Question

Fiat

Fiat is an Italian car manufacturer based in Italy. The company was founded in 1899, and has grown to become the world's ninth largest car maker, and the largest in Italy. The company is best known for producing small, economical family cars. Fiat designed cars are manufactured worldwide, and the company has factories in Brazil, Poland and Argentina, and has licensing agreements with many other countries, including Russia, India, Pakistan and China. The company has tended to buy out its component suppliers and also minimized the number of suppliers it deals with. This creates greater security of supply and reduces costs, in some cases dramatically.

The Products Although Fiat has a reputation for small, cheap cars, the company has won the prestigious European Car of the Year Award 12 times in 40 years, more often than any other manufacturer. Fiat has also made a major breakthrough in its engine technology, developing an engine (the Fiat 500 model) that has the lowest emissions in the world. In addition, the car is extremely economical to run

Emerging Markets Fiat has made a decision to focus on emerging countries. Since cars sold in these countries need to be simple to maintain and operate, they tend to have fewer features (e.g. often do not have air-conditioning), so Fiat is well-placed to exploit these opportunities. Re-engineering the cars to have fewer features is obviously a great deal cheaper than adding features, so development costs can be minimized.

Promotion on Communications Fiat has concluded an agreement with the British School of Motoring (BSM), which is the UK's largest driving school. BSM uses Fiats for teaching people to drive, and in exchange Fiat provides the cars at a heavily discounted rate, and also offers special deals for graduates of BSM. Fiat's website emphasizes the 'fun' aspects of driving a Fiat. The company believes that Italians have a fun-loving approach to life, and that this is reflected in the design and performance of the cars.

During 2009, the car scrappage scheme adopted throughout Europe (by which governments subsidized the replacement of old cars with new ones in order to stimulate the economy) provided a major boost to Fiat, at a time when the worldwide recession was damaging sales. However, Fiat faces a number of challenges in the next few years. The relative strength of the euro has eroded the firm's competitive price advantage, the rising price of steel worldwide has raised costs, and the entry of
Japanese and Korean manufacturers into Europe has increased competition in Fiat's traditional markets.

The Future As people become more environmentally aware, and as governments worldwide look to bring in legislation to reduce greenhouse gases, Fiat is well placed, with its fuel efficient, cheap-to-run, economical cars. In addition, Fiat's expertise in creating engines that can run on alternative fuels also gives the company an advantage over competitors.

1-Conduct SWOT analysis for Fiat?

2-Discuss the factors Fiat should consider before deciding the price of their cars?

3-Produce 2 objectives for Fiat in 2012?

4- Recommend How Fiat should coordinate its marketing mix in order to maintain its competitive position during an economic recession?

5-Discuss 2 promotional techniques that Fiat can use to promote its cars?

Answer 1

1) SWOT Analysis of FIAT

Strength -

1) The company has experience of 2 centuries in manufacturing cars. This is advantageous to the company.The company devise its strategies based on its experience and customer preferences.

2) Despite image of manufacturing low cost cars it begged awards. This shows that the company can go beyond its capabilities.

3) It has agreements with other countries which is necessary for any company to grow.

4) The biggest strength of the company at present is its expertise in creating engines that can run on alternative fuels which is the need of the market. As companies are under pressure to make products that are environment friendly and sustainable.

Weakness:

1) Image of low cost car manufacturer. As the living standard of people increases their demand for luxurious cars may increase, and Fiat manufacture low cost family cars.

2) Despite 200 year old co it cannot expand its operations in other countries at a rapid pace.

Opportunities :

1) Fiat can capitalize on its capability of  manufacturing engine which produces less emission. This has huge potential in the current scenario as the world is facing environmental pollution.

2) Emerging market can be explored where low cost and less feature cars are in demand and which matches the company's manufacturing strength.

3) After buyout of its suppliers the co has opportunity to expand in other parts of the world as their will be further reduction in its costs.

Threats :

1) Competition from Japanese and Korean car manufacturers.

2) The company's competitive advantage has been eroded due to Euro's strength and rise in steel prices.

3) Image of low cost car manufacturer.

----------------------------------------------------------------------------------------------------------------------------------------------------------------------

2) Factors Fiat should consider before deciding the price of their cars :

a) Market in Which it is selling its car : The co can differentiate prices based on its market. Like in emerging market it can keep its prices lower.

b) Economy - If its recession or slowdown, the co needs to devise its strategies accordingly. In slowdown the co can reduce prices.

----------------------------------------------------------------------------------------------------------------------------------------------------------------------

3) 2 objectives for Fiat in 2012 :

a) The company must explore emerging markets aggressively as it has experience and manufacturing engines that produces less emission. There is pressure on  emerging markets to reduce pollution so there will be demand for low pollution emitting vehicles.

b) The company should get out of its image of low cost manufacturing car company, as in coming years there will be huge demand for luxurious cars as well.

----------------------------------------------------------------------------------------------------------------------------------------------------------------------

4) Marketing mix in order to maintain its competitive position during an economic recession :

a) It should focus on emerging markets as there is lot of demand for its cars. The co must make cars which are economical yet efficient.

b) As image of Fiat is of manufacturing fun cars. This aspect is sometimes unaffected by economic recession. The co must keep going with its campaign of fun loving car.

----------------------------------------------------------------------------------------------------------------------------------------------------------------------

5) 2 promotional techniques that Fiat can use to promote its cars:

a) Environment Friendly Car - This could help the company immensely as there will be huge demand of environment friendly car in emerging as well as developed market.

b) Low cost Car - As it is the biggest strength of the co to produce low cost but efficient cars.