Professional Documents
Culture Documents
FIAT SPA
Top Competitors for FIAT SPA
Competitors
FORD MOTOR COMPANY
PEUGEOT SA
Volkswagen AG
Volkswagen AG Rankings
DAX 30
#50 in FT Global 500 (June 2014)
Target market
Fiat targets all upper class and middle class consumers
as theyve all luxury brands like Ferrari, Meserati, and
Alfa so they do products for high class people
PESTEL
POLITICAL
:\
EU
Enlargem
ent
War in
Iraq
Unstable
Current
Situation
in the
Middle
East
CAFE
ECONOMI
CL:
China and
the WTO
Strong
Position
of China
The
automotiv
e industry
crisis of
20082010
Current
global
economy
Exchange
Rates
SOCIAL:
Growth of
Middle
Class
Social
Awarenes
s
TECHNOL
OGCAL:
Energy
crisis
Alternativ
e
Resources
ENVIRON
MENTAL:
Terrorism
Increased
Competiti
on
LEGAL:
Kyoto
POLITICAL
(1) EU Enlargement:
Since 2007 there have been twenty-seven EU member states including
Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary,
Slovenia, Malta, Cyprus, Romania and Bulgaria. For Fiat, a car company
that has its base in the EU, this means more countries for Fiat to trade
with within European barriers.
(2) War in Iraq:
Ever since the War in Iraq (2003) the oil price has been increasing. The
price increase of gasoline at the gas station has had an immense effect on
the demand of cars, because oil and cars are complementary products.
The rise of the price of one, causes a decline in the demand of the other
one. Needless to say, this also impacts Fiat.
(3) Unstable Current Situation in the Middle East:
The recent events in Egypt, Tunesia and Libya are disturbing politics in
the Middle East. Libya one of the OPEC countries is caused the oil price
per barrel to increase by +- 15$ over the past 7 days. Again, an increase
in the price of fuel has an immediate impact on the demand for cars.
(4) The Corporate Average Fuel Economy (CAFE):
The Corporate Average Fuel Economy regulation is a piece of legislation
which requires all participating car- makers to manufacture automobiles
with a 27.5 mpg average (NHTSA, 2007). For car manufacturers who do
not have the technology to or research and development capacity to be
able to make engines at this economy, it will require money and time to
be able to hit the targets.
ECONOMICAL:
(1) China and the WTO:
China is one of the largest markets for cars. According to industry
forecasts, China will be the third largest market for automobiles in the
near future. Another important point to notice is that China joined the
World Trade Organization in 2001. Chinas entrance into the WTO could
have been an advantage (new markets) or a threat (new competitor) for
FIAT. Considering the fact that Fiats market share internationally is not
that strong and that FIAT sells mostly on the EU market; one can conclude
that Fiat has had a more negative effect from China joining the WTO, than
a positive one.
(2) Strong Position of China:
In the production of passenger cars, Asia-Oceania leads with a share of
53% of the world production, followed by Europe with 31% and America
with 14% (2009).
(3) The automotive industry crisis of 2008-2010:
The automotive industry crisis of 20082010 was a part of a global
financial downturn. The crisis affected European and Asian automobile
manufacturers, but it was primarily felt in the American automobile
manufacturing industry.
(4) The current global economy:
FORCE
THREAT
Low
High
(6) Mergers:
Entry barriers are quite high in the automobile sector. However,
established companies are entering new markets through strategic
Product differentiation:
Product differentiation is equally as important. There are many cars that
are similar to for example, the Fiat Punto. Fiat has to face though
competition when rivals like Peugeot, Ford and Opel launch their city
cars.
Switching costs:
There is a high treat of this force because it is easy for Fiat buyers to sell
their cars and switch to a competitive brand.
Buyers willingness:
Products that are economically priced, or have performance tradeoffs will
have an effect on the buyer willingness to commit. Although the Fiat cars
have gained a negative reputation and as a consequence, it is difficult for
Fiat to be a substitute and competitor for the other carmakers.
The threat of RIVALRY HIGH.
High concentration on national and international markets:
Rivalry among the competitors is very strong in this industry due to the
concentration on both the national and international markets. Major car
producing nations like the US, Japan, Italy, France, the UK, Germany, China
and India experience this intense rivalry.
