention that romantic relationships have an opportunity cost as well. He provided some lists of things people sacrifice to be in relationships such as losing their personalRead MoreOpportunity Cost Essay623 Words   |  3 PagesDiscuss the opportunity cost of getting your MBA. What steps and economic factors must a student make when choosing between getting a degree and taking another route in life? Feel free to include aspects from your own decision to pursue your MBA. When considering to starting an MBA program, there are many questions that you have to ask yourself. Can I afford the program? Will it help me to become more marketable in the job industry? Will I have time to dedicate into completing coursework? Read MoreEssay on Economics and Opportunity Cost1005 Words   |  5 Pagesweekly salary. Product market c. The manager buys dinner at Billy’s Cafà ©. Product market d. After he pays all of his employees their wages and pays his other bills, the owner of Billy’s Cafà © takes his profit. Factor market 2. List the opportunity costs of the following: a. going to college - the money you would have earned if you worked instead. b. missing a lecture – takes away from your knowledge of that lesson. c. withdrawing and spending $100 from your savings account, which earns 5Read MoreThe Benefits of College and Opportunity Cost991 Words   |  4 Pagesnormal, bland Economics 101 class, you are almost destined to overhear a professor speak about one of the most important cornerstones of basic microeconomics, opportunity cost. By definition, opportunity cost is what one forfeits in order to pursue something else. A big decision of life that exemplifies the exact definition of opportunity cost is when teenagers go to college. Instead of getting a job at a low level right out of high school, many of todays concerned teens are giving up their abilityRead MoreOpportunity Cost And Its Effect On The Economy1428 Words   |  6 PagesOpportunity cost refers to what you must give up when it comes to decision making when it comes to choice, or it relates to the value of the next best opportunity. Opportunity cost is the implication of scarcity in the economy. It entails where people have to c hoose between different alternatives when determining on how they shall spend their money and their time. The Nobel Price Economist winner Milton Friedman suggested that there is no free lunch for people who are fond of saying that instead

Of Mice And Men Critical Evaluation Essay Example For Students

Of Mice And Men Critical Evaluation Essay The main theme of Of Mice and Men by John Steinbeck is fate . The techniques he uses such as the title , repetition , echoes and symbolism are very successful in putting across his very pessimistic views on this theme . The two main characters , George and Lennie , share a dream . George dreams of a piece of land of his own . Independence . A couple of acres , a cow and some pigs . Lennie dreams of tending rabbits . With the title Of Mice and Men , Steinbeck is telling you that this dream whilst on the verge of realization , will be destroyed by fate . It relates to Robert Burns poem To a Mouse . Burns and Steinbeck share the same pessimistic views on fate . In To a Mouse Burns shows that he believes that just as your dreams are about to come true , The best laid schemes o mice an men , fate will always strike , gang aft agley . The last two lines , An leae us nought but grief an pain , for promisd joy! , show that Burns believes that youre worse off after your dreams have been crushed than you were beforeIn the story , almost anyone could be the mouse although the most obvious is George . I think this is a very well chosen title for this short story as if you know the poem you know more or less what is going to happen . Steinbecks technique of repetition is effective in that it builds up to the climax of the tragedy . The mouse Lennie had was dead . He had killed it unintentionally when petting it . This situation is repeated further on in the story when Lennie is given a pup by Slim . Lennie had been playing with it and had hit the puppy for biting him . You know that an incident like this is going to be the downfall of George and Lennie . The episode in Weed also hints on future tragedy . Lennie sees a girl wearing a beautiful red dress and , child-like