...1. While this was not the most ideal situation for Chrysler, I think the alliance with Fiat was a necessity. Chrysler had a tremendous loss in profits, had to lay off many workers, and was going to have to file for bankruptcy. This was a great option to help them stay afloat and get help from an outside source. Obviously for Fiat this was a good move. They did take a risk since Chrysler was going into bankruptcy, but they were able to acquire it for a reasonable price and also help themselves to re-enter into North America with a company that already had a solid market share. Fiat most recently purchased the 41% of Chrysler they did not own. The company is definitely on the upswing and will be able to better compete with GM and Ford. 2. Before 2009 strategic alliance: Chrysler – Strengths of Chrysler were they have a strong brand name and recognition within North America. In addition, their Jeep and minivan lines are very popular. They were one of the top three recognized auto brands in North America. Weaknesses were there was no presence in overseas in Europe, they were going into bankruptcy, and their de-merger with DaimlerChrysler hurt them financially. They also remained behind the other manufactures for quality and satisfaction with consumers and had little or no sub-compact cars. Fiat – Strengths of Fiat were they had reinvented themselves overseas in the European markets and are one of the most visible brands of small brand cars in Europe and quality is very...
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...Chrysler’s Changing Organizational Culture Chrysler’s Changing Organizational Culture Ricky Burks Excelsior University In this analysis we will examine the organizational culture of Chrysler Group LLC in order to understand the mission or vision that the company was built on, while taking a look the components of the company’s culture that made it recognizable to others as the Chrysler brand or their known way of functioning. These components would include its observable artifacts, espoused values, and basic assumptions that are related to the specific culture of Chrysler Group. In addition to understanding the company’s past culture we will explore the changes made by their CEO Sergio Marchionne in order to revamp the company’s culture and make Chrysler a more profitable company. This will be done by bringing an understanding to the competing value framework Chrysler has and how Sergio Marchionne has made changes to the company itself. This requires looking at changes made within PE fit and the mechanisms that were used created organizational change for Chrysler. First, one can tell that Chrysler functions under a market culture; therefore, “a market culture has a strong external focus and values stability and control (Kreitner & Kinicki pg.70).” The market culture did not completely change for the company as they still function under the same culture but previous observable artifact and espoused values have been...
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...Fiat plays double or quits with Chrysler Introduction Below are two articles about the merger between Fiat and Chrysler. Please read these and analyse them in the context of TWO of the theoretical frameworks ( One from OS, One from HR) which have been reviewed and considered in this course. Your answer should include: A brief summary of the relevant theories, and any evidenced based critique of those theories You should then apply those three concepts to this case study, so as to illustrate how they apply, or may be contradicted, in the Fiat –Chrysler merger. From The Economist, 27 November 2010, P 73-74 IN JANUARY Fiat cars will be back on sale in America for the first time in 27 years. The tiny, retro-styled Fiat 500 will appear in the showrooms of 130 dealers across the country. It was launched at the Los Angeles motor show last week, alongside a revamped Chrysler range. Fiat’s return to America is the first visible result of what is intended to be an ever closer union with Chrysler, agreed on last year when the Detroit giant was in bankruptcy. The two companies are betting that the Fiat 500—designed by Frank Stephenson, the man behind BMW’s transatlantic success with the MINI—will also prove as popular with Americans as it has with Europeans. Returning to a country from which Fiat was driven out by poor quality—Americans used to quip that its name stood for “Fix It Again, Tony”—is a big risk. But the reward is to get back into one of the world’s largest...
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...Alfa Romeo b. A challenger position c. The threats and opportunities d. Marketing Mix (4P) 4) Conclusion 1) Introduction: Alfa Romeo is an Italian carmaker born in 1910, in Milano. Since 1986, the brand is a part of the Italian Automotive group Fiat. The Fiat Group owns the brands Abarth, Alfa Romeo, Chrysler, Dodge, Fiat, Ferrari, Iveco, Jeep, Lancia and Maserati. The CEO of Fiat is Sergio Marchionne and Harald Wester is the CEO of Alfa Romeo. Alfa Romeo left the Us Market in 1995, because its situation was dire, after a gold period in the middle of the sixties. Since 1995, Alfa Romeo officially sold only two models in the USA, representing 125 units. Fiat Group aims to develop its position on the world market, in September 2010, Fiat was the ninth automotive group in the world, with a production of 2.46 millions of vehicles. To develop itself on an international way, the group is counting on the US market and had implemented many strategies to increase its market shares. The main one was to progressively acquire the Chrysler LLC group in 2009. Currently the group is present in the USA, with the brands Chrysler, Dodge, Ferrari, Fiat, Iveco, Jeep and Maserati. The next step of this global strategy is the come back of Alfa Romeo on the US market. The group aims to reintroduce the brand in the USA in 2013. With this come back, Alfa Romeo expects to sell 400,000 around the world in 2014 and to increase its...
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...A Hundred Factories Too Many Scotch Makers Roll Out a New Barrel Which Airlines Will Disappear in 2009? Julian V. James Dr. Linda Harris The Business Enterprise-BUS 508 Date: 2/16/09 Summary With all the sales of cars around the country sinking from China to the US, automakers find themselves in an embarassing position. It is true that Chrysler may well vanish or be folded into GM or another major player (Welch, 2009). Many automakers are trying to find ways to cut production and cost to stay afloat, but may be force to downsize and lay off thousands of workers around the country. This would allow the automakers to maintain production levels but lower costs. Some of the big car makers are thinking about merging with other car compaines to stay in business. Toyota is actually the only car company to be expanding their operations in China, and announced its sixth plant in October (Welch, 2009). Forecastors are saying that car buying should rebound starting in 2011.What they’re relying on, says Michael Robinet of resercher CSM, is population growth and a sales bonanza in 2013 as people start to replace aging vehicles (Welch, 2009). Another industry that seem to be having a tough time staying afloat is the airline industry. The Airline industry should be turning around in 2009 because in 2008 fuel cost was at an all time high(Welch, 2009). This caused many airlines to file chapter 11, which will let them emerge from bankruptcy even stronger(Foust,2009). ...
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...1. What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry? The alignment between Fiat and Chrysler does not exactly save Chrysler. It gives Fiat an entry into the U.S. In short, Fiat is to get 35% of Chrysler, will not pay any cash for the stake, and it will give Chrysler access to its technology. Fiat had publicly said it wanted a production base in North America for its Alfa Romeo brand--and presumably the Fiat brand, too. Through its35% interest that it is getting in Chrysler, it would presumably have access to a U.S. plant to build its cars. The case is intended to have students look at the 2009 Chrysler-Fiat strategic alliance, its current issues, and future viability in the global auto industry. The new landscape of the American auto industry and the role of Fiat is analyzed in the cross-border tie-up. After de-merging with Daimler in 2007, Chrysler did not do well because of the 2008-2009 global financial crises and its bankruptcy filing. Chrysler’s other problems included its financial constraints and heightened competition in North America. The company had no choice but to look for a partner. During this process, Chrysler explored the possibility of a tie-up with GM, Ford, Volkswagen, Tata Motors, Nissan and Fiat. Eventually Chrysler decided on creating a strategic alliance where Fiat agreed on taking a 20 percent stake in Chrysler. In the next five years, the tie-up may increase Fiat’s ownership of Chrysler to...
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...fortify its worldwide truck leadership position. This expansion and commitment to small fuel-efficient cars puts it in direct competition with FIAT, more heavily in the American market than in the European market, being that Ford has a significant hold on the American Market in comparison to FIAT as a new entrant. Not only does Ford have the competitive advantage of defending its truck/SUV position in a nation of truck and SUV drivers (America; historical aversion to small cars), but a pre-existing reputability and domestic consumer awareness (vs. FIAT with its shoddy reputation for quality). Ford can use its foothold in the truck/SUV market to capture the new small car market, its current market share in the U.S. is 15.3 percent. However, FIATs acquisition of Chrysler may strengthen their American positioning. Unfortunately it is too soon to really tell. Comparable product offerings: Ford Focus and Ford Fiesta when compared to FIAT Punto and FIAT Panda. Peugeot: This France-based company is a huge competitor to FIAT based on product offerings, as it focuses on the same niche: passenger cars and light commercial vehicles (many fuel efficient/hybrid). It currently has a European market share of 17.4 percent compared to FIAT at 6.5 percent. However FIATs recent initiatives show that it could beat out the competition. Peugeot and FIAT are both controlled by holding companies, operate in the continental European mass market, have relatively weak competitive positions outside...
