Applied Corporate Strategy

This document provides an analysis of the opportunities and threats in the corporate strategy of Fiat Chrysler and Peugeot Automobiles. It includes an external analysis of the business environment and industry, as well as an internal analysis of the resources and key competences of the organization. The document also discusses the strategies used by the companies using SAFe criteria.

Applied Corporate
Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
1) Carry out external analysis (business environment and industry) to identify a set of
Opportunities and Threats and assess industry attractiveness.....................................................1
2) Analyse the resources and key competences of the organisation to identify a set of Strengths
and Weaknesses and identify core competences (key factors that may give the company its
competitive advantage.................................................................................................................5
3) Evaluate the given strategy (as per chosen case) using SAFe criteria.....................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Corporate strategy is the hierarchically process that covers highest strategic plans in
relation to business that can help to increase the business performance and profitability. If
organisation is having good planning and activities then it become easy to compete with other
company and attain the competitive advantages (Arbogast and Kumar, 2018). If organisation is
running their business then it has to analyse the competition then should be formulate plans
which can help to manage the functions and increase brand image. To understand about
strategies Fiat Chrysler and Peugeot Automobiles has been selected that is American
multinational corporation which is world's eighth largest auto maker. This organisation was
founded in October 2014 by merging Fiat and Chrysler. Fiat Chrysler Automobiles' corporate
headquarters is domiciled in Amsterdam, and the financial headquarters are in London. This
report covers external analysis to identify opportunities, analyses the resources and key
competencies of organisation and strategies by using SAFe criteria.
MAIN BODY
1) Carry out external analysis (business environment and industry) to identify a set of
Opportunities and Threats and assess industry attractiveness
In business environment, number of businesses are established where it is important to
analyse the environment and take corrective steps which can help to increase the sales and
performance. If organisation is able to compete with others then it will be an easy task to attain
the competitive advantages.
External environmental analysis: This is an objective assessment of the changing world
where number of businesses are operated. This tell how environment affected the business and
what changes needs to bring so that they can operate their business effectively. Therefore,
PESTLE analysis of food industry like Fiat Chrysler and Peugeot are as defined:
Political factor: This factor is consider various elements in relation to political such as
government policy, political stability, foreign trade policy, and labour laws that need to focus
while in operation (Cappa, Cetrini and Oriani, 2020).
Opportunity: In UK and U.S., government is stable that favour the Fiat Chrysler and
Peugeot to run their business and expand it in other country by manufacturing number of car
models. Herein, such organisation is understand the demand of customers and make efforts to
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bring new model that can help to increase the brand image. This can be opportunity for
organisation to increase the sales and maintain profitability.
Threat: Oppositely, Increases in tax rate and Vat can be challenge for Fiat Chrysler and
Peugeot to pay higher charges and amount by selling the different products in other country. As
it has to spend money on buying raw material and selling the products.
Economical factor: The relation of economical factor is with economic growth, interest
rate, unemployment rates, inflation rates, and others that need to consider while operation. This
is important for organisation to focus on such factors and increase the performance.
Opportunity: After Brexit the inflation rate of US is stable that supports the Fiat
Chrysler and Peugeot to sale their products and increase profitability. As having stability in
economy of country it become an opportunity for selected organisation to buy raw material and
manufacture the different model of cars. This can help to increase the organisational productivity
and profitability (Dahl and Fløttum, 2019).
Threat: On the other side, happening of pandemic (Covid-19) in all over the world has
created the challenges for Fiat Chrysler and Peugeot to manufacture the products as all
businesses are closed & stopped for certain time that might be affected the profitability due to
reducing sales.
Social factor: This factor involves population growth rate, safety emphasis, lifestyle
attitudes, cultural barrier etc. that are important to consider in case of running business (Doherty
and Smith, 2020).
Opportunity: The population growth rate of London and American country is increasing
continuously that become opportunity for Fiat Chrysler and Peugeot as people started to buy cars
in high number. The management of selected organisation understand the demand of their
customers and targeted all class of people which become opportunity for business to increase the
activities.
Threat: Oppositely, Due to COVID-19, needs and wants of people totally changed that
has impacted negatively on auto mobile sector as production and selling process are reduced.
