Peugeot Essay ⋆ Business Essay Examples ⋆ EssayEmpire

Peugeot is a major car manufacturer originating and headquartered in France. The company’s industrial origins trace back to a steel foundry set up in a converted flour mill in the early 19th century. