Case Study for Fiat Auto and General Motors Alliance

2319 Words Apr 14th, 2013 10 Pages
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:
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Automotive industries like Fiat and General Motors e should embrace efficiency as well as innovativeness to be able to ensure continuous existence as well as maintain competitive advantage. In addition, strategic alliance is also considered with the aim on expanding the business in the global market (Porter, 1996). This part will analyse the alliance with the consideration of the Porter’s Five Forces Model.
New Market Entrants VERY LOW In the Five forces model, the first factor to be given consideration is the threat of new entrance of new automotive industries. With the strategic of globally competitive industries like Toyota, Honda, Ford, General Motors and even Fiat, , the threats of entry in the automotive industry is noted to be very low. Based on the case study provided, the threats of new entrants for a new automotive industry is very low since a new auto industries will need more financial resources as well as capital investment to be able to continue the business. In addition, these new industries also need high proprietary technology to manufacture and offer new and innovative automobile/cars that will compete in the existing automobile models made by the mentioned industries. Aside from this, the economic crisis and the industrial competition also makes the threat of new entrants to be very low since most of the

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