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Chrysler-Fiat Case Study
Transcript of Chrysler-Fiat Case Study
Bail out of $4bill BUT with PROVISO The Chrysler Company -Established in 1924
- Already established firms made life difficult
- 'number 3 auto manufacturer' What Could Be Learnt From Multinational Alliances Performance of Chrysler Conclusion Fiat's position in the alliance is strong and worthwile
Analyse the situation at the time of the alliance
- Obama’s bailout funds Lucas Cannan The Chrysler-Fiat Alliance John Paul Lowenthal Johnson Two sides to the Story and - Bailout money was to avoid bankruptcy which they were forced into anyway
- Based on modeling in relation to performance before 2008 and performance of competitors post 2009 Assumptions for the Alliance For Chrysler this alliance means stability, structural changes in manufacturing, new technology, and access to Europe's market.
Fiat is expecting from this alliance a quick access to the North American market, possibly own 51% stake in Chrysler, and a strong global presence. How to analyse this Alliance We need to look into
2. Strengths and Weaknesses of the alliance
3. Conditions at the time of the alliance What is a Strategic Alliance What Are The Problems In the majority of alliances, businesses’ goals and markets can present problems.
Areas that can be affect in international alliances are: knowledge sharing in R&D, control, antitrust issues, and ownership problems.
Chrysler views this alliance mainly as a survival action and a part of a bankruptcy proceeding.
FIAT need to bring under control Chrysler’s losses and restructure the organization.
Both auto manufacturers had problems with alliances in the past. Weaknesses Before Alliance Chrysler
- De-merger of Daimler Chrysler.
- Impacted by 2008 recession and high oil prices.
- Problems because of financial exigencies, disappearing market share, and limited influence in global auto industry. Strengths before the Alliance Chrysler
- Established Brand in North America.
- Established distribution and sales network in North America.
- Major manufacturer of utility trucks.
- Jeep brand and minivans are popular in North America. Strengths After Alliance Chrysler
- Survival of company and bankruptcy proceedings.
- Structural changes in manufacturing and management.
- New technology.
- Access to Europe’s market Weaknesses after Alliance Chrysler & Fiat
The global auto industry is a classic example in the areas of competition, industry evolutions, and creative destruction.
- Corporate Integration.
- Technology Sharing.
- Mismatch of Brand Portfolios. Major Auto Manufacturers Fiat
- FIAT has made huge recovery under leadership of Sergio Marchionne.
- Has been reinvigorated in Europe.
- One of the most visible brands in small cars in Europe.
- Quality has improved. Fiat
- Corporate growth has been tumultuous.
- Market share problems and reputation.
- Growth and survival had problems in areas of technology and quality standards.
- Financial problems and laid off thousands of workers. Fiat
- Owns 20% of Chrysler with a possibility to raise it to 51% after 2013.
- Quick access to the North American market.
- Strong global presence.
- Savings of millions of dollars. Positive 1. Research & Development.
2. Product Development.
3. Distribution Networks.
4. Knowledge Sharing.
5. Technology Sharing.
6. Access to New Markets.
7. Acquisition of Stake.
9. Money Injection.
11. Money Savings.
12. New Leadership. Negative 1. Post-merger integration problems.
2. Corporate cultures.
3. After de-merger problems.
Disappearing market share,
massive losses, etc.)
4. Anti-trust issues.
5. Ownership problems. Introduction