Preview Case
CEO Eras and Strategy at Daimler
Diversification was one of the key corporate strategic thrusts of Edzard Reuter in his era of being
CEO of Daimler from 1987 to 1995. He wanted to transform the company into an »integrated
technology corporation« and diversified Daimler with acquisitions in the aerospace and electrical
industries such as MBB, MTU, Dornier, and AEG. His successor, Jürgen Schrempp, changed this
diversification strategy and refocused the group onto the automobile business during his 10 years
as CEO. He wanted to refocus the corporation and create a world auto giant with a strong
shareholder value orientation. Under his leadership, the Daimler-Benz AG merged with the US
corporation Chrysler in 1998. Due to unsatisfactory results, the era DaimlerChrysler was finished
in 2007 by Dieter Zetsche, who has become CEO in January 2006. During his era, the company
was renamed to Daimler AG. Zetsche’s achievements include leading the Group out of a recession
after the financial crisis, growing the China business, and expanding the model range. He
modernized the brand Mercedes-Benz, which attracted younger buyer groups and helped to
regain the world lead in premium car sales in 2016. In 2017, however, Zetsche was in the
headlines because the company was accused of emissions manipulations by the German Federal
Ministry of Transport. In May 2019, the Swede Ola Källenius was appointed Zetsche’s successor.
As of February 2022, Daimler AG was renamed to Mercedes-Benz Group AG to focus on the
return to the core of the company—building the world’s most desirable automobiles with the
Mercedes Star as a promise for the future: changing the existing to make it better. It is supposed
to underline the strategic focus on taking the lead in electromobility and vehicle software.
Business Environment in Indian Food Processing Industry
The food processing industry in India could appropriately be described as one of India's higherpotential but undr-exploited industry. Processed foods are value-added products when raw
commodities are transformed into a processed product. India's food processing sector covers a
wide range of raw, intermediate and finished products. These includes dairy, fruits and vegetable
processig, grain processing, meat and poultry processing, fisheries and consumer foods including
packaged food and beverages.
The ministry of Food Processing Industries, set up in 1988, is the nodal agency in India responsible
for developing the food processing industry. For the GOI, The food processing industry is a
priority sector thus ensuring policies to support investment and attract more foreign direct
investment.
Just a few reliable statistics related to food processing industry in India are available. Based on
the figures collected from sources including the Ministry, the estimates of industry size is Rs.8500
billionb (US137 billion) likely to grow at a compound annual growth rate (CAGR) of 6%. Annual
food exports from India are around US22 billion and have grown fast at a CAGR of 33%. Yet,
India's share in total world trade in processed food remains abysmally low at around 2.3%.
The major market players in the Indian food processing industry include local companies such as
Amul, Kwality, Rei Agro, KRBL, Parle Agro, Hatsun Agro, Heritage Foods, Kohinoor Foods, LT
Foods, Laxmi Energy, Mavalli Tiffin Room (MTR) Foods and formidable foreign companies such
as Britannia, Nestle, Glaxo Smith Consumer Healthcare, Pepsico and Hindustan Unilever.
The business environment in which the food processing industry exists could be explained in
terms of the opportunities and threats.
Opportunities are supported by factors such as:
. High demand potential- the total expenditure on food in India is 32% of an urban (44% in rural)
household's total average annual expenditure as compared to that of an aggregate of 12% in
USA.
. Low output from organised sector- less than 2% of the total production of fruits and vegetables
is processed.
. Exports of agricultural and processed food have been rising steadily. Agricultural and processed
Food Products Export Development Authority (APEDA) figures put exports at Rs. 17918 crore in
2005-06 rising to 31552 crore in 2013-14; increasing preference for Indian foods abroad.
. Low cost Indian labour can be used to set up large, cost-effective manufacturing units for
domestice and export markets.
. Diverse agro-climatic conditions in India provide a wide-ranging and large raw material base
suitable for food processing industry. There is great potential for semi-processed and ready-toeat packaged food segments. Food production is surplus.
. Younger population, increasing urbanisation, changing lifestyles, emergence of nuclear families,
increasing personal incomes, improving standard of living, rising number of working women,
convenience needs of dual income families.
. Deep inroads by the spread of televisions as an advertising medium and emergence of retailing
culture.
. Increasing income levels in India have led to a variety in diets with rising per person consumption
of diary products, fruits and vegetables; projected shift in Indian eating habits to mass-based
basic foods like wheat flour, chicken, milk, etc.
. Emergence of branded quick service restaurants market in India that has attracted international
brands such as Domino's, KFC, McDoald's and Subway; the same remains attractive for more
players.
. Several promotional measures undertaken by the government under the Ministry VIsion, 2015
document.
. Adoptation of food safety and quality assurance measures by the industry.
. The advent of the WTO regime and reduced subsidies in developed countries can add to India's
strengths in food production and processing industry.
Threats arise owing to factors such as:
. Lack of comprehensive national policy on the food processing industry; reservation of several
items for the small-scale sector and overregulation with multifarious legislation governing the
industry; large number of licensing and regulatory authorities overseeing agro-food processing
units in the country; inconsistencies in policies at central and state governmental levels.
. Inadequate infrastructure for distribution and preservation: long and fragmented supply-chain
retail structure, inadequate infrastructure, including cold chain storage refrigerated vehicles for
logistics and transportation, special handling facilities at airports and inadequate post-harvest
management.
. Limited access to appropriate technology for processing and packaging, low investment in
research and development by industry and high cost of production.
. Impediments to exports in terms of onerous certification, registration and labelling
requirements, differing food standards around the world, shelf-life requirements, intellectual
property right protection and customs procedures.
. Losses from the wastage of fruits and vegetables for want of processing and value addition.
. Lack of trained manpower and technical know-how and support.
. High taxation on packaged items.
. Lack of private initiative and weak private- public partnership provisions.
. Resistance from civil right groups.
Besides these threats, there are some interesting myths related to processed food and the
industry in India. For instance, it is perceived that Indians are largely vegetarian while the fact is
that 75% are non-vegetarians. Or, that the food processing industry is a high-risk industry
dominated by multinational companies (MNCs). The reality is that it is not a high-risk industry
and is dominated by local companies worldwide. The global trends reveal that in developed
countries there is rising demand for convenience and specialty food products. In developing
countries like India the experience is that as income increases, demand for processecd food
grows, especially for higher valued food products such as meat and poultry products.