SWOT analysis of Chrysler - Chrysler SWOT analysis

From the days Water Chrysler founded the Chrysler Corporation in 1925, the company has been a strong player in the automobile segment. Currently, the company is called Fiat Chrysler Automobiles and is a trusted and popular brand in the USA and Europe.

The company is headquartered in London and the US operations are based out of Detroit. The company has been associated with some of the biggest success stories in the automotive segment and is the owner of brands like Dodge, Plymouth, De Soto, and Fargo.

Currently, Fiat Chrysler which was incorporated in the year 2014 through a partnership designs, manufactures, distributes and sells vehicles and vehicle spares in around 70 plus countries across the world and is ranked as the 11^th largest automaker of the world. The company has an annual turnover of around 85 billion USD in the year 2016.

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Strengths in The SWOT analysis of Chrysler

Strengths are defined as what each business does best in its gamut of operations which can give it an upper hand over its competitors. The following are the strengths of Chrysler:

Differentiation: Chrysler has always tried to differentiate between its product categories. While Dodge was about sturdy design and suitability across all terrains, Fiat is about styling and technology. Through the right brand ambassadors, product placements and advertisements the differentiation is also clear in the customers’ mind.
History: The Chrysler Corporation was founded in the year 1925 and the automaker has a rich history spanning for more than a century now. The company has also been associated with vehicles of all types and exposed to developing cars to suit driving conditions across the world in the span of these ninety plus years.
Positioning: The “imported from Detroit “ tagline which was introduced for the first time through the “born of fire” campaign has been able to position the brand strongly in the consumers’ mind as a brand of quality, style, and technology attributes that Americans were looking for in imported cars. The campaign also helped the brand to capture the automobile market where imported cars were growing in popularity.
Hig recalls: Due to the right branding strategy and promotions the brand Chrysler enjoys very high mindshare as well as brand recall in most markets it operates in.

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Weaknesses in The SWOT analysis of Chrysler

Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Chrysler are:

Fleet sales: Chrysler has been always focused on fleet sales and fleet sales account for almost 17 percent of their total sales which is the highest amongst any other car maker in the US. However, this is affecting the customer perception in the retail market which in turn affects their revenues.
Multiple mergers: Chrysler has been entering into mergers with the objective of coming out of bankruptcy. Initially it was Daimler Chrysler, followed by the private equity firm Cerberus and currently, it is Fiat Chrysler. These have diluted the brand drastically.
Product Lines: Chrysler has a lot of products in its product lines with multiple variants in each category all of which are eating into the costs of the company. If the product lines are not trimmed the company will face severe financial crises.
Poor after sales service: In most emerging markets, cars are purchased for their resale value and easy availability of after-sales service. Chrysler has serious issues in both these aspects with the result that it is not a popular brand there.

Opportunities in The SWOT analysis of Chrysler

Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its returns. Some of the opportunities include:

Scope for penetration in emerging economies: The demand for automobiles is expected to. Increase annually at a rate of 10 % for the next three years. The market penetration of luxury cars in India is as low as 11 %.This means that there is ample scope for automakers in these markets,
Demand for fleet cars: In cities, there is a growth of taxis and rented car services like Uber. This can create a new demand for fleet cars which is something that Chrysler specializes in.
Favorable trends: The number of dual-income households has increased as more women join the workforce. This has also increased the demand for second cars in households which already own cars and most customers prefer smaller cars.

Threats in The SWOT analysis of Chrysler

Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:

Technology: Some of the emerging technology areas like robot-driven cars, alternate energy vehicles, interconnected traffic and safety systems etc can prove to be extremely expensive to develop and may erode into the already low margins of carmakers.
Competition: The company faces the immense pressure of competition from Chevrolet, Nissan, Toyota, Hyundai.GM etc.