as he is , he wants to touch it . He grabs the dress and the girl lets out a loud scream . He panics and all he can think of to do is hold on .He holds on until George arrives on the scene just in time and hits him on the head with a gatepost . The introduction of Curleys wife adds another piece to the puzzle . Her description when she was standing at the doorway with her rouged lips , hair hung in little rolled clusters and cotton house clusters shows that she will be the one who destroys George and Lennies dream . This technique is simple but very effective . George had told Candy of his dream and Candy wanted in on it . Candy had the money to purchase the land required from compensation received after his arm had been cut off by machinery . This moved them to the verge of achieving their dream . In my view the most successful technique in illustrating John Steinbecks view of fate is the symbolism in the last chapter . A watersnake glided smoothly up the pool , twisting its periscope head from side to side , and it swam the length of the pool and came to the legs of a motionless heron that stood in the shallows . A silent head and beak lanced down and plucked it out by the head , and the beak swallowed the little snake while its tail waved frantically . The heron , motionless and waiting , represents fate while the watersnake , helpless and unaware , is its victim . Steinbecks view on fate is illustrated again by the word choice . Words like lanced , plucked and waiting suggest that Steinbeck believes that fate striking is almost medical ; sure and precise . .u2c051473ee8733dac5e483e4601bc54e , .u2c051473ee8733dac5e483e4601bc54e .postImageUrl , .u2c051473ee8733dac5e483e4601bc54e .centered-text-area { min-height: 80px; position: relative; } .u2c051473ee8733dac5e483e4601bc54e , .u2c051473ee8733dac5e483e4601bc54e:hover , .u2c051473ee8733dac5e483e4601bc54e:visited , .u2c051473ee8733dac5e483e4601bc54e:active { border:0!important; } .u2c051473ee8733dac5e483e4601bc54e .clearfix:after { content: ""; display: table; clear: both; } .u2c051473ee8733dac5e483e4601bc54e { display: block; transition: background-color 250ms; webkit-transition: background-color 250ms; width: 100%; opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #95A5A6; } .u2c051473ee8733dac5e483e4601bc54e:active , .u2c051473ee8733dac5e483e4601bc54e:hover { opacity: 1; transition: opacity 250ms; webkit-transition: opacity 250ms; background-color: #2C3E50; } .u2c051473ee8733dac5e483e4601bc54e .centered-text-area { width: 100%; position: relative ; } .u2c051473ee8733dac5e483e4601bc54e .ctaText { border-bottom: 0 solid #fff; color: #2980B9; font-size: 16px; font-weight: bold; margin: 0; padding: 0; text-decoration: underline; } .u2c051473ee8733dac5e483e4601bc54e .postTitle { color: #FFFFFF; font-size: 16px; font-weight: 600; margin: 0; padding: 0; width: 100%; } .u2c051473ee8733dac5e483e4601bc54e .ctaButton { background-color: #7F8C8D!important; color: #2980B9; border: none; border-radius: 3px; box-shadow: none; font-size: 14px; font-weight: bold; line-height: 26px; moz-border-radius: 3px; text-align: center; text-decoration: none; text-shadow: none; width: 80px; min-height: 80px; background: url(https://artscolumbia.org/wp-content/plugins/intelly-related-posts/assets/images/simple-arrow.png)no-repeat; position: absolute; right: 0; top: 0; } .u2c051473ee8733dac5e483e4601bc54e:hover .ctaButton { background-color: #34495E!important; } .u2c051473ee8733dac5e483e4601bc54e .centered-text { display: table; height: 80px; padding-left : 18px; top: 0; } .u2c051473ee8733dac5e483e4601bc54e .u2c051473ee8733dac5e483e4601bc54e-content { display: table-cell; margin: 0; padding: 0; padding-right: 108px; position: relative; vertical-align: middle; width: 100%; } .u2c051473ee8733dac5e483e4601bc54e:after { content: ""; display: block; clear: both; } READ: Greek Mythology and Religion EssayThe watersnake could represent almost anyone in the novel although it is most likely that it represents George . The heron represents fate , but also Lennie as he was the one who was always going to destroy Georges dream . In conclusion I consider the main theme to be fate . I consider the symbolism of the watersnake and the heron to be the most successful technique in putting across Steinbecks pessimistic views on the subject .