Fiat Failure Case Study Example | Topics and Well Written Essays - 2500 words

Fiat Failure - Case Study Example Finally this study has particularly identified Fiat's inability to reorganize its internal and external strategic value chain and supply chain management processes to achieve positive synergies related to costs and corresponding benefits. More than a century of operations at Fiat were essentially characterized by typical Italian family business approach. The Agnelli family dynasty has been controlling Fiat ever since its inception and even today the family and its related people have roughly 34% of the shares. The company was growing from strength to strength, diversifying in the process in to one of the biggest European Business Conglomerate (Cammarata, Kurucz, Maj, Pavlovic & Portmann, 2006). Its diversification strategy spread in to a number of unrelated businesses as well. Aircraft manufacturing to pharmaceuticals Fiat spread its organizational umbrella. Currently its mammoth organizational structure has become unwieldy. Fiat has been going through a series of downs and very rare ups for a number of years now (Barry, 2009). The organization's inability to come to terms with the changing patterns of international trade and above all its structural orientation in the rapidly changing external competitive environment was not only flawed but also strategically divergent. It is the latter problem that affected the company much more than any other. The recent efforts to turn around the company financially and operationally have been met with no success because in the first place the company has been relying too much on corporate outcomes related to volume sales and capturing market shares while its smaller rivals have been concentrating on technology related productivity goals to identify niche markets in far corners of the globe(Landmann, Wolters, Bernhart & Harsten, 2000).Despite a growing threat coming from these bigger competitors, Fiat was more or less occupied with fluid external environment that pa rticularly had an impact on new product launches rather than testing the mood of the customer. Fiat's inability to effect internal structural changes along with a focus on the rapidly transient strategic competitive environment has been the main reason for its current debacle. While its competitors concentrated on merger and acquisition (M&A) related synergies, there was very little or no effort by Fiat to integrate its existing scale related advantages in to the existing operational environment (Fiat News, 2009). Thus its strategic market orientation was lacking in many respects. 2. Research aim The research aim of this paper is to establish a series of correlations and regressions