Chrysler started out in the 1920s by Walter P. Chrysler. Walter had joined as Chairman of Maxwell Motor Corporation. Maxwell had high debts and shortly after automobiles under the brand name of Maxwell was stopped. In 1924 saw the introduction of the Chrysler Automobile named Chrysler Six. Chrysler is an American automobile manufacturer headquartered in Auburn Hills, Michigan. Chrysler is the third largest automobile manufacturer in the United States that had filed for bankruptcy on April 30, 2009. Resources
In 1925, the Maxwell Car Company was reorganized into the Chrysler Corporation because of Maxwell high debts. Chrysler introduced their first vehicle in 1924 for $1,565. Chrysler has 24 wholly-owned U.S. subsidiaries. Capabilities
Chrysler had acquired Dodge Brothers firm in 1928 making it the largest automaker in the United States. The company also started the DeSoto and Plymouth divisions. Plymouth was positioned as a low price car while DeSoto was a medium price car. In the 1960s, Chrysler expanded into Europe and formed Chrysler Europe by acquiring the UK-based Rootes Group, Simca, and Barreiros. Core Competencies
In 1951, Chrysler developed the Firepower. It was the first hemispherical-head V8 engine which later became popular as the HEMI engine. The company had become famous for creating power steering, power windows, the alternator, electronic fuel injection and many other automotive innovations. Chrysler introduced revolutionary new features that would later be adopted by almost every automobile manufacturer including ridged rims which kept a flat tire from coming off the wheel and rubber engine mounts to reduce engine vibration traveling through the rest of the car.
Three findings of fact with justified recommended solution In May 1998, Chrysler Corporation and Daimler-Benz AG agreed to combine their businesses in what they called a “merger of equals”. It’s not always a smart business decision to combine businesses. The merger of Chrysler Corporation and Daimler-Benz AG did not do so well for Chrysler. Chrysler reported a loss of $512 million after the merger. Their market share fell from 16.2% to 13.5%. The merger of the two businesses had many problems because of the different cultures of the two companies. Their working styles were different.
The Germans were used to having long meetings and submitting lengthy reports while the Americans preferred to spend less time on discussions. The two companies had too many differences. The companies needed to accept changes and to enter compromises in order to make the merger of the companies a success. Before the merger ever happened, they should have observed the business culture of each company because cultural conflict is a reason for failed mergers. The company announced that it had reached an agreement to establish a global strategic alliance with Fiat. Shortly after Chrysler had filed for bankruptcy, they establish a global strategic alliance with Fiat.
This was a good business strategy for Chrysler because Fiat would make available its entire product portfolio and powertrain technology, worldwide distribution capabilities for vehicles and synergies in the areas of purchasing and partnerships. Chrysler didn’t know how to invent fuel-efficient vehicles and with the help of Fiat, they would help create a “fuel-efficient engine family” to use in Chrysler vehicles. These two companies not only help each other but they also help create jobs. The alliance between the two companies would create more than 5,000 manufacturing jobs. It’s a win-win situation for everyone.
Chrysler’s focus remained more on SUVs and trucks, leaving the Asian carmakers to capitalize on the change in consumer preferences when fuel prices were going up. Chrysler’s focus should not have remained on SUVs and trucks when fuel prices were rising. It was poor business strategy. Good business strategy would have been fuel-efficient cars. SUVs and trucks are definitely not fuel-efficient vehicles.
The Japanese companies knew how to capitalize on the change in consumer preferences. It’s very important for companies to keep up with the change in consumer preferences. Chrysler failed to produce vehicles that met the needs of the American consumers. Chrysler did not produce fuel efficient cars like the Japanese companies. Chrysler should have known that consumers couldn’t afford their vehicles when fuel prices were going up. Chrysler’s lack of innovation to market fuel efficient vehicles was one of the reasons that had led to their financial problems.
Works Cited Wheelen, T. L., & Hunger, J. D. (2012). Strategic Management And Business Policy Toward Global Sustainability. Upper Saddle River: Prentice Hall.