Fiat delivers birth of new Baby Jeep

Summary of Article

The article that struck me for this insight was the BusinessWeek’s piece on Fiat’s new “Baby Jeep.” Having driven my cousin’s new Jeep over spring break I was able to witness Jeep’s new “Fiatness” first hand.

Facing a struggling Jeep product line with the Cherokee and Liberty, Fiat decided to revamp and reconsider their product strategy. This Tuesday Chrysler Group reported that it sold 26% more “baby” Grand Cherokee’s last month than it did in the year prior. In addition to the new strategy taken towards their product line, a new Jeep Renegade was introduced last month in Geneva, another Fiat inspired smaller cheaper option. As a product line, the small SUV /compact crossover grew from 9.7% to 11.6% nationwide.

It is undoubtedly Fiats new ownership position over Chrysler Group that is facilitating all these changes as well as a shift in consumer demand. Since Fiat, being born and raised in Italy, specializes in high performance, high efficiency and compact size at a reasonable price these changes come much easier due to Fiat’s background.

This article goes ahead and vaguely explains the change in strategy and direction taken by Chrysler Group in regards to Jeep’s product line as well as its recent success. It continues by inquiring how interesting it is that Jeep sold more of a mini, less powerful version of the earlier Jeep Cherokee, obviously at a lesser price.

 

Summary of Illustrated Concepts

This article touches upon a lot of what we’ve talked about in class in terms of product in relation to the consumer, management strategy and even company acquisition. Within the past year, Fiat finalized its acquisition of the American car manufacturer, Chrysler Group. Seeing the struggling and long famous Chrysler, Fiats management saw an opportunity in the shifting American market. An acquisition that many thought of to be foolish and suicidal due to Chrysler Group’s financial problems. However, Fiat saw something that many did not. For years Fiat has been trying to get into the American market, but due to its small, weak and somewhat “not tough” image it has struggled to do so, but now was their opportunity.

For years now the American car market has demanded big, tough, tech advanced, sometimes excessive and gas guzzling vehicles. However, since the financial crisis in 2008 and 2009 there has been a change in this trend. Besides the rise in the price of gas, many American consumers demanded more fuel efficient cars without sacrificing too many of the luxuries of what they were used to. This is where Fiat came to play approximately 3 years ago when it made its first move towards acquiring Chrysler Group. Fiat management saw an opportunity and seized it. What this article illustrates is the results of Fiat’s revamping of Chrysler Group, one product line at a time. Taking their changes very cautiously, the new Jeep’s may not be the powerful 8-cylinder, 16mpg Cherokee it was a few years ago, but instead the smallest Cherokee model which I had the opportunity to drive was a 4-cylinder, front wheel drive, Cherokee earning a 26 combined miles per gallon.

Lastly, besides aforementioned concepts above demonstrated by Fiats acquisition of Chrysler Group, Fiat along with Chrysler management have noticed this shift in the American car market and have successfully started integrating changes to react. This re-strategizing, revamping and reaction to the market demand is a key concept or attribute to successful management.

I loved this article for a few reasons. First, may be the most obvious, being Italian and growing up around Fiats, seeing Fiat do well for itself while providing consumers their needs is awesome. Secondly, it demonstrates perfectly how to identify an opportunity, in a very forward looking perspective and taking advantage of it. Thirdly, it also presents a longer more complicated mode of entry through an acquisition. Through the acquisition, Fiat was not only able to take a look at what Chrysler’s weaknesses were and work on them but also introduce their line of small fuel efficient cars and witty Fiat 500 commercials.

Lastly, although somewhat repetitive in terms of what I took from my last insight as well, is the uncanny interconnectedness between the concepts being presented in class and the real world. While identifying what was going on beyond what the article clearly stated, it was interesting to see the farther I peeled into the facts, the more layers and concepts I was able to identify and connect to the article. Out of all the assignments I’ve had over the years, it is ones like these that I’ve always learned from the most because they are the epitome of connecting what goes on in the real world to what is being taught in the classroom and without this connection, most of the time what goes on in the classroom goes unused or unseen because no connection is ever identified. So I can say without hesitation that articles like this and the analysis of articles in general contribute highly to my understanding of concepts covered in class.

 

 

 

Stock, Kyle. “Fiat’s ‘Baby Jeep’ Strategy Pays Off.” Bloomberg Business Week. Bloomberg,        01 Apr. 2014. Web. 02 Apr. 2014.

http://www.businessweek.com/articles/2014-04-01/fiats-baby-jeep-strategy-pays-   off#r=hpf-st

 

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