Technological factor: This factor is showing the new technology, innovation, resources
and automation and other activities that are required in business and increase the performance
(Minár, 2016).
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Opportunity: Technology is important for organisation which helps to influence number
of people by brining innovation and modifying existing products. This factor has impacted
positively on Fiat Chrysler and Peugeot as by using new technology producing process,
distribution, playing order and payment online activities have been introduced that supported
organisation to regulate and manage the business effectively. For instance, the chosen
organisation bringing new technology in their car manufacturing company such as Self driving
system, universal roof rack and augmented reality Dashboard that helps to attracts the
customers.
Threat: In adopting new technology there is need to invest high spending and money
which may be risky for chosen organisation as is their business will run or not (Köhler and
Zerfass, 2019). Herein, Fiat Chrysler and Peugeot faces a threat of high spending in adopting
new technology and new manufacturing process that affected the productivity.
Legal factor: When business is running in external environment there is need to follow
all regulation which are important for managing the activities.
Opportunity: Fiat Chrysler and Peugeot is large size organisation that follows all
employment regulation in relation to business which can help to operate and regulate the
business effectively. In auto mobile sector, chosen organization understand what employees
wants and how they can be satisfied which helps to manage the business effectively.
Threat: If Fiat Chrysler and Peugeot is not following all employment rules and
regulation like discrimination, equal opportunity, health and safety, bonus and others then it will
be threat for organisation to face the challenge and business affected negatively. This might be
create a feeling of conflicts between employer and employees which reduces the organisational
performance.
Environmental factor: This factor is considering weather climate, environmental
policies, reducing carbon and others activities which is required to follow in operation (Ledin
and Machin, 2016).
Opportunity: Fiat Chrysler and Peugeot follow all safety standard and environment
protection rules that helps to to manage the business and increase performance. For example it
follows system of Lowing Emissions And Pollution that can help to manage the workings and
increases sales of products.
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Threat: If organisation is not following environmental rules and climate is changing day
by day then will be considered as threat as all activities has reduced. In case of auto mobile
sector it is high threat for company not to focus on pollution and increasing pollution as
government can warn and give a red alert if all are not controlled.
Therefore, by using PESTLE factor it become easy to understand for Fiat Chrysler and
Peugeot which factor can be opportunity for organisation and how they can manage their
business in changing environment.
Porter's 5 forces – This is a model which uses by organisation to identify the “Balance
of power” in particular market that states how a particular sector can be maintain the
profitability. The porter's five force in context to Fiat Chrysler and Peugeot are as defined:
Competitive rivalry- This factor is showing the competition which states how many
competitor are having in market. The main competitor of Fiat Chrysler and Peugeot are BMW
Group, General Motors, Volkswagen etc that are also manufacuring different design and models
of cars which attracts number of customers. This shows as high threat of competitor who are
selling different types of cars in challenging market that create risk for chosen organisation. In
this, organisation has to reduce prices of cars so it can influnce number of people.
Threat of substitute products- This means substitute of products which are available in
market and may impacts the operation. (Minár, 2016). In context to Fiat Chrysler and Peugeot
substitute product is bicycle, motor, bus and other transport which can be used by people in
reaching aywhere. There is moderate threat of substitute beecause due to change demand people
are showing their interest in cars which can be an opportunity for chosen organisation.
Bargaining power of buyers- This mean power of power while buying products as at
what prices they purchase after bargaining the cost. In context to Fiat Chrysler and Peugeot
bargaining power of buyers is high as having number of option in auto mobiloe market
encourages chosen organisation to reduce their product's prices which can help to increase the
sales.
Threat of new entrants- In UK, threat of new entrants force is facing by Fiat Chrysler
and Peugeot as there is no need to invest high amounts, and government give permission to
establish a business successfully that can be create high competition for chosen organisation.
Bargaining power of suppliers- This means suppliers who supply the products to
manufacturer for preparing final products. In context to Fiat Chrysler and Peugeot, suppliers has
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low bargaining power as many suppliers are available in market who sells raw material at less
prices which became an opportunity for Fiat Chrysler and Peugeot to increase their production
and sale effectively (Naklicka, 2020).
