Daimler: Motoring at the Speed of China

This case is set in 2018 in China and follows Daimler’s efforts to compete in the Chinese automotive market amidst fast paced changes which are underpinned by state driven efforts at fostering innovation. Testing its leverage as the world’s largest and most profitable auto market, China is aggressively pushing foreign and domestic auto manufacturers towards new and ambitious targets for electrification. At the same time, Daimler has to be responsive to the particular tastes of auto consumers in China, especially their preferences for on-line connectivity which are creating space for players like Tencent, Alibaba, and Baidu to become real competition, threatening traditional car companies’ ability to control the car interface.

This case can be used in graduate- and postgraduate-level management courses on global strategy or in international business. It can be used to demonstrate the strategic implications of fast paced innovation and change (often state-driven) in an industry which might necessitate the need for ambidexterity. It also explores the challenge of balancing strategies of global integration and local adaptation in international companies.<br><br>By working through the case and assignment questions, students will be able to:<ul><li>Understand the complexity of strategic analysis in a disruptive technological environment, in particular the importance of strategic partnerships to provide complementary assets.</li><li>Create analytical frameworks for determining the next steps for the company’s strategy when adjusting to different paces of change in home versus host markets.</li><li>Analyze why a firm’s strategy calls for the need for both ambidexterity and balance between global aggregation and local adaptation and identify the challenges inherent in this approach.</li><li>Understand the role played by state-led innovation policies, including those designed to maximize spillover benefits from foreign direct investment (FDI) and discuss the appropriate strategic response of Western multinational enterprises (MNEs) like Daimler.</li></ul>

• Disruption, ambidexterity, innovation