Product differences:
Competitors have similar products and there is a reasonable lack of
differentiation opportunities. This results in more competition.
as General Motors, Toyota in Japan, Tata Motors in India and Korea. Due to
increasing competition, FIAT's domestic market share has declined.
Price wars:
High levels of rivalry are indicated by such actions as price wars,
advertising campaigns and product developments keep them on the edge
of innovation and profitability. These actions have an impact on the
revenues of the car makers. Competition, particularly in pricing, has
increased in recent years. The demand for automobiles has decreased and
total global production for the automobile industry significantly exceeds
demand. Overcapacity combined with high levels of competition and
poorly performing economies, could strengthen pricing pressures. Fierce
competition results in price discounts and pressures on profit margins in
the industry. It is becoming more difficult for FIAT to increase or maintain
vehicle prices.
Strategic partnerships:
Fierce competition leads to strategic alliances. Car producers are trying to
find new ways to reduce overhead and increase revenue. Partnerships
help to create synergies (cf. joint ventures and alliances).
SWOT
Since the appointment of CEO Sergio Marchionne, the company has been
restructured and more organized in the way it is run. The decisions come
from the top and are clearly implemented. Fiat is still
pursuing a global strategy. Through its alliance with Chrysler it will be able
to re-penetrate the North American market, they used the Chrysler 500 as
its premium model, which had a great success in Europe
and in America. This is a breakthrough in Fiat history at the dawning of a
new age.
Strengths:
(1) Know How:
Fiat has had a long experience of the auto industry and contributed to the
development of this industry.
(2) Control:
Fiat has control over historic Italian firms: Ferrari, Alfa Romeo, Lancia and
Maserati.
(3) Design:
Its strength in design- Italian style differentiates itself from competitors.
Great names and designers, such as Giorgetto Giugiaro.
(4) Strong management team:
Strong management team including Sergio Marchionne. More openminded than the previous era of the Agnelli brothers.
(5) Reliable:
According to the Reliability Index (2009), Fiat cars are more reliable than
the industry average.
(6) Evocative Power:
Evocative power FIAT golden years (50s and 60s). Some models, such as
500, are evocative of the glorious age of the Italian style.
(7) Small Cars:
They are good at producing small cars.
(8) Qualified people:
FIAT has qualified personnel in its research centers.
(9) Environmental Commitment:
FIAT environmental commitment also on a European level.
Opportunities:
(1) Form alliances with companies such as PSA Peugeot Citroen, who
produce cars of similar price and size and quality.
(2) In some developing countries, cars tend to be simpler (no AC)
therefore they require less money to produce.
(3) There is potential to expand operations in emerging markets such as
India, and China.
(4) There is an absence of market penetration in developed markets such
as the U.S.
(5) Due to the integration of the Eastern European countries in the EU,
there is access to cheaper labor within the European Union.
Threats:
tastes. Fiats culture is to far from dealers and customers that represent
the FIAT market.
(5) Management culture:
The management takes the concept of mature market to serious and so
focuses on services, assistance and price cuts (through promotions) more
than on innovation and
brand asset management.
(6) Engineering supremacy:
The supremacy of Engineering, Fiat is creating a product that is perfect
from an engineering perspective but not close enough to the customer
perspective
(7) Economies of scale:
FIAT tries to implement economies of scale, although it has not the
financial power to sustain them. In addition, this brings the company to
focus on quantity rather than
quality and innovation.
(8) Outsourcing:
The policy of outsourcing has been wrongly implemented.
(9) Anonymous models:
After the old models, the Panda and the UNO, FIAT models have not been
recognizable. This is of huge concern because it means that FIAT is not
able to exploit in the
Right way the great potentials that are offered by the Centro Stile.
Balance sheet
Financial Statements For Fiat Spa (F)
Year over year, Fiat S.p.A. has been able to grow revenues from 83.8B EUR to
86.6B EUR. Most impressively, the company has been able to reduce the
percentage of sales devoted to income tax expense from 0.75% to -1.08%.
This was a driver that led to a bottom line growth from 44.0M EUR to
904.0M EUR.
