Corporate Strategy: PESTEL Analysis, Porter's Five Force Model, Value Chain Analysis, VRIO Model

This report discusses the corporate strategy of Fiat Chrysler Automobiles, including PESTEL analysis, Porter's Five Force Model, Value Chain Analysis, and VRIO Model. It analyzes the external and internal environment of the company and explores different opportunities for growth.

Applied Corporate
Strategy
Table of Contents
INTRODUCTION.....................................................................................................................................3
PESTEL Analysis..................................................................................................................................3
Porter’s Five Force Model..................................................................................................................5
Internal Analysis of Fiat Chrysler Automobiles..................................................................................6
Porter’s Value Chain Analysis............................................................................................................7
VRIO MODEL......................................................................................................................................8
SAFe...................................................................................................................................................9
CONCLUSION.........................................................................................................................................9
REFERENCES.........................................................................................................................................10
Books and Journals..........................................................................................................................10

INTRODUCTION
Corporate strategy is long term strategy developed by the company with aim of gaining
competitive advantage over their competitors. It is a portfolio which is designed by the
management of the company to deliver value to its customers and fulfilling stakeholder’s promises.
It focuses on developing strategies to maange the resources of the company. Fiat Chrysler
automobiles is company headquartered in London (LOREDANA, 2019), UK is world’s eighth
largest auto maker. On 31 October, 2019 the FCA Company announced its merger with Group PSA
(Peugeot) with the aim of expanding the business and analysing different opportunities for
achieving growth in the competitive environment. This report involves the PESTEL analysis of the
external environment of the company and for anaysing the internal environment SWOT analysis is
performed (Hamed and Mubarak, 2019). It has also covered the value chain analysis of the
company, VRIO framework and SAFe.
PESTEL Analysis
To evalueate the external environemnt of the company or any organisation there is high need of
PESTEL analysis. This is a framework implied by the company for the analysis of the external
environment factors that impact the growth of the company. It covers all the factors which are not
covered in the SWOT analysis and keeps track of the changes in the external environment of the
company. The PESTEL analysis can be explained as follows:
POLITICAL FACTORS
Political factors involve the interference of the government in the operations of the
company and how the laws of the government are affecting the company. The government make
certain rules and regulations that are beneficial for the citizens but has a great impact on the
company which includes the Brexit. In relation with the Fiat Chrysler Automobiles, the Brexit
policy has a great impact on the company’s working. The government have also formed certain
laws which include tax laws, safety laws which affect the productivity of the automobile company
(Baporikar, 2018). The government leaders are dynamic and their political ideologies also affects
the company’s growth and further opportunities.
ECONOMICAL FACTORS
There are also impact of inflation, GDP, unemployement along with interest rate which
are there able to impact the economy of the country. This change in economy helps the Fiat
Chrysler automobile to get impacted. Economic factors have huge impact on the success of the
company and it is important for the company to analyse its economic environment effectively to
achieve stability in the industry. The economic factors that affect the company includes the change
in fuel prices, tax rates and many more. The change in the economic policies and conditions affects
the company's operation in a negative way. so, the company must analyse these factors to avoid the
wastage of the resources. There are also impact of inflation, GDP, unemployement along with
interest rate which are there able to impact the economy of the country. This change in economy
helps the Fiat Chrysler to get impacted.
SOCIAL FACTORS

Social factors are also known as socio-cultural factors which depicts the culture of the
target audience of the company. These factors explain the characteristics, attitude and perception of
the customers regarding the company and their brand products. The customers prefer valuable
products with safety and comfort driving from the companies. The companies must analyse the
buying behaviour of the customer to identify what they actually want. These factors can be
identified as opportunity for the industry to enhance their operations.
TECHNOLOGICAL FACTORS
Technology is one the factor which have high impact on the company. In relation to
this, use of latest technology which is there ablet to use different technology can help the company
to give better impact in realtion to profit and attracting large cusotmer base. Technology acts as the
driving force for the growth and development of the company. It is an important factor for
achieving success in this competitive digitalisation era across the globe. In relation with the Fiat
Chrysler Automobiles, the company mainly focuses on different technological factors which are
designing environment friendly cars, maintaining fuel efficiency, installation of self-driving
technology in their cars and many more. The latest technology will attract many new customers
towards their products and persuade them for immediate purchase (Bernhold and Wiesweg, 2018).
ENVIRONMENTAL FACTORS
Environment includes the surroundings in which the company is operation and working
as a cooperative business for its customers. These factors start from the natural disaster and
continue till the climate change. These factors affect the company’s operations and its workforce
who is working by taking environment protection as their primary concern. In relation with the Fiat
Chrysler Automobiles, the company mainly focuses on maintaining their carbon footprints and
working towards attainment of the objectives of the organisation. FCA generally aims at production
of low emission, fuel efficient and sustainable vehicles for their prospective customers.These
factors can be identified as an opportunity for the car industry.
LEGAL FACTORS
Legal term defines the laws and legal rules and regulations which are implemented on
the company by the government officials. The company always try to abide the rules to get legal
advantage and government support in compare to its competitors. The Fiat Chrysler Automobiles
focuses on maintaining health and safety at their workplace and producing clean cars which achieve
success in near future for the company (Brickley, Zimmerman and Willett, 2020). Workers are
also an important and efficient tool for the companies and there are many laws which protect their
rights. These factor can be identified as a threat for the company as the employees can take
advantage of these rights against the companies.
Hence, the Fiat Chrysler Automobiles analyse all the factors of the macro environment to maintain
high quality and productivity standards to achieve the competitive edge over its competitors. Also,
the company focuses on the effective use of technology to produce value added products for its
customers.
Porter’s Five Force Model

