We will write a custom Case Study on Fiat Company specifically for you
301 certified writers online
Will Fiat be successful in the United States this Time?
For the longest time automotive industries have been looking into secrets that have made small car companies such as Toyota attain a competitive edge in the marketplace. While other companies have failed to penetrate the marketplace, Toyota has been able to achieve this with ease. Unlike Toyota, Fiat is among the world major automotive companies that have failed in penetrating the international market (Schwartz, 2009).
With the increasing marketing opportunities in the US, Fiat has since 2011 staged a reentry strategy into the US market. Fabbrica Italiana Automobili Torino, commonly known as Fiat, is back in the US after 27 years of absence. However, its recent launch of Fiat 500 has been marred by mishaps: while Chrysler has rapidly improved, the sale of this new make has fallen short of consumers’ expectation.
Due to its history in America, Fiat’s reentry into America is bond to face challenges. With the new subcompact car available in several variants, Fiat hopes to win the US market again (Schwartz, 2009).
While the company is associated with poor quality and poor customer services, its reentry into the American market may be subject to challenge. However, on reviewing its current strategies, this paper argues that the company will successful in the United States this Time. To support this argument, this paper will look into the company reentry strategy.
The History of the Fiat 500
Founded in 1899, Fiat is an Italian car company. Fiat operates in over 80 countries across the globe. Despite its failure to expand into the US markets, the company introduced its Fiat 500 in the North American market in the year 2011.
With more than a million sales of the Fiat 500, the Fiat 500 is in more than 100 countries across the globe (Schwartz, 2009). Over the year, the company has won many international awards in the automobile industry. Some of these awards include the 2009 World Car Design of the Year, the 2008 European Car of the Year, and the Fiat 500 entry into the US Commercial.
Fiat’s American history is marred with negative brand image. This image has a direct effect on the company’s reentry into the American markets. There are a number of reasons as to why Fiat left the American markets. Fiat was commonly known for the mechanical issues on its cars as well as poor customer service.
The company’s exit from the American markets led to the entry of brands such as Toyota (Schwartz, 2009). Over the years, the market successor companies have established new markets in America. Therefore, Fiat’s exit from the American markets and the entry of new brands into the US market are potential challenges to its reentry.
There is a wide range of business practices Fiat would use to have a successful reentry in the American markets. To begin with, Fiat could immolate the current technology used by the Chrysler vehicles. By adopting this approach, the American audience would reference the quality they apparently offer in their vehicles.
Fiat could gradually begin by incorporating its vehicles into the Chrysler dealership showrooms (Schwartz, 2009). This approach would help its target market familiarize the vehicles to the Fiat brand. By taking advantage of Chryslers’ internet presence, Fiat will also be able to promote its reentry into the American markets.
In addition, to introduce a new car into the American market, Fiat has shared its new technology in launching its new “Dodge branded” vehicle (Schwartz, 2009). As far as its organizational structure is concerned, the launch of the new “Dodge branded” vehicle will present more opportunities than challenges in the American markets. Its recent merge with Dodge is a smart move mainly because the company will utilize a well-established brand to market its products.
As argued by (), customers are only interested in buying products from well-established brands. The significance of this approach is that, through Dodge, Fiat will be able to establish itself in the marketplace. In addition, Fiat can use the profits earned from this joint venture in funding its reentry into the American Automotive Market.
As the company enters into the American Market, it is important for Fiat to ensure that the reentry is different from that of the 1980s. To achieve a successful reentry into the US market, Fiat should change its ambition to market and connect their overrated products to its new consumers (Schwartz, 2009). Since 1980, Fiat has continued to revamp its car structures as well as their design.
It is necessary that the company understand both threats and opportunities upon reentering the US market. Using its most recent award on the “World’s Most Reorganized Cars of 2009,” Fiat could successfully establish its brand in America. Despite the fact that Fiat is an independent branded network of dealers in America, it is important to maximize its current relationship to its advantage (Schwartz, 2009).
Get your first paper with 15% OFF
While utilizing the existing relationships, the company will have an opportunity to reenter into the US market. Successful relationships in the new market will attract opportunities to learn competitors’ strategies. By learning competitor strategies, Fiat will attain a competitive edge in the American markets.
While reentering into the American market, it is important for Fiat to have an effective organizational structure. Traditionally, organizational structures play a major role in determining a company’s future direction. As far as the organizational structure at Fiat is concerned, there is need to elaborate both the implicit and explicit policies and rules (Schwartz, 2009).
The importance of elaborating the implicit and explicit policies and rules is that they provide a structure where the various responsibilities and roles are effectively coordinated, delegated, and controlled (Schwartz, 2009). Organizational structure is important since it determines the future direction of a given company.
In line with this view, Fiat should understand the importance of having in place an effective organizational structure. In this case, Fiat should adopt a decentralized organizational structure. This this kind of structure, the company will be able to make informed decision that will facilitate a successful reentry into the American automotive market.
In conclusion, this paper argues that although Fiat’s history in America directly effects its reentry into the American market, this paper has established that there is a possibility of a successful reentry into the American markets. However, its success into the American markets will greatly depend on how it will integrate the new opportunities in its reentry strategy.
Since most of the American have a negative record of the company, it is necessary that the company incorporate approaches that will convince these customers. As established in the case study, merging with successful companies such as Dodge will help Ford convince both the old and the new set of customers.
Schwartz, N. D. (2009). Fiat Gives Detroit a Lesson on Small Cars – NYTimes.com, Nytimes.com. Retrieved from https://www.nytimes.com/2009/07/15/business/global/15fiat.html?_r=0