Fiat Assignment Example | Topics and Well Written Essays - 3500 words

Fiat - Assignment Example There are many reasons such as inflation, increased competitiveness from Japanese and Korean manufacturers, the emergence of low cost Asian manufacturers, change in policies and the global crisis. As a result, huge losses have been faced in terms of sales and turnover. There are many internal issues as well that have added to the existing problem of Fiat. This can be handled by identifying the key opportunities. The transformation of opportunities into strengths is the need of Fiat to come out from the crisis. Legal and consumer trends are looking for green technology and gas- efficient cars. This can be a major advantage for Fiat as it has always been addressing environmental concerns. In this report, an analysis of all such areas has been done which have contributed towards the decline of the Fiat’s performance and ranking in the automotive industry. The aim is to figure out the problematic areas where change and direction is required. In the first section, the background of the company is discussed. The external factors such as economic or technological which are the major indicators of growth or decline in any industry are evaluated to understand the current market trends and situation. The major challenges faced by Fait group are outlined keeping in mind its strengths and weaknesses. In the end, recommendations are given in the form of solutions that must be incorporated in the company’s strategy to address the major areas of concern. Company Background: Fiat is one of the founders of European Automotive Industry and has a history of more than 100 years. The acronym of FIAT is Fabbrica Italiana Automobili Torino. It was established on the eleventh of July 1899 by a group of investors and has its headquarters in Turin, Italy. Today, it has been operating in more than 61 countries with 1,063 companies. It has diversified into a pool of industries and has been designing and selling cars, trucks, construction & agriculture equipment, engines, mil itary vehicles, aviation etc. At the time of its inception, Giovanni Agnelli, one of the members of the Board of Directors, stood out and was known as the company’s innovator and mastermind. He had a great strategic vision and determination to make the company highly successful. Due to his utmost efforts along with the other members of the company, Fiat gained recognition at a very early stage and it is said to produce more than 10% percent of Italy’s GDP. In 1900, the first factory was opened in Carso Dante with a workforce of 150 workers who produced 24 cars. As of 2009, only the domestic workforce has reached to 198,348 workers. It has a workforce of about 223,000 people. Out of which, 111,000 are outside Italy. Fiat logo was designed in 1904 which has become a status symbol due to the superior and world-class cars manufactured by the company. During the First World War, it aimed at the production of munitions. With the rapid technological changes, developments were made at the railway sector, commercial vehicles etc. The year 1958 was marked as an economic boom for Italy which was facing a downfall due to the advent of the Second World War. The automobile sector also grew as it was the driving force for the Italian economy. Fiat experienced an increased production along with the exports from 1965 to 1977. In the year 1979, an independent automobile sector came into existence which was named as Fiat Auto S.P.A which included Fiat, Autobianchi, Ferrari, Abarth