Fiat had gone through major alterations some good and some bad in the past old ages. From the old ages of 2004 a new comer came on board with decree named Sergio Marchionne. He was the dominate stockholder in Fiat and took on the occupation to resuscitate the companies public presentations when they were at their lowest point. Sergio attempted to cut down the costs and look for new advanced ways to make autos that were fashionable and grabbed attending. At this clip when he took over the auto production had unsympathetic theoretical accounts and there was a deficiency of investings.
Fiat group ‘s was in debt and the money was fluxing out at a rapid rate, but the Bankss were repaid with the aid of rights issue in late2005. In bend with Mr Marchionne taking over and holding all the jobs of get downing he had an involvement and clear ends in doing the company win. In the clip he stated he made many alterations and enforced schemes in order to do certain that he achieves advanced and originative cars that are of good quality. This instance survey involves looking at the strengths, failings, chances and menace that the company has faced through the old ages of 2004 to 2008 and compare how things have changed due to Mr Marchionne ‘s programs to break the company. Making a SWOT analysis on the company will guarantee that we examine the company ‘s concern construction and operations, history and merchandise and it will supply a drumhead analysis of the cardinal gross lines.
Fiat is a company that is engages in many activities such as fabrication, distributing, building equipment and commercial vehicles. Fiat operates in Europe and North America, with fiat seeking to better their place by been advanced a attempt alteration how Fiat is perceived. When Fiat Hired Mr Marchionne the company knew that he was a corporate trouble-shooter but that he had ne’er worked in the car industry, but by taking the opportunity as they were on the brink of bankruptcy and thought it would be a good thought to name in an amateur.
1. Undertake a SWOT analysis of Fiat at the clip that Mr Marchionne was appointed and propose how a SWOT analysis in 2008 may differ.
The SWOT analysis provides a company with information that is helpful with duplicate resources and capablenesss to the competitory environment in which it operates. SWOT stands for Strengths ( S ) , Weaknesses ( W ) , Opportunities ( O ) and Threats ( T ) . Strengths and Failings are normally the internal factors within the environment and the chances and menaces are the external factors of the house. ( Bradford, Robert W, Duncan, Peter J, Tarcy: Simplified Strategic Planning )
Therefore during the twelvemonth 2004 Fiat faced many challenges but overcame some due to their strengths and chances. First by looking at the internal factors we can analyze the strengths and the failings that the company faced in 2004. The strengths of a company is like an advantage that they have over their rivals and each companies strength differ consequently and in the instance of Fiat their strengths are as follows:
Fiat had qualified staff members that created a competitory advantage by making accurate prediction of the market, for illustration Mr Marchionne said that by cut downing clip to market is a important beginning of competitory advantage For “ the cats running the trade name who are largely non applied scientists, but are people with a really strong consumer merchandise prejudice ” . The staff members do non hold to foretell the market so far in front. Another strength that Fiat had was that they were determined to work the autos ‘ comparative fuel efficiency.
Fiat expected its fleet to hold lower norm emanations that any rival. Fiat had a new comer to take over and implement alterations. This created a advantage due to the fact that Mr Marchionne was able to Fiat offers a assortment of merchandises from commercial vehicles to trucks, and been manufacturer of agricultural and building equipment. Fiat was in a joint venture with Alfa, Ferrari and Lancia, this created a good known trade name and image of quality and provided decree with historical value.
Fiat strength is offering the client slower mean emanations that what fiats rivals do. This is because the company makes a batch of smaller autos and few bigger 1s. The strength of decree is besides the fact that they used power-train engineering. Fiat became the first car manufacturer to offer diesel engines that complied with the Euro fuel criterions. Fiat had complete openness, fast communicating, answerability and when Mr Marchionne demanded those he besides stated that he dislikes corporate political relations and hierarchy.
Following is Fiat ‘s Failings in 2004, failings of a company is like a disadvantage. It is something that the company does non peculiarly perform good in. It is like a spread in capablenesss and it is of import for a company to retrieve that it is good to admit their failings and seek better it by wither looking for chances or utilizing some of their strengths to get the better of a failing. Decrees failings are as follows: Fiat had deficiency of investings which caused the mills to be inflexible.
Fiat did non do any signifier of paradigms, this may hold saved them clip but it is seen as a failing due to the fact with a vehicle it is of import to make crash proving. There was a deficiency of cooperation and committedness from employees due to the fact that the employees did non to the full understand the client ‘s demands and the market tendencies and this resulted in vehicles non been able to sell good as they were unappealing. The cost of production was excessively high at this phase as when Mr Marchionne came in he had to pare them because he realised that they were over disbursement with respect to the fact that at the clip the auto demand was inexorable.
