Tata Motors and the Fiat Auto: Joining Forces

Tata Motors and the Fiat Auto: Joining Forces

MGT 510- Global Business Management

Introduction

The ability to move from one location to the other is a very necessary part of our business and professional lives. The automobile is one the most effective mode of transportation. The automobile industry offers diverse mobility supporting additional business partnerships and increase commerce. Many major manufacturing countries have come to rely on the automobile industry (Williams, 2008). The automotive industry supports a country's economy by providing employment opportunities and economic impact. The auto industry is a major supplier towards the economy of all the major manufacturing countries worldwide.

This paper will explore potential business opportunities in India. The paper will explain the benefits associated with a Fiat entering into a partnership with Tata Motors and if the partnership is a positive move for both corporations. This paper will also include recommendations and examine challenges facing both Fiat and Tata Motors. This paper will examine the case study exploring possible motivator supporting joint business ventures. Lastly, this paper will conclude with recommendations supporting a successful alliance. Explain the business opportunity in India.

India is a rapidly growing country. It ranks second in the world with regards to population. India is the largest democracy in the world with free and fair judiciary and ranks seventh in size ("Trade chakra," 2008). The markets of India's economy are favorable for global investors. In addition to size and population, there are several factors attributing to India attractiveness in the area of business opportunity.

The middle class of India is enormously large and has a teat deal of purchasing power. This country is also recognized for its advances in technology, rich natural resources, and well established financial institutions both public and private. A significant section of the population is bilingual with English as the second language ("Trade chakra," 2008). Lastly, economic reforms supporting freedom of entry, advance technology and import/export has created an atmosphere that embraces new business.

Based on your understanding of the case, explain if Fiat can benefit from a partner and provide your rationale.

Fiat has been in existence since July 11, 1899 (Cullen, 2011). It has had a presence in the Indian automobile industry for over one hundred years. The Fiat Group over time has ventured into several areas of manufacturing and marketing several products to include commercial vehicles, engines for sea vessels, trucks and trams. Automotive manufacturing is an industry that is highly competitive with a global marketplace. There were a few major factors that would encourage Fiat's decisions to pursue partnerships.

Aside from the constant threat of competition, Fiat was also facing financial troubles and lack of consistency in executive leadership. The success of any business is support by the demand for the company's product or services. Fiat's inability to diversity their product greatly damaged their "bottom line." Limiting production to small passenger vehicles minimized Fiat's market concentration. Corporations must also demonstrate the ability to attract, recruit and retain strong effective leaders. Fiat experienced significant turnover in leadership.

The Fiat Group is facing several barriers that would limit their ability to be successful as a stand-alone cooperation.

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