Justification- By considering such forces Fiat Chrysler and Peugeot can create the
opportunity for their business as it attracts the large number of customers by reducing prices and
offering good designs, features, and quality of cars that increases sales and profitability. The
chosen organisation is facing high threat in new entrants, competitive rivalry, and bargaining
power of buyers that can be create challenge for organisation and reduces the organisational
productivity and profitability. Moderate threat in substitution of product for this chosen
organisation has to generate the interest of customers in auto mobile that can help to increase
sales. Other than this, threat of bargaining power of suppliers is low which become a great
opportunity for company as it could buy raw material and parts at lower cost and manufacture
cars at affordable prices which helps to increase the sales and brand image in challenging
environment.
2) Analyse the resources and key competences of the organisation to identify a set of Strengths
and Weaknesses and identify core competences (key factors that may give the company its
competitive advantage
Internal analysis: This is an analysis of business organisation that uses to know the
internal capabilities of organisation. The management of Fiat Chrysler and Peugeot has
conducted the internal analysis by using following models.
Value chain analysis: This analysis is relating to identifying the activities of business
organisation so it can deliver the best value to customers as well as business. The value chain
analysis for Fiat Chrysler and Peugeot are as given:
Primary activities-
 Inbound logistics- This means an activity which performed by organisation by using
material and resources. Fiat Chrysler and Peugeot is collecting the raw material and auto
mobile parts for running business that can help to manage the activities.
 Operations- This means material and resources which are produced by company. Fiat
Chrysler and Peugeot is focusing on manufacturing the different design, features and
facilities of cars that attracts large number of customers (Pidun, 2019).
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 Outbound logistics- After manufacturing the products there is need to deliver the
products which can help to operate a business successfully and increase profitability.
 Marketing and sales- This activity is related to using the marketing and selling activities
as how to reach the customers and influence them to buy the products. Such as B Fiat
Chrysler and Peugeot is using online marketing and online selling which helps to increase
the sales. Through this, it provide information to customers regarding cars which they
have introduced in the market.
 Services- This refers as support and services which need to provide to customers. Such as
Fiat Chrysler and Peugeot offering variety of services to its customers after sales as free
service that make happy and satisfied.
Support activities-
 Firm infrastructure- This activity is related to overall structure of organisation that need
to follow. Fiat Chrysler and Peugeot 's structure is attractive and well designed that helps
to get introduce about organisation and face competition easily. By using this,
organisation is selling the different model of cars and sale them effectively.
 HRM- HRM is important in all organisation as it formulate regulation and recruit
employees who can work in challenging situation and manage the workings. The HR
management of Fiat Chrysler and Peugeot is managing all activities and functions by
focusing on them and increases the performance in changing environment.
 Technology development- The management of Fiat Chrysler and Peugeot uses new
technology and innovation in their manufacturing process and existing models which
attracts large number of customers and increase the profitability (Pramudita, 2016).
 Procurement- This is the activity which uses by organisation for procurement of
resources which are available in market. In context to Fiat Chrysler and Peugeot,
management are using the different types of process in procuring and selling the products
which helps to increase the organisational profitability.
VRIO analysis-
This analysis is related to activities and resources which are available in the market and
supports to increase the organisational profitability. Every organisation should analysis the needs
and resources which can help to operate the business and supports to make profitability. In
context to Fiat Chrysler and Peugeot, VRIO analysis is defined below:
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Resources Valuable Rare Inimitable Organized
Quality and raw material Yes No No No
Customer support Yes Yes No No
Distribution Yes Yes Yes No
Financial resources Yes Yes Yes Yes
Valuable resources- Resources are valuable for organisation as it helps to perform the
all functions and activities which can help to increase the performance. Fiat Chrysler and
Peugeot is having various resources such as raw material, customer support, distribution and
financial resources which all are valuable as it helps to operate the functions and manage the
activities. Herein, chosen organisation is delivering best quality, feature and designs of car
which influences number of customers and encourage them to make buying decision.
