Case Study 4 Chrysler

At least we finish Early for our presentation.What is Chrysler's corporate focus?Vision: To provide cars and trucks that people will want to buy, will enjoy driving and will want to buy again.Mission: Return to ProfitabilityStrategic Framework: Enhance our CoreExtend our BusinessExpand the MarketBusiness Fundamentals - Five Pillars:Customer FirstGo GlobalBe GreenQuality . . . periodPowered by Great People

Core Values: We must achieve sustainable performance by exceeding the evolving customer requirements and expectations better than the competition and in a culture built on leadership, accountability, passion, integrality and discipline, and in an environment of mutual respect.

Chrysler Group Mission, Vision and Principles:

The founding philosophy of Chrysler was "design with purpose." After the Chrysler corporation went into bankruptcy in 2008, a new company emerged with a realignment of its mission, vision, and principles to return the company to profitability. In the redefinition, the new vision, mission and principles reinvigorated the purpose of Chrysler's "design with purpose." This new Chrysler Group mission, referred to as its "vision" is...

"Our vision is to build cars and trucks people want to buy, will enjoy driving and will want to buy again."

The new Chrysler Group further defines its "purpose"...

"To create the type of exciting, efficient, reliable, safe vehicles you expect and deserve."

In an open letter to stakeholders in 2009, the CEO at that time, Bob Nardelli defined threebasic principles for the new Chrysler Group... Enhance our core: invest in product enhancements; strengthen our customer focus; improve our relationship with our dealers; and recommit the entire organization to a new level of quality.

Extend our business: develop or establish partnerships to provide new products; build off of existing products to extend into new segments; explore new and adjacent market opportunities; and accelerate new technologies and innovation.

Expand our market: pursue global alliances to fill gaps in our product portfolio and open new geographic opportunities; increase global sales by building from our existing dealer network; and invest closer to our global customers by enhancing regional business operations and global engineering centers.It is unclear if these principles are still the guidelines for Chrysler leaders after Sergio Marchionne was named CEO in September, 2011.

SwotStrength

1. The strategic alliance enhances the product proliferation both Chrysler and Fiat which means increase its market share and producing wide range of product to target different market segments.2. Strategic alliances with Fiat give Chrysler the resources, technology and distribution networks.3. Strong R& D capabilities with Fiat such as developing better products that allowing it to run the businesses and differentiate its offering in a highly competitive market.4.After the alliance with Fiat, it become the sixth largest cars manufacturers in the worldWeakness

1. Implication of strategic alliance between Chrysler and Fiat will bring different approach in term of culture and management to run the new company because Fiat is an Italian company. Just like the previous merger with Daimler- Benz.2. Chrysler needs to pay off the large financial debt (federal loan) to the government for restructuring plan.3. The bankruptcy status that ruined the image and reputation of Chrysler which changing customers perception, trust and the confident level.

Opportunities1. Technologies innovation in hybrid electric cars that inspired from other competitors that have already produced it.2. Increasing in new Demand in smaller cars and cost fuel efficiently.3. Exploring new market geographically to expand its products globally.Threat1. Global financial crisis- if the economy is down, consumers will reduce buying; this will make Chrysler cars drop its sales.2. Global oil fuel crisis Fuel price keeps increasing due to limited supply of resources.3. Competition from major player in the market such as Honda , Toyota and Ford4. The difficulty of gaining trust and confidence from customers due to the Chryslers bankruptcy status before alliance with Fiat5.Potential to stay in bankruptcy status

Strategy 1: Horizontal Growth StrategyAfter the strategic alliance between Chrysler and Fiat is completed, based on the case study, the new company would like to enter the United States market but they had to competing with German and Japanese car maker where both of them had long term successful gaining in the U.S market. This strategy help Chrysler to achieve growth by expanding it operation into other geographical locations and by increasing the range of product and services offer to current market. By using this strategy, Chrysler should choose a closed strong alliance that act as the Chrysler supplier or distributor for mutual advantages.Instead of entering the U.S market, Chrysler needs to apply the strategy alliance with other region or outside United States for example exploring to China market. They need exploring the new market to expand it products globally. The benefit for strategic alliances, it can gain target market in China because the potential alliance of Chrysler know the current trend of the china market. The partner alliances will help Chrysler to distribute and manufacturing the cars in China. Chrysler and it potential strategic alliance company in China uses this strategy as a way to achieving market growth and increase the market share of Chrysler in China. It also allows them focus on Chrysler key strength for example cars technology, cars designing, and distribution channel and manufacturing it with the help of it potential strategy alliances to distribute and manufacturing the cars in China market.The strategy allow both of them exploring and focusing in market opportunities rather than Chrysler entering the China market without any partnership alliance and not knowing the market trend and culture and policy makers in the particular region rather than simply compete with other competitors such as Honda, Ford and Toyota. This strategy is linked with it basic principles and mission of new Chrysler group which is to extend the business which is to develop or establish partnership to provide new products, extend into new segment, exploring new market opportunity.. It can gain high profitability if the new alliances capture the market of China. This will exist the Chrysler from bankruptcy.

