Corporate Strategy Analysis: Fiat Chrysler and Peugeot Merger Report

This report provides a comprehensive analysis of the corporate strategy employed by Fiat Chrysler and Peugeot following their merger. The report begins with an introduction to corporate strategy and the context of the merger within the automotive industry. It then delves into an external analysis using PESTLE and Porter's Five Forces models to identify opportunities, threats, and industry attractiveness. The report then shifts to an internal analysis, evaluating the companies' resources and core competencies using VRIO analysis and the value chain model. The report concludes by evaluating a recent strategy implemented by the company and assessing it using the SAFe criteria. The analysis covers political, economic, social, technological, environmental, and legal factors, as well as competitive forces, to provide a holistic view of the strategic landscape. The report highlights key strengths, weaknesses, opportunities, and threats, offering a detailed examination of the merger's strategic implications and potential for success.

Applied
Corporate
Strategy

Table of Contents
Introduction................................................................................................................................3
Main body..................................................................................................................................3
External analysis and different opportunities and threats provided to business.....................3
Analysis of internal components providing core competency to business.............................6
Strategy that company implemented recently and evaluating its SAFe criteria.....................7
Conclusion................................................................................................................................10
References................................................................................................................................11

Introduction
Corporate strategy refers to a system of strategic planning within an organisation.
Organisations are now aiming at different goals and directions in order to make sure that they
are achieving all the objectives which they have decided for the organisation. It is often seen
that this objective score consisting of long run visions for the organisation. The following
report is based upon a merger between Fiat Chrysler and Peugeot Owner (Dahl and Fløttum,
2019). Fiat Chrysler is an automotive industry organisation which announced its merger with
Italian firm in 2014. The below mention report discusses various internal and external
analysis which would be done by organisation while they are consisting of people with the
following merger.
Main body
External analysis and different opportunities and threats provided to business
PESTLE analysis
PESTLE analysis is defined as the framework which provide the beirf information
about avrious threat and factor which is faced by any organisation in market. This include
political factor, environmental factor, social factor, technical factor and legal factor. This
factor influence the productivity and profitability of an organisation.
Political factors: Political factors include various government policies, stability of
political parties and taxation policies in an economy. It is often seen that political factors are
highly effecting a business or industry. The merger between Fiat Chrysler automobiles and
Peugeot Owner will be highly affected by political factors of the economy. Different tax
policies and government stability of different economy will often bring in various risk for the
business as they will continue with their activities after the merger have taken place.
Threats: The political factors will impact highly on the firm which will be formed after a
merger. It is often seen that they didn’t corruption in various economy will impact the
business plan which the organisation have developed after merger for their business.
Economic factors: there are a number of different economic conditions such as the
exchange rate, taxation policy, and interest-rate and soon which are affecting a business
highly. It is often seen with organisation which is running in more than one country that they
will be affected by economic factors (Surijah, 2016). Fiat Chrysler automobile and Peugeot

Owners are successfully making sure that they can achieve highest position in the automobile
market after the merger which will be taking place. There are a number of different models
which are developed by both of this organisation focusing upon the population and the
economy where the organisation is setting up their business. It is necessary for them to make
sure that the economic condition of the countries in which they run business is developing or
developed to set up their functions.
Threats: Setting up a business in underdeveloped or developing company will be difficult for
the organisation as the GDP of the economy along with the foreign exchange rate will bring
in barriers for these organisations.
Social factors: There are a number of different social factors such as the changing
needs and demands of consumer and the trends in market which are affecting businesses.
When taking the auto mobile industry awareness of the individuals about the effects that auto
mobiles have on environment is increasing. It is required by both of this organisation to make
sure that they are bringing in auto mobiles with all the qualities which can fulfil the
requirements of consumer and also meet their day to day changing needs and demands.
Opportunities: Conducting proper market research in order to meet the needs and
requirements of consumer is a great way in which Fiat Chrysler automobile and Peugeot
Owner can successfully set up their business (Hardy, Lexa and Bruno, 2020). It is also
required by them to conduct proper market research from time to time to provide consumer
with the products which are trending in the market.
Technological factors: The technological factors are highly affecting organisations in
auto mobile industry. It is often seen that the technological advancement is bringing benefits
to the organisation and when taking the merger between two organisation into context they
can successfully intake all the technological advancement. The investment which is required
for these advancement is also present with the organisation which will successfully help them
in developing as one of the biggest car manufacturer in the world.
Opportunities: Both of these organisations coming together will have huge funds available
with them. These funds can be successfully used by them in order to make sure that they are
investing on research and development department. Along with this they can adopt all the
new technologies in the market which will help them to bring in products and services which
have not been offered to their consumers. The technological development will also help them
to stand the competition in the market in order to meet all their objectives and aims.
Environmental factors: The environmental factors are highly affecting automobile
industry as all the products of this industry are having some impact on the market. The

