Operation Management at Fiat - Case Study Example

Fiat was founded On 11 July 1899 at Palazzo Bricherasio, the company charter of "Societ Anonima Fabbrica Italiana Automobili Torino" was signed. Among the members of the Board of Directors, Giovanni Agnelli stood out in the group of investors and won recognition for his determination and strategic vision. The 'Fabbrica Italiana Automobili Torino' company was founded in Turin, The first factory was opened in 1900 in Corso Dante. 150 workers were employed there and produced 24 cars. After that Fiat started a factory on s green field site at Melfi in southern Italy.

At that time the competition was too high in the automobile industry. Fiat and all its competitors were facing a problem of poor quality products and productivity. The plant was the outcome of a major re-engineering effort undertaken by the company related to quality, productivity and endemic industrial conflict. For over a decade the plant was considered by Fiat and its competitor to be the leading example of productivity. But after the factory was started to do a better performance, it started fell down in productivity because of a strike in its production and supply area, by workers.

From the very beginning the production system of Fiat's is a customer driven production system. But as the production was fallen due to the strike, the marketing department has to take steps to defend its market share, which was decreased as well. But as it's the problem of internal environment and related to human resource where alone marketing department cant do much. Marketing department can do a research "LE PEST C analysis (stands for Legal, Economical, Political, Ecological, Social, Technological and Cultural analysis)"1 along with HR department on its internal environment to find out the problem.

At same time Fiat have to do another research on its customer to understand their recent behavior, needs and also on market to understand the recent market situation and future trends. All the decisions will depends up to these research result and some measurement. Such as recent consumer behavior, situation of sales and recent market share, recent market trends- after conflict was covered and published by media.After media coverage, if the market and consumer behavior remain same marketing department need no to go for increase marketing activities such as advertisement but other promotional tools must be in working mode such as "public relation, direct marketing, sales promotion"2 etc.

To capture the market share and get a competitive advantage they will use "Flank Attacking strategy"3. If the market trends shows that the future market may boom and the consumer behavior are in changing pattern as they want to spend more money for having a car, and if the demographical segment shows that the income level is increasing and will booster the sales, only then Fiat should start to build a new factory that will be worthy to Fiat in long run. If Fiat decide to start a new plant based on positive research