PSA Peugeot Citroen Case Study: Jacques Calvet's Strategic Plan
Q1
Strengths:
PSA team had strategic and financial advantages over its competitors with stimulation of synergies between Peugeot and Citroen, which came form the standardisation of vehicles with 50% of non-visible components being shared. Joint purchase of these components was another advantage above competitors. R&D expenses were also shared as per the two parallel model ranges.
Using two different dealer networks for each marque also created an advantage over competitors by giving PSA greater market coverage.
PSA was also the world leader in diesel and electric cars technology.
Weakness
The group does not have an extensive range like its other competitors which not only have cars but also have light trucks, vans ect. As a result of this weakness PSA had to opt out of the American market which represent’s 40% of sales in North American Market.
Compared to its competitors in 1995 most of the companies investments are centred in Western Europe. Under the leadership of Calvet, PSA is also restricted as to forming alliances with companies outside of Europe such as the Japan, whilst its competitors are looking to gain international markets share by investing in international markets.
Q 2-3
This question is based on information in Subhash (2000) and theories mentioned by Walker and Mullins (2008).
Jacques Calvet aim’s for PSA is to be leading car manufacturer in the European markets in terms of vehicles sold. (Jain, Subhash C. (2000).
Jacques Calvet’s approach is expansion of PSA’s current business by promoting higher growth with greater economies of scale. The first step of being CEO in 1984 of the company was to eliminate 30,000 jobs and promote growth by spending heavily on modernisation in order to improve productivity, flexibility, efficiency and quality of products. Aided by the strong launch of the 205 super mini car, PSA returned to growth and profitability in 1985 meaning greater return for its shareholders.
By sharing the R&D
Strengths:
PSA team had strategic and financial advantages over its competitors with stimulation of synergies between Peugeot and Citroen, which came form the standardisation of vehicles with 50% of non-visible components being shared. Joint purchase of these components was another advantage above competitors. R&D expenses were also shared as per the two parallel model ranges.
Using two different dealer networks for each marque also created an advantage over competitors by giving PSA greater market coverage.
PSA was also the world leader in diesel and electric cars technology.
Weakness
The group does not have an extensive range like its other competitors which not only have cars but also have light trucks, vans ect. As a result of this weakness PSA had to opt out of the American market which represent’s 40% of sales in North American Market.
Compared to its competitors in 1995 most of the companies investments are centred in Western Europe. Under the leadership of Calvet, PSA is also restricted as to forming alliances with companies outside of Europe such as the Japan, whilst its competitors are looking to gain international markets share by investing in international markets.
Q 2-3
This question is based on information in Subhash (2000) and theories mentioned by Walker and Mullins (2008).
Jacques Calvet aim’s for PSA is to be leading car manufacturer in the European markets in terms of vehicles sold. (Jain, Subhash C. (2000).
Jacques Calvet’s approach is expansion of PSA’s current business by promoting higher growth with greater economies of scale. The first step of being CEO in 1984 of the company was to eliminate 30,000 jobs and promote growth by spending heavily on modernisation in order to improve productivity, flexibility, efficiency and quality of products. Aided by the strong launch of the 205 super mini car, PSA returned to growth and profitability in 1985 meaning greater return for its shareholders.
By sharing the R&D