Fiat chrysler (2) PDF

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Final project in strategic management covering the fiat-chrysler merger and acquisition ...

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FIAT CHRYSLER Company Profile

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Mission Statement & Vision FIAT Chrysler works and focuses on developing and delivering world class training and consulting. They work endlessly to make sure they properly train and mold their employees to be able to give excellent services to the regions they serve. They do not only work for themselves, they also manage their training and consulting processes to become a benchmark for external companies. The four key practice methods that guide FIAT Chrysler to become successful and thrive in their development are: (1) Developing effective training solutions to increase manufacturing skills and accelerating the spread of culture to improvement at FIAT Chrysler plants. (2) Training and coaching FIAT Chrysler’s Internal Trainers. (3) Standardizing World Class training packages, incorporating learning solutions and best practices developed on the factory floor. (4) Sharing the FIAT Chrysler approach with suppliers and World Class Manufacturing partners. FIAT Chrysler’s vision focuses on them becoming the largest car maker in the world. To do that they have to have the proper training and consulting to continue to expand their brand and their brand name. With over 159 manufacturing facilities, 87 Research and Development centers, dealers and distributors, and over 200 thousand employees operating in over 150 countries, training their manufacturers and factory workers, and all employees is substantially important to their success. Their training provided to internal trainers helps them to stay in the running as a major car maker. It

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gives them the information and productivity it needs to know when and how to make decisions to keep them successful. It also allows them to know how to strategically make decisions to make them money at the least cost possible [ CITATION Kee18 \l 1033 ]. Short History FIAT, also known as Fabbrica Italiana Automobili Torino, an Italian company was founded in the year 1899 by Giovanni Angelli, in Turin Italy. The company has grown and made itself very dominant in the world. By the late 1900s, FIAT automobiles were well known. Throughout the 1990s FIAT experienced ups and downs making it obvious that they were barely able to compete with the Japanese and Korean manufacturers. Because of this they made the move to merge with other companies to give them a better fighting chance against competing manufacturers. In 2000, they started to merge with American manufacturer, General Motors. Almost a decade later, FIAT and GM separated. In 2009 FIAT and Chrysler formed an alliance after Chrysler filed for bankruptcy. In 2007 Chrysler parted ways from DaimlerChrysler after the joint partnership between the two companies was unsuccessful. This led to the bankruptcy of Chrysler. During the convergence FIAT took a 20 percent ownership interest in Chrysler, with FIAT’s CEO Sergio Marchionne being appointed as the CEO of Chrysler. The Alliance FIAT begins the production of the all-new Jeep Grand Cherokee in Detroit in the year 2010. During the year 2011, FIAT increased their ownership interest in Chrysler to 53.5 percent, now owning more than half of the group. Also that year, FIAT spins off its capital goods

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activities to FIAT Industrial in order to focus on its core automotive businesses. In 2012, FIAT increased their ownership in Chrysler again by 5 percent, making their total ownership 58.5 percent. In January of 2014, FIAT finally completely owns Chrysler and in October the two companies become Fiat Chrysler Automobiles. The merging of the two allowed for both companies to endeavor some changes. Some changes include optimization of the respective manufacturing footprints and global supplier base, sharing of technologies and access to new markets[ CITATION Fia18 \l 1033 ]. The acquiring of Chrysler makes Chrysler the company’s primary brand in North America. Chrysler will go against companies such as Ford, Chevrolet, Toyota, and Volkswagen. While FIAT’s own Alfa Romeo, produced in 1984, becomes the company’s premium brand. The Alfa Romeo will go against companies like Mercedes-Benz, BMW, and Audi. Alfa Romeo returns to the North American market, after an absence of some 20 years[ CITATION Fia18 \l 1033 ]. Major Competition FIAT Chrysler has many competitors in the automotive industry. Those competitors are Ford Motor Company, General Motors Company, Volkswagen, Chevrolet, Toyota Motor Corporation, Mercedez-Benz, BMW, and Audi. However, their major competitors are Ford Motor Company, General Motors Company, Toyota Motor Corporation, and Volkswagen. Ford Motor Company was founded in 1903 by Henry Ford and 11 associate investors. In 1919 the company was in full ownership of himself, his wife and his son. Ford Motor Company manufactures passenger cars, trucks, and tractors as well as

