Corporate Strategy Analysis Report: Fiat Chrysler Business Situation

This report provides a comprehensive analysis of Fiat Chrysler's corporate strategy. It begins with an introduction to corporate strategy and its importance, followed by an overview of Fiat Chrysler's business situation. The main body of the report includes an external analysis using Porter's Five Forces model, assessing the bargaining power of suppliers and buyers, threats of new entrants and substitutes, and rivalry among competitors. An internal analysis employs the value chain analysis, examining primary activities like inbound logistics, operations, outbound logistics, marketing and sales, and services, alongside secondary activities such as firm infrastructure, human resource management, technology development, and procurement. The report further includes a TOWS analysis, stakeholder analysis, and a SAF (Suitability, Feasibility, and Acceptability) matrix to evaluate strategic options. The conclusion summarizes the key findings and strategic recommendations for Fiat Chrysler. The report aims to understand Fiat Chrysler's competitive positioning and suggest improvements based on the strategic models applied.

APPLIED CORPORATE
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Fiat Chrysler business situation..................................................................................................3
External Analysis.........................................................................................................................3
Internal Analysis..........................................................................................................................5
TOWS Analysis...........................................................................................................................8
Stakeholder Analysis.................................................................................................................11
SAF (Suitability, Feasibility and Acceptability) Matrix............................................................12
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Corporate strategy is a strategic plan of the company that defines the firm overall aim and
direction and the way in which will be gained within strategic management activities. It is
essential for the company because it enables to allocate its resources, builds company's
expectations and enhances competitive positioning in the business market. The main objective of
this strategy is to achieve all goals financial and non-financial within defined period. There are
various companies which have put high efforts to develop effective corporate strategy so that it
enables to gain high profitability in business (Hernandez and Menon, 2019). To understand role
of corporate strategy has an example of Fiat Chrysler. It is an Italian/American multinational
corporation and has become world's eighth largest auto maker that is headquartered in London,
UK, UK. It posses wide product line and offers them across the world to the customer, In this
report will discuss various strategic models like porter's five force, Value chain analysis in the
Context of Fiat Chrysler .
MAIN BODY
Fiat Chrysler business situation
External Analysis
Porter's five force model
It is a strategic framework that is undertaken by company in order to analyse competitive
environment of business in its business market. It is essential for the organization because it
supports to adjust strategy accordingly competitive situation and improves potential benefits of
the business. This strategic model is applied by Fiat Chrysler plc for analysing intensity of
competition in retail industry wherein it operates. This model comprises five forces such as:
 Bargaining power of suppliers (High)
All most all companies in the retail market buys raw material from suppliers. While skilled
suppliers have less availability in UK's market, so they are in dominant position and can decrease
margin of the retail company's which Fiat Chrysler plc can generate over the product from
customers. For example powerful suppliers have strong negotiating power for extracting higher
price from the retail industry. Thus, higher bargaining power of suppliers directly reduces overall
productivity of retail companies like Fiat Chrysler plc (Feldman, 2020).

 Bargaining power of buyers (High)
High availability of auto mobile companies in UK' market increases bargaining power of
buyers. For example there are various auto mobile companies like Fiat Chrysler sells similar
product like maserati, jeep, ram, fiat, lancia etc. at different prices that brings opportunity for
buyers because they get alternative options to buy products. So, they go only those retail
companies which offers product with high quality at minimum price which directly impact on
Fiat Chrysler profitability. It denotes that bargaining power of suppliers is too high, so they
always seek for discounts and offers (Oertwig and et.al., 2017).
 Threats of new entrants
Threats of new entrant is lower because there are big four companies like Ford, Toyota which
already has established good brand image in the UK's market and sells wide line product to the
customer and have captured good market share over its products In the auto-mobile industry. So,
it will be difficult for the new entrant to establish their business or in a case if the new entrant
open it's business. In that state new entrants initially has to sell good quality product at lower
price but it is not possible for the new entrants because general motors already sells vehicle
product with high discounts. Overall, there is very less threat of new entrants in retail industry.
 Threats of substitute product or services (Moderate)
Threats of substitute product is moderate because most of the retail companies i.e. Fiat Chrysler ,
Toyota and Ford posses' wide product line and services which meets all customer's needs and
expectations. Still, there has very fewer threats of substitute product and services for the Fiat
Chrysler . However, Fiat Chrysler always try to lead innovation in it's existing product and
improves customer's shopping experience. But it can get threat from Tesla in future because it
also posses similar product like Fiat Chrysler but still planning to introduce new features in it's
existing product portfolio.
 Rivalry among the existing competitors (Low)
Fiat Chrysler has established strong brand presence in the UK's retail industry so it is considered
one of the most powerful competitions for auto-mobile companies. Fiat Chrysler is act as market
leader in the business because it offers product at lower price so but it is highly pressurized from
the nearest rivals in term of price wars that has introduced by Tesla and Toyota which directly
affects profit margin of Fiat Chrysler (Mukherjee, 2018).

