Case Study for Fiat Auto and General Motors Alliance
Case Study: Fiat Auto and General Motors Alliance
Case Study: Fiat Auto and General Motors Introduction The economic crisis and other factors, affect different companies in the global market and automotive industries are not exempted. In order to cope with economic problems within the industry, different companies try to find the most efficient ways to save the company and one of these is through the consideration of merging or going into alliance. In alliance, both companies pursue strategic fit to compliment organisational approaches setting the stage for potential strategic synergy (De Kluyver, 2000). However, it is inopportune that there is no clear evidence that supports the value of strategic fit in mergers Case Study: Fiat Auto andGeneral Motors (Chatterje et al., 1992). In addition, research shows that there is a relatively high risk in having an alliance or joint venture as between 55%-70% mergers and acquisitions are unable to meet the anticipated purpose (Carleton, 1997). Primarily, the goal of this paper is to analyse the alliance the happened between Fiat Auto, an Italian car manufacturer and General Motors (GM), a US-based automotive industry. The analysis will consider the use of marketing analysis tools such as Porters Five Forces Analysis. In addition, this will also analyse the problems and issues facing the alliance of both companies and provide recommendation to solve the problems faced.
Overview of the Case study: Problems and Issues The case was about the merging or the strategic and industrial alliance set and established by Fiat Auto and General Motors in order to expand their business in the global market, particularly in North America for Fiat and Italy for General motors and the rest of the world. In this alliance, General Motors have obtained 20% share to expand their business inEuropean market and Latin market, while Fiat obtained 5.1% stake in the General Motors. The strategic and
Case Study: Fiat Auto and General Motors Introduction The economic crisis and other factors, affect different companies in the global market and automotive industries are not exempted. In order to cope with economic problems within the industry, different companies try to find the most efficient ways to save the company and one of these is through the consideration of merging or going into alliance. In alliance, both companies pursue strategic fit to compliment organisational approaches setting the stage for potential strategic synergy (De Kluyver, 2000). However, it is inopportune that there is no clear evidence that supports the value of strategic fit in mergers Case Study: Fiat Auto andGeneral Motors (Chatterje et al., 1992). In addition, research shows that there is a relatively high risk in having an alliance or joint venture as between 55%-70% mergers and acquisitions are unable to meet the anticipated purpose (Carleton, 1997). Primarily, the goal of this paper is to analyse the alliance the happened between Fiat Auto, an Italian car manufacturer and General Motors (GM), a US-based automotive industry. The analysis will consider the use of marketing analysis tools such as Porters Five Forces Analysis. In addition, this will also analyse the problems and issues facing the alliance of both companies and provide recommendation to solve the problems faced.
Overview of the Case study: Problems and Issues The case was about the merging or the strategic and industrial alliance set and established by Fiat Auto and General Motors in order to expand their business in the global market, particularly in North America for Fiat and Italy for General motors and the rest of the world. In this alliance, General Motors have obtained 20% share to expand their business inEuropean market and Latin market, while Fiat obtained 5.1% stake in the General Motors. The strategic and