Managing Innovation: Assessment

This assessment explores the external analysis and internal resources and competences of Fiat Chrysler and Peugeot company in managing innovation. It discusses the PESTEL analysis and Porter's Five Forces model for external analysis, and identifies the strengths and weaknesses of the company's resources and competences. The assessment also includes a value chain analysis and VRIO framework analysis.

MANAGING INNOVATION
ASSESSMENT

Table of Contents
INTRODUCTION.....................................................................................................................................3
MAIN BODY.............................................................................................................................................3
Q1. External analysis...............................................................................................................................3
Q-2 Resources and important competences of chosen company..............................................................6
Q-3 Evaluating tactic utilizing SAFe criteria........................................................................................10
CONCLUSION........................................................................................................................................12
REFERENCES........................................................................................................................................13

INTRODUCTION
Corporate strategy refers with the plan and various strategies which are regarding the
expansion as well as development of the business units for expanding themselves and for
achieving goals and objectives of company in effective manner. On the other side, managing
innovation is refers with the handling all the activities need introduce something new like the
new ideas, developing unique products at the market place. The present report is based on the
“Fiat Chryster and Peugeot” company which is deals into two car market would be created
business with a combined market value. The report will explains the external market analyse
with the help of PESTEL analysis and Porter five force model. After that, report will analysis the
internal capabilities of company. At the end of the report will evaluate the selected strategy for
company.
MAIN BODY
Q1. External analysis.
External environment analysis is refers with the those elements and factors affect to
company from the outside the business and market place. In order to analysis external analysis of
company here is select PESTEL model. This is the best tool which is used by the company in
order to analyse as well as monitor the macro environment factors that have an impact on
company in effective manner. This could be helpful for analysing the more effectiveness for
company for analyse those factors which affect to company from outside the company. PESTEL
analysis in the context of Fiat Chryster and Peugeot are as follows:
Political factor:
The political factors refers with the government norms which have affect to company in
negative manner because that is the threat for company. Government influences consumption of
various products in UK because Government sets the advertising budget which is lower then the
actual income. In that if Fiat Chryster and Peugeot company is consumer extra paper for direct
marketing then government influence the company in negative manner. Direct marketing
required more paper work and posted advertisement (Brewster, 2017). Through that customers
are more attracted towards the business in effective manner. That is the threat for Fiat Chryster
and Peugeot company.

Economical factor:
Economical factors are refers with the certain economy performance which is includes
economic growth, exchange rate, inflation rate as well as disposable income of consumer. In that
money spending on the advertisement has increased by government then it is create opportunity
for business in effective manner. This create more effectiveness Fiat Chryster and Peugeot
company. On the other side, if economic growth of country is good when income of customers
are good then customers are able to purchase products from company in effective manner.
Social factor:
The social factors refers with the population trends like population growth rate, age
distribution, income, attitude and lifestyle of customers. Like if company not produce products as
per customer requirement then company is affected in negative manner because customer
attitude is changed towards the products (Feldman, 2020). One the other side, if customers raise
their spending and conspicuous consumption in the region than It is create opportunity for
company in effective manner. This creates more profits for company because customers are able
to spend more money of company products in effective manner.
Technological factor:
Technological factor is refers with the innovation within the company with new ideas for
innovating new products in order to gain more growth of company in effective manner. Present
days technology is more update day to day. More customers are like to purchase products from
online shopping that is helpful for company when Fiat Chryster and Peugeot introduce online
shopping app for customers (PESTEL analysis, 2019). The continue changes in the consumers
buying behaviour preferences with emergences of online shopping versus urban retails shopping
is create more opportunity for company in effective manner. With the help of social media,
company is able to reach out the niche markets for that company need to spend more on research
and development.
Environmental factor:
Environmental factors are refers with the changes in to the weather, climate, offsets as
well as the changes into the environment are affect to the business in negative manner. But

