Fiat Chrysler Automobiles N.V. SWOT Analysis / Matrix

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SWOT analysis is a strategic planning tool that can be used by Fiat Chrysler Automobiles N.V. managers to do a situational analysis of the firm . It is an important technique to understand the present Strengths (S), Weakness (W), Opportunities (O) & Threats (T) Fiat Chrysler Automobiles N.V. is facing in its current business environment.

The Fiat Chrysler Automobiles N.V. is one of the leading firms in its industry. Fiat Chrysler Automobiles N.V. maintains its prominent position in market by carefully analyzing and reviewing the SWOT analysis.  SWOT analysis an immensenly interactive process and requires effective coordination among various departments within the company such as – marketing, finance, operations, management information systems and strategic planning.

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The SWOT Analysis framework facilitates an organization to identify the internal strategic factors such as -strengths and weaknesses, & external strategic factors such as - opportunities and threats. It leads to a 2X2 matrix – also called SWOT Matrix.

The Strengths-Weaknesses-Opportunities-Threats (SWOT) Analysis / Matrix helps the managers of the Fiat Chrysler Automobiles N.V. to develop four types of strategies:

  • SO (strengths-opportunities) Strategies
  • WO (weaknesses-opportunities) Strategies
  • ST (strengths-threats) Strategies
  •  WT (weaknesses-threats) Strategies
Fiat Chrysler Automobiles N.V. swot analysis / matrix

SWOT Matrix Strategies Objective

The core purpose of SWOT matrix is to identify the strategies that an organization can utilize to exploit external opportunities, counter threats, and build on & protect Fiat Chrysler Automobiles N.V. strengths, and eradicate its weaknesses.

Step by Step Guide to Fiat Chrysler Automobiles N.V. SWOT Analysis

Strengths of Fiat Chrysler Automobiles N.V. – Internal Strategic Factors

As one of the leading companies in its industry, Fiat Chrysler Automobiles N.V. has numerous strengths that enable it to thrive in the market place. These strengths not only help it to protect the market share in existing markets but also help in penetrating new markets. Based on Fern Fort University extensive research – some of the strengths of Fiat Chrysler Automobiles N.V. are –

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  • Successful track record of developing new products – product innovation.
  • Highly successful at Go To Market strategies for its products.
  • Automation of activities brought consistency of quality to Fiat Chrysler Automobiles N.V. products and has enabled the company to scale up and scale down based on the demand conditions in the market.
  • Strong Brand Portfolio – Over the years Fiat Chrysler Automobiles N.V. has invested in building a strong brand portfolio. The SWOT analysis of Fiat Chrysler Automobiles N.V. just underlines this fact. This brand portfolio can be extremely useful if the organization wants to expand into new product categories.
  • High level of customer satisfaction – the company with its dedicated customer relationship management department has able to achieve a high level of customer satisfaction among present customers and good brand equity among the potential customers.
  • Strong dealer community – It has built a culture among distributor & dealers where the dealers not only promote company’s products but also invest in training the sales team to explain to the customer how he/she can extract the maximum benefits out of the products.
  • Strong distribution network – Over the years Fiat Chrysler Automobiles N.V. has built a reliable distribution network that can reach majority of its potential market.
  • Good Returns on Capital Expenditure – Fiat Chrysler Automobiles N.V. is relatively successful at execution of new projects and generated good returns on capital expenditure by building new revenue streams.

Weakness of Fiat Chrysler Automobiles N.V. – Internal Strategic Factors

Weakness are the areas where Fiat Chrysler Automobiles N.V. can improve upon. Strategy is about making choices and weakness are the areas where an organization can improve using SWOT analysis and build on its competitive advantage and strategic positioning.

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  • High attrition rate in work force – compare to other organizations in the industry Fiat Chrysler Automobiles N.V. has a higher attrition rate and have to spend a lot more compare to its competitors on training and development of its employees.
  • Investment in Research and Development is below the fastest growing players in the industry. Even though Fiat Chrysler Automobiles N.V. is spending above the industry average on Research and Development, it has not been able to compete with the leading players in the industry in terms of innovation. It has come across as a mature firm looking forward to bring out products based on tested features in the market.
  • Not very good at product demand forecasting leading to higher rate of missed opportunities compare to its competitors. One of the reason why the days inventory is high compare to its competitors is that Fiat Chrysler Automobiles N.V. is not very good at demand forecasting thus end up keeping higher inventory both in-house and in channel.
  • Financial planning is not done properly and efficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.
  • Days inventory is high compare to the competitors – making the company raise more capital to invest in the channel. This can impact the long term growth of Fiat Chrysler Automobiles N.V.
  • The marketing of the products left a lot to be desired. Even though the product is a success in terms of sale but its positioning and unique selling proposition is not clearly defined which can lead to the attacks in this segment from the competitors.
  • Not highly successful at integrating firms with different work culture. As mentioned earlier even though Fiat Chrysler Automobiles N.V. is successful at integrating small companies it has its share of failure to merge firms that have different work culture.

