Tata and Fiat Jv

Satisfactory Essays
Case: Fiat’s Strategic Alliance with Tata. IB-Sec A &C.

Please use the following questions as guideline to prepare the case: (Follow instructions in outline except those mentioned below.. 1. Given that, Fiat existed and operated in India for long why did it decide to form a strategic alliance with Tata? * Frequent bottlenecks with earlier smaller JV partner(premier) * felt the need for bigger player- with financial and management compatibility * Long term approach * Respected name and trust on “TATA” brand * Strong foothold of TATA in promotion, distribution and dealership across India. * Seriously challenged with the problems unique to India. Did not have a clue how to solve them on their own e.g
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Important aspects to focus on: i. Partner selection 1. Earlier partner – premier – small player ,did not match up to fiats requirements for capital commitments 2. Tatas had – brand ,long term commitment, excellent domestic and international reputation 3. Both parties had elaborate meetings to communicate strategic priorities and interests in working together c. Alliance structure ii. GM- Fiat alliance did not completely guard against the risk of opportunism by the partner. In this case fiat got the better out of GM. iii. Exit clauses were dealt thoroughly: 4. Right of both companies in case one company exited 5. Continuity of other contracts if JV is terminated iv. During negotiation “business issues” took the centre stage and legal issues were to be addressed later. It shows mutual trust and focus on goals. d. Management of the alliance v. Cultural differences at different layers needs sensitisation 6. Country cultures – Italian and indian 7. Corporate cultures – Fiat (autonomy of decisions) tata(centralisation) e. Nature of resources available f. Degree of market uncertainty g. Level of competition in the market h. Types of synergies vi. Modular vii. Sequential viii. reciprocal

5. Which aspects of the JV negotiation, according to the group, are
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