Chrysler Fiat: Strategic Alliance

The goal of this consulting report is to analyze the strategy for General Motors. To start, a five forces analysis of the automobile industry was conducted. The five forces include the following factors: competition among rivals, threat of new entrants, supplier power, buyer power, threat of substitutes, and role of complements. Understanding the influence of each of these factors provides insight into the attractiveness of the automobile industry. Such an understanding is necessary for an effective critique of General Motors’ strategy for the future.

Though Ford, Dodge, and Chevrolet had managed to make cars affordable a new problem arose, and that was who can stay at the top of the automobile business? Though we’ll never know exactly when Ford’s and Dodge’s rivalry will end, we do know they will keep making some nice

The Fiat Auto acquisition of Chrysler occurred in 2014, which turned Chrysler into an Italian automobile manufacturer (Abrams, 2014, para. 1). By combining these two firms one automaker now have strong ties to the American and Italian auto industry. By Fiat gaining Chrysler’s reputable name it can easily penetrate the American market. This why the acquisition between Fiat Auto and Chrysler can be seen as a growth strategy. Fiat now competes in a large global market, which subjects the firm to many different external environments. The General Enviornment consist of factors that affect every industry, for example taxation. A firm that operates in the auto industry and one that operates in healthcare industry are both going to be subject to government taxation and affect by it. In order to work efficiently and eliminate the threat of general enviornment risk the firm must use a strategy of including these risks in their work process. For example, if Fiat operations in the United States (U.S.) have to follow the U.S. Department of Labor regulations and pay any employee that works over forty hours in a workweek, overtime pay (2015, para.1). In order to reduce the cost associated with paying overtime and keep the budget in line, Fiat might consider hiring in part-time help during its anticipated high volume periods. This will keep production costs low and allow for a larger margin of profit.

In the latest J.D. Power dependability study Ford has now rivaled Japan in manufacturing of vehicles; GM’s Buick division has now tied with Jaguar for the first time in years. Buick also beat out foreign makers Toyota and Lexus From 8 out of 11 car segment awards the car manufacture GM has climbed to the top with their new models with three first place finishes in best all-around, best designed vehicle, and at something we all like to hear when it comes to purchasing a vehicle lowest pricing, but most reliable.

Today Chrysler is the ideal American brand. Through marketing efforts and engineering innovation, Chrysler continues to stand for style, quality, and affordability. In 2015, Chrysler designed the Chrysler 200 from the ground up which featured high quality design both on the interior and exterior (This is Chrysler, 2017). Mr. Marchionne delivered his promise to turn Chrysler around through changing the workflow and the organizational

Chrysler has a small number of rivals in its market (Ford, GM, Toyota, Honda and Nissan) and as such will compete aggressively with others in the market and set their own prices in the process. They tailor their strategies towards their competitor’s reaction. Chrysler has done well with their branding which sets them aside from others in the same industry.

Global competition in the industry: There are many vehicle manufacturers throughout the world. A few common vehicles seen in my state are GM, Chrysler, Lexus, VW, Honda, Toyota, Ford, and Jeep. Each company tries to stay ahead of the rest. Toyota, based in Japan, for example was one of the first businesses to introduce hybrid vehicles. This was a direct result of the oil embargo. After having three oil shortages automobile manufacturers are creating more fuel efficient, environmentally friendly products.

The company that chose for this assignment is Mercedes-Benz. Mercedes-Benz is a old company. It established since almost one century ago. Mercedes-Benz is also a well-known automobile company on the world. It also have many competitors such as Audi, BMW, Volkswagen and so. In the following paragraphs will shows the Mercedes-Benz company background, country background, example of PESTEL, Porter’s 5 Forces, Strategic Recommendations and the conclusion.

I will be comparing both companies General Motors Company and Ford Motor Company for the past three years. We will be able to see all the trends these two automotive manufacturers have and which one may be better to invest in by looking at the last few year’s ratios and percentages. This will give us a better understanding and the knowledge of who maybe the industry leader and who is the follower. These are both major corporations that strive off customer loyalty and both competing on a global scale to make their mark in the one of the top automotive manufacturers in the world. This analysis will give us an understanding of what lies ahead in the future for these two manufacturers.

The Chrysler Group LLC initial public offering (IPO) was initiated by a trust known as the United Auto Workers (UAW) Retiree Medical Benefits Trust to cover medical benefits for retired workers who owned 41.5% of the company. The trust was created in 2007 as a way of reducing Chrysler's financial liability of paying existing workers and former employees’ health care costs and retirements. Initially, the trust was not supposed to have a large share of its assets in the form of stock, but with Chrysler running out of cash the following year, and falling into bankruptcy in 2009, the only asset it could offer was its own stock.

The different variations and attributes of Chevy’s product line appear to give their customers a wide range of choices to meet their functional needs. Chevy has made numerous strides in creating and maintaining customer satisfaction and appreciation over the years. However, choices does not always prove to be successful. Too many choices have been known to confuse customers and, in some cases, customers did not even purchase a product (Schwartz, 2006). Furthermore, with a strong and loyal customer base Chevy may still remain a larger portion of the competition, but could be missing out on simplifying the playing field. In addition, Chevy should focus on international markets to better serve them in a leaner vehicle manufacturing age.

In 2010, over 28 automobile firms registered sales within the United States. The total number of foreign firms doing business in the US was 25. To make the point more saliently, 90% of all firms selling autos within the US are from foreign soil. This number is a stark contrast to what the industry looked like in the pre World War II era, and is probably hard to imagine for the average consumer. However, the top producers in the US market

Internal competition to Fiat come from the "big Three", Ford, GM, and Chrysler, whilst external competition comes from makers such as Toyota, Honda, and Hyundai. Since Fiat will also be using the Alfa Romeo Giulietta model it will also be faced with competition from other manufacturers of that model that included Nissan, Mazda, Volkswagen, BMW, Audi, and Mercedes . The competition will rest on factors such as size of vehicle, fuel economy, seating, engine, and price with safety being a primary factor for many families.

The automotive industry is widespread globally with a wide range of organizations involved in the following: development, marketing, manufacturing, designing, and sales. This analysis will take a further look at automakers in the industry, more specifically General Motors (GM), Volkswagen (VLKAY, Honda, Nissan, Toyota. Beginning around the 1890s, the automotive industry has evolved and undergone shift changes in consumer trends, product development, marketing, and industry competition shifts. Some of the major changes have been the result of: Regulatory, Safety, Economy, Reliability, and Environmental.

In the Fiat’s Group it is noticed a high impact turnaround, the re-launch of the company had been made possible by the identification and implementation of a very clear strategic choices which had a significant effect on the firm’s business model in relation to its competitors. The positive aspects of their strategy is the risk reduction due to the diversification of the Group’s business, which in turnaround process lower