Abstract

This case is about the strategic alliance between Italian carmaker Fiat S.p.A. (Fiat) and US auto giant Chrysler LLC (Chrysler). On April 30, 2009, Fiat and Chrysler entered into a strategic alliance. The case describes the rationale behind the alliance and details the events that led to the partnership between the two companies. The case highlights the benefits of the alliance for both the automakers. According to industry experts, the alliance would allow Fiat and Chrysler to take advantage of each other's distribution networks and global supplier base. The deal means Chrysler, which was fighting off bankruptcy and struggling to sell the less fuel-efficient larger models, would have access to new markets and cheaper, more environmentally friendly technologies while Fiat would be able to gain a foothold in the US automobile market. The case also discusses the challenges that lie ahead of Fiat and Chrysler in making this transcontinental alliance a success. According to some analysts, the differences in culture and management styles of both Fiat and Chrysler could become a hindrance to the realization of the synergies of this partnership.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the issues and challenges in strategic alliances.
• Analyze the pros and cons of transcontinental and cross-cultural alliances.
• Examine the benefits of strategic alliances in the automobile industry.
• Evaluate the alliance between Fiat and Chrysler and its potential synergies.
• Analyze the future challenges of the alliance between Chrysler and Fiat and how these can be overcome.

Keywords

Strategic Alliance, Transcontinental Alliance, Competition, Risk diversification strategy, Expansion strategy, Synergies, Culture, Organizational structure, Integration plan, Global automotive industry, Structural changes in the auto industry, Fiat, Chrysler