The following measure in the SWOT analysis is to look at the ageless factors that affect the running or the administration. The chances of Fiat are seen as opportunities that come your manner that can assist you heighten your company. In the instance of Fiat in 2004they came across the undermentioned chances: Making strategic confederations with GM allowed Fiat to farther expand and make more clients and it enables so to hold more funding.
Fiat besides got the chance of spread outing into a high growing market by traveling on a joint venture with other good known autos, such as Ferrari, Alfa and Lancia. This allowed them to make more acknowledgment as it was associated with good known and established auto trade names. They besides had market chances to travel international which resulted in doing trade much easier and making a wider group of clients. Fiat got the chance to engage an foreigner to assist put the company on the right path which allowed them to acquire expertise advise and assist the company to be successful.
The following measure is to look at the menaces which involves things you can non command, it is the forces that can possible impact you concern in a bad manner therefore menaces need to be watched and actions need to be put in topographic point in order to guarantee that it does n’t harm the concern. Therefore the menaces that Fait had to face during the twelvemonth 2004 are as follows: The market at the clip was inexorable significance that they had trouble on selling the autos at that clip. They entered the market at the incorrect clip and this could hold been because of deficiency of research done on the environment.
The other failing was that they did non hold superior autos that were really attractive to the market and the rivals. Although they were in joint ventures the autos did n’t appeal to what the clients truly wanted. The other failing was that the rivals were gaining new theoretical accounts at the clip which could hold clouded the Fiats autos. Last due to the rigorous emanation criterions that were put in topographic point Fiat battled to maintain up.
In 2004 Fiat was non on its game and was on the brink of bankruptcy but all changed when they hired Sergio Marchionne. Therefore by making a SWOT analysis for2008 we will be able to place the alterations that were implemented and how it affected the internal and external factors of the concern. As antecedently done by get downing with the strengths of Fist in 2008 we can find whether or non Mr Marchionne had a positive consequence to the company as he had ne’er worked in an car industry.
The strengths are as follows: Fiat eliminated all of its debt, this changed from a failing in 2004 to a strength in 2008 due to the fact that Mr Marchionne cut the costs down and found advanced ways to make a auto that was attractive and of good quality. The net incomes addition every bit good by 2007 Mr Marchionne created good relationship with the staff as when he got at that place he changed the organizational construction to guarantee that there was openness for communicating. This strength allows the employees to cognize what was traveling on in all subdivisions and made each employees feel of import with their occupations.
Before a failing in 2004 was that the autos been produced were unattractive and now in 2008 after forcing to the bounds they are making fashionable autos such as the Bravo. Mr Marchionne brought the company a nucleus competency within the fabrication procedure and he made certain that he gave the interior decorators assurance in order to believe that can postulate with the best in the universe. Bravo was the cardinal success of the company as is showed the strength of the development side of the company.
Another strength that came about with the designing of the autos by guaranting they are fuel efficient, in 2004 the failing of non cognizing what the market wanted and seeking to happen a solution was their ruin but Mr Marchionne pushed the applied scientists to happen ways to do this happen when the new regulations were enforced on C dioxide. The other strength that decree has now over its rivals is the engineering that allowed the cost of production to lower.
In 2004 the market was inexorable and that was a major menace to the company as their gross revenues were merely worsening even more nevertheless due to the alterations made by Mr Marchionne with production of their autos and with the addition of demand for Fiat ‘s smaller autos what was a menace so is now seen as a their strength. Mr Marchionne besides got the staff members to be more devoted as when he changed the organizational construction he opened up to them and made them experience confident in the company and the merchandise.
Following are the failings of Fiat in 2008: Even though the smaller autos were making so good when Mr Marchionne joined the company the failing of the remainder of the scope vehicles was in much demand of reclamations they were still non making every bit good as the smaller vehicles. In China, India and Russia the public presentations of Fiat are non traveling good due to miss of market research on those sections. If they had done market research they could had seen that those states preferred a certain manner auto.
Mr Marchionne set some gross revenues criterions but the company was non able to make their mark, in fact he set marks for Alfa and Lancia and the consequences together did non even fit the mark set for each separately. The market is filled with rivals and Fiats failing is that even though they have the proficient accomplishments they lack penetrations on markets and have no hint on how long it will last. The determinations devising is besides a failing as Fiat needs to be awake and crisp due to a batch of competition but alternatively Mr Marchionne is brooding on if doing auto of lower cost will damage the bing trade name. Alternatively of making a new one or happening another manner the failing of blowing clip.