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...Ethical Issues In 1994, a group of Chrysler engineers met to review proposals and recommendations for improving their Chrysler Minivan lines in order to make them more competitive. Paul Sheridan, one of the engineers on Chrysler 's Minivan Safety Team, raised the number one issue on the lists of proposals and recommendations: The latches on the minivan rear doors appeared to be popping open even in low-speed crashes. The Chrysler Minivan latches did not appear to have the strength of either the Ford Windstar minivan or the Chevy minivan rear door latch. Mr. Sheridan proposed that Chrysler make the latches stronger and use that strength as a marketing tool. After Mr. Sheridan made his proposal, and according to testimony in a subsequent product liability suit, a top production engineer told Mr. Sheridan , "That ship has sailed. We told you that last time. Next subject." In Jimenez v Chrysler Corporation, 269 F.3d 439 (4th Cir. 2001), the jury deliberated only 2.5 hours before returning a verdict for the Jimenez family of $262.5 million, $250 million of which was punitive damages. Chrysler agreed with the National Highway Traffic Safety Administration (NHTSA) to replace the latches on 4 million minivans manufactured since 1984. Chrysler has spent $115 million for that replacement program on everything from notification to installation and estimates that about 61 percent of the van latches have now been replaced. The number of deaths from ejection through the rear...
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...4.5 percent and 43.8 percent respectively.2 As the effects of the global financial crisis recede, it is expected that the Turkish automotive sector will reach average annual growth rates of 4.5-5 percent per year in 2011 and follow this trend through till 2013. There are 22 automotive manufacturers in Turkey. The total capacity of the OSD members (15 manufacturers including two tractor manufacturers) amounted to 1,561,155 vehicles in 2010.18 The capacity seemed to stay stable for the first six months of 2010 and the capacity utilization was 72 percent. Most Turkish manufacturers have established joint-ventures with foreign car makers. There are 15 international players in the automotive sector which are; BMW Group, DAF Trucks , Daimler, FIAT Group, Ford, General Motors, Jaguar, Land Rover, MAN, Porsche, Peugeot, Citroën, Renault, Scania, Toyota, Volkswagen and Volvo...
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...April TRAINING EXECUTIVE EXECUTIVE BUSINESS SIMULATION MARKET RESEARCH MARKET RESEARCH PACKAGE FOR THE EUROPEAN PASSENGER AUTOMOTIVE INDUSTRY 2009-2010 Release 9 MARKET RESEARCH MARKET RESEARCH PACKAGE FOR THE EUROPEAN CAR INDUSTRY THE EUROPEAN CAR MARKET The European motor industry is the world's largest car market, having exceeded the US market in total units sold (excluding light trucks). It is also an extremely competitive arena. Some of the patterns to emerge from this market over the last few years are listed below. 1. Sales Figures1 Historical and Current The last strong rise in sales was in 1998 (14.3m), continuing into 1999, however, in 2000 sales fell by 2.2% (14.7m) and stayed at this level in 2001. In 2002 sales fell by 3%, 2003 saw an increase of nearly 5% but this was a result of an expanding marketplace, in reality there was another fall of 1% when comparing sales in the same EU member countries. 2004 saw a genuine 2% increase in registrations, remained stable in 2005, showed a substantial 4% rise in 2006 but then the percentage increase dropped to 1% in 2007. In 2008 European car sales figures were easily the worst for over a decade: 14.6m in extended Europe, 13.6m in the core economies, a drop of 8.2% and 8.1% respectively over 2007 figures. Gloomy forecasts for 2009 proved to be well founded with the whole market falling by a further 0.7% to 14.5m, however, the market excluding the new EU countries did show a 0.7% improvement to 13.7m...
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...http://articles.latimes.com/2009/jan/21/business/fi-fiat21 Fiat and Chrysler sign alliance plan January 21, 2009|Ken Bensinger By taking a stake in Chrysler, Fiat may be providing a glimpse of the future of the auto industry, one that's a lot more global -- and where everybody scratches each other's back. The deal, announced as a letter of intent Tuesday, is not final but would give the Italian automaker a 35% stake in Chrysler, as well as access to Chrysler's U.S. manufacturing facilities and huge distribution network. In exchange, Chrysler would be able to sell its larger vehicles in Fiat's international dealerships and to add much-needed small, fuel-efficient cars to its fleet using Fiat's small engine and transmission technology. As such, it's a partnership that could, in theory, lead to Italian-engineered, U.S.-built Fiats being sold as Dodges at a dealership near you, and Mexican-made Dodges sold as Fiats in France. "I would love to sell Alfa Romeos or Fiats or Fiats badged as Dodges," said Jon Gray, owner of Orange Coast Chrysler Jeep Dodge in Costa Mesa. The partnership is the leading example of the business model du jour in the auto industry, one in which companies trade their strengths with competitors to cover their own weaknesses in the hope that both come out stronger. "Maybe the future for the industry consists in a series of alliances," said Thomas Klier, who, as a senior economist at the Federal Reserve Bank of Chicago, has studied the auto business...
