Fiat Changing Business Environment Marketing Essay

decree changing Business surroundings Marketing EssayABSTRACTThis report emphasis on the revision convocation and psychoanalysis of its remote line of descent environs. It outlines the alliances mise en scene in terms of its history and product services, with major strategic milest mavins and chance upon competitors. The operations in some of the diaphysiss used for the external analysis ar the pestel and porters. As a result, strategic directions are proposed that testament assist the club group in sustaining and developing a successful performance in order to keep and advance its grocery positions glob tout ensembley. This report is besides cogitate of list of recommendation for the revisal group.CONTENTS1 ABSTRACT2. founding2.1 INTERNAL ENVIRONMNET2.2 EXTERNAL ENVIRONMENT3. MICRO-ENVIRONMENTKEY COMPETITORSCUSTOMERSSUPPLIERSPUBLICPRODUCT AND service4. MACRO-ENVIRONMENTPOLITICAL INFLUENCEECONOMIC INFLUENCESOCIAL INFLUENCE expert INFLUENCEENVIRONMENTAL INFLU ENCELEGAL INFLUENCE5. COMPANY accentuateMISSION AND VISION STATEMENT OF FIAT companyHISTORY6. b building blocky ANALYSIS7. RECOMENDATION8. CONCLUSION9. REFERNCES2. INTRODUCTIONBusiness Strategy is seen as one of the most important areas deep down social club group. It base also be specify as per Johnson Scholes and Whittington (2008, p.3) as the direction and scope of an establishment both manoeuvre the long term, which achieves advantage in a changing environment by means of its configuration of resources and competences with the bet of fulfilling stakeholders expectations. As grass be seen, dodge is a complex field and inevitably connected to revisal companies success or failure. Thus it is vital for the organisation to constantly evaluate and adapt its strategy in order to be successful (Grant 2005 p.7)External and Internal strategical Analysis of club GroupThis part focal pointes on fiats performance by analysing both the external and internal environment of t he company. External environmental presss elevate to the macro-environment, the industry or sector, and the competitors that affect an organisation (Johnson, Scholes and Whittington, 2008). Equ ally important as the external environmental scanning is the analysis of a companys internal environment to identify its strength and weaknesses (Hunger and Wheelen, 2009).This is also referred to as strategic capability which is defined as the resources and competence of an organisation needed for it to survive and prosper (Johnson. Scholes and Whittington 2008, p.95) for this analysis, the focus is on the car industry in the UK food grocery store in general, and the subaltern car sector in particularBusiness environment encompasses all those operators that affect a companys operations, and includes customers, competitors, stakeholders, suppliers, industry trends, formulas, other government activities, social and frugal factors and technological developments. (Business dictionary, 20 10).Basically business environment is segregated in in the midst of two categoriesInternal environmentExternal environment2.1 Internal EnvironmentThere are various components which particularly change the behaviour of employees. Events, Conditions andfactorswithin an organization are few of them.Theiractivitiesandchoices are under influence. Factors that are often consumeed part of the internal environment include theorganizationsmission statement, d naked as a jaybirdshipstyles, and itsorganisational culture. Internal factor which occur inside the company are management, manpower, wrangling material, machine, money.2.2 External EnvironmentEXTERNAL ENVIRONMENT is factor essentially away(p) the control of organizational members. Conditions, trends, and forces are few enlisted factors. External environmental scans are conducted in operations to identify and analyse important factors in the external environment. This analysis is often a critical aspect in all business or strategic plans.External environment are assort into two major parts1. Micro-environment2. Macro-environmentMICRO-ENVIRONMENTKEY COMPETITIONERS orderings key competitors are the cut companies Renault and PSA Peugeot Citroen, and the German Volkswagen AG (Hoovers, 2010).Volkswagen (VW) is Europes number one carmaker with an annual production of more than six million car, trucks, and vans. The company operate in 153 countries and aim at position itself as the global economic and environmental specker among automobile manufacturers (Volkswagen Group, 2010) PSA Peugeot Citroen is present in 160 countries, and is shortly counselling on its development in high-potential securities industryplaces such as China, Latin America and Russia. On 2009 the company conjured more than 3 million vehicles (Peugeot Citroen, 2010). Renault is present in 118 countries in sell more than 2 million vehicles in 2009 (Renault, 2010). Main competitors in UK are Ford and Toyota.CUSTOMERSCustomers play an importa nt subprogram in business environment. They are the key monitors on whose basis an organisation acts upon. They are the relation in amid different business enterprises who bribe the services and products to their satisfaction (Collin English dictionary, HarperCollins Publishers 1991, 1994, 1998, 2000)SUPPLIERSAffiliations with the companies that supply your business with goods and services,(Grant, Scholes 2007). As a increment company, Fiat group focus on one of their factor of suppliers price. And price is considered important when you are selecting suppliers to assist you as you grow your business. A cleric service which act as a substitute providing goods and raw materials avail adapted to achieve the need of gather up proposed by the company.PUBLIC frequent are the targeted food merchandise components or individual who persuades interest in the business or the products and services. They capitalise pcts in merchandise. They whitethorn be directly or indirectly active to open market (Collins Thesaurus of the English style Complete and Unabridged 2nd Edition. 2002).PRODUCTS AND SERVICESThe Fiat Group is subdivided in different business units (automobiles representing the biggest business unit according to worldwide revenues (Fiat Group, 2010).The auto business unit produces and sells cars globally under the Fiat, Alfa Romeo, Lancia, Fiat professional (light commercial-grade vehicles) and Abarth tags. Additionally, Mascerati and Ferrari are also part of the Fiat Group (Fiat Group, 2010).MACRO-ENVIRONMENTPESTEL AnalysisThe macro-environment can be determined by using the PESTEL analysis. The PESTEL framework is an analysis tool that outlines factors affecting the companys strategy, and allows the identification of key drivers of change (Johnson, Schnson, and Whittington, 2008).Political influencesGovernment regulation the UK and the EU have the strictest regulation concerning emissions.Issues with emissions are highly volatile as if the manufactur er does not abide by the standards it will translate into high running cost for the customers and standardizedly to discourage them from buying.Economic InfluencesRecession resulted in increased unemployment and lower purchasing power of customers.Increased interest rates in bank loans for consumers. arise prices of raw material, e in particular for steel (Star, 2010).Rising fuel prices.Social influencesChange in consumers buying pattern callable to the recession customers of more aware of the struggling car market and assay for better deals (e.g. Fiat 500 is priced with a high premium higher up the industry average for such a car).Small car compute and partly bad reputation of brand name.Technological InfluencesInnovative railway locomotive room deriving from the Japanese and German car market.Rapid, high-quality inventions and developments from competitors, especially from key players like BMW , Volkswagen , Mercedes, etcEclectic-car (e.g. from Renault- Nissan) are not prod uced by Fiat yet.Environmental InfluencesEnvironmental awareness of customers coupled with tough government regulations construct a tough market for Fiat, as all main competitors aim at producing eco-friendly cars with low of CO2.The charge cover scenario will affect the whole automotive industry, as oil is a finite resource.Legal InfluencesEU competition laws.Although Fiat is know as a producer of eco-friendly cars ( autos Review 2010) tougher car emission laws could lead to increased production costs of cars.5. COMPANY BACKGROUNDFIAT is a word wide operating Italian automobile manufacturer, engine manufacturer, financial and industrial group based in Turin in the Piedmont region.All though the FIAT group is present in many countries around the globe, its market position is especially strong in Europe and Latin America. europiumLeading automaker in EU.Faced sales decrease in 2008 due to economic environment.Current market addresss in UK is 4.02%USA leave market shares in US ( until) recent alliance with Chrysler last family and Canada market.These two markets are currently considered as the biggest auto market in the whole world.ASIANo significant market establishment of Fiat in this market. Some key players in this market are Suzuki and Tata motors.The Asian market is also an emerging market and is un tapdanceped market for Fiat.LATIN the StatesExceptional high sales in Latin America specially Brazil. Fiat market share in Brazil is 25.5% as of may 2010.(Auto trends, 2010 fiat 2010 European motors forward-lookings, 2010)5.1 MISSION AND VISION STATEMENT OF FIAT GROUPFIATs mission statement says FIAT is an automotive-focused industrial group and design and manufactures automobiles, trucks, cycle loaders, excavators, telehandlers, tractors and combine harvesters. In terms of its vision, the FIAT group, states Innovation has an important place among the FIAT groups core values and beliefs. Because the lone(prenominal) way to meet the challenges of the early is to be innovative innovative in everywhere and in every way. FIATs aim is to strike the balance in experience, creative and technology (FIAT group 2010).5.2. HISTORYThe FIAT group (Fabbrica Italiana Automobili Torino), establishment in the year 1899 was one of the founders of the European Automobile Industry. It was developed under leadership of Giovanni Agnelli and made a successful presence in the Italian market as tumefy as the international market. The FIAT group is now managed by Serigo Marchionne, who is the chief executive officer presently. The Agnelli Family still controls FIAT by owning 30% of the shares for the FIAT group.Right from the start, the company had a strong propensity for the international expansion and innovation. The company grow outside Italy in 1908 when FIAT Automobile Co. was founded in the United States. In the meantime, Fiat also expanded to new sectors. In 1958 production started growing enormously and Fiat set up new manufacturing plants ab oard. In the nineties the company escalated its expansion into international markets to cope with crisis, and achieved over 60% of its disturbance outside Italy. Because of aggression competition, Fiat concentrated on developing markets and was prompted as an innovation brand at affordable prices. Today Fiats products are sold in more than 190 countries around the world (Fiat, 2010). Although the Fait Group industrious in many sectors, it redefined its core business area in 2003 by again focusing on the traditional automotive sector. As a consequence, certain business no longer considered strategic such as the Aviation and Insurance Sectors were sold (CSR Globe, 2010). The company returned to their first mission to produce attractive, stylish cars with improved quality and exciting engines, accessible, focusing on a continuous overhaul of its products, on technological research and constructive consanguinity with the customer (Fiat, 2010).In terms of its revenues and trading p rofit, the Fiat group is currently facing some severe decline as shown in lick 3. Revenues declined from almost 60 million down to 50 million Euros in 2009, and trading profit even declined to less than one third compared to 2008 (Fiat Group, 2010). deck up ANALYSISA SWOT analysis explores the relationship between the between the environmental influences and the strategic capabilities of an organisation when compared with its competitors. (Johnson, Scholes and Whittington, 2008, p.118). With the help of the SWOT Analysis tool, it is assertable to identify the strategic fit between the organisations internal and external capabilities and thence determining alternative strategies. By doing a SWOT analysis for the FIAT group, the companys strengths, opportunities, weakness and threats can be outlined.SWOT Analysis for Fiat cogencyWith a brand name established over a decade, Fiat is known for its strong hold in the small cars segments and excellence engine technology. It also enjoys a huge brand portfolio including Ferrari, Mascerati, Alfa Romeo and Lancia (Fiat UK, 2010).According to the SMMT data survey, the UK market has shifted towards the small cars recently (SMMT UK, 2010).Fiat has the potential of producing innovative products, which has been the companys driving force since the very beginning.Fiat is the only automaker whirl highly fuel- efficacious cars and has the last-place CO2 emissions in Europe at 127.8g/km (Automobile Review, 2010) compared to the key players. Thus, Fiat is an organisation highly committed to environment sustainability and making a difference.Fiat stands 8th in the ethical ranking in the automotive industry, which pushes the brand image and reputation (CSR International 2010).WEAKNESSFiats main focus on small cars segment only has been the reason for its low market share in UK/Europe.As an approach to increase their sales, Toyota is focusing on expression consumer confidence. Whereas Fiat focuses on new innovations and introduc tion of technology, but to an extent it fails to consider what their customers expect.OpportunitiesThe Asian economy still has a lot of untapped potential, which FIAT can look into.Recent alliance with Chrysler who has appointed 130 dealers in US to represent FIAT is a good opportunity for the Fiat brand to market itself (Just Auto, 2010).Due to Fiats innovative technologies, there is an opportunity for it to tap other markets as well as develop new market segments.ThreatsToyota and Ford remain two of the strong competitors for Fiat. With Toyota launching at to the lowest degree 18 new models in the European market 2009, it poses a major threat to Fiats market share. Toyota currently has a market share of just about 5.01% in the Uk( Mad UK, 2010).The recession has reduced the purchasing power of the customers in the last couple of years, which has resulted in a drop in demand for new cars.RecommendationAfter conducting the different environmental analysis for fiat group, it is now possible to recommend strategic options available to the company.In general, it is recommended for the Fiat group to follow which adapt differentiation and low price relative to competitors. This combination will help the company the gaining a strong combative advantage. Fiat could move towards a low cost focus strategy in the emerging Asian markets. At the same time it can further tap the US market. This will also increase Fiats market share globally. By applying the hybrid strategy, the Fiat group is also able to capture the untapped Asian market with its cost and fuel efficient cars like Punto, 500C, Grande Punto, Linea etc. By focusing on improving its market share, Fiat will be able to gain economies of sale by cost savings. This is turn will provide resources to finance its RD sector, which will get hold of way for new highly efficient products for the markets, thus generating higher margins which will again increase Fiats market share.Fiat could also move towards offering low cost cars to its customers by expanding in the emerging Asian markets.It may also be recommended to tap the US market (untapped).It should expand its activities in RD (Research and Development).The above strategies will help the Fiat group increase its market share not only in the UK but globally. It will also increase its economics of scale. Recommendation can also be prone for the strategic development of particular products in the UK market. The GE-McKinsey Matrix for the Fiat Automobile Group in the UK, and its application to the strategy guidelines based on the directive policy matrix, also allow for the recommendation of future strategies. As a result of this analysis, the following strategies can be recommendedFor the Fiat 500, product enthronisation and growth are required because the market is growing and if the business unit continues to invest in the market, it should see itself sustaining its growth.For the Fit Bravo, selective growth would be useful, as this wou ld allow Fiat to be more focused on the needs of the market.For the Fiat multipla, the harvest /divest path can be recommended, as this would allow Fiat to keep their existing market share and diversify in due course.CONCLUSIONThis report focused on the Fiat Group and its current performance. An external and internal environmental analysis was conducted critically, which allowed for the recommendation to Fiat. Based on the various strategic analyses done in this report, it can be suggested that the Fiat Group needs to adopt new strategies for the future. If the above mentioned recommendation combined and implemented successfully, they will not only help to sustain and improve the companys business performance, but also improve its market position compared to key competitors in the automotive industry. With the rapid changes in technology and innovations, it is important for the Fiat group to be customer focused.