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2009 Chrysler-Fiat Strategic Alliance Case Study

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2009 Chrysler-Fiat Strategic Alliance Case Study
The 2009 Chrysler-Fiat Strategic Alliance

A strategic alliance links two or more companies operations by combining manufacturing resources and knowledge. These tie-ups combine R&D, product development, distribution networks, and other areas in knowledge allocation. With that said, Chrysler was ordered by the U.S. government to form an alliance and file for Chapter 11 bankruptcy in-order to acquire government bailout. So, in early 2009, Fiat turned out to be the key contender for Chrysler and in April 2009, Chrysler and Fiat announced their strategic alliance and agreed on a new ownership structure. In May 2009, Chrysler filed for Chapter 11 bankruptcy in a New York court and started the process of a company-wide restructuring. Chrysler and Fiat, as well as the Obama Administration, announced that the Fiat Group, plans on providing technology-related expertise and assembly platforms to Chrysler. The focal aim of this alliance is to allow Chrysler to survive and develop small and fuel-efficient autos in North America. The initial formation of this alliance allocated Fiat with twenty percent ownership of Chrysler and could raise its stake to thirty-five percent. After 2013, if Fiat meets certain conditions such as, introducing fuel-efficient cars and manufacturing small auto engines in North America, their shares of Chrysler ownership may rise to fifty-one percent. Therefore, this strategic alliance will benefit both companies and allow Fiat entry to the United States.

Italy Fact Sheet:

* Italy has a diversified industrial economy: * divided into a developed industrial north, dominated by private companies, and a less developed, welfare-dependent, agricultural south, with high unemployment. * The Italian economy is driven in large part by the manufacture of high-quality consumer goods * produced by small and medium-sized enterprises, many of them family owned. * Italy also has a sizable underground economy: (accounts for 15%
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