From the above analysis can be understood that Fiat Chrysler plc has good competitive
positioning in the business market but still it gets negative impact from the suppliers and buyers.
But It has planned to recruit suppliers across the world so that they get high quality raw material
at lower price through it will enable to generate high profit margin. To decrease bargaining
power of buyers it has goal to introduce new product services and improves quality of existing
products that will support company to sell product at good price. Thus, Fiat Chrysler plc will
tackle current situation of business.
Internal Analysis
Value Chain Analysis
It is a strategic analytical tool that is organized to examine opportunity and find
competitive opportunities. This model plays significant role after development of vision
statement. It also allows company to categorize their resources on the basis of their potential so
that it can enable to achieve it's proposed goals and objectives over the time period. This
framework is applied for the fiat Chrysler in order to categorize essential activities to find
competitive opportunities through which it get long-term and short-term competitive advantage.
The model comprises two type activities I.e. primary and secondary (Cillo and Pradella, 2019).
 Primary activities
The primary value chain activities of Flat Chrysler is directly involve in manufacturing and
selling the goods to targeted customers. This activities comprise various primary activities such
as inbound logistics, operations, outbound logistics, marketing and sales, and services which
undertakes by company in it's business.
Inbound Logistics
It is essential to build strong relationship with suppliers as their support is important to
have, store and distribute them. Fiat Chrysler Auto-mobile N V always focuses in product
development phase through it can face various challenges. It focuses on every aspect of
transformation such as from raw material to finished product so that it does not have to face any
challenges in respect of product quality or service.
Operations

It is another important activity that arises when raw material receives by Flat Chrysler N
V and it ready to transform raw material into final product and introduce in the business market.
Operational activities includes different type of activities i.e. machining, packing, handling and
testing. However, equipment repairing and maintenance are also involved in this category.
Operation management of Fiat Chrysler also perform this activity like manufacturing and service
operation. This activity is essential for enhancing productivity, maximizing the potential as well
as ensures competitive success of the company. However, high productivity of Flat Chrysler
Auto mobile N V supports to maximize economic growth, improve profitability of business in
the auto mobile sector (Marković, Aćimović and Mijušković, 2019).
Outbound Logistics
It involves those activities which delivers the product to the user by passing thorough
different intermediaries. Outbound logistics activities are raw material handling, storage,
planning, order processing, transporting and delivering to the end customer. Operation
management of Flat Chrysler N V always examine and optimize the outbound logistics to
explore sources of competitive advantage and gains all projected objectives of the company. This
outbound activities are highly essential for the company because these are required to manage
timely along with optimal cost while product delivery processes puts minimum negative impact
on the quality and increase level of customer's satisfaction as well as maximizes growth
opportunity.
Marketing and Sales
It is another essential stage of primary activities in which stage highlights the
differentiation and benefits points to follow customers that they offer better product as compared
competitors. As know only producing high quality product and sells them at affordable prices
cannot develop value unit for the Flat Chrysler Auto mobile company. In this stage, marketing an
sales managers plays vital role to create values of proposed products such as they perform
different marketing and sales operations i.e. Sales force, advertising, promotional activities,
pricing, quoting, channel selection and building good relation with channel members. Fiat
Chrysler put more investment in the marketing and selling activities so that it can create
awareness in customer's about product and services which excites them to buy its new vehicle

