Fiat CEO: "New Chrysler as Apple"
What do you do if you’re an overlarge organization fighting a losing battle for market share in a down market, with high fixed costs and a stultified bureaucracy, facing more nimble competitors? If you’re Time magazine, you interview Chrysler-controlling Fiat CEO Sergio Marchionne. And if you’re Sergio facing a similar situation for Chrysler, you tell the troops that an Apple a day keeps the Sebrings away. “Since he took over as chief executive of Italy’s Fiat in 2004, the chain-smoking Canadian-Italian has used Apple as a model, focusing on the way Steve Jobs transformed it from an also-ran computer company into a global icon of cool. He encourages Fiat managers to take a close look at Apple’s branding prowess and even asks them to benchmark their activities against the company. His biggest success at Fiat is the 500 — a tiny, very cool 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren — which Marchionne calls ‘our iPod.'”
If Marchionne is to succeed, he needs above all to reposition Chrysler from maker of clunky, overpowered gas-guzzlers to purveyor of must-own, energy-efficient vehicles. “The challenge for Fiat Chrysler is to move away from popular products and into ‘pop’ products, full of cool environmental technology and on the right side of history,” says Carlo Alberto Carnevale, a professor of strategic management at Bocconi University’s business school in Milan and a close watcher of Fiat. “In that sense, it’s the same bet as Steve Jobs’. That’s why Marchionne uses that metaphor.”
The question is: does it apply? We shall see.
More by Robert Farago
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To quote jpcavanaugh: "...the driving philosophy of the company will be a series of well-engineered and innovative vehicles that will be attractive to both car people for their performance and features and non-car people for their image." That sounds like it SHOULD BE the philosophy of ALL car companies. Making huge profits for the shareholders should be a byproduct.
It's an apples-and-oranges comparison (sorry.) The only way ChryCo could ape Apple would be if they got a lot - a lot - smaller and devoted their efforts to niche-market products. Apple doesn't even market to businesses or low-end personal computer users. They don't want that market because with that market comes the mundane, workaday reputation that will ruin their snob appeal and hip cred. A $500 Macintosh would undermine the Apple image. OTOH, is ChryCo really ready to dump 75% of their product line to focus on hip, niche market products? If they want to be niche marketers, IMO they would do better to copy Harley Davidson, which rose to its current level of success by marketing low-tech vehicles that were desirable both because of their cost (high $$$) and because they oozed that retro-cool panache that makes them different from their competition. Harley doesn't make sportbikes, dirtbikes or beginner bikes (and before someone says it: No, Buell =/= Harley.) They know that selling a "cheap bike" would damage their reputation far more than what would be offset by increased sales. They don't try to be all things to all people. Instead of saying "please buy one of our motorcycles" they ask "do you have what it takes to ride one?"