The failing in 2004 of non doing paradigms still remains the same as Mr Marchionne sees it as salvaging clip and money but this is non the instance as you would wish to cognize that the auto is safe and strong plenty if any accident had to go on. The fact that Mr Marchionne gained independency when GM left he at the same clip lost the lone parachute they had as GM alarmed them on how much money they were losing and the company can see this as a short term failing unless they do n’t make anything about it and non make look into up ‘s of fundss
Following are the chances that came in 2008: With the failing in 2004 been short of investing Mr Marchionne turned the company about by deriving full control of the company once more when he made and understanding with GM to go forth the partnership, with this chance he knew he could do a batch of smaller autos out of the trade. The thought of go forthing GM was for Fiat to acquire their independency back and Mr Marchionne achieved merely that and was able to run the concern decently. When there was new regulations seting topographic point Fiat saw an chance to seek abide with the regulations and at the same clip salvage cost that is when Fiat used their patented engineering to make the first engine with two cylinders.
This allowed Fiat to protect themselves from other industries for at least four old ages. With Fait in good form now in 2008, due to Mr Marchionne, he decided to look elsewhere to happen more chances and expression for the following undertaking. This undertaking was to look at the underachieving trade names of Lancia and the Alfa, but the failing with this is that they found it difficult to categorize the auto. When Mr Francois and Mr Marchionne discovered their involvement in the trade name they decided to engage Carla Bruni as he saw an chance for the metempsychosis of the trade names.
Due to the chance of traveling international Fiat reached many states and is anticipating a good growing to come from the emerging markets. Decrees growing came from the chance of a joint venture. Mr Marchionne identified chances that lead the company to its success today ; he was able to acquire the company out of debt by taking the chance of bring forthing the smaller vehicles which is a success.
Last by looking at the menaces that came about with the alterations made by Mr Marchionne we are able to compare the differences between the old ages. The menaces are as follows: There is still a major menace in 2008 with respect to a batch of rivals gaining new theoretical accounts, Fiat is still behind it rival and is seeking to catch up with companies such as VW and Peugeot and Citroen. These challengers have standardizing parts and platforms across theoretical account ranges whereas with Fiat their parts are rather different and this can be a menace when it comes to costs of all different providers and costs of quality.
By traveling international you will confront some menaces and in this instance it the menace of the vehicles non selling good in topographic points such as China, Russia and India, in 2004 this was non a menace due to Fiat been base in Europe and America merely. There is still the menace of engineering altering quickly and this involves passing a batch of money and even though Fiat is making much better it still large hazards to pass excessively much money and it is of import that one examines if it is worthwhile.
Decision:
The SWOT analysis was a helpful tool for us to understand the full state of affairs of Fiat and the alterations from 2004 to 2008 with the aid of Mr Marchionne. As a consequence some of the failings of Fiat in 2004 became strengths in the analysis for 2008. Mr Marchionne knew that in order to acquire the company back to sound fiscal place he had to diminish merchandise cost and this enabled the company to cut down technology, and development cost. He besides achieved an economic advantage for the company as by subscribing confederations with Ford and hence gaining experiences and traveling into new district with limited hazards.
Mr Marchionne fundamentally merely focused on simpleness and wanted to guarantee that the autos regained attractiveness which they did and as a consequence the trade name was rediscovered and there was trade name consciousness for Fiat.Mr Marchionne took the company frontward and introduced fashionable and quality merchandises to the universe and he achieved this because he made sure he understood the wants and desires of the clients and their gustatory sensation, he besides catered for the lower and medium section and separated them from the higher 1s and by making this the company make different demographics.
Mr Marchionne at the terminal of the twenty-four hours repositioned the company on affordability and modernness unlike in the 2004 analysis it showed that the vehicles were unappealing to the clients which was a major ruin for Fiat. By supplying the clients with low-cost autos of good criterions Fiat become a hit once more. The industry is now at its best and Mr Marchionne states that he genuinely has devoted staff which can merely intend more success for Fiat.
Harvard Referencing:
Bradford, Robert W, Duncan, Peter J, Tarcy: Simplified Strategic Planning, retrieved 7th April 2010, www.quickmba.com
Humphrey, J. & A ; Memedovic, O. ( 2003 ) . The Global Automotive IndustryValue Chain: What Prospects for Upgrading by Developing Countries. Vienna: UNIDO -United Nations Industrial Development Organization.
hypertext transfer protocol: //www.lulu.com/items/volume_30/470000/470624/1/print/470624.pdf
Berta, G. & A ; Ciravegna, L. Una nuova configurazione. Il sistema mondiale dell’auto. hypertext transfer protocol: //www.torino-internazionale.org
