Internationalization Process of Fiat : Project 178

1.Abstract

In this paper, i tried explain the main aspects of internationalization process of automobile company "Fiat".As u will see in the following pages,Fiat that its establishment dates back to beginning of 1900s was trying to internationalize for taking place in the globalizing world.They named this process as Project 178

As a large company with a small domestic market, Fiat Auto has always been faced with the issue of internationalization, which can be considered an evolutionary process that has unfolded throughout the last century, and influences the current globalization strategy. This began in 1993 when Fiat Auto took a decisive step towards creating a global organization by setting up Project 178, whose main features are:

1. Define a family of new models, based on the same platform, to be produced and sold with basically no significant change, in a number of countries.

2. Create a worldwide supply chain to manufacture, in different places of the world, a family of new models suited to the motorization needs of BEMs(bigemerging market).

3. Take advantage of cost differentials, namely labor cost differentials, available in PLEMAs(peripheral of large existing market areas).

4. Guarantee absolute standardization of each version of the models produced, even if they are targeted to different markets.

5. Establish an organizational learning process capable of conciliating the design of a centralized product with the needs of various final markets.

6. Diffuse, by replication and adaptation to foreign plants, the lesson learned in the setting up and operation of the highly successful green-field plant in Melfi (Italy).

7. Develop a global supply chain, flexibly and efficiently using the production capacity and the supplier base available in different countries.

We can list the main aims of Fiat's internationalization process as above.

2.Globalization

2.1.What is Globalization

Globalization, or globalisation is the increasing interdependence, integration and interaction among people and corporations in disparate locations around the world. It is an umbrella term which refers to a complex of economic, trade, social, technological, cultural and political interrelationships. The term has been used as early as 1944, however Theodore Levitt is usually credited with its first use in an economic context.

2.1.Definition:

Globalization can be defined as stresses the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology.

While being a complex and multifaceted array of phenomena, globalization can be broken down into separate aspects:

* industrial globalization (alias transnationalization) - rise and expansion of multinational enterprises

* financial globalization - emergence of worldwide financial markets and better access to external financing for corporate, national and subnational borrowers

* political globalization - spread of political sphere of interests to the regions and countries outside the neighbourhood of political (state and non-state) actors

* informational globalization - increase in information flows between geographically remote locations

* cultural globalization - growth of cross-cultural contacts

2.2.Economic Definition :

Globalization is the worldwide process of homogenizing prices, products, wages, rates of interest and profits . Globalization relies on three forces for development: the role of human migration, international trade, and rapid movements of capital and integration of financial markets.

2.3.Charasteristics of Globalization:

Globalisation/internationalisation has become identified with a number of trends, most of which may have developed or accelerated since World War II. These include greater international movement of commodities, money, information, and people; and the development of technology, organisations, legal systems, and infrastructures to allow this movement.We can list the main aspects of globalization like this;

* Spreading of multiculturalism, and better individual access to cultural diversity, for example through the export of Hollywood and Bollywood movies. However, the imported culture can easily supplant the local culture, causing reduction in diversity through hybridization or even assimilation. The most prominent form of this is Westernization, but Sinicization of cultures also takes place.

* Greater international travel and tourism

* Greater immigration, including illegal immigration

* Spread of local consumer products (e.g., food) to other countries (often adapted to their culture)

* World-wide fads and pop culture such as Pokйmon, Sudoku, Numa Numa, Origami, Idol series, YouTube, and MySpace.

* World-wide sporting events such as FIFA World Cup and the Olympic Games.

* Formation or development of a set of universal values

* Development of a global telecommunications infrastructure and greater transborder data flow, using such technologies as the Internet, communication satellites, submarine fiber optic cable, and wireless telephones

* Increase in the number of standards applied globally; e.g. copyright laws and patents

* The push by many advocates for an international criminal court and international justice movements.

3.Internationalization and Auto Industry

Globalization has recently become the key issue in the automotive industry, reflecting

not only the car manufacturers' to globalize but also the effects of a dynamic and complex framework of competing initiatives. One key aspect is the tendency of OEMs (original equipment manufacturers) to decrease the level of vertical integration, simplifying their production arrangements, reducing investment in fixed and non-fixed assets, and focusing