Posted: July 12th, 2016

Why did Marchionne make a multibillion dollar bet? Why did he decide to buy a moribund Chrysler (it wasn’t the first time that Chrysler had gone bankrupt)?

You are asked to prepare a report, focusing on three issues: 1. An analysis of the external factors impacting upon the car industries in which the company operates and the rationale for the two companies to go together This question refers to the reasons behind the merger/acquisition. Why did Marchionne make a multibillion dollar bet? Why did he decide to buy a moribund Chrysler (it wasn’t the first time that Chrysler had gone bankrupt)? What external factors could justify this decision? The question is orientated to external factors but the firm/environment interface should not be ignored. A ‘reduced’ PESTLE (i.e. analyse only relevant elements, skip the rest) is of course useful, but other tools such as Porter’s 5 forces may be more analytical in revealing the industry key factors. (Using chapters 4 to 6 in Haberberg & Reiple as starting point). 2. How Fiat­Chrysler is likely to perform compared to its rivals and any competitive advantage it may obtain from going together; this includes the identification of critical resources Here we are interested in your critical evaluation of Chrysler’s and FIAT’s performance (in a general sense) since the merger. General and specific performance indicators should be chosen in accordance with the e