Case Study

Fiat and Peugeot's Sevelnord venture (B1): Peugeot's mandate for industrial investment negotiations

16 pages
May 1996
Reference: IMD-3-0645

The second part of this series (cases B1 and B2) describe the perspectives of Peugeot and Fiat respectively as they prepare to enter in a major negotiation regarding SEVELNORD’s manufacturing capacity and production plan. The two cases follow the same outline and differ primarily on a few critical data that generate the difference of perspective between the two parties. Participants only read the “B” case of the company they will represent in the negotiation. The participants are also provided with a financial model (an Excel spreadsheet) to help them assess the profit implications of their decisions and compromises. The goal of this exercise is to make participants aware of the tradeoffs in alliances and the necessity to help the partner achieve a satisfactory performance in order to ensure the long term stability of the venture. Broader lessons can be drawn regarding negotiation techniques and tactics. Note: It is also possible to use only the A and C cases, skipping the negotiation exercise.

European Strategy, Car
Field Research
© 1996
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