Corporate Strategy of Fiat Chrysler: An Analysis

This report analyzes the corporate strategy of Fiat Chrysler, including external and internal analysis, strategic models, and value chain analysis. It discusses the business situation, external factors, Porter's five forces model, and the value chain activities of Fiat Chrysler. The report also highlights the company's competitive positioning and recommendations for improvement.

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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Fiat Chrysler business situation..................................................................................................3
External Analysis.........................................................................................................................3
Internal Analysis..........................................................................................................................6
Stakeholder Analysis.................................................................................................................11
SAF (Suitability, Feasibility and Acceptability) Matrix in organization...................................13
CONCLUSION..............................................................................................................................13
REFLECTION .............................................................................................................................14
REFERENCES..............................................................................................................................15
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INTRODUCTION
The corporate strategy of a company is a strategic plan that defines the firm
overall aim and direction and the way in which will be gained within strategic
management activities. It is essential for the company because it enables it to allocate
its resources, builds a company's expectations and enhances competitive positioning in
the business market. The main objective of this strategy is to achieve all financial and
non-financial goals within a defined period. There are various companies that have put
high efforts to develop an effective corporate strategy so that it enables them to gain
high profitability in business. Fiat Chrysler is an Italian/American multinational
corporation and has become the world's eighth-largest auto maker that is
headquartered in London, UK. It posses a wide product line and offers them across the
world to the customer (Feldman, 2020). This report will discuss various strategic models
like Porter's five forces, Value chain analysis in the context of Fiat Chrysler.
MAIN BODY
Fiat Chrysler business situation
External Analysis
Political factor in this factor governments have set up their rules and regulation including
taxation, strategies and many other factors. In this company they need to follow
their business as per government norms and taxation process might be simple for
using their business. Economic factors includes disposable income, growth
income of employee and customer. In present time people do not have enough
money that they can easily spend for purchasing their products as per the situation
companies have set up fewer products price for their customer and making more
satisfied. Social factors trends in market, changing market trends so for these
companies also need to change for their customer and make them some benefits
in hard time (Brewster, 2017). Technological factor have impact as company can
make use of technology in their business and make their developed online through
which they can have more benefits.
Porter's five force model
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It is a strategic framework that is undertaken by a company in order to analyze the
competitive environment of business in its business market. It is essential for the
organization because it supports to adjust strategy accordingly competitive situation and
improves the potential benefits of the business (Ibrahim and Harrison,2020). This
strategic model is applied by Fiat Chrysler plc for analyzing the intensity of competition
in the retail industry where it operates. This model comprises five forces such as:
 Bargaining power of suppliers (High)
Most of the companies in the retail market buy raw materials from suppliers. While
skilled suppliers have less availability in UK's market, so they are in a dominant position
and can decrease the margin of the retail company's which Fiat Chrysler plc can
generate over the product from customers. For example, powerful suppliers have strong
negotiating power for extracting a higher price from the retail industry. Thus, higher
bargaining power of suppliers directly reduces the overall productivity of retail
companies like Fiat Chrysler plc.
 Bargaining power of buyers (High)
The high availability of automobile companies in the UK market increases the
bargaining power of buyers. For example, there are various automobile companies
selling similar products like Maserati, Jeep, Lancia, etc. at different prices, which brings
opportunity for buyers because they get alternative options to buy products. Therefore,
only those retail companies which offer a product with high quality at a minimum price
directly impact Fiat Chrysler's profitability (Genoveva and Siam, 2017). It denotes that
the bargaining power of suppliers is too high, so they always seek discounts and offers.
 Threats of new entrants (Low)
Threats of the new entrants are lower because there are big four companies like Ford,
Toyota which already has established a good brand image in the UK's market and sells
wide line product to the customer and has captured good market share over its products
in the automobile industry. It will be difficult for the new entrants to establish their
business as they have to sell good quality products at lower prices but it will not be
possible because General Motors already sells vehicle products with high discounts
(Bruijl, 2018). Overall, there is very less threat of new entrants in retail industry.
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 Threats of substitute product or services (Moderate)
Threats of substitute product are moderate because most of the retail companies i.e.
Fiat Chrysler, Toyota and Ford posses' wide product line and services which meets all
customer's needs and expectations. Still, there have very fewer threats of substitute
products and services for Fiat Chrysler. However, Fiat Chrysler always tries to lead
innovation in its existing products and improves the customer's shopping experience.