Opportunities for Fiat Chrysler Automobiles N.V. – External Strategic Factors

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  • Stable free cash flow provides opportunities to invest in adjacent product segments. With more cash in bank the company can invest in new technologies as well as in new products segments. This should open a window of opportunity for Fiat Chrysler Automobiles N.V. in other product categories.
  • The new taxation policy can significantly impact the way of doing business and can open new opportunity for established players such as Fiat Chrysler Automobiles N.V. to increase its profitability.
  • The market development will lead to dilution of competitor’s advantage and enable Fiat Chrysler Automobiles N.V. to increase its competitiveness compare to the other competitors.
  • New trends in the consumer behavior can open up new market for the Fiat Chrysler Automobiles N.V. . It provides a great opportunity for the organization to build new revenue streams and diversify into new product categories too.
  • Decreasing cost of transportation because of lower shipping prices can also bring down the cost of Fiat Chrysler Automobiles N.V.’s products thus providing an opportunity to the company - either to boost its profitability or pass on the benefits to the customers to gain market share.
  • Economic uptick and increase in customer spending, after years of recession and slow growth rate in the industry, is an opportunity for Fiat Chrysler Automobiles N.V. to capture new customers and increase its market share.
  • Government green drive also opens an opportunity for procurement of Fiat Chrysler Automobiles N.V. products by the state as well as federal government contractors.
  • New customers from online channel – Over the past few years the company has invested vast sum of money into the online platform. This investment has opened new sales channel for Fiat Chrysler Automobiles N.V.. In the next few years the company can leverage this opportunity by knowing its customer better and serving their needs using big data analytics.

Threats Fiat Chrysler Automobiles N.V. Facing - External Strategic Factors

  • Increasing trend toward isolationism in the American economy can lead to similar reaction from other government thus negatively impacting the international sales.
  • Imitation of the counterfeit and low quality product is also a threat to Fiat Chrysler Automobiles N.V.’s product especially in the emerging markets and low income markets.
  • Growing strengths of local distributors also presents a threat in some markets as the competition is paying higher margins to the local distributors.
  • Rising pay level especially movements such as $15 an hour and increasing prices in the China can lead to serious pressure on profitability of Fiat Chrysler Automobiles N.V.
  • As the company is operating in numerous countries it is exposed to currency fluctuations especially given the volatile political climate in number of markets across the world.
  • Intense competition – Stable profitability has increased the number of players in the industry over last two years which has put downward pressure on not only profitability but also on overall sales.
  • The company can face lawsuits in various markets given - different laws and continuous fluctuations regarding product standards in those markets.
  • Shortage of skilled workforce in certain global market represents a threat to steady growth of profits for Fiat Chrysler Automobiles N.V.   in those markets.

Limitations of SWOT Analysis for Fiat Chrysler Automobiles N.V.

Although the SWOT analysis is widely used as a strategic planning tool, the analysis does have its share of limitations.

  • Certain capabilities or factors of an organization can be both a strength and weakness at the same time. This is one of the major limitations of SWOT analysis . For example changing environmental regulations can be both a threat to company it can also be an opportunity in a sense that it will enable the company to be on a level playing field or at advantage to competitors if it able to develop the products faster than the competitors.
  • SWOT does not show how to achieve a competitive advantage, so it must not be an end in itself.
  • The matrix is only a starting point for a discussion on how proposed strategies could be implemented. It provided an evaluation window but not an implementation plan based on strategic competitiveness of Fiat Chrysler Automobiles N.V.
  • SWOT is a static assessment - analysis of status quo with few prospective changes. As circumstances, capabilities, threats, and strategies change, the dynamics of a competitive environment may not be revealed in a single matrix.
  • SWOT analysis may lead the firm to overemphasize a single internal or external factor in formulating strategies. There are interrelationships among the key internal and external factors that SWOT does not reveal that may be important in devising strategies.

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Weighted SWOT Analysis of Fiat Chrysler Automobiles N.V.

In light of the above mentioned limitations of the SWOT analysis / matrix, corporate managers decided to provide weightage to each internal strength and weakness of the firm. Organizations also assess the likelihood of events taking place in the coming future and how strong their impact could be on company's performance.

This method is called Weighted SWOT analysis. It is better than doing simplistic SWOT analysis because with Weighted SWOT Analysis Fiat Chrysler Automobiles N.V. managers can focus on the most critical factors and discount the non-important one. It also solves the long list problem where organizations ends up making a long list but none of the factors deemed too critical.

Limitation of Weighted SWOT analysis of Fiat Chrysler Automobiles N.V.

This approach also suffers from one major drawback - it focus on individual importance of factor rather than how they are collectively important and impact the business holistically.

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Example of Weighted SWOT Analysis

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SWOT Worksheet & Template

If you like to do your own SWOT analysis or want to make your own Weighted SWOT SWOT matrix then feel free to download Fern Fort University SWOT Analysis Template.

References / Citations & Bibliography

  • M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
  • A. D. Chandler, Strategy and Structure (Cambridge, Mass.: MIT Press, 1962)
  • O. E. Williamson, Markets and Hierarchies(New York: Free Press, 1975);
  • L. Wrigley, Divisional Autonomy and Diversification (PhD, Harvard Business School, 1970)
  • R. E. White, Generic Business Strategies, Organizational Context and Performance: An Empirical Investigation, Strategic Management Journal7 (1986)