Case Study: The Alliance Of Fiat And Chrysler

I. Executive Summary The alliance of Fiat and Chrysler was part of a strategy for both individual companies. It is just in the last few years they created this strategic alliance. This alliance later turned into a merger of both companies. An alliance and merger are brought on by motivational factors. Chrysler began in North America. They were a company always falling behind competitors like GM and Ford. Once Toyota, Honda and Nissan entered the automobile industry, Chrysler felt even more danger as a company. They were behind in rankings and sales. Chrysler needed to make a global impact to withstand competition in the industry. Along with competitive threats, Chrysler had troubles with debt and expensive labor union contracts. Fiat began …show more content…
Looking into the motivations for Fiat and Chrysler is more understandable after seeing their mishaps through the years. Chrysler had a motivation to make entry into a global market being Italy. This is the only way they could compete with other companies in the automobile industry. Fiat was also a great company for Chrysler to merge with in order to clear up financial problems. Fiat was having trouble with technology sharing, fully knowing the U.S. could help them with this. They saw a way for Chrysler to help their entry into the U.S. market. Plain and simple, Fiat and Chrysler were looking for entry into new markets in order to compete with other companies in the industry as well as improve their technological stance in producing vehicles. Fiat Chrysler has to adapt to each new market they are entering. It is one thing to make a move into a new market, but being able to succeed in one is even more difficult. They have to make a strategic plan in order for success. Fiat Chrysler can do so by bringing what they each do well out and into each side of the company. Fiat knows the Italian market very well which will allow them to help Chrysler compete with other companies. Fiat Chrysler will make extreme changes in cost …show more content…
This industry is recognized as an oligopoly which helps the cause for competitors minimizing the effects of price-based competition. (Industry Handbook: Automobiles) Technology helps the industry because each company is trying to find new ways of incorporating it into a vehicle. For example, Bluetooth became a popular advancement in vehicles and was installed in the early 2000s in some auto manufacturers like BMW, Lexus and Chrysler. Companies can compete by adding better technology and further advancing models faster than the next company can. Technological advancement has become the competition weapon in the