company have pressure on the direct marketing agencies and direct mail to companies for
reducing impact on environment which is the opportunity for Fiat Chryster and Peugeot in
effective manner. Through that, company is able to find mail and convey their message in any
situation to other companies. This is more helpful for the businesses to done their work without
any disturbance which is generated with the environmental changes.
Legal factor:
This factor is overlap the political factors which is include more specific laws like as
discrimination, antitrust, employment and consumer protection laws. Those are very important
laws which are affected to company in negative manner (Köhler and Zerfass, 2019). The
consumer protection law is comes when company is hide something from customer about the
products and services of company. Here company have need to explain all information to
customer if company is not provide complete information then customer have right take action
against of company with the help of consumer protection act and regulations. That is create
threat for company in negative manner.
Those are the external factors which can affect to company in negative manner. In order
to analysis complete industry here is use porter five force model. This the framework for
analysing the competitive environment of company in effective manner. Explanation of those are
as follows in the context of company:
Threats of new entrants:
New entrants into the market are come with the new and unique product and services.
This creates more issues for company but the Fiat Chryster and Peugeot company have the best
quality of products than which is not affected to the company. There are various barriers which
are affect to new entrants are distribution channel and market penetration costs because in that
company need to come with new product into the new market and there is required more cost
and funds. That can be affect to company in negative manner. This high impact on the business.
Threats of substitute products and services:
There are various substitute products in which Fiat Chryster and Peugeot company deals
that is create switching cost for customers when company is not provide better quality of

products and services (Porter five force analysis, 2020). In this segment customer analyse the
price of products and services which are company provided in negative manner. Like the price of
product is high and expensive then customers are not able to purchase then they are easily switch
to another company which is create negative impact for company. For that management need to
analyse the market first and then sets the price of product. This have moderate impact on the
business.
Bargaining power of customer:
Bargaining power of customer are threat for company because customers have power to
demand the very cheaper price of product. This can affect to Fiat Chryster and Peugeot company
in negative manner. Like if the buyer are powerful then they can demand the cheap price or
product improvements to reduce profits. This is not good for company (Mazzei and Noble,
2017). In that company need to make positive attitude in the front of customers which can
helpful for company to create more trust on company and they are more loyal for company and
towards the products or services of company in effective manner. This have high impact on
business.
Bargaining power of suppliers:
There are various supplier in the market where company is operates their business. That
would be create negative impact on the business. In this switching cost of suppliers are high
because suppliers can change work with the companies in negative manner. For that Fiat
Chryster and Peugeot company need to build relationship with those suppliers who work under
the industry from the long duration is create positive impact on company. This create higher
impact on the business.
Competitive rivalry:
There are various competitors where Fiat Chryster and Peugeot company operates there
business. This creates negative impact on the business because the higher level of competitors
are created more issues for company to make their higher profit industry (Tanriverdi and Du,
2020). This creates more negative impact on the business. This give moderate impact on
company.

Those are the factors which are affect to company in negative and in positive manner
from the whole industry. Those are very important aspects which have need to considered by
company at the time of business as well as its growth into the market place.
Q-2 Resources and important competences of chosen company
Key resources-
Internal analysis can define as exploration of a business competency, position, cost and
competitive viability in marketplace where Fiat Chrysler & Peugeot company has been operated
(Sheetal and Dehury, 2020). It can help organization & management, in term of identifies its
strengths and weaknesses that could impact productivity and profitability either in positive or
negative manner. Here, internal analysis has conduct in context of above firm in order to
determine its 5 important strengths and 1weakness.
Strengths-
Strong workforce-
Employees are the key strength of Fiat Chrysler and Peugeot organization as it helps to
be competitive in sector against business rivals (de la Rosa-Navarro, Díaz-Fernández and Lopez-
Cabrales, 2019). With skilled & talented workforce company can achieve set goals and
objectives in effective manner. It can be considered as essential resource that can be used for
gaining current & further opportunities accessible or emerge in market where it has established
and manage its venture.
Financial performance-
Another resource that can be recognized as strength of Fiat Chrysler and Peugeot is its
financial performance which is really very good. With this asset company can take better action
and decision in context of investing in profitable projects or task which in return increase its
business sales even better and also contributes in increasing profitability as well.
Global distribution channel or network-
Fiat Chrysler and Peugeot has effective and strong distribution network in the world of
business that spread all over the globe. Apart from operations and managements in more than 39
nations, company has international distribution and sales network crossing around 140 countries.