Rare resources- This means products and service are rarely available in the market and
helps to attain the competitive advantages. In Fiat Chrysler and Peugeot, raw material and
quality is not rare as it can be get by others in their activities. On the other side, customer
support, distribution and financial resources are rare which can help selected organization to
attracts the large number of customers and make them happy by offering variety of products and
services. Financial resources are uses to buy raw material, marketing and selling the products.
Customer supports solve the queries and encourage them to buy products.
Inimitable resources- This means resources which are inimitable that can help to attain
the competitive advantages. For Fiat Chrysler and Peugeot distribution and financial resources
are considered as inimitable which can help to operate and run the business continuously. By
using distribution resources it has good transport facility and financial resources are uses to
manage the functions that helps to take the competitive advantages (Rauw, 2019). The chosen
organisation has number of store where customer can get better experience as manager give
opportunity to drive and make the right buying decision to such cars. These are inimitable
resources because no competitor company can copy this distribution channel and have their
different ideas to influence customers.
Organized resources- This means all activities and task in related to business, should be
organised that helps to increase the profitability. In context to Fiat Chrysler and Peugeot, all
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financial resources are organised as management prepare the budget every year that states how
particular activity needs money so all activities are organised accordingly which can help to
increase the organisational profitability (Naklicka, 2020). This create an opportunity for selected
auto mobile company as financial resources uses to buy parts, managing activities, using new
technology and other operational work which can help to attain the business goals.
SWOT analysis-
SWOT analysis is a specific tool which uses by companies to analyse the strength and
weakness of business by knowing internal environment which can help to improve the business
profitability. The SWOT analysis for Fiat Chrysler and Peugeot are as explained:
Strengths Weaknesses
 FCA is a global automotive brand
that has operation in 40 countries.
 This has global sales and distribution
network spanning around 140
countries.
 This sells a wide range of vehicles
offering its customers a large range
of vehicles.
 This mainly focuses on innovation
and invest large amount of money in
R&D.
 Decline market share in key market.
 FCA has been forced to make several
recalls in recent period.
 Occurrence of natural issues.
 Changes in government and its
regulations.
Opportunities Threats
 Differentiated products in auto mobile
sector.
 Uses of new technology and innovation
in auto mobile sector.
 Automated driving which is consider as
major focus.
 Electric and hybrid vehicles
 Uses of digital marketing that attracts
 Changing customer needs that affect
auto business.
 Economic fluctuation.
 Regulatory changes that create
challenges for auto mobile industry.
 Changes in currency.
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number of customers.
3) Evaluate the given strategy (as per chosen case) using SAFe criteria
TOWS Matrix- This is a matrix which uses by organisation to develop the strategic
options for the business by using internal and external analysis that can help to make better
decision and manage the functions effectively. Fiat Chrysler and Peugeot is using the TOWS
matrix that are as explained:
Threats
 Increase in import and export- This can be threat for Fiat Chrysler and Peugeot as
government has changes the import and export duty that limits the sale of organisation.
 Increase in interest rates- In UK and US, rate of interest has been changed that become
threat for Fiat Chrysler and Peugeot to pay high rate of interest on loan amount (Spear
and Roper, 2016).
 Lifestyle attitudes of customers- This is another threat which is facing by Fiat Chrysler
and Peugeot as demand and lifestyle of customers has been changed that directly affected
business negatively.
 Strict environmental policies- If government has formulated strict environment policies
then it will be threat for Fiat Chrysler and Peugeot to reduce their production process.
Opportunities
 Brining innovation: Needs and wants of customers are changing where Fiat Chrysler
and Peugeot get opportunity to grow their business by bringing innovation in their
products and services.
 Introducing electric and less pollution vehicles: Fiat Chrysler and Peugeot is also
manufacturing electric and less pollutant cars which can help to keep clean environment
and encourages customers to buy such cars.
 Government stability: This is major opportunity for any business as if government is
stable in UK then Fiat Chrysler and Peugeot can regulate their business and further
activities effectively which helps to increase the performance.
 Using new technology: Fiat Chrysler and Peugeot uses new technology such as AR,
VR, and digital marketing which encourages customers and make buying decisions
(Vukovic, 2020).
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Weakness:
 Not wider area: Fiat Chrysler and Peugeot is operating business in specified location
only where it cater services in specified areas that maintains limited sales.
