External and Internal Analysis of Fiat Chrysler and Peugeot Merger

Fiat Chrysler and
Peugeot

Table of Contents
Introduction......................................................................................................................................3
Main Body.......................................................................................................................................3
Q1 External Analysis..................................................................................................................3
Q2 Internal analysis.....................................................................................................................6
Q3 Strategy Evaluation...............................................................................................................9
Conclusions....................................................................................................................................11
References......................................................................................................................................12

Introduction
For an organisation to continue to sustain successfully in market it is important that they
formulate strategies which can help them in making effective decisions and actions so that they
can gain a competitive advantage in market. Efficient strategies must be formulated by
organisations after analysing their external and internal environment so that the strategies which
can help in minimising the negative impacts of the factors (Albrecht, Holland and Peters, 2016).
Appropriate strategies can also help in optimising the use of capabilities and strengths of
organisation so that the opportunities present in market can be captured and the threat can be
effectively dealt with. This report is based on Fiat Chrysler and Peugeot is taken of which Fiat
Chrysler Automobiles is an Italian-American multinational corporation and is the world's 8th
largest automotive maker. The group was formed in 2014 by the merger of Fiat and Chrysler and
in October 2019, FCA announced to merge with Group PSA which will be on a 50-50 all stock
basis. In this report the external analysis for the company will be done so that the opportunities
and threats in industry can be found. Also the resources and competences of organisation will be
found so that a competitive advantage can be achieved so that effective merger can take place.
Main Body
Q1 External Analysis
External analysis is related with analysing the external business environment so that the
the potential threats and opportunities which are present in the industry can be identified which
can help in taking effective actions so that high profitability, growth and productivity can be
gained. PESTLE is a strategic management tool which help in efficiently analysing the external
environment which can be used by Fiat Chrysler and Peugeot so that the effectiveness of their
merger can be analysed:
• Political: These are the factors associated with the rules and regulations of a government
which affect the tax regulations, trade tariffs etc. of a country and affect businesses. The
political opportunities for merger of Fiat Chrysler and Peugeot are that the governments
of both the countries i.e. UK and France respectively favour expansion of companies
which help them in increasing investments, job opportunities etc. which can help both the
companies to combine strategically. However, there are certain threats of their merger as
after the post-Brexit of UK from EU, the relations of both the countries will be troubled

which can create many hurdles in their merger. In order to make the merger successful it
is important that the political hurdles are dealt with effectively which can help the
resultant company in becoming the 4th largest automotive company in the world (Ansoff,
2018).
• Economical: These factors are related with the economic condition of a country which
affect the unemployment rate, purchasing power of people, interest rates etc. The
opportunities of merger of both the companies is that it will help them in producing
sustainable, clean and innovative mobility solutions like electrification of auto mobiles,
reduction of emission and autonomous driving technologies. This will help both the
companies in being highly profitable in the market. However there will also be certain
threats for this merger like the global slowdown in the demand for automotive along with
the rising cost of vehicles because of the use of advanced technologies so that emissions
can be reduced and pollution can be controlled.
• Social: These are the factors related with the composition of people in society like age,
religion, caste etc., their living standards, likes and preferences etc. The social
opportunities for the merger of Fiat Chrysler and Peugeot are that the knowledge of
people regarding pollution and global warming is increasing which can help in increasing
the demand of vehicles which have reduced emissions. This can give an opportunity to
the company in producing cars which can help in reducing air pollution. The threats
however with their merger will be that the demand for luxurious cars in the market is
decreasing which can affect the expensive merger of the two companies (Bettis and
Mitchell, 2016).
• Technological: These are the factors related with technological advancements and the
rate at which R&D takes place in a country which can help in accessing advanced
technologies easily and at cheaper rates. The opportunities for Fiat Chrysler and Peugeot
for merger is that the two companies can bring together their investments which can help
them in acquiring highly advanced technology easily and also help in meeting the
changing needs and wants of customers. However, the threats for their merger is that the
fluctuations and high cost of acquiring technology can affect acquiring new techniques so
that highly advanced and innovative features can be installed in the cars.