Huge portfolio –
Along with above strengths, company can gain several benefits by using the current one
and that is wide portfolio of organization that provides vehicles in different categories. Through
this strength firm can satisfy its buyers which is actually very essential to do.
Differentiated items-
Organization gain competitive benefits by using differentiation tactic which is one of its
strengths that management use to obtain further advantages as well. It allows organization to
differentiate its goods from rivals that has operated in similar industry.
Weakness-
Lack of technology usage-
Because of this weakness company could gain less benefits in term of retaining and
gaining attention of profitable and potential buyers for longer period of time. Fiat Chrysler and
Peugeot could not invest money in regard to use advance technologies for marketing process as
its manager only focus on products quality.
Value chain analysis-
Primary activities Supportive activities
Inbound Logistics- Fiat Chrysler and
Peugeot Company can manage its inbound
activities ineffective manner by developing
productive and influencing relationship with
suppliers or distributors who has delivery
products and vehicles parts to manufacture
excellent design cars especially for target
market. With this act, firm obtain, store and
then distribute quality items, which increase
sales and profits margin even better.
Frim infrastructure- It is another core
competence of firm that help company and its
management to manage daily work of
employees & operational efficiency in
effective manner. Within organization all the
legal matters has handled by experience
persons who have a lot of knowledge about
law and business ethics, which is important
to know.
Operations- Fiat Chrysler and Peugeot
Organization can achieve its objective and
Human resource management- HR manager
and its team within Fiat Chrysler and Peugeot

business aims by managing functional and
operational activities. Furthermore, firm is
able to manufacture and then test all its
vehicles before selling to target market which
is the core competence of company. It help to
increase customers satisfactory level and
productivity as well.
company by managing employees and
business performance increase operational
efficiencies and effectiveness. They are able
to train existing workforce and hire new
people as well, who are capable to perform
work in productive manner and contributes in
gaining competitive advantages.
Out bound logistics- Fiat Chrysler and
Peugeot and its management is capable to
manage this activity in effective and
systematic manner. For example, effectively
handling products delivery and supply chain
acts which help to deliver products to target
market on time. It aid to gain competitive
benefits and increasing sales even better.
Technology development- Along with all
competences, organization is also able to
design vehicles in attractive and influencing
manner which helps to gain attention of new
buyers and give reason to existing consumers
about retaining with chosen brand for longer
period of time. On the other hand, company
use technology in context of manufacturing
products but less focus on using in regard to
marketing.
Marketing & sales- through porter’s value
chain analysis, it has identified that Fiat
Chrysler and Peugeot Company is not taking
interest in marketing operation and product
promotion as firm invest a lot of money to
improve product quality instead of
promotions, which may impact negatively
upon its business growth as well as brand
image within automotive sector.
Procurement- Fiat Chrysler and Peugeot firm
is capable to handle and manage procedure of
purchasing inputs and delivery final products
to consumers. Its management carefully
considering procurement activities that help to
optimize above acts systematically. By
managing these activities along with above
all, firm can build its strong brand image in
market which boost productivity even better.
Services- Fiat Chrysler and Peugeot in order
to satisfy its potential and new buyers provide
value added services in form of pre and post
sales service which people like and consider
as worthy of buy. Firm is able to cater this

service which is actually valuable for
organization and its consumers as well.
VRIO framework-
Value-
Employees, financial performance and wide portfolio are the valuable resources of Fiat
Chrysler and Peugeot which could not be taken or obtain by other companies (Bilbao-Terol and
et.al., 2019). Firm can use these resources for several things.
Rare-
Team of experienced, skilled and talented workers is rare thing that no one can take
without conducting hard work and attempts. Furthermore, good financial performance is also a
rare thing because no one can build it in market so easily it requires a lot of efforts.
Imitable-
Global distribution network is impossible to imitate by other brands and rivals of Fiat
Chrysler and Peugeot as can built in automotive sector by working in productive manner and
managing business operations.
Organization-
Fiat Chrysler and Peugeot has competence to sustain within automotive industry for
longer period by producing and delivering quality products to customers who are able to pay
exchange of money.
Q-3 Evaluating tactic utilizing SAFe criteria
Here is make proper evaluation of whole report in proper manner with the help of
suitability, acceptability and feasibility of strategies which are suitable for company in effective
manner. For that here is select TOWS matrix which is help to analysis complete threat,
opportunities, threats and weaknesses of company. Explanation of that are as follows:
TOWS matrix:

Internal factors
External
factors
Strength (S) Weaknesses (W)
Opportunity (O)  Employee are more
capable who are ready to
use new technology at the
workplace in effective
manner.
 Their financial condition is
good through that
company is ready to attract
more customer towards
company with better R&D
system about marketing
(TOWS matrix, 2019).
 Lack of technology is
create issue for
company for that
management need to
work with updated
technology for better
enhancement.
 Economic condition of
country is not good in
that management need
to sets price after
analysing market.
Threat (T)  Company hide something
from customer which is
affected company but
company work with
consumer protection act is
helpful for protecting
company with any issue.
 There are very substitute
product but company have
lower price which is good
for company.
 Various competitors
are affect to company
in negative manner
that is threat for
company.
 Lower advertisement
rate and budget can
affect to company in
negative manner.
Accessibility-
Stakeholder matrix-
High interest and power-

Government is one of the Fiat Chrysler and Peugeot stakeholders that can put positive
impact upon business expansion and other strategies by reducing tax rate.
High interest and low power-
Suppliers are another stakeholder; they can impact in negative manner by making new
demands and desire to increase supply chain prices. These stakeholders are less interested to
work with specific brand as they have more opportunities.
Low interest and high power-
Consumers are included in category of third group of stakeholder because they have high
power in context of pricing changing and low interest in purchase.
Low interest and low power-
Workers are not interested in success and growth of Fiat Chrysler and Peugeot as they
can put negative impact on expansion tactic by switching to new job opportunity.
Feasibility-
Excellent knowledge of IT and management as well as appropriate amount such as
money are requiring that Fiat Chrysler and Peugeot could use to gain in future benefits.
CONCLUSION
By summing up above discussion, it has been concluded that Fiat Chrysler and Peugeot
has been gained competitive advantages and achieved its business objectives by applying
appropriate techniques and strategies. By making effective plans and using approaches,
organization has obtained its key opportunities and overcome threats. Furthermore, from above
analysis it has been identified that by using abilities, skills, knowledge and talent of each worker,
company has gained a lot of benefits in term of increasing productivity level which in return
maximize profitability even better than other players. By using business strengths, management
has overcome weaknesses that is really very important to do. Organization has beat its rivals by
using all resources, it is able to give touch competition. Moreover, through different strategic
management tools such as VRIO, value chain analysis, PESTLE and porter’s five forces, all the

forces either external or internal has been determined that manager has considered before taking
any actions and then develop effective plans.

REFERENCES
Book and Journals
Bilbao-Terol, A and et.al., 2019. Integrating corporate social responsibility and financial
performance. Management Decision.
Brewster, C., 2017. The integration of human resource management and corporate strategy.
Policy and practice in European human resource management, pp.22-35.
de la Rosa-Navarro, D., Díaz-Fernández, M. and Lopez-Cabrales, A., 2019. Disentangling the
strength of the HRM system: effects on employees reactions. Employee Relations: The
International Journal.
Feldman, E. R., 2020. Corporate strategy: Past, present, and future. Strategic Management
Review. 1(1). pp.179-206.
Köhler, K. and Zerfass, A., 2019. Communicating the corporate strategy. Journal of
Communication Management.
Mazzei, M. J. and Noble, D., 2017. Big data dreams: A framework for corporate strategy.
Business Horizons. 60(3). pp.405-414.
Sheetal, R.R. and Dehury, R.K., 2020. Exploration of Pedagogy and Industry Expectations of
Management Education: Mediation by Faculty Competency. Journal of Talent
Development and Excellence. 12(3s). pp.1778-1790.
Tanriverdi, H. and Du, K., 2020. Corporate strategy changes and information technology control
effectiveness in multibusiness firms. Management Information Systems Quarterly.
44(4). pp.1573-1617.
ONLINE
PESTEL analysis. 2019. [Online]. Available through:
<https://www.business-to-you.com/scanning-the-environment-pestel-analysis/>
Porter five force analysis. 2020. [Online]. Available through:
<https://www.mindtools.com/pages/article/newTMC_08.htm>