Strategic Management Case Study

Q1. Expand on the rationale behind the order of magnitude and Chrysler strategic alliance. In December 2008 revisal witnessed such a strike down off in its demand for cars that they were forced to close for a month and lay off close to 50,000 workers. The company indicated that amid the pecuniary crisis it was looking for a demotener who could give the company the much needed push in the northwest American market. Fiat learned about Chryslers bankruptcy problems and put an gallop on the table for the purchase of Chrysler. Experts felt the alliance was part of Fiats expansion and risk diversification strategy. On Jan 20th, 2009 as part of its bankruptcy filing, Chrysler announced its plans to establish a global strategic alliance with Fiat. The rationale for this alliance is in truth simple. Commenting on the alliance, CEO of Fiat and Chrysler Sergio Marchionne summed it up by saying, This operation represents a constructive and cardinal solution to the problems that have plagued non just Chrysler in recent years, but the global automotive industry as a whole.

Bringing together Fiats world class technology, platforms and power trains for small and mass medium sized cars and its extensive distribution network in Latin America and Europe with Chryslers rich heritage, strong North American presence, and talented and dedicated workforce go away clear a powerful new automotive company go helping preserve jobs and a manufacturing industry that is critically important to the US and Canadian economies. The alliance is a good suit of swimming integration. Benefits of horizontal integration include: 1.Reducing costs- horizontal integration allows companys to grow and therefore to substantiate economies of scale. As part of the alliance both of the companies would reportedly unveiling seven new vehicle models in the US market. This will be cheaper to do as they will use Chryslers plants across North America aswell as Fiats complementary technology and expertise.... If you want to get a full essay, order it on our website: Orderessay

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