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| Author: | Jolly, D. |
| Title: | Co-operation in a Niche Market: The Case of Fiat and PSA in Multi Purpose Vehicles |
| Journal: | European Management Journal
1997 : VOL. 15:1, p. 35-44 |
| Index terms: | JOINT BUSINESS VENTURES CAR INDUSTRY CASE STUDIES |
| Language: | eng |
| Abstract: | Stimulated by the success of Renault in Europe and Chrysler in North America, PSA and Fiat decided to enter the emerging multi purpose vehicle market by forming an alliance to design, develop and manufacture an entirely new vehicle. The study of this case shows that the narrowness of this segment combined with a growing entry cost reduce the possibility of autonomous moves. As a consequence, the alliance has mainly been designed for sharing investments and risks, and for gaining economies of scale in a joint plant. As such, it offers a typical example of a scale alliance. However, we stress that those benefits are counterbalanced by the fact that when the allies go back to competition for commercialising the vehicles in their respective distribution networks, they offer quite similar products. It reduce the span of differentiation. |
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