Automotive Industry and Fiat
Read the 'Management At Work' case on pages 146-147 about the auto industry. Complete the Case Questions #1-3. Research Fiat and Chrysler on the Internet and write an update on current events in those companies.
1. According to a major economics consulting firm, 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 its 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 a strategy to transform itself from an international business into a multinational or global business.
2. What benefts does Fiat hope to gain from its arrange- ment with Chrysler? What potential drawbacks does it face? Judging from your analysis of benefts and draw- backs, explain why the Fiat–Chrysler arrangement might best characterized as a strategic alliance? In what sense is it best characterized as a direct investment?
3. What challenges in the U.S. cultural environment do you expect Fiat to face as it uses its Chrysler connec- tion to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing, and leading? 1. Fiat has established it self as quality product. Bringing their reputation and business skill will attract American consumers. Having their attention and possibly blending the product they can conquer the America market for cars as well as Italy, Europe and other country markets. Being based in the US they can now claim Fiat as a US product and use all the tax cuts. Making it more affordable, now it has exotic looks without the exotic prices! If manufacturing is domestic with the Fiat cars
1. According to a major economics consulting firm, 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 its 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 a strategy to transform itself from an international business into a multinational or global business.
2. What benefts does Fiat hope to gain from its arrange- ment with Chrysler? What potential drawbacks does it face? Judging from your analysis of benefts and draw- backs, explain why the Fiat–Chrysler arrangement might best characterized as a strategic alliance? In what sense is it best characterized as a direct investment?
3. What challenges in the U.S. cultural environment do you expect Fiat to face as it uses its Chrysler connec- tion to compete in the American car market? What management challenges will Marchionne face in the areas of planning and decision making, organizing, and leading? 1. Fiat has established it self as quality product. Bringing their reputation and business skill will attract American consumers. Having their attention and possibly blending the product they can conquer the America market for cars as well as Italy, Europe and other country markets. Being based in the US they can now claim Fiat as a US product and use all the tax cuts. Making it more affordable, now it has exotic looks without the exotic prices! If manufacturing is domestic with the Fiat cars