Porter’s five force model is used to analyse the industry’s weaknesses to shape the
industry’s corporate strategy. In relation with the Fiat Chrysler Automobiles, the company uses five
factors to assess its competition level and enhance of the profitability which can be explained as
follows:
Threat of New Entry
The automobile industry is a worldwide grown industry which has many entry and exit
barriers. This industry requires huge investment of capital and human resource which will be
helpful in its smooth operations. There are diffent automoibile company and due to this there is
high chances of getting new company in this industry where Fiat Chrysler automobile needs to
focus on thier quality peouct and to fulfll the requriement of cusotrmer. In relation with Fiat
Chrysler Automobiles, the company has threat of new entrants but with limited chances as this
industry requires expert knowledge about the automobile sector and not anyone can enter in this
industry easily (Clark, 2019). The company focuses on customer retention and after sales service
that will attract new customers to their brand products.
Bargaining Power of Suppliers
Suppliers are the backbone of the industry and they supply quality products to their
customers which maintain their competitive edge. The supplier’s power can affect the industry as
they are few in number due to which they can demand high profit margin from the company. There
is need to have better relation with their suppier in realtion to get better deal for Fiat Chrysler
automobile. In relation with Fiat Chrysler Automobiles, the company focuses on maintaining good
relation with their suppliers so that they can supply their products to their customers and act as a
link between the company and the customer.
Bargaining power of Buyer
Buyers are the main target for the company and they try to maintain a healthy relation
with them to retain them for longer duration. Due to having many company there is high bargaining
power to their cusotmer. There is also one reason that shifting cost is less. In relation with the Fiat
Chrysler Automobiles company, the factor that will work in their favour for limiting the bargaining
power of the customer are their product quality, innovation and research technique and most
importantly their after sales service. The company works on the basis of their customer’s preference
which provides them a competitive edge over its competitors.
Threat of Substitutes
Substitute products act as an easy tool to attract the customers who want high quality
but with cheaper prices. Every company has this threat as this will decrease their customer base and
also affects their market share in the industry. Due to haivng many opetion to the cusotmer Fiat
Chrysler automobile have the high threat for the substitute for their technological product which
can affect the company sales. In relation with Fiat Chrysler Automobiles company mainly focuses
on updating its existing products and introducing innovative car models to attract the prospective
customers (Cohen and Neubert, 2019). FCA has maintained their brand image which helps them in
driving the sales base and increasing loyal customers.
Competitive Rivalry

The industry is facing intense competition due to which the current players in the
industry are focused towards maintaining their customer base. Fiat Chrysler automobile is having
diffent compeititors who ara there able to provide their product to thier cusomre in better range
with better specificationn. For this the players are trying to cut down their operational cost which
will help them in utilising this money towards the research on the customer trends. In relation with
the Fiat Chrysler Automobiles Company, rivalry helps them in focusing on customer acquisition
channel by working towards the attainment of objectives of the organisation (Denzel, 2016).
Hence, this is the implication of Porter’s Five Force Model in which the company focuses on the
innovation and research methods for the acquisition of the loyal customers for their brand.
Porter’s Value Chain Analysis
Porter’s value chain analysis is a framework which is used to analyse that how the
company is creating value for their customers. It is also used to build competitive advantage which
will help in the growth of the company. This analysis can be explained as follows:
Firm infrastructure
(general management, accounting, finance, strategic planning)Human resource management
(recruiting, training and development)Technology development
(R&D, product and process improvement)Procurement
(purchasing of raw material, machines and supplies)Inboud logistic
(raw material, handling and ware house)Operations
(machining, assembeling and testing products)Outbound logistic
(warehouse granad distribution of finished products)Marketing and sales
(advertising, promoting, pricing channel relations)Services
(installations and repair parts)
Primary Activities: These are directly related to the physical creation, sale,
maintenance and support of the product. This includes the following:
壱 Inbound Logistics: In relation with Fiat Chrysler Automobiles Company, supplier act as a
key factor. It includes all the process which is related to the storing and distribution of
the product internally.
壱 Operations: In relation with the Fiat Chrysler Automobiles, the company has the advantage
of operational system that creates value for their customers. It includes all the processes
which transform the products inputs into outputs effectively.
壱 Outbound Logistics: These activities include the process of delivering the product to
customer. In relation with Fiat Chrysler Automobiles, the company have the advantage