Annual
Currency in
Millions of Euros
Revenues
TOTAL REVENUES
GROSS PROFIT
As of:
Dec 31
2010
Restate
d
EUR
Jan 01
2012
Restate
d
EUR
Dec 31
2012
Restate
d
EUR
Dec 31
2013
Restate
d
EUR
35,610.
0
59,559.
0
83,765.
0
86,624.
0
35,880.
0
59,559.
0
83,765.
0
86,624.
0
30,611.
0
50,810.
0
71,422.
0
74,326.
0
5,137.0
8,749.0
12,343.
0
12,298.
0
2,922.0
5,255.0
7,163.0
7,073.0
4 Year
Trend
R&D Expenses
974.0
1,381.0
1,801.0
2,212.0
90.0
49.0
68.0
-77.0
3,986.0
6,685.0
9,032.0
9,208.0
OPERATING INCOME
1,151.0
2,064.0
3,311.0
3,090.0
Interest Expense
-908.0
-1,521.0
-1,822.0
-1,843.0
683.0
352.0
279.0
211.0
-225.0
1,169.0
1,543.0
1,632.0
120.0
146.0
74.0
74.0
-19.0
-19.0
32.0
22.0
-166.0
--
--
--
861.0
1,022.0
1,874.0
1,554.0
-118.0
-1,177.0
-15.0
-300.0
16.0
8.0
-89.0
12.0
-53.0
2,079.0
-246.0
-251.0
-14.0
2,100.0
-138.0
-114.0
706.0
1,932.0
1,524.0
1,015.0
484.0
534.0
628.0
-936.0
-80.0
-199.0
-852.0
-1,047.0
222.0
1,398.0
896.0
1,951.0
378.0
--
--
--
NET INCOME
520.0
1,199.0
44.0
904.0
520.0
1,199.0
44.0
904.0
142.0
1,199.0
44.0
904.0
Ratios
Profitability - Fiat Spa (F)
Return on Assets
Return on Equity
Industry Comparison
Industry Comparison
2.12%
15.69%
Return on Capital
Industry Comparison
4.69%
Industry Comparison
Industry Comparison
13.75%
-0.72%
EBITDA Margin
SG&A Margin
Industry Comparison
Industry Comparison
7.51%
8.02%
Industry Comparison
Industry Comparison
1.0x
28.9x
Inventory Turnover
Industry Comparison
Industry Comparison
3.9x
6.7x
Quick Ratio
Industry Comparison
Industry Comparison
1.4x
1.0x
Industry Comparison
Industry Comparison
323.52%
89.10%
Industry Comparison
Industry Comparison
7.24%
32.78%
EBITDA
Gross Profit
Industry Comparison
Industry Comparison
3.05%
0.13%
Receivables
Inventory
Industry Comparison
Industry Comparison
-4.60%
11.45%
Capital Expenditures
Industry Comparison
Industry Comparison
2,195.09%
-7.13%
Industry Comparison
Industry Comparison
24.39%
-66.42%
Chrysler Group
COMPETITORS
FORD MOTOR COMPANY
PEUGEOT SA
Volkswagen AG
Volkswagen AG Rankings
DAX 30
#50 in FT Global 500 (June 2014)
Target Market
Chryslers target market is usually mid level as they are in to premium
/luxury products .Their focus is on selling high class people and they make
products for them
PESTEL
Political factors
The firm should be ware with all rules and regulation governing
the production of cars, such as fuel efficiency cars which are
highly emphasized, vehicle emissions, safety and standard issues
should be given priority.
Economic factor
At the beginning of the simulation the economy were in good
conditions, GDP growth were projected to raise from 1% to 1.5%
in period 1 and inflation to decline from 2,5% to 1.5% these were
fluctuation hence economy decline at end of simulation.
Social Factors
Cars is one of agent which pollute environments due to emission
of Co2 and noise, large cities, has affected with these emission
and lead to diseases related to breath and skin. Many traffic jams
which are time consuming, and increasing road accidents.