But it can get a threat by Tesla in the future because it also posses similar products like
Fiat Chrysler but still planning to introduce new features in its existing product portfolio
(Helmold, 2019).
 Rivalry among the existing competitors (Low)
Fiat Chrysler has established a strong brand presence in the UK's retail industry so it is
considered one of the most powerful competitions for automobile companies. Fiat
Chrysler is acting as the market leader in the business because it offers products at a
lower price so but it is highly pressurized from the nearest rivals in term of price wars
that have introduced by Tesla and Toyota which directly affects the profit margin of Fiat
Chrysler.
From the above analysis can be understood that Fiat Chrysler plc has good
competitive positioning in the business market but still it gets a negative impact from the
suppliers and buyers. The company has planned to recruit suppliers across the world so
that they get high-quality raw material at a lower price through it will enable them to
generate a high-profit margin. To decrease the bargaining power of buyers it has the
goal to introduce new product services and improves the quality of existing products
that will support the company to sell products at a good price. Thus, Fiat Chrysler plc
will tackle current situation of business. Flat chrysler report sold their 80.1 percent of its
stake in companies quantity (Statista Research departments, 2019). In 2007, company
have taken partnership which has been proved unsuccessful. Chrysler company has
make their growth in various countries and working with different business. They have
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hired high quality of employee who can easily work with them and raw material which
they are purchasing having lower prices. Threat for lossing their more profits in recent
time and partnership has become unsuccessful in which they have more fear of loss.
Competition have been increased and many customers been attracted to some other
business.
Internal Analysis
Value Chain Analysis
It is a strategic analytical tool that is organized to examine opportunities and find
competitive opportunities. This model plays a significant role after the development of
the vision statement. It also allows the company to categorize its resources on the basis
of their potential so that it can enable to achieve its proposed goals and objectives over
a period of time (Rosales And et.al., 2017). This framework is applied for Fiat Chrysler
in order to categorize essential activities to find competitive opportunities through which
it gets a long-term and short-term competitive advantage. The model comprises two
types of activities: primary and secondary.
 Primary activities
The primary value chain activity of Flat Chrysler is directly involved in manufacturing
and selling the goods to targeted customers. These activities comprise various primary
activities such as inbound logistics, operations, outbound logistics, marketing and sales,
and services undertakes by the company in its business (Fernandez-Stark and Gereffi,
2019).
Inbound Logistics
It is essential to build a strong relationship with suppliers as their support is important to
store and distribute them. Fiat Chrysler Automobile N V always focuses on the product
development phase through it can face various challenges. It focuses on every aspect
of transformation such as from raw material to the finished product so that it does not
have to face any challenges in respect of product quality or service.
Operations
It is another important activity that arises when raw material received by Flat Chrysler N
V is transformed into the final product and introduced in the business market.
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Operational activities include different types of activities: machining, packing, handling
and testing. However, equipment repairing and maintenance are also involved in this
category (Carril‐Caccia and Pavlova, 2020). Operation management of Fiat Chrysler
also performs this activity like manufacturing and service operation. This part is
essential for enhancing productivity, maximizing the potential as well as ensures the
competitive success of the company. The high productivity of Fiat Chrysler Automobile
N V supports to maximize economic growth and improve the profitability of the business
in the automobile sector.
Outbound Logistics
It involves those activities which deliver the product to the user by passing through
different intermediaries. Outbound logistics activities are raw material handling, storage,
planning, order processing, transporting and delivering to the customer. Operation
management of Flat Chrysler N V always examines and optimizes the outbound
logistics to explore sources of competitive advantage and gains all projected objectives
of the company. These outbound activities are highly essential for the company
because these are required to manage timely along with optimal cost while product
delivery processes put a minimum negative impact on the quality and increase the level
of customer's satisfaction as well as maximizes growth opportunity.
Marketing and Sales
It is another essential stage of primary activities in which the stage highlights the
differentiation and benefits points to follow customers that they offer a better product as
compared competitors (Palacios-Mateo, van der Meer and Seide, 2021). By producing
high-quality products and selling them at affordable prices cannot develop value unit for
the Flat Chrysler Automobile Company. In this stage, Marketing and sales managers
play a vital role to create the values of proposed products such as they perform different
marketing and sales operations: Salesforce, advertising, promotional activities, pricing,
quoting, channel selection and building good relations with channel members. Fiat
Chrysler put more investment in the marketing and selling activities so that it can create
awareness in customers about product and services which excites them to buy its new
vehicle products. Thus, the company enables to establish a strong brand image, stay
competitive dynamics in the automotive sector.
