International Case StudyInternational Case StudyOnOn

The Restructuring of Daimler- BenzThe Restructuring of Daimler- Benz

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

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

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

YESYES

The operations of the groups The operations of the groups are different.are different.

This will allow them to This will allow them to respond flexibly to the respond flexibly to the challenges of worldwide challenges of worldwide competition.competition.

Activities that are Activities that are should be centralized:should be centralized:

Proper business planProper business plan Proper decision-makingProper decision-making Long term business strategyLong term business strategy Long term profitabilityLong term profitability

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

the Aerospace and InterServices businesses? the Aerospace and InterServices businesses?

Why Daimler bought AEG:Why Daimler bought AEG:

To diversify their businessTo diversify their business To enter into railroad sectorTo enter into railroad sector To use AEG’s automation To use AEG’s automation

productsproducts To enter into production of To enter into production of

electric productselectric products

Why did it venture into:Why did it venture into:

AerospaceAerospace To enter into aircraft engineeringTo enter into aircraft engineering To become an integrated high-To become an integrated high-

tech grouptech group

InterServicesInterServices To enter into service industryTo enter into service industry To facilitate customers of other To facilitate customers of other

groupsgroups To broaden their reachTo broaden their reach

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

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