Problem: How can Chrysler return to the prosperity they had once achieved and convince consumers to purchase their vehicles again?
- New owner Cerberus allows Chrysler to make quicker decisions because they are a private company.- Have a goal to give a return to its investors.- Have successful divisions in Dodge and Jeep.- At Chrysler
there in now an emphasis on working fast.- They realize that there is a major problem with the company and are doing everything they can to fix it.- Now have a new Interior Design
Studio which was used on the 2009 Dodge Ram.- Are starting to study customer preferences early to limit changes in the design cycle.- Has collaborated with Tata Motors Limited of India. Their all-electric Ace mini truck will be sold through Chryslers Global Electric Motorcars division. - Private ownership means they don't have the statutory requirements of a public company.
- Poor relationship with dealers, suppliers and the American consumer.- CEO Bob Nardelli has very little experience in the automotive industry.- Chrysler has operational problems and high costs.- Last year they stopped production on the Neon (their best known small car).- Are behind in R&D and announced they would be introducing an electric vehicle
in three to five years when most of their competition will have them sooner.- Being a private company makes it harder to go to capital markets for money.- Under past ownership they used to build vehicles that dealers didn’t want, didn’t order and couldn’t sell resulting in a time consuming mess that needs to be cleaned up.- After 8 years of foreign ownership Chrysler has been stripped of traditional corporate functions including human resources, legal and finance that were all run from Germany.
- Demand for small cars is rapidly increasing.- Consumers are starting to become interested in buying alternative fuel sources.- China’s Cherry Automobile Co. is developing a subcompact car that Chrysler is considering selling under its brand.- Foreign automakers looking to create a larger presence in the U.S. buy buying valuable pieces of Chrysler.
- U.S economy is struggling and consumers aren’t spending as much money as they used to.- There is a rapid decline in sales of trucks, pick ups and minivans as consumers tend to buy more fuel-efficient vehicles.- Oil and gas are expensive and prices continue to rise.- People want smaller cars and Chrysler is not known for making them.- Chrysler has no significant international operations.- Auto sales are down 22% so far in 2008.- Steel prices have risen steeply.- Consumer Reports have Chrysler ranked worst among 15 automakers in quality.
1. Smaller Cars
As gas prices continue to rise, consumer demand for smaller vehicles will continue to increase. This isn’t good news for Chrysler because they are not known for making small cars and don’t have a good foundation to build off of if they want to be competitive in this market.
The Plan: Make and Development a top priory. In order to do this they will have to stop the production on some of their bigger cars and trucks like the Aspen or Town and Country and move the people developing those cars to start creating small ones. If this cannot be done then Chrysler will have to buy small cars from foreign companies in China or Japan and then sell it under the Chrysler brand.
2. America’s Company
Chrysler is seen as one of U.S.A’s “big three” car companies. Lately, Americans have started to purchase more foreign vehicles and have stayed away from buying cars from American companies. Chrysler still has a large amount of brand loyalty but they need to find a way to convince consumers to buy there product once again. The American market is huge and Chrysler will need to reestablish a presence in order to restore the company and become successful once again.
The Plan: Start a brand new advertising campaign that focuses mainly on being “America’s Company”. You could put all of their vehicles into one commercial and have them driving next to each other and have patriotic words being said with visual affects that are very modern and appealing to the American audience. They should also move away from their “Inspiration Comes Standard” slogan and use “The American Classic” as their new one. However, they would need two different slogans because “The American Classic” would not do well in some parts of the world.
3. Rebuilding Relationships
One of Chrysler’s biggest weaknesses is having poor relationships with their dealers, suppliers and workers on the assembly line. It recent years there have been improvements but if they want to become a powerful automotive company again everyone has to be happy at all levels of employment. If you are pleased with your job and happy about your working conditions then the chances are higher that you will do a better job.
The Plan: High level employees at Chrysler need to start making more of an effort listening to what all levels of the company needs. This can be done by going into factories and holding meetings where you discuss problems and try to solve them. Frequent updates and communication has to be done as well on a daily basis which will help decrease the gap between corporate and Chrysler’s other employees.
4. Improve Quality
The quality of Chrysler vehicles is nothing to brag about. Consumer Reports have Chrysler ranked the worst among 15 of its competitors in quality. Over the years they have built up a bad reputation that needs to be broken if they want to succeed and grow as a company.
The Plan: When designing new vehicles Chrysler will have to put a large amount of emphasis on the quality. This means that expenses will rise, but in order to sway purchasers back to buying their product the customers have to know that the quality of Chrysler vehicles is just as good if not better than the competition.