of their distribution network internally and externally in the organisation.
壱 Marketing and Sales: This includes all the strategies which assist in the marketing and
sales of the product (Foucault and Frésard, 2019). In relation with Fiat Chrysler
Automobiles Company has the advantage of after sales service which creates a
competitive edge for its competitors.
壱 Service: These are the activities related to the maintaining the value for its customer by
innovating and development of product. In relation with the Fiat Chrysler Automobiles, the
company is famous for delivering the efficient sales service to its customers.
Support Activities: These activities support the primary function of the value chain analysis.
These act as a secondary system which provides help and support to the primary one. These
activities can be explained as follows;
壱 Purchasing or Procurement: In relation with Fiat Chrysler Automobiles, company mainly
aims at finding best suppliers and vendors at feasible prices which will deliver their
value added products to the customers.
壱 Human Resource Management: This is how well a company hires and motivates their
workforce. In relation with Fiat Chrysler Automobiles, the company hires efficient
employees with good HR practices.
壱 Technological Development: These activities relate to managing and processing
information of the company to create strong customer base. In relation with Fiat
Chrysler Automobiles, the company focuses on combining technology and innovation
for attainment of the objectives of the organisation.
:
四 Infrastructure: These are the company’s support system that helps in the performance of
the operations of the company effectively (Glatte, 2019).
Hence, the company uses value chain analysis for building the blocks of valuable
product for their customers.
VRIO MODEL
VRIO Model uncovers the sustained competitive advantage of the organisation. It is a
framework which analyse tools designed to protect the resources of the organisation. This includes
four core competencies which are used for the achievement of the vision and mission of the
organisation. These components can be explained in respect to the Fiat Chrysler Automobiles as
follows:
ResourcesValuableRare Inimitable OrganizedCompetitive advantageCustomer LoyaltyYESNO-YES-YES-
Moderate competitive advantageTechnological Advancement YESNOYESYES-Moderate competitive
advantageHRYESYES YESYESHigh competitive advantageCSR YES YES NO-YES-Low competitive advantage
壱 Value: This includes analysing those resources which deliver value to its customers. In
relation with Fiat Chrysler Automobiles, the company has achieved the value factor then
the company can move on the rarity component of this analysis. The company deliver
has achieved global sales and distribution network which adds value added products in

their offerings. It is important to continuously analyse the value of the resources to
increase the customer’s perceived value (Hunjra, Hanif and Nguyen, 2020). This value
component can be analysed with the help of performance of SWOT analysis of the
company.
壱 Rare: This includes production of rare products for the customers to achieve brand
value for the company. In relation with Fiat Chrysler Automobiles, the company aims at
building competitive edge by supplying fuel efficient and self-driven cars to achieve
rarity component for its organisation. However, rare and value resources grant
temporary competitive advantage to the company. The company designs those products
which are not easy to develop in the near future.
壱 Imitability: The Company is trying to achieve this component by analysing their
resource capabilities. In relation with Fiat Chrysler Automobiles, the company offers
excellent after sales service with innovative offerings. It is difficult and expensive to
duplicate the offering of the Fiat Chrysler Automobiles for any other company. Due to
this the customers become loyal to their brands and do not switch to another brand. The
company can develop those resources which are difficult to imitate by developing
complex innovative offerings to their customers. This will help in enhancing the
productivity of the organisation.
:
四 Organisation: This component includes the analysis of the culture of the organisation
and how well they are mobilising their resources for the benefit of their workforce. In
relation with the Fiat Chrysler Automobiles, the company determines the utilisation of
their resources is being performed effectively or not. The company also focuses on
maintaining healthy relationships with their workers to avoid the conflicts in the
working environment (Jain, Kashiramka and Jain, 2018). The company has the
management which are well managed in their working and have clear thoughts
regarding their working and goals achievement.
Hence, the company performed this analysis to determine the reason of their
competitive advantage. The company have the effective workforce which are focused towards their
goals and try to bring change in the organisation by continuous improvement in their performance.
SAFe
This framework is designed to evaluate the strategic opportunity of the company in near
future. It is used as a tool to determine the strategic possibilities for the company according to their
current growth prospects which will help in attainment of obejctives of the company. In relation
with Fiat Chrysler Automobiles, there are three criteria’s of this framework which are discussed
below:
Suitability: This criterion judges the suitability of the opportunity according to current
demand and requirements of the company. The company mainly focuses on the addressed
opportunities and threats in the working environment and devise the strategy accordingly. The Fiat
Chrysler Automobiles analyse the opportunities according to their culture, working style, and the
capabilities of their workforce. Also, the strategy must take advantage of the strength, reduce the
weaknesses, take advantage of the opportunities and address the threats of the company . Suitability