Legal Factors
The firm should comply with all laws and regulation with its
operations, such as gas emission laws, safety and standard
issues, vehicles regulations, compatibility spares manufactures
Technological factors
Cars manufactures are starting to introduce Alternative Energy
Vehicles, which are using electricity only (rechargeable batteries),
fuel cell, hydrogen, solar or hybrid. Despite of its expensiveness it
will be solution to energy efficiency and lowering pollution, but
during simulation we were not accessed to develop purely cars, or
hybrid models despite of its existence. Other technologies such as
synthetic materials, web procumbent technologies, JIT
Management, advanced logistics computer-aided design software,
increase efficiency and save money
Environmental factors,
Environment pollution, is one of challenging issues threaten the
world, car manufactures should pay attention in it issues, by
transforming their technology into alternative energy vehicles,
reduce emissions
SWOT
Opportunities
Growing of economy this led to increase on purchasing power
customers as well as growing of emerging markets
Threats
New laws might imposed regarding to gas emission and safety
issues, increasing competitions from other firms, introduction of
new technologies, as well as global economy downturn,
development of hybrid technologies might be threat for car
manufactures
Strength
At foundation of the simulation, all firms started with one car in
each at the Economy, Family and Truck, this give opportunity to
fair competition due to the fact, all firms within simulation were
started with zero competition, within these unexploited markets,
hence the firs firms which is risk taker to possibly gain lions share
compare to other firms which are risk averse.
Weakness
All firms were started with same situation simulation, hence
another firm can move into our future vehicle class before our
firm decide to move
Critical success Factors, are those that differentiate one products
or services from another in the eyes of consumes, can be
threshold features and differentiators
Rivalry among existing firms is very high, due to the fact that all
firms were started in similar situation. Firm E compete with 6 firms
on which all implementing different strategies in order to perfume
better in the market.
Balance sheet
Currency in
Millions of Euros
Revenues
TOTAL REVENUES
As of:
Dec 31
2010
Restate
d
EUR
Jan 01
2012
Restate
d
EUR
Dec 31
2012
Restate
d
EUR
Dec 31
2013
Restate
d
EUR
35,610.
0
59,559.
0
83,765.
0
86,624.
0
35,880.
0
59,559.
0
83,765.
0
86,624.
0
4 Year
Trend
30,611.
0
50,810.
0
71,422.
0
74,326.
0
5,137.0
8,749.0
12,343.
0
12,298.
0
2,922.0
5,255.0
7,163.0
7,073.0
R&D Expenses
974.0
1,381.0
1,801.0
2,212.0
90.0
49.0
68.0
-77.0
GROSS PROFIT
3,986.0
6,685.0
9,032.0
9,208.0
OPERATING INCOME
1,151.0
2,064.0
3,311.0
3,090.0
Interest Expense
-908.0
-1,521.0
-1,822.0
-1,843.0
683.0
352.0
279.0
211.0
-225.0
1,169.0
1,543.0
1,632.0
120.0
146.0
74.0
74.0
-19.0
-19.0
32.0
22.0
-166.0
--
--
--
861.0
1,022.0
1,874.0
1,554.0
-118.0
-1,177.0
-15.0
-300.0
16.0
8.0
-89.0
12.0
-53.0
2,079.0
-246.0
-251.0
-14.0
2,100.0
-138.0
-114.0
706.0
1,932.0
1,524.0
1,015.0
484.0
534.0
628.0
-936.0
-80.0
-199.0
-852.0
-1,047.0
222.0
1,398.0
896.0
1,951.0
378.0
--
--
--
NET INCOME
520.0
1,199.0
44.0
904.0
520.0
1,199.0
44.0
904.0
142.0
1,199.0
44.0
904.0
Ratios
Profitability - Fiat Spa (F)
Return on Assets
Return on Equity
Industry Comparison
Industry Comparison
2.12%
15.69%
Return on Capital
Industry Comparison
4.69%
Industry Comparison
Industry Comparison
13.75%
-0.72%
EBITDA Margin
SG&A Margin
Industry Comparison
Industry Comparison
7.51%
8.02%
Industry Comparison
Industry Comparison
1.0x
28.9x
Inventory Turnover
Industry Comparison
Industry Comparison
3.9x
6.7x
Quick Ratio
Industry Comparison
Industry Comparison
1.4x
1.0x
Industry Comparison
Industry Comparison
323.52%
89.10%
Industry Comparison
Industry Comparison
7.24%
32.78%
EBITDA
Gross Profit
Industry Comparison
Industry Comparison
3.05%
0.13%
Receivables
Inventory
Industry Comparison
Industry Comparison
-4.60%
11.45%
Capital Expenditures
Industry Comparison
Industry Comparison
2,195.09%
-7.13%
Industry Comparison
Industry Comparison
24.39%
CNH
CNH Global N.V. Competition
-66.42%
Caterpillars
KOMATSU LTD.
