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Mergers, Acquisitions, Alliances and Synergies Case Study
Case Title:
Strategic Alliances in the Automobile Industry (A): The Fiat-GM Alliance
Publication Year : 2008
Authors: Hansa Iyangar, Saradhi
Industry: Automobile Industry
Region: US
Case Code: MAA0169
Teaching Note: Available
Structured Assignment: Available
OR
Abstract:
‘Nothing is permanent but for change.’ This adage holds good even for the industry – responsible for umpteen number of socio-economic changes in the modern societies – called industry of industries, the automobile industry. But, the changing times forced the global auto-industry to master newer tips for its survival. During the 1980s and early 1990s, the auto-industry shrunk, from a horde of independent companies, into a handful of global consortiums fiercely competing with each other. Immediate need to cut costs and intensifying price wars made carmakers align with each other (instead of competing) – for gaining access to technology and markets and to achieve economies of scale. In this milieu, the importance has shifted from capital intensive and risky mergers and acquisitions, to strategic alliances like the one formed by Fiat and GM. Some of these collaborations are by choice while others are by force like the Fiat-GM Alliance. This case study, first in the series of 3 cases, enables a discussion over the conditions that led to the formation of the alliance. It helps analyse the nature of the alliance and debate whether it was rneeded, in the first place, and how far it could endure. Does the alliance have the required steam to reward the partners? Was the partnership a result of mutual respect not sacrificing one side for the other?
Pedagogical Objectives:
- The case is meant to provoke analyses among students to understand the process of forming an alliance and the critical success factors for doing so.
Keywords : Alliances in global automobile industry; Fiat-GM Alliance; Cross-border consolidation; Price wars; Mergers,Acquisitions,Alliances Case Study; over capacity; GM in global car industry; Emerging trends in automobile industry; Big Three of Detroit; US automobile industry; Strategic Inflection Points in automotive industry; Critical Success Factors in automotive industry