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automotive parts and accessories. Its headquarters are in Dearborn, Michigan. Ford Motor is one of the “Big Three” automakers in the United States along with General Motors and FIAT Chrysler. Some of their most popular models are the Ford F-150, the Ford Escape, and the Ford Fusion[ CITATION Fia18 \l 1033 ]. General Motors Company was founded in 1908 under the leadership of William C. Durant. Its headquarters are in Detroit, Michigan. GM consolidated several motorcar companies producing Buick, Oldsmobile, Cadillac, Pontiac, formerly known as Oakland, Ewing, Marquette and other autos such as Reliance and Rapid trucks. GM operates manufacturing and assembly plants and distribution centers throughout the United States, Canada, and other countries. Their major products include automobiles and trucks, automotive components, and engines. GM was the world’s largest motor-vehicle manufacturer for much of the twentieth and twenty-first centuries[ CITATION Fia18 \l 1033 ]. The company operates through almost a half dozen business segments: GM North America, GM Europe, GM International Operations, and GM South America. Toyota Motor Corporation was started in 1933 as a division of the Toy9oda Automatic Loom Works, Ltd. Toyota Motor, among the world's largest automotive manufacturers by revenue, designs and manufactures a diverse product line-up that ranges from subcompacts to luxury and sports vehicles to SUVs, trucks, minivans, and buses. (hoovers,fca,us) Toyota also makes automotive parts for themselves and they sell them to others. They produce their cars with combustion or hybrid engines, such as the Prius. Today Toyota has assembly plants and distributors in many countries. In addition to automotive products, its subsidiaries manufacture rubber and cork materials, steel, synthetic resins, automatic looms, and cotton and woolen goods. Others deal in

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real estate, prefabricated housing units, and the import and export of raw materials. Their subsidiaries also manufacture vehicles. Daihatsu Motor produces smaller cars, their mini-vehicles and Hino Motors produces bigger vehicles, their trucks and buses. Volkswagen was formed by the government of Germany-then under control of Adolf Hitler in 1937. Volkswagen was headquartered in Wolfsburg, Germany. In 1959 Volkswagen began to be introduced and sold in the United States. However, sales were relatively slow due to the Nazi connections and small car size. Volkswagen is the second leading carmaker in the world by vehicle sales behind Toyota. Their cars are named after climate patters, insects, and small mammals[ CITATION Fia18 \l 1033 ]. They have a collection of cars, trucks, and vans, including models such as Passat, Jetta, and Fox. The Passat was named after a trade wind, the Jetta as named after a jet stream, Volkswagen owns a garage full of luxury carmakers which it grants significant autonomy: Audi, Lamborghini, Porsche, Bentley, and Bugatti. Chevrolet was named after Louis Chevrolet, a successful race car driver for Buick. Chevrolet was founded in 1911 and in 1913 the Chevy “Bowtie” emblem was released. In 1953, the introduction of the Corvette helped to shape Chevrolet’s lineup. Over the years, Chevrolet produced many other vehicles, one being the Chevrolet Silverado. It has grown to be a very common truck and its sales are well. However, it is constantly battling with Ford’s F-100 and F-150 trucks. As years go on Chevrolet introduces the Chevrolet Impala and the Chevrolet Camaro. Both cars have become well known through the years. Chevrolet sells worldwide and in 140 different countries, while constantly setting records and producing cars[ CITATION Fia18 \l 1033 ].

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Market Position FIAT Chrysler Automobiles designs, engineers, manufactures and sells vehicles and related parts and services, components and production systems. They have over 159 manufacturing facilities, 87 R&D (Research and Development) centers, and dealers and distributors, with over 200 thousand employees. They operate in over 140 countries. Along with stable brands of cars, FIAT’s businesses also include Comau, for production systems, Magneti Marelli, for components, and Teksid, for iron and castings[ CITATION Fia18 \l 1033 ]. FIAT Chrysler has activities organized into four regional operating segments for their mass-market automotive brands: NAFTA, LATAM, APAC, and EMEA. FCA’s NAFTA region supports the design, engineering, development, manufacturing, distribution and sale of vehicles I the United States, Canada, Mexico, and the Caribbean Islands. With 36 plants, 10 R&D centers, and 91 thousand employees, the NAFTA region works to improve the driving experience in North America and around the world[ CITATION Fia18 \l 1033 ]. FCA’s LATAM region is responsible for developing, producing, distributing and selling cars along with some light commercial cars in Brazil, Argentina, and Venezuela. The