products. Thus, company enables to establish strong brand image, stay competitive dynamics in
the Automotive sector (Salvi and Pahurkar, 2016).
Services
Fiat Chrysler offers pre-sale and post-sale services to the customer in order to make loyal
customers for the company. Post-sale services are considered as marketing and promotional
activities because it makes feel customers that they are valuable part of the company. But
company does not have good support activities which is essential for protecting brand reputation
instead of using it as advertisement tool in order to spread positive word of individual mouth.
So, marketing and sales management of Fiat Chrysler requires to pay attention on this activity in
effective manner (Mudambi and Puck 2019).
 Secondary activities
There are various secondary activities that are undertaken by company in coordinating and help
primary value chain activities. Fiat Chrysler company gets advantage from the secondary
activities as well which are mentioned below:
Firm Infrastructure
It is one of the essential element of secondary activities which indicates wide range of activities
i.e. quality management, accounting, legal input handling, financing, planning and strategic
management who keeps attention on day to day process of product development. Effective
infrastructure management of Fiat Chrysler Auto-mobile N V allows company to keep control
overall infrastructure activities like costs that leads strengthen the competitive positioning of the
business in the Auto-mobile sector. It is one of the major strength of business through which
company always gets competitive advantage from business market.
Human Resource Management
It is another essential resource of Fiat Chrysler Automobile N V wherein HR
professionals involves in various activities of the company like recruiting, selecting, training,
rewarding, personnel management and performance management activities. Effective HRM
allows Fiat Chrysler to decline competitive pressure on the basis of motivation, efficient
workforces and commitment. With the effective HRM practices, company always enable to gain

cost minimization objectives by examining hiring, training costs with their productive returns.
But still, company requires paying attention on employees' performance because all members do
not put sufficient efforts like others. Only, HR professionals of the Fiat Chrysler can play vital
role in improving productivity, efficient of individuals in the workplace so that company can
receive effective outcomes in the business. \
Technology development
It is another aspect of secondary activities and it is essential for all businesses. For example in
modern era, overall all value chain activities are properly dependent on technological support.
Fiat Chrysler needs technological integration in manufacturing, distribution, marketing and HR
activities so that it can gain all proposed objectives over the time period. However, company
uses highly advanced technologies like automation software, product design research, technology
supported customers and data analytics. Technological development factor is another important
factor that helps to gain long-term competitive advantage in its competitive market.
Procurement
Procurement is the processes that involves in various activities i.e. purchasing inputs that
may wide range from equipment, machinery, raw material, suppliers etc. that are important items
which are required to produce the finished product. The procurement process of Fiat Chrysler is
quite effective because operation management keep attention on each aspect from raw material
to end product.
From the above discussion over value chain analysis can be understood that Fiat Chrysler
needs to pay attention on employees performance and technological development through it can
maximize economic growth of business. Otherwise, HRM, infrastructure and primary activities
are the major strength of business through which it can achieve all projected goals and objectives
within time frame.
TOWS Analysis
TOWS Analysis is very helpful tool to different companies and businesses in market
place, and that’s why Fiat Chrysler Automobiles (FCA) also has required to employ this tool in
its business environment for gaining some appropriate business strategies in market place.

TOWS tool generally indicate four major internal factors of a business, named; strengths,
weaknesses, threats and opportunities, and after knowing the impact of all these internal factors,
business can simply make appropriate business strategies to its venture (Holmqvist and Ruiz,
2017). This tool has been applied below for FCA.
TOWS Analysis Strengths (S): FCA is highly
reputed automobile brand in
the market, and it has
collection of some exclusive
vehicles. Company’s business
expansion process is very
excellent, because by using
own expansion strategy, FCA
has successfully expanded its
business operations in many
countries. Company’s Jeep
model of vehicles has
recently gained huge
popularity in market place
just because of is attractive
shape and modern features.
Weaknesses (W): The FCA
was founded in year 2006, so
that it not has an appropriate
experience for working in the
international automobile
industry, because its many
competitors have experience
of more than 100 years in this
industry. In this situation, due
to lack of experience, the
company is able to gain huge
competitive advantage in
market place.
Opportunities (O): In this
dynamic world, strong
marketing is very necessary
to a business, in which FAC
has an opportunity to attract
maximum customers towards
its brand by employing digital
marketing strategy in own
workplace (Neneh, 2016). On
the other side, most people
are like to buy such vehicles
SO Strategies: The company
have to adopt and implement
the product differentiation
strategy for making some
more exclusive range of
products and services.
Product differentiation
strategy will enable to
company for offering very
quality vehicles to customers
in market place, and then the
WO Strategies: Currently the
company have to depend on
modern and latest marketing
strategy, named; digital
marketing strategy. Basically,
currently most people in
market are using various
digital services, in which this
is the best opportunity to
company for running its
marketing campaigns

