Fiat Auto Acquisition Of Chrysler

1349 Words Jan 29th, 2016 6 Pages
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. Another external factor that every firm has to consider is the industry…
Open Document