 Having substitution: The chosen organisation is selling the variety of products but their
substitute products are available in market which affected the sales.
 High attrition rate: In Fiat Chrysler and Peugeot there is high attrition rate which make
feel sad to employees and reduce the production process.
 Generation of high cost: In adopting new technology and innovation cost of Fiat
Chrysler and Peugeot become high which create risk for company and minimize the
profits.
Strength:
 Promotional channel: Fiat Chrysler and Peugeot is using different promotion channel
such as social media, print media, direct marketing and others that helps to provide the
information to customers and increase sales (Ledin and Machin, 2016).
 Skilled and talented staff: In chosen organisation there is skilled and talented staff are
working who introduce new model of cars and other vehicles that suits customers.
 Proper utilisation of resources: The management of Fiat Chrysler and Peugeot are
utilising all resources properly which can help to maintain higher productivity. Large portfolio: Fiat Chrysler and Peugeot has large portfolio of brand where it offers
different design and model of cars.
Stakeholders analysis:
This framework is uses by companies to get the competitive advantage and manage the
business. The stakeholder analysis in context to Fiat Chrysler and Peugeot are as defined:
LEVEL OF
INTEREST
LEVEL OF
INTEREST
LEVEL OF POWER HIGH LOW
HIGH Management, Owners Government
LOW Staff members Customers
High power, high interest – In Fiat Chrysler and Peugeot Fiat Chrysler and Peugeot,
owners and management have high power and high interest who decide the changes and make
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right business decision by offering variety of products and services. Herein, management bring
the changes in auto mobile sector and share with shareholders so that funds can be raise for
further activities.
High power, low interest – The government of country has high power but low interest
as formulate flexible and easy trade policy which supports to operate the business effectively
(Yamazaki, 2019). The government of country does not interrupt auto mobile sector which helps
to manufacture different design and feature of cars that helps to attracts large number of
customers.
Low power, high interest – In Fiat Chrysler and Peugeot organisation, number of
employees are working who have low power to make decision but have high interest as if they
work hard then get extra benefits.
Low power, low interest – This force is considering customers who have low power and
low interest in Fiat Chrysler and Peugeot as it buy the products but does not have right to
interrupt in any task.
Evaluation of all strategies by using SAF's criteria
Suitability: All the above strategy such as VRIO analysis, stake holder analysis, TWOS,
value chain etc. are suitable to Fiat Chrysler and Peugeot as it helps to understand the demand of
customers and provide them products at affordable prices which influences them and increases
sales (Köhler and Zerfass, 2019).
Acceptability: By using all resources properly and analysing the competition Fiat
Chrysler and Peugeot is accepting changes effectively which deliver best services and products
in changing environment that supports to regulate business and increase the profitability. Herein,
management measure risk, liquidity, sensitivity and stakeholder reaction which helps to make
right business decision (Zhu and Westphal, 2020).
Feasibility: This states aptitude, ability and implementation of all defined strategy which
are feasible to manage a business and increase the sales. In this, Fiat Chrysler and Peugeot
management assess cash flows, break even analysis, and financial test which helps to make
higher profits by overcoming the expenses effectively.
CONCLUSION
From the report it can be concluded that in the business environment there are many
competitors who are selling better quality of products and services so that they can compete with
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others and maintain the higher profitability. Values chain analysis and stake holder analysis uses
to identify competition and manage the each workings, SWOT and TWOS matrix states abilities
of risks of organisation that need to overcome. Moreover, PESTLE analysis uses to analyse
external environment so that decision can be taken accordingly.
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REFERENCES
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Spear, S. and Roper, S., 2016. Storytelling in organisations: supporting or subverting corporate
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Vukovic, N., 2020. Aligning BI with Corporate Strategy in SME: A case study based on the
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Yamazaki, K., 2019. Golden Rules in Global Corporate Strategy. In Japanese Global Strategy
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Online
SWOT analysis of Fiat Chrysler and Peugeot. 2020. [Online]. Available through:
<https://notesmatic.com/2018/12/fiat-chrysler-automobiles-fca-swot-analysis/>
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