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R&D center in Betim, designs cars that meet the specific needs and desires of Latin Consumers. FCA’s APAC region supports the design, engineering, development, manufacturing, distribution and sale of mass-market vehicles in the Asia Pacific region. They also have key operations in China, India, Japan, Australia and South Korea. The APAC region operates three manufacturing plants. They are located in Changsha, China, and India[ CITATION Fia18 \l 1033 ]. FCA’s EMEA region supports the design, engineering, development, manufacturing, distribution of sale and mass-market vehicles in Europe, the Middle East, and Africa[ CITATION Fia18 \l 1033 ]. FIAT Chrysler reported an annual profit of just under €377m on revenue of €110.6bn, as gains in North America and Europe offset lower revenue in Latin America and the Asia-Pacific. However, to reduce the company’s debt and fund future investments, any money made with the Ferrari brand were excluded from the profit. FIAT Chrysler is now the world’s seventh largest automobile maker. In December of 2015, there was a market share of 12.4 percent in North America, a market share of 14.2 percent in Latin America, and a market share of 6.1 percent in Europe. Apparent Strategy Fiat Chrysler is the world’s seventh largest automobile company. Fiat Chrysler operates under two different subsidiaries one FCA Italian and the other FCA USA, between these two Fiat Chrysler has the following brands under their belt: Abartha, Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Maserati, and Ram Trucks.

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Chrysler Fiat apparent marketing strategy appears to focus on improving the production and manufacturing of Chrysler automobiles so that Chrysler automobiles align accordingly against their competitors. Chrysler has been manufacturing vehicles since 1924, therefore Chrysler already has brand recognition, and customer base; therefore Chrysler Fiat does not have to put their focus on creating a customer base and brand recognition, instead Chrysler Fiat appears to be shifting their focus on international growth, cutting costs, increasing revenues and fine tuning their production process. In May of 2014 Fiat Chrysler announced their 5- year business plan which consists of Fiat Chrysler wanting to increase units sold to 7 million, generate revenues of 132 billion, reduce financial debt to under 1 billion dollars by the end of 2018, and trying to increase growth internationally. Fiat Chrysler is currently shifting their focus on Jeep, they aim to increase their brand recognition globally. Global growth is being focused on Jeep due to the fact that much of their competition is shifting their focus on SUV automobiles. Chrysler is going to be rebranded within the United States so that the company can keep up with their competitors and release automobiles that align with their competition. Critical Factors of Success All Companies have pressure to produce; to be more, more efficient, more effective and more profitable, automobile manufacturers are no exception. In an era where competition is more prevalent than ever, information is readily accessible via the world wide web; consumers have more options than ever before. Meaning that

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automobile companies must be more competitive than ever before, means companies must be more competitive than ever before. Chrysler has a proven track record for manufacturing vehicles that are innovative, reliable and ahead of the curve; while also maintaining affordability to their consumers. Introducing an automated production line has resulted in more efficiency of production, assuring quality of each vehicle, and led to savings due to the system being able to adjust to fluctuations within the market. Chrysler introduced this flexible production line in 2016, since implementing Chrysler is able to produce cars in two weeks with zero down time; utilizing all resources and time. Fiat Chrysler also has a strong relationship with their dealers; Fiat Chrysler is a global manufacturer with 14 brands under their name and dealerships among 150 different countries; within 100 miles of Elizabeth City, NC there are 19 Fiat Chrysler dealerships; meaning that they are easily and readily accessible to any consumer. Fiat Chrysler views all of their employees as an investment; as with any investment you want to churn a profit. Fiat Chrysler is no different. Fiat Chrysler trains all of their employees; training consists of educating each employee on their vehicles and services, but also trains the employee on how to fully utilize each of their strengths. Chrysler Fiat offers free tuition to all 118,000 of their employees, employee’s spouses, and employee’s children within their dealerships (Jeep, Dodge, Chrysler, Fiat) free tuition via Strayer University. Employee turnover has since decreased 35 percent [ CITATION Jen16 \l 1033 ]. Doing this allows Fiat Chrysler to ensure they have the best employees; employees that feel their needs are being not only heard but being met are more productive, focused, and loyal.

