Corporate Strategy of Fiat Chrysler: An Analysis

Student ID Number
Programme Title BSc Business Management
Module Title Applied Corporate Strategy
Module Code (listed on
Moodle and in LTAFP) QAB020X603A
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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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