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Services
Fiat Chrysler offers pre-sale and post-sale services to the customer in order to make
loyal customers for the company. Post-sale services are considered as marketing and
promotional activities because it makes the customers feel that they are a valuable part
of the company. But the company does not have good support activities which are
essential for protecting brand reputation instead of using it as an advertisement tool in
order to spread positive word of individual mouth (Dutta, 2021). So, the marketing and
sales management of Fiat Chrysler requires paying attention to this activity in an
effective manner.
 Secondary activities
There are various secondary activities that are undertaken by the company in
coordinating and help primary value chain activities. Fiat Chrysler company gets an
advantage from the secondary activities as well which are mentioned below:
Firm Infrastructure
It is one of the essential element of secondary activities which indicates a wide range of
activities i.e. quality management, accounting, legal input handling, financing, planning
and strategic management who keeps attention on the day to day process of product
development. Effective infrastructure management of Fiat Chrysler Auto-mobile allows
the company to keep control of overall infrastructure activities like costs that lead
strengthen the competitive positioning of the business in the Auto-mobile sector
(Maglalang, 2021). It is one of the major strength of business through which the
company always gets a competitive advantage from business market. Flat Chrysler
company make their some unique tangible assets such as building, equipments which
they are suing in finishing their raw material, investments, cash and vehicles that used
for serving their business growth. Intangible assets such as copyrights, patents,
trademarks this factor which make companies unique from some other company.
Human Resource Management (HRM) allows Fiat Chrysler to decline competitive
pressure on the basis of motivation. It is another essential resource of Fiat Chrysler
Automobile where HR professionals involved in various activities of the company like
recruiting, selecting, training, rewarding, personnel management and performance
management activities. With effective HRM practices, the company always enables to
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gain cost minimization objectives by examining hiring, training costs with their product
returns. But still, the company requires paying attention to employees' performance
because all members do not put sufficient efforts like others. The human resource
department of Fiat Chrysler can play a vital role in improving the productivity, the
efficiency of individuals in the workplace so that company can receive effective
outcomes in the business. Organization HR used training for their employee,
performance management, developments and culture, compensation through which
these things make them more different from other organization.
Technology development
It is another aspect of secondary activities and it is essential for all businesses. For
example in the modern era, overall all value chain activities are properly dependent on
technological support. Fiat Chrysler needs technological integration in manufacturing,
distribution, marketing and HR activities so that it can gain all proposed objectives over
the time period. However, the company uses highly advanced technologies like
automation software, product design research and technology-supported customers and
data analytics. Technological development factor is another important factor that helps
to gain a long-term competitive advantage in its competitive market.
Procurement
Procurement is the processes that involve various activities i.e. purchasing inputs that
may wide range from equipment, machinery, raw material, suppliers, etc. that are
important items that are required to produce the finished product. The procurement
process of Fiat Chrysler is quite effective because operation management keeps
attention on each aspect from raw material to end product.
From the above discussion over value chain analysis can be understood that Fiat
Chrysler needs to pay attention to employee performance and technological
development through it can maximize the economic growth of the business ( Kapoor and
Kaur, 2017). Otherwise, HRM, infrastructure and primary activities are the major
strength of a business through which it can achieve all projected goals and objectives
within a time frame.
TOWS Analysis
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TOWS Analysis is a very helpful tool to different companies and businesses in the
marketplace, and that is why Fiat Chrysler Automobiles has applied this tool in its
business environment for gaining the appropriate strategies in the market. TOWS tool
generally indicates four major internal factors of a business named: strengths,
weaknesses, threats and opportunities, and after knowing the impact of all these
internal factors, the business can simply make appropriate business strategies for its
venture. Bellow it is shown the TOWS analysis applied for Fiat Chrysler Automobile.
TOWS Analysis Strengths (S):
Fiat Chrysler is a highly
reputed automobile brand in
the market, and it has a
collection of some exclusive
vehicles. The company’s
business expansion process
is very excellent because by
using its own expansion
strategy (Maglalang, 2021),
Fiat Chrysler has
successfully expanded its
business operations in many
countries. The company’s
Jeep model of vehicles has
recently gained huge
popularity in the marketplace
just because of its attractive
shape and modern features.