Caterpillars Rankings
#49 in FORTUNE 500 (June 2014)
S&P 500 (June 30, 2014)
Dow Jones Industrials
#81 in FORTUNE's Fastest-Growing Companies (September 2013)
#137 in FT Global 500 (June 2014)
#49 in FORTUNE 1000 (June 2014)
Target market
CNH target all agriculture and constructional companies. For agriculture
they have products like new Holland tractors etc which farmers holding up
high output from farms and there constructional companies they are
products are usually for constructional and they have buses which is
usually for transportation companies
New Holland Tractor" has a significant impact, so an analyst should put more
weight into it. "New Holland Tractor" is a difficult qualitative factor to defend,
so competing institutions will have an easy time overcoming it.
Weaknesses
Heavy reliance on few suppliers
These statements will have a short-term negative impact on this entity, which
subtracts from its value.
Opportunities
Infrastructure Spending
Plans to spending large amounts of money in infrastructure should increase
the demand for construction related businesses. Significant spending on
school construction, highways, utilities, and the power grid. IT spending will
also increase to cope with the increase in demand for information to provide
advanced services. Material suppliers and manufacturing industries will also
benefit. Many countries around the world are increasing their infrastructure
spending in order to increase the economy. Infrastructure Spending will have
a long-term positive impact on the this entity, which adds to its value. This
statement will have a short-term positive impact on this entity, which adds to
its value.
Threats
Housing Crisis
Housing crisis lowers the company's assets and equity and makes it harder to
do business in the market. Lower equity lowers the amount of money that
can be loaned and thus limits the ability of the company to generate
additional income from loans. Pressure on mortgages, home equity growth
will slow. A major source of past revenue and profits will decrease and lead to
a decrease in future cash flow and stock value. Utility companies will see less
grow as the growth rate of new housing developments slows. A slowdown will
also affect landscaping companies.
Volatile Commodity Prices
Volatile commodity prices increase the risk to the company, since a sudden
change in commodity prices can hurt profits and increase the chances of
bankruptcy. It also makes long-term forecast more difficult and long-term
investments to meet demand more difficult. "Volatile Commodity
Prices" has a significant impact, so an analyst should put more weight into
it. "Volatile Commodity Prices" will have a long-term negative impact on this
entity, which subtracts from the entity's value. This statement will have a
short-term negative impact on this entity, which subtracts from its value. This
statement will lead to a decrease in profits. "Volatile Commodity Prices" is a
difficult qualitative factor to overcome, so the investment will have to spend
a lot of time trying to overcome this issue.
CNH is the most efficient technology for the associated costs of operation.
Due to the highly specialized purposes of the machinery produced, there
may be some overlap between possible uses, but the machines face no
risk of substitution (Haisten). There is no other viable option for buyers to
consider for the task CNH Inc. Page 21
to be completed in a resourceful and timely fashion. For example, if a
company were to refuse the services of heavy machinery and focus on
standard human labor as an alternative, the timeframe and associated
expenses would be wasteful in comparison to what the major competitors
in the agricultural industry have to offer. CNH does not have to necessarily
concern itself with substitute products, but rather on maximizing the
reliability and functionality of the machinery they currently produce.
Competitive Rivalry within an Industry High
Hundreds of competitors in a worldwide industry have created a
significant threat to Caterpillar. They operate in an environment with 50
top competitors controlling roughly 80% of the market (Haisten). Since
CNH focuses more upon their service rather than diversification, the door
is left open to other competitors to take advantage of new opportunities.
Several competitors provide products that offer benefits to other
industries such as the military or consumer products. For example, Deere
& Company offers a variety of products to consumers regarding lawn care.
However, in an attempt to counter the issue of competitive diversification,
CNH is beginning to focus on global expansion instead. The company said
it expected growth of more than 10 percent in China and 8 percent in
India in 2010. That is much more robust than the 3.5 percent growth CNH
predicted for the United States and the 1 percent growth in Europe
(FundingUniverse). CNH must continue to find ways to remain competitive
in an industry filled with so many extremely competitive organizations.
