Fiat Business Case. 

Additionally, it was also felt that the company was very late in addressing the quality issues related to its products. This delay in improving the quality of its products dissuaded customers from buying Fiat’s cars. This was also a major reason because of which Fiat was not able succeed in the American car market despite its affordability and this also lead the company to withdraw itself from the American car market.

Towards the end of 1990s, the company also experienced a financial crunch due to its diversification measures. The acquisitions made by Fiat Auto during the period contributed to its problem since the performance of some of the acquired businesses was rather disappointing and additionally they also resulted in added costs for the company. Another factor responsible for this situation of the company was that the company bought a few firms when it was at the top of its business cycles and consequently had to shell out a lot of money to acquire them. The debts of Fiat were largely the result of such acquisitions made by the Italian automobile giant.

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Factors that are related to planning and control play a vital role in the decline of the Italian automotive giant. The role played by the R&D department is to be seriously taken into account while discussing about the crisis or performance decline of Fiat. The reason behind this can be described as the “supremacy” of the Engineers at the R&D wing. The most serious problem recognized is the “supremacy” of Engineering over customers’ needs. The requests of Marketing are often rejected because considered as wrong from an engineering perspective. This is an issue of huge concern because Marketing is the one that gives information about customers’ needs, expectations, and market trends.

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