Weaknesses (W):
Fiat Chrysler was founded in
the year 2006 therefore the
company does not have an
appropriate experience for
working in the international
automobile industry, its
competitors have experience
of more than 100 years in this
industry. In this situation, due
to the lack of experience, the
company is able to gain a
huge competitive advantage
in the marketplace.
Opportunities(O):
In this dynamic world, strong
marketing is very necessary
for a business. Fiat Chrysler
has an opportunity to attract
maximum customers towards
its brand by employing a
SO Strategies:
The company has to adopt
and implement the product
differentiation strategy for
making a more exclusive
range of products and
services. Product
WO Strategies:
Currently, the company has
to depend on modern and
latest marketing strategies
and digital marketing
strategies. Currently, most
people in the market are
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digital marketing strategy in
its own workplace. On the
other side, most people are
like to buy such vehicles for
daily use and able to provide
proper safety, The company
has another opportunity to
generate excellent profit
margins in the market place
by designing and developing
vehicles with advance safety.
differentiation strategy will
enable the to company for
offering high-quality vehicles
to customers in the market
place, and then the company
will gain an excellent
competitive advantage in the
market.
using various digital services.
This is the best opportunity
for the company to run its
marketing campaigns
digitally, under the digital
marketing strategy for a
positive influence upon the
customers and they can
make their plan to buy
vehicles from this company.
Threats (T):
The biggest threat to the
company is the new entrants
entering the international
automobile industry. On the
other side, the present
coronavirus pandemic also
has reduced the sales ratio of
Fiat Chrysler in the market,
so this is another key threat
to the company (Kapoor and
Kaur,2017). However, each
automobile company has
badly been affected by this
pandemic, because people
do not want to spend money,
they wish to buy only
essential goods and services,
and vehicles are not very
essential to them.
ST Strategies:
On the basis of existing
threats, the company has to
adopt the focus strategy on
different market situations.
After focusing on and
analyzing various market
situations, the company can
simply make its brand very
effective.
WT Strategies:
According to weaknesses
and threats, Fiat Chrysler has
to adopt a cost leadership
strategy for providing various
vehicles to customers at very
favourable prices. This
strategy has enabled to
excellent competitive
advantage as well.
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Stakeholder Analysis
The management at Fiat Chrysler has to consider these steps to conduct stakeholder
analysis.
Step 1: Determination of stakeholders
Currently customers, employees, government, suppliers are major stakeholders of Fiat
Chrysler, in which the company has to prioritize these all stakeholders on the basis of
their power and interest.
Step 2: Prioritize stakeholders
Fiat Chrysler must use power and interest matrix for analysing the real power and
interest key stakeholders. Generally, power and interest matrix divide all stakeholders
into four different categories: High power and high interest: Governmental ways have higher power and
higher interest in the business because it contributes to all over the growth of the
GDP. High power and low interest: Customers have high power and low interest
because many other automobile companies are also influencing the customers
for buying their vehicles.
 Low power and high interest: Employees have low power and high interest
because they have linked with the company just because of earning some
money.
 Low power and low interest: Currently, suppliers have low power and low
interest in Fiat Chrysler because there are various automobile companies
available in the market which can buy raw materials from them (Carril‐Caccia
and Pavlova, 2020).
Step 3: Communicate with stakeholders
The top-level management of Fiat Chrysler has always required establishing excellent
communication with its various stakeholders for maintaining a great relationship with
them. With proper communication, the company can retain its all stakeholders
effectively.
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SAF (Suitability, Feasibility and Acceptability) Matrix in organization
SAF is a very innovative matrix to different businesses and companies which
basically evaluates various strategic options to pick the most appropriate one. SAF will
help to Fiat Chrysler for judging and scoring all strategies in proper manner. Financial
resources that companies used such as bonds, debenture, checks through which they
can make their resources more unique in developing and supportive for their
companies.
Suitability Feasibility Acceptability
According to the current
market reputation of the
company, the Fiat Chrysler
can simply adopt and
implement those all
strategies in its business
environment which has been
mentioned in the TOWS
analysis: focus strategy, cost
leadership, digital marketing
and product differentiation.
In all business strategies, the
company has to be focused
on highly using product
differentiation and digital
marketing strategy, because
these are not consuming lots
of time and resources
(Strategy Evaluation SFA -
analysis, 2019).
The company has to be ready
for accepting the outcomes
which will be gained from the
process of the strategy
implementation process
because sometimes
outcomes can put negative
impact also on the business.