for daily use, which are able
to provides proper safety, in
which company has another
opportunity to generate
excellent profit margins in
market place by designing
and developing vehicles with
advance safety.
company no need put its huge
efforts for gaining excellent
competitive advantage in
market place.
digitally under the digital
marketing strategy for
positively influencing many
of people in market place.
When people seen FCA’s ads
ion digital tools, then they
can make their plan to buy
vehicles from this company.
Threats (T): Day to day
many new entrants are
entering in international
automobile industry, in which
this is the biggest threat to
company. On the other side,
present corona virus
pandemic also has reduced
sales ratio of FCA in market,
so this is another key threat to
company. However, each
automobile company has
badly affected by this
pandemic, because there are
no people in markets to buy
products and services from
companies, because currently
people believes in buying
only essential goods and
services, and vehicles are not
very essential to them.
ST Strategies: On the basis of
existing threats, the company
have to adopt the focus
strategy for systematically
focusing on different market
situations. After focusing and
analysing various market
situations, the company can
simply make its brand very
effective.
WT Strategies: According to
weakness and threats, FCA
have to adopt cost leadership
strategy for providing various
vehicles to customers on very
favourable prices (Rittenburg
and et.al., 2016). This
strategy has enabled to
excellent competitive
advantage as well.

Stakeholder Analysis
The management at Fiat Chrysler have to consider these steps to conduct stakeholder
analysis;
Step 1: Determination of stakeholders
Currently customers, employees, government, suppliers etc. are major stakeholders of
FCA, in which the company have to prioritize these all stakeholders on the basis of their power
and interest.
Step 2: Prioritize stakeholders
Fiat Chrysler have to use power & interest matrix for analysing real power & interest key
stakeholders. Generally, power and interest matrix divide all stakeholders in four different
categories;
 High power and high interest: Government always has higher power and higher interest
in business, because it contributes in all over growth of the GDP.
 High power and low interest: Customers have high power and low interest, because they
many other automobile companies also influencing to customers for buying their
vehicles.
 Low power and high interest: Employees have low power and high interest, because they
have linked with company just because of earning some money.
 Low power and low interest: Currently suppliers have low power and low interest in
FCA, because there are various automobile companies available in market which can buy
raw-materials from them.
Step 3: Communicate with stakeholders
Top-level management of FCA has always required establish an excellent communication
with its various stakeholders for maintaining great relationship with them (Sinha, 2018). With
proper communication, the company can properly retain it’s all stakeholders effectively. This is
the main reason that a strong communication is very necessary with different stakeholders.

SAF (Suitability, Feasibility and Acceptability) Matrix
SAF is very innovative matrix to different businesses and companies which basically
evaluates various strategic options to pick the most appropriate one. SAF will help to Fiat
Chrysler for judging and scoring all strategies in proper manner.
Suitability Feasibility Acceptability
According to current market
reputation of company, the
FCA cab simply adopt and
implement those all strategies
in its business environment
which has been mentioned in
the TOWS analysis, like;
focus strategy, cost
leadership, digital marketing
and product differentiation,
etc.
In all business strategies, the
company have to be focused
on highly using product
differentiation and digital
marketing strategy, because
these not consumes lots of
time and resources (Strategy
Evaluation SFA -analysis, 2019).
The company have to be
ready for accepting the
outcomes which it will be
gained from the process of
strategy implementation
process, because sometimes
outcomes can put negative
impact also on the business.
CONCLUSION
This report has been summarized significance of corporate strategy in organization's
success. Porter's five forces i.e. bargaining of suppliers, bargaining power of buyers, threats of
substitute, threats of new entrants, rivalry among existing competitors implemented for the Fiat
Chrysler that has been concluded in this report. It can be summarized value chain analysis for the
company in order to analyse its internal environment, strength and weaknesses through which
company has achieved competitive opportunities in this report.