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Fiat Chrysler has a steady and proven track record of increasing their revenues and churning profit. Fiat Chrysler has found a great deal of success with being able to generate revenue and being able to create new streams of revenue. Fiat Chrysler saw revenue nearly double in 2017; revenue raising 93% and net cash of 4.5 billion dollars [ CITATION Smi18 \l 1033 ]. Fiat Chrysler creates this revenue not only by increasing units sold but also by their service of their vehicles (labor and parts.)

Market Orientation Market orientation is a business concept that focuses on addressing, discovering, and meeting the needs of all of their consumers through its product mix. Market orientation is a critical asset to any company because it allows the company to listen to their customers and provide their customers with exactly what it is that they customer wants and to plan accordingly so that the company can meet those needs. Fiat Chrysler’s product mix consists of each of their automobile brands (Jeep, Maserati, Dodge etc.) Fiat Chrysler tries to address their customer needs and wants by following the customer trends and market trends. Fiat Chrysler is growing the Jeep brand internationally to align with the sudden rise in SUV vehicles in other countries. However, Fiat Chrysler failed to adjust to not only customer wants but also market trends when they did not put emphasis on electric cars and other new energy fuel efficient vehicles. “In China, for example, we have made a number of mistakes in the past and

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underestimating new energy vehicles in the market has been one," a direct quote from Fiat Chrysler CEO March 2018[ CITATION Gee18 \l 1033 ]. Due to oil prices steadily increasing in recent years, climate change becoming an everyday household word, and advancements in technology majority of automobile manufacturers have shifted their focus. Many manufacturers have adjusted their vehicle lineup to include not only fuel efficient vehicles with high MPG but also vehicles that run completely off of batteries and require charging. With climate change, and with each year being a record year of heat, the auto industry is under a microscope to consumers, consumers want vehicles that are not only budget friendly but also eco-friendly. In 2015 Ford released the Ford Focus which was able to park itself, meaning the car would use sensors and backup cameras and be able to self-park. Currently Tesla has produced a vehicle that can drive itself; If we don’t regard the major kinks that need to be addressed with that vehicle, and just look at the fact that Tesla released a self-driving car because they have the resources, technology, and skill available to them. Tesla was founded in 2003 and has a fraction of the resources that Fiat Chrysler has available to them. Learning Orientation Every organization that wants to be successful needs to have culture that provides not only orientation training which is provided when an employee is first hired when but also provide continuous development through training and education. Due to the constant changes within the market and other market factors such as society, values, and culture companies are constantly changing. In order for a company to be

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successful with these changes companies must be able to adapt but also educate and train their employees to adjust also. Fiat Chrysler is good with this; Fiat Chrysler provides their new employees with orientation when first hired, the length of which orientation lasts varies, for some it can be 2 weeks and others it can be 2 months. Fiat Chrysler also provides their employees with ongoing education, and even offers their employees free tuition. Fiat Chrysler offers free tuition to all 118,000 of their employees, employee’s spouses, and employee’s children within their dealerships free tuition via Strayer University. Employee turnover has since decreased 35 percent (Jenkins, 2016). Doing this allows Fiat Chrysler to ensure they have the best employees.

Creative Climate Creativity is a very critical factor of any product, but it is especially critical when it comes to automobiles. Automobile manufacturers must be able to offer their consumers unique and innovative vehicles that are also able to keep up with their competition. In our modern era creativity is synonymous with technology, and with all major auto manufacturers changing their focus towards efficiency and sustainability; It was no surprise when Fiat Chrysler jumped on ship. In January of 2017, Fiat Chrysler released a demo of a new minivan concept that they had been working on. This concept van was completely battery powered with one charge being able to go 250 miles, this concept car also has a futuristic aesthetic featuring open windows, open seating while also being affordable and budget friendly.

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[ CITATION Bun17 \l 1033 ]. Fiat Chrysler plans to have this concept van out into the market by 2020. Organizational Flexibility An organization that is flexible is an organization that is willing to try new tactics, new methods, and new strategies so that the organization is able to become more effective, efficient, and competitive amongst competition. While technology rapidly changes and is constantly evolving Fiat Chrysler has proved to keep up with these changes. Organizational flexibility is evident within the company, in 2016 Fiat C...