of the strategy also depends on the culture of the company and desired goals of the management.
Internal Analysis of Fiat Chrysler Automobiles
Internal analysis is the SWOT analysis of the Fiat Chrysler Automobiles company
which will determine its strength, opportunities and develop strategies for reducing weaknesses and
threats. This analysis can be explained as follows:
:四 STRENGTHSWEAKNESSESThe Fiat Chrysler Automobiles has the advantage of broad
portfolio of strong brand which has been developed by different mergers and acquisition
of the companies.
:四 Furthermore, the company has maintained strong financial status and also provides excellent
after sales service to their customers which will build strong loyal customers base for
their brand.The company surplus profits have been reduced due to its fleet sales which
have impacted their operations and productivity in a negative way (Pidun, 2019. Rudolf,
2019).
:四 Also the company experiences a delay in electrification strategy due which the company’s
margin are affected.OPPORTUNITIESTHREATSThe Fiat Chrysler Automobiles
Company can expand their business operations to the electric vehicles which will help in
serving innovative products to its customers (Emrick, Shivdasani and Ventouras, 2017).
:四 The company can also experience white space products which will help in increasing their
market share and growth prospects in the near future.The company also have some
threats which include protectionist policies of the government and global trade war has
severely impacted the company’s operations.
:四 The new entrants in the industry are competing for the scarce human resource which will
create obstacles for the brand. Hence, this is the internal analysis of the Fiat
Chrysler Automobiles Company which helps in highlighting the strengths of the company
and developing strategies for the threats and weaknesses of the company.
The TOWS matrix is explained below:
Strength- Existing brand, Existing customer base, Existing distribution
Weaknesses- Brand perception, intermediary use, Technology skills, x-channel support
Opportunities- Cross selling, New markets, new services, alliances or co-branding
Threat- customer choice, new entrants, channel conflict a, new competitive entrants
Acceptability: It focuses on the views of the stakeholders and this play an important
role in this analysis. This factor also analyse the risk and return associated with the strategy
development for the company. In relation with the Fiat Chrysler Automobiles, the current strategy
must meet the expectations of the stakeholders which will reduce the level of risk associated with it.
It also helps in analysing the returns of the strategy and the reactions of the stakeholders.
Acceptability of the strategy also depends on the workforce as they are the key factors who will
implement it in the organisation. Stakeholders mapping is the process of identifying the interest of
the stakeholders in the projects in relation with the amount of power they are possesing in the

company.
Feasibility: It is essential to use this key as this will analyse the business capability of
executing the strategy formulated for the company. The company must have the financial and
human resources for the implementation of the strategy. In relation with Fiat Chrysler Automobiles,
the company searches for the people who have the skills and knowledge for the strategy
implementation. Also, the company must devise a strategic plan and implement according to the
structure of the organisation. Feasibility depends on the current economic and profitability
conditions of the company (Milano, 2020).
Hence, the company must use this framework for selecting an effective strategy and
analysing it effectively for the attainment of the organisational goals and objectives.
CONCLUSION
Corporate strategy is a clearly defines strategy which is implemented with the aim of
motivating the workforce to achieve the customer satisfaction. This report discussed about the
PESTLE analysis and impact of its factors on the company’s external environment. Also the report
explains the porter’s five force model which helps in explains different industries who sustain
different level of productivity. Furthermore, the report have discussed about the analysis of the
internal environment of the company with the help of determining its strength, opportunities and
reducing the weaknesses and threats of the company. Also, there is a explanation of the VRIO
model which depicts the value, rarity, imitability and organised form of the products of the
organisation. There is a SAFe framework explained above which analyses the suitability,
acceptability and the feasibility of the corporate strategy of the company.

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