DAIMLER Essay Example | Topics and Well Written Essays - 1000 words

DAIMLER - Essay Example In 2010, Daimler managed to form an alliance with Nissan and Renault (Reed, 2013). Before this alliance, it is important to denote that Daimler and Chrysler had a merger with Chrysler. But because of cultural differences, the merger ended. Under this alliance, Renault and Nissan allowed Daimler to use their channels of distribution, and production units. This is in countries such as Slovenia and Japan. Daimler on the other hand allowed Nissan and Renault to use their 6-4 cylinder technology to produce diesel engines for their productions. In 2012, Nissan allowed Daimler to use its production plans in Tennessee to manufacture their Mercedes brand. This was the first time that Daimler managed to produce vehicles at a North American trade zone. Another deal that occurred this year was the incorporation of Mitsubishi, into an alliance with Nissan-Renault-Daimler. Under this agreement, the companies agreed to share factories and production units for purposes of creating a huge multi-brand international automotive group. The purpose of creating this automotive group is to manage to compete against automotive giants such as Toyota, and Volkswagen. In this agreement, the three companies are to help Mitsubishi to develop electric cars at their North American plants, in exchange of using the distribution channels, and production units of Mitsubishi in Japan, and the emerging markets of Asia (Pearson, 2013). This deal covered mainly, the production of electric cars. Daimler does not only have a strategic alliance with Renault-Nissan, but it also has a alliance with Beijing Automotive company. Beijing Automotive Company (BAIC) is a state owned company in China. For purposes of capturing the Chinese market, and making its brand of Mercedes as a leading brand in China, the company had to form an alliance with BAIC. Most recently, Daimler entered into a deal with BAIC. In this deal, Daimler managed to acquire a 12% stake at BAIC. This was worth 844 million dollars. In return, Daimler was to cede the control of their manufacturing joint venture. BAIC was to increase its stake at this manufacturing joint venture from 50, to 51%. This gave it a controlling stake at this venture. Daimler and BAIC also had a joint sales operations alliance (Tejada, 2013). Under this deal, BAIC was to cede the control of their sales operations to Daimler. Therefore, Daimler was to increase its stake at their sales operations joint venture from 50 to 51%. Under these deals, Daimler is able to tie itself to its Chinese partners, and hence provide stiff competition to BMW. BMW is the leading luxury car brand in China, and Daimler seeks to overturn this. Another alliance is with that of Teslo Automakers Corporation. The company owns a 4.3% stake at Teslo, and it uses their drive train technology, for purposes of producing electric cars. The main reason of entering into an alliance with Teslo is to reduce the market share of BMW as a leading luxury car brand (Welch, 2013). Part Fo ur: The strategies of the company are divided in four main areas, namely (Daimler. 2013); Strengthening of the organization’s core businesses. In order to strengthen its core businesses, Daimler has embarked on improving the quality of its motor vehicles through innovation, and by using new and emerging technologies. These innovations are aimed at expanding the market share of the business, by catering for the needs of its customers, as well as improving the qua