Strategies 2: Global Standardization strategy(pp438)When the company embarks on a global standardization strategy, it located its manufacturing and other value chain activities at the global location that will allow them to increase efficiency, quality and innovation. By doing this strategic, it has to solve the problem of coordination and integrating its global values chain activities. It to find the lower the bureaucratic cost associated with resource transfer between corporate headquarter and its overseas divisions and provide the centralized control that global standardize strategy requires.In these strategies, the Chrysler headquarters is manage and coordinate the activities of the Chrysler home operation and oversea operation. It means Chrysler headquarters group decide where to locate the different function at the optimal global location for performing that activity. For example, Chryslers had the product group one that doing global R &D in Italy of the technology of engine, product group 2 is for designing the cars is located in United States. The product group structure allow Chryslers to decide how best pursue a global standardization strategy for example the manufacturing process, product design and which country to increasing efficiency. Therefore, for the manufacturing process it is wiser to move to China to manufacturing the cars because for the resources using cheap labor and place the R & D and product design innovation design because they had skill, capabilities and expert people to design better cars.

Strategy 3: Organization strategy - Strategy control system (pp288)Chrysler must choose the organization strategies and structure that they hope will allow Chrysler to use it resources most effectively to pursue it business model and create value and profit and achieve their goal to exit from bankruptcy. Therefore, they need to create a strategic control system tools that allow them to monitor and evaluate whether their strategy and structural are working as intended, how Chrysler count be improved and how they should be changed if they are not working.Strategic control is not just about monitoring how the well an organization and it member are performing currently or about how well Chryslers is using its existing resources. It is helping the strategic management to obtain efficiency, quality, innovation and responsiveness to customers.

Control and efficiency to determine how efficiency is Chrysler are in using the organization resources to measure how many units of are being used to produce a unit of output. They must also be able to measure the number of units of output of the cars.Control and quality use the strategic control is helping Chrysler to determine the quality of Chrysler cars and service because it gives feedback quality.Control and innovation use the strategic control to help to raise the level of innovation for Chrysler to create an innovation cars for example produce a affordable, cost fuel efficiency and smaller cars.Control and responsiveness to customer- it help make Chrysler more responsive to customers if the develop a control system.Strategy control system are the formal target setting, measurement and feedback system that Chrysler to evaluate the whether the company is achieving superior efficiency, quality, innovation and customer responsiveness.The strategies is should be flexible enough to allow the Chrysler to respond as necessary to unexpected event by giving enough accurate information and a clear picture how the Chrysler performance, by using the information ,for future decision making.

Best Strategy (Rujuk Guidelines nya).Choose Strategy one- Strategic alliance horizontal

Should be link to Mission and vision statement of the companyExplain the Pro site not Cons SiteThe best strategy is linked or cope with it current strategy framework which is to extend the business by develop a new products and building existing product to extend into new segment and new market for cars that is cost efficiency , affordable and smaller.This step can make the company to recover from the bankruptcy and gain level of trust and confidence level of among the potential customers and existing customers.Implementation ( Munirah)

Short run term ( Munirah)Strategic alliance with other region

1. If the short terms are success they can apply 2nd strategies to increase profitability.2. Enter in market in china 1st. particular choose Guangzhong for manufacturing because it is industries region .3. Select one trust strategic alliance that manages the market in China. Cars manufacturing or car owner.4. Arrange an agreement to sign the Memorandum of Understanding. What are the benefit for both part

Long termGlobal standardized strategy

1. Need to present to the top management for decision making2. Financial department need to analysis the cost to producing the cars3. Designing and production operation need to design the innovation cars.4. Quality control, enhance the warranty strategy on cars. To make the and services.5. Testing the cars for technology, safety measurement, and test drive.6. Market research- getting information from the customers.

Implementation GuideHR, Finance, Marketing, Research, production and design