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...RESEARCH ON INDIAN HATCHBACKS BY KUNTAL CHOWDHURY PGDM FS; ROLL NO - 12 THE INDIAN HATCHBACKS A Detailed Analysis of the Hatchbacks in the Indian Automobile Market(An Independent Study) AUGUST 2012. TABLE OF CONTENTS 1 | Introduction | 2 | Market Share | 3 | Participants | 4 | Brand Overview | 5 | A Segment | 6 | B Segment | 7 | B+ Segment | 8 | Slogans Of Brands | 9 | Conclusion | A hatchback is an automobile designed such that the boot is integrated with the cabin space. The Indian hatchback market is growing each day. Any car maker who is looking for significant volume has a hatchback model in its bucket. The financial year 2010-2011 has seen good growth among hatchbacks in the country. The companies such as Honda and Toyota are keenly eyeing the hatchback space in India. Honda has recently launched the Brio, while Toyota recently launched the Etios Liva. Honda’s premium hatchback, the Jazz, however, has not won much favor with customers and sales have dropped 35 percent year on year. Among hatchbacks in India, Maruti Suzuki is the most dominant player followed by Hyundai and then Tata. Maruti’s Alto is the country’s and the world’s largest selling hatchback, at 346,840 cars being sold in India last year, a growth of 47 percent. The second-largest selling hatchback in the country is again from Maruti – the Wagon R. However, the Wagon R has close competition from the Hyundai i10, which is just behind it, though the i10 hasn’t grown as much...
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...example, when the U.S. government offered as much as $4,500 in "cash for clunkers" rebates, Chrysler's sales chief at the time, Peter Fang, drew up a plan to offer an additional $4,500 from Chrysler, two people familiar with the matter said .... But when Mr. Marchionne found out about it, he was furious, these people said. In an August meeting with Mr. Fang and his sales team, the CEO excoriated them, saying doubling discounts amounted to "giving away margin" at a time when Chrysler was scrambling for profits, one person familiar with the details of the meeting said." Sergio was ballistic," this person said .... Mr. Marchionne took the helm at Chrysler in June, when the company exited bankruptcy protection and formed an alliance with Italy's Fiat SpA, where he...
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...The 2009 Chrysler-Fiat Strategic Alliance Part-I What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry? The strategic alliance between Chrysler and Fiat was a beneficial step for both the companies. Chrysler was facing problem of financial crisis of 2008-2009 and was not able to perform after de- merging with Daimler in the year 2007. In North-America Chrysler was facing challenges of its bankruptcy filing and global financial crisis, because of which the demand of its car decreased in the domestic market. In order to recover from this loss, Chrysler had no other option but to find a partner with whom it could serve the foreign market. Chrysler surveyed the possibilities of various big automakers like Nissan, TATA Motors, Ford, Volkswagen, GM and Fiat. Finally they decided to create a strategic alliance with Fiat. In this alliance Fiat agreed for 20% of Chrysler stake and increased to 35% within five years. With this Alliance, Fiat got the opportunity to enter the US Market and instead of paying for the 35% of Chrysler stake, they provided Chrysler access to their technology in automobiles. (Calabrese, 2012) Fiat announced publicly their intention to open a production center in North America for manufacturing of Alfa Romeo and Fiat brands. By doing so they gained 35% stake in Chrysler and gained access to the Chrysler production center in America. Similarly, Chrysler also benefitted by gaining...
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...Shifting Gears in the Auto Industry Question One Prior to taking over Chrysler, Fiat was an international business – exporting cars out of Italy to other countries and engaging in joint ventures around the world, including an extremely unprofitable partnership with GM in 2005. The brand had a negative reputation in the United States, and it was senseless for the brand to invest resources in the American car market. By 2006, however, Fiat was turning a profit, and in 2009, the company was named one of Fortune magazine’s most admired companies and became Europe’s third-largest car company and the ninth largest in the world. As Fiat experienced this massive success, transforming into a true multinational business became a viable option. Purchasing the struggling Chrysler brand was a logical way for Fiat to truly become a part of the American automobile market and become a multinational company. Instead of merely exporting cars to the US or entering a joint venture with a US automobile maker, Fiat is able to have full operations in the United States using Chrysler’s existing resources. The merger was practical for both brands, as Chrysler desperately needed resources, and by buying out Chrysler, Fiat gained access to Chrysler’s network of distribution channels in the United States and the brand recognition of Chrysler. As a multinational business, Fiat will still be able to adapt product offerings and strategy for each country, but will have better access to the markets of each...
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