environment is getting polluted due to these auto mobiles and it is necessary for the
businesses to make sure that they are making cars which will not have a negative effect on
the environment (Brønn and Brønn, 2018). There are used pollutants released by cars in the
environment and Fiat Chrysler need to make sure that they are taking care of all the
environmental factors affecting business after the merger.
Threats: If the organisation fails to successfully develop cars which are environmental
friendly they can face threat in future. It is required by them to work upon various ways of
developing fuel-efficient and less polluting cars for customers. If the organisation does not
fulfil these requirements they can face negative influence from government of nations along
with the consumers. The organisation can also not develop sustainably if they do not focus
upon different environmental factors.
Legal factors: There are a number of rules and regulations which are to be followed
by businesses when they are running in different nations. These rules and regulations are
developed by the ruling parties and the government in the countries for different businesses.
When taking the merger into context it is often seen that some of the countries do not support
merger of huge organisations. This is because the competition in the market is reduced and
also some of the organisations set up their monopoly through the help of this strategic
alliance. Fiat Chrysler automobile and Peugeot Owner can face this threat in a number of
different countries due to the legal rules and regulations.
Threats: The organisation may face huge threat if they fail to follow the required laws which
have been created by government in different countries. It is often seen that when an
organisation is not successfully following all the rules and regulations of a country they may
face negative impact. This can be in the form of legal proceedings against the organisation
due to which they require to pay huge fine or may also lose their license of running the
business.
As per the above disussion it is analyse that Fiat Chrysler have also facing some issue
in their organisation. The various impact which is based on social, political, environmental,
and legtal factor which affect productivity and profitability of an organisation. This PESTLE
model help organisation to know the various factor which make impact in their firm. The
threat were analysed as per by using this method. Fiat Chrysler also used this method to
observe various circumstances which create negative impact on their business.
Porter’s five forces model
This tool was developed in order to enable the business firm to compete in business
environment consisting of various dynamic factors. Activities of a business firm is been

carried out by thier management effectively in order to provide efficiency towards it's goals.
This tool helps a business to conqure it's competitors and to grab future opportunities to the
workforce.
Bargaining power of buyers: When taking into context the bargaining power of the
consumers it is often seen that after both of these organisations have joined hands they can
successfully come up with new products. These new products will be different from the
competitor and reduce the bargaining power of their consumers in the market.
Bargaining power of suppliers: The bargaining power of suppliers will also be
reduced as both of these organisations have a number of different suppliers in the market
(Schmidt and Redler, 2018). Also the suppliers of both of these organisations will want to
join hands with huge organisation after the merger which will provide them with better
relations with the suppliers.
Competitive rivalry: The competitive rivalry for the organisation after the merger will
definitely reduce. When they are joining hands the manufacturing process and technological
advancement of the organisation will help them to reduce the competition in the market
throughout the globe.
Threat from substitutes: There are a number of substitute product present in the
market of auto mobile industry (Rugman and Verbek, 2017). However providing great
quality to the consumer will help the organisation to make sure that they are reducing the
threat from substitute and differentiating their products and services for their consumers as
compare to the competitors in the market.
Threat from new entrants: The amount which is required by new entrants to enter
into automotive industry is huge. Due to this the threat from new entrants for Fiat Chrysler
and Peugeot Owner will reduce as both of them work together. The technological
advancement and investment required in research and development department is also huge
due to which most of the companies do not enter into such industry.
Using this analysis Fiat Chrysler was able to increase their market presence and build
it's brand image amongst there respective customers. The management was able to implement
appropriate plans by analysing external environment of the firm and also helped in growth of
an organisation.
Analysis of internal components providing core competency to business
VRIO analysis

vrio analysis is defined as the an analytical tool which show the briliant for the
evaluation of organisation resources and this help in an organisation to gain competitive
advantage from the market. VRIO analysis usualyy is an acronym from the initial of the
names of the various dimesnion which help an organisation to know their value and assest.
These tend to value, rareness, imitability and organisation.
Valuable: These are all the resources of the organisation which are valuable for business. It is
necessary that business is managing all these resources to make sure that they are providing a
tough competition in the industry. Below mentioned are various valuable resources present
with both Fiat Chrysler auto mobile and Peugeot Owner while taking the merger into context:
 Manufacturing process which is used in both of the organisation is valuable to them as
they require producing high-quality products for the consumer. It is a great advantage
in competitive environment.
 Technology is also valuable resource for both of these organisations as it is required
by them to develop best quality of the new products which they will be launching in
the market. It is a great way to bring competitive advantage to the business as well.
 The local and international presence of both the organisation in the market is one of
the valuable resources which will help them to gain attention from most of the
consumers. The skilled and trained employees in both of the organisation or also valuable
resource for the organisation which will successfully help in bringing creative and
innovative ideas in future.
Rare: Rare resources consist of all the resources for an organisation which their competitors
cannot inherit easily. Fiat Chrysler and Peugeot Owner there are a number of resources which
are rare for the organisation and it is difficult for their competitors to use these resources as
mentioned below:
 Technology is one of the most real resources present with both of these organisation
as the competitors require huge fund to invest on gaining such technological
development.
 The popularity of both these brands is very good in their own region. This will help
them to attain huge range of customer base as they will be working throughout the
globe. The employees which have been trained and experienced in the organisation are one
of the major resources for the organisation. It is difficult for the competitors of
organisation to gain such talented and skilled employees.

