Fiat Chrysler
Case Questions
1. According to a major economics consulting firms, Fiat`s ¨South American operations are the jewel in the Italian company`s global operations¨. Fiat has plants in Brazil and Argentina, and Brazil is the biggest market, well ahead of its home-country market. In 2011, with the Chrysler venture taking up more and more of the firm`s attention – and as European sales suffered a steep decline – rumors began to circulate that Marchionne might move Fiat headquarters from Italy to the United States. Discuss Fiat´s takeover of Chrysler as part of strategy to transform itself from international business into a multinational or global business
2. What benefit does fiat hope to gain from its arrangement with Chrysler what potential drawback does it face? Judging from your analysis of benefits and drawbacks, explain why the Fiat-Chrysler arrangement might be characterized as strategic alliance? In what sense is it best characterized as a direct investment?
3. What challenges in the US cultural environment do you expect Fiat to face as it uses its Chrysler connection to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing and leading?
Before their merger, Fiat and Chrysler were two comparatively small regional companies overly reliant on just three auto markets—the U.S., Italy and Brazil.
Through the first nine months of 2013, nearly 85% of the Fiat's automotive revenue came from North America, Latin America and Europe. About two-third of its profit before interest and taxes came from North America, according to data on the company's website.
In the U.S., Chrysler, though profitable, still suffers from the drought of research and development spending in recent years—a gap acutely visible in midsize sedans.
Chrysler faces significant investments to keep pace with rising U.S. government fuel efficiency standards. Chrysler-Fiat ranked last among 11 auto makers in a U.S.
1. According to a major economics consulting firms, Fiat`s ¨South American operations are the jewel in the Italian company`s global operations¨. Fiat has plants in Brazil and Argentina, and Brazil is the biggest market, well ahead of its home-country market. In 2011, with the Chrysler venture taking up more and more of the firm`s attention – and as European sales suffered a steep decline – rumors began to circulate that Marchionne might move Fiat headquarters from Italy to the United States. Discuss Fiat´s takeover of Chrysler as part of strategy to transform itself from international business into a multinational or global business
2. What benefit does fiat hope to gain from its arrangement with Chrysler what potential drawback does it face? Judging from your analysis of benefits and drawbacks, explain why the Fiat-Chrysler arrangement might be characterized as strategic alliance? In what sense is it best characterized as a direct investment?
3. What challenges in the US cultural environment do you expect Fiat to face as it uses its Chrysler connection to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing and leading?
Before their merger, Fiat and Chrysler were two comparatively small regional companies overly reliant on just three auto markets—the U.S., Italy and Brazil.
Through the first nine months of 2013, nearly 85% of the Fiat's automotive revenue came from North America, Latin America and Europe. About two-third of its profit before interest and taxes came from North America, according to data on the company's website.
In the U.S., Chrysler, though profitable, still suffers from the drought of research and development spending in recent years—a gap acutely visible in midsize sedans.
Chrysler faces significant investments to keep pace with rising U.S. government fuel efficiency standards. Chrysler-Fiat ranked last among 11 auto makers in a U.S.