PESTLE Analysis
Political
Dec 31
2011
Restate
d
EUR
Dec 31
2012
Restate
d
EUR
Dec 31
2013
EUR
3,686.0
5,639.0
4,611.0
4,705.0
Short-Term Investments
112.0
68.0
4.0
--
Currency in
Millions of Euros
As of:
Assets
4 Year
Trend
--
86.0
90.0
74.0
3,798.0
5,793.0
4,705.0
4,779.0
Accounts Receivable
15,612.
0
15,409.
0
16,477.
0
16,832.
0
Other Receivables
1,573.0
1,837.0
1,615.0
1,728.0
17,185.
0
17,246.
0
18,092.
0
18,560.
0
TOTAL RECEIVABLES
Inventory
3,898.0
4,865.0
4,843.0
5,464.0
11.0
47.0
56.0
140.0
24,892.
0
27,951.
0
27,696.
0
28,943.
0
9,310.0
9,831.0
10,039.
0
10,342.
0
Accumulated Depreciation
-6,027.0
-6,307.0
-6,317.0
-6,346.0
3,283.0
3,524.0
3,722.0
3,996.0
Goodwill
1,848.0
1,937.0
1,907.0
1,823.0
Long-Term Investments
737.0
616.0
470.0
495.0
1,308.0
1,284.0
1,228.0
1,212.0
1,235.0
1,478.0
1,789.0
2,076.0
Other Intangibles
477.0
486.0
466.0
464.0
1,093.0
1,296.0
1,583.0
1,932.0
TOTAL ASSETS
34,873.
0
38,572.
0
38,861.
0
40,941.
0
Accounts Payable
4,077.0
5,043.0
4,838.0
5,336.0
Accrued Expenses
--
1,128.0
1,186.0
1,266.0
Short-Term Borrowings
5,626.0
--
--
--
--
9,235.0
8,761.0
7,542.0
--
5.0
6.0
6.0
508.0
660.0
217.0
303.0
2,570.0
512.0
1,273.0
1,223.0
--
983.0
1,073.0
1,379.0
12,781.
0
17,561.
0
17,348.
0
17,049.
0
13,069.
0
10,968.
0
11,862.
0
14,134.
0
Long-Term Debt
Capital Leases
--
43.0
43.0
48.0
Minority Interest
740.0
838.0
748.0
52.0
2,157.0
2,158.0
2,213.0
1,967.0
52.0
111.0
168.0
219.0
2,258.0
2,479.0
1,851.0
1,968.0
30,317.
0
33,320.
0
33,485.
0
35,385.
0
Common Stock
--
1,913.0
1,919.0
18.0
Retained Earnings
3,573.0
1,822.0
2,417.0
3,810.0
243.0
679.0
292.0
1,676.0
3,816.0
4,414.0
4,628.0
5,504.0
TOTAL LIABILITIES
TOTAL EQUITY
4,556.0
5,252.0
5,376.0
5,556.0
34,873.
0
38,572.
0
38,861.
0
40,941.
0
Ratios
Ratio data TTM as of 06/30/2014
Profitability - Cnh Industrial Nv (CNHI)
Return on Assets
Return on Equity
Industry Comparison
Industry Comparison
3.90%
Return on Capital
15.26%
Industry Comparison
5.80%
Industry Comparison
Industry Comparison
20.99%
-0.97%
EBITDA Margin
SG&A Margin
Industry Comparison
Industry Comparison
12.40%
8.59%
Industry Comparison
Industry Comparison
0.6x
1.5x
Inventory Turnover
Industry Comparison
Industry Comparison
6.1x
3.4x
Quick Ratio
Industry Comparison
Industry Comparison
2.9x
2.2x
Industry Comparison
Industry Comparison
396.65%
86.40%
Industry Comparison
Industry Comparison
4.30%
59.07%
EBITDA
Gross Profit
Industry Comparison
Industry Comparison
-1.06%
1.68%
Receivables
Inventory
Industry Comparison
Industry Comparison
7.07%
18.25%
Capital Expenditures
Industry Comparison
Industry Comparison
-4.86%
10.89%
Industry Comparison
Industry Comparison
-15.30%
29.49%