Imitable: Imitable resources refers to all the resources which cannot be copied by the
competitors of a business (Keyes, 2016). Fiat Chrysler automobiles and Peugeot Owner are
the organisations which have various imitable resources as mentioned below:
 The brand popularity is one of the most imitable resources which is bringing huge
population to the organisation which their competitors cannot. Along with the already
existing customers they are also continuously developing more consumers for them in
market. The nature of the employs and behaviour of employees in the organisation is also one
of the resources which cannot be copied by the competitors of Fiat Chrysler and
Peugeot Owner which make them difficult to copy
Organised: It is required by organisation to make sure that they are successfully organising
all the resources available to them. These resources are organised in a manner to bring
maximum profit to the organisation. Below mentioned are some of the major resources which
are bringing profit for Fiat Chrysler and Peugeot Owner:
 Employs of both the organisations are well trained and skilled. These employees are
successfully motivated and increase from time to time with a number of different
incentives and benefits they gain an organisation. In order to make sure that maximum
productivity can be gained by these employs both of the organisation and training
them and making sure that it provides them with competitive advantage.
Strategy that company implemented recently and evaluating its SAFe criteria
TOWS analysis
Internal factors
Strengths
Opportunities
There are a number of strings which are
brought to both of these organizations
while they are merging together.
Technological advancement of both of this
organization is one of the major resource
which will help in providing them strength
over the other competitors in the market. It
will also help them to make sure that there
enhancing their market share and also
increasing their customer reach from time

External factors to time.
Threats
There are a number of strengths of both of
these organisations which will help them
in making sure that they can bring a new
products and services in the market. These
products and services will be successfully
fulfilling all the needs and requirements of
customers. It is often seen that the needs
and requirements of customers keep on
changing due to which the investment
which is done on the organisation can
going to vein (Mazzei and Noble, 2017). It
is required by the organisation to make
sure that they are successfully conducting
market research to understand the current
trend in market.
SAFe analysis
The following analysis is helpful in understanding the effectiveness of strategies
adopted by organisation. Along with this it focuses upon strengths and weaknesses of the
organisation (Brewster, 2017). Below mentioned are strategies which can be adopted by Fiat
Chrysler and Peugeot Owner so that they can successfully create various strategies to bring
advantages:
Sustainability: In the following factor the organisation requires to understand the
opportunities which are brought by different strategies. When taking the current analysis it
can be seen that there are a number of ways in which technological factors will help the
business of automotive industry to run for a longer period of time. They can also develop
various new products and services using the expertise of both the organisation involved in
merger with the help of which they can bring long-term benefits for the organisation.
Acceptability: While taking such huge decisions of corporate strategy it is necessary
that the stakeholders of organisation and accepting this strategy. The organisation is required
to meet all the needs of the stakeholders and also communicate them about different
strategies which will be incorporated in the organisation. While the merger Fiat Chrysler and

Peugeot Owner or successfully taking the plan to stakeholders and approving it by them in
order to make sure that the stakeholders are satisfied.
Feasibility: The last aspect of the following analysis is feasibility in which it is
necessary to understand the resources present with both the organisations to carry out the
merger. It is necessary that the employees of the organisation and all other resources of the
organisation in merger are supporting the decision (Köhler and Zerfass, 2019). Fiat Chrysler
automobiles and Peugeot Owners are launching new car which will help them to generate
huge profits in the market. It is required by them to analyse the customers of both the
organisation and also employs of both the organisation that will be carrying out this
execution.
Conclusion
With the help of the following report it can be concluded that there are various factors
in internal and external environment that are affecting a business. While making big decisions
like merger it is necessary for business to analyse all these factors to successfully conduct all
the activities in merger. There are also a number of different threats and opportunities which
will be brought by organisation while they are following this strategic plan and it is necessary
for management to list down the drawbacks and benefits of all these steps. Fulfilling all these
requirements organisation can successfully go for merger and achieve all their future aims
and objectives.

References
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