CONCLUSION
This report has been summarized the significance of corporate strategy in the
organization's success. Porter's five forces: bargaining of suppliers, bargaining power of
buyers, threats of substitute, threats of new entrants, rivalry among existing competitors
implemented for the Fiat Chrysler that has been concluded in this report. It can be
summarized value chain analysis for the company in order to analyse its internal
environment, strength and weaknesses through which the company has achieved
competitive opportunities.
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REFLECTION
At time of preparing this report I recall that how should I need to complete this
work and how I will handle the situation what I am going to face in this report. But after
when my team members support me for working in this report I an feeling good towards
this project. I gave divided my part along with this I have also divided my team members
through which they will not have nay problems and I will also not face any issues
regards to this work. While at time of making this report I have also found some of the
my skills from which I came to know that communication and interpersonal skills that are
lacking behind. In doing this report I have decided that for next time I will try to this
alone without taking the help of any other team members, while by doing this that only
keep me more developed as well as too my skills that which are lacking behind me in
this projects. From that time I have decided that I will try to make this more developed
and when more coming reports that could help me for completing the project more
easier. In few days I have completed project and I have submitted this report. After that I
was feeling good and kindness that I have done my work. After few days I got feedback
from other side for that I have become frustrated and I was thinking that I will complete
this and how much time it might be take for completing on time. When I get feedback I
was thinking and I have decided to developed those skills due to which I have get this
feedback and that time I have also decided for helping others. While by helping other I
will also get some new knowledge and that could keep me more satisfied. I will try to
improve skills such as after having my feedback including be specific, have main focus
on positive terms, check how its been receive and don't wait too long terms. This things
might be help me for making their project more better. While by keeping this skills in
mind for next project I will try to be more specific and I ensure that I will not face any
other issues which I have faced in this project. For this report I have set up sub divided
of the work and make them more valuable through which that could keep me more
growth and that could also help me for making further best reports. After attending the
feedback I was feeling that next time I will try to my best so I will not get feedback as I
have get in this projects. From this project I will make that for upcoming project I will try
to make more relevant theme for the work so that could keep me more better with
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having skills developed. Along with that would also my team members for being more
relevant what have been asked in projects.
REFERENCES
Books & Journals
Brewster, C., 2017. The integration of human resource management and corporate
strategy. Policy and practice in European human resource management, pp.22-
35.
Bruijl, G.H.T., 2018. The relevance of Porter's five forces in today's innovative and
changing business environment. Available at SSRN 3192207.
Carril‐Caccia, F. and Pavlova, E., 2020. Mergers and acquisitions & trade: A global
value chain analysis. The World Economy, 43(3), pp.586-614.
Dutta, S., 2021. Mechanistic Framework of Global Value Chains. arXiv preprint
arXiv:2101.03358.
Feldman, E.R., 2020. Corporate strategy: Past, present, and future. Strategic
Management Review, 1(1), pp.179-206.
Fernandez-Stark, K. and Gereffi, G., 2019. Global value chain analysis: a primer.
In Handbook on Global Value Chains. Edward Elgar Publishing.
Genoveva, G. and Siam, S.T., 2017. Analysis of Marketing Strategy and Competitive
Advantage. International Journal of Economic Perspectives, 11(1).
Helmold, M., 2019. Tools in PM. In Progress in Performance Management (pp. 111-
122). Springer, Cham.
Ibrahim, E.B. and Harrison, T., 2020. The impact of internal, external, and competitor
factors on marketing strategy performance. Journal of Strategic
Marketing, 28(7), pp.639-658.
Kapoor, S. and Kaur, M., 2017. Basel III norms: A Swot and tows
approach. Vision, 21(3), pp.250-258.
Maglalang, R., 2021. Getting the most across the value chain. In Machine Learning and
Data Science in the Power Generation Industry (pp. 123-134). Elsevier.
Palacios-Mateo, C., van der Meer, Y. and Seide, G., 2021. Analysis of the polyester
clothing value chain to identify key intervention points for
sustainability. Environmental Sciences Europe, 33(1), pp.1-25.
Rosales, R.M. And et.al., 2017. Value chain analysis and small-scale fisheries
management. Marine Policy, 83, pp.11-21.
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Online
Strategy Evaluation SFA -analysis. 2019. [Online]. Available Through:
<https://johnsohn.dk/2019/08/03/strategy-evaluation-sfa-analysis/>.
Statista Research departments, 2019. FCA - Statistics & Facts [Online]. Available
Through:<https://www.statista.com/topics/2395/fiat-chrysler-automobiles/>
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