Question 1: Current Situation of Fiat in India
In the initial stages, it is evident that Fiat was struggling to maintain its share in the market. It had not gained popularity among the consumers as it experienced shortages of spare parts as well as lazy customer care. These problems affected the image of the Fiat Company and could not effectively compete with the other brands in the market. Later, the firm formed an alliance with Tata Motors in a bid to help it revive its competition plans. In the coalition, the Fiat could source the spare parts from TM (Gupta and Gupta 386). It was a significant move to improve customer reliance and satisfaction. Currently, Fiat's situation and position in the market is quite bleak. The firm can now compete with other distributors' products regarding quality, design as well as pricing. Moreover, the Fiat has enjoyed an excellent distribution that other competing firms at struggling to match. It has acquired a significant share of the market after the alliance. The Fiat needs to develop mechanisms that maintain its competition advantage over the others and secure its market share.
Question 2: Business opportunity in India and the need for the Fiat for a partner
The investment opportunity that is available in India is the market for auto products. The consumer analysis and the revenues generated from this country depict that the auto market is the best business opportunity (Gupta and Gupta 386). About Fiat, it is critical for the firm to get a partner that would help it promote its presence in the country. In addition, a partner would be vital in developing its market share in India. Additionally, a partner would be necessary as Fiat would generate increased revenue and market share since its domination in the European market is reducing significantly.
Question 3: Fiat and Tata Partnership and the Comparison between the Fiat-GM and the Fiat-Tata relationships
I believe Tata and the Fiat would form a very good partnership. From the joint venture, their partnership has proven to be a success. In addition, they have realized increased revenues since they merged. To guarantee this, they ought to invest in product promotion to maintain their market share. On the contrary, the Fiat-GM relationship did not work after the merger. After Fiat spending in GM stock and even purchasing a sizeable amount of capital, the GM decided to write off the entire investments it had done in Fiat. The decision by GM was critical in making the Fiat-GM relationship fail.
Question 4: Convincing Ability of the Joint Venture between the two Firms
Undoubtedly, the business case is convincing to a great extent. In the first half of 2006, it is evident that the Fiat Auto realized an operating profit of $184 million from revenue of about $14.8 billion (Gupta and Gupta 385). With this amount, it is noble to conclude that the business case is a feasible one.
Question 5: Assessment for the Negotiation Process between Tata and the Fiat
The negotiation process between Tata and Fiat was designed in a way that both parties benefited from the whole process. In their alliance, they addressed several issues around product development, distribution process, product outsourcing, and the manufacturing mechanisms. All these aimed at ensuring that no party would discriminate the other at any point.
Question 6: Recommendation for Successful Alliance
Both parties, which are Tata and Fiat to remain committed to their objectives for their merger. In addition, they need to expand the distribution process and improve on their customer care services.
Gupta, Abhishek, and Neetu Gupta. "International strategic alliances: design and management." EXCEL International Journal of Multidisciplinary Management Studies 3.12 (2013): 74-81.
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