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Alexander Zimmermann
Title
Prof. Dr.
Last Name
Zimmermann
First name
Alexander
Email
alexander.zimmermann@unisg.ch
Phone
+41 71 224 2025
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PublicationChanging Fortunes: Corporate Growth at DaimlerChrysler and BMW (1998-2005)This case describes the growth patterns of Germany's most prestigious car manufacturers - DaimlerChrysler and BMW - between 1998 and 2005. Both companies initially faced a simi-lar need for growth in order to remain independent and competitive in an ever more consoli-dated and demanding global car industry. Within the observed period, BMW not only over-took its rival in terms of sales in the premium car segment, but also nearly doubled its market value, while DaimlerChrysler lost more than 50% of its consolidated share price. The two rivals' changing fortunes are directly related to the fundamentally different growth strategies pursued. Daimler focused on external growth, initiating the blockbuster merger with Chrysler and acquiring major participations with Mitsubishi and Hyundai. The company diversified beyond its core business of producing premium cars, becoming one of the major players in the global mass market. BMW, conversely, remained focused on organic growth in its premium core business, benefiting from its superior capabilities in product and process innovation. The two cases show the importance of innovation in the core business, and growth into directly related segments. The Daimler example is furthermore a good illustration of the risks associ-ated with extensive expansion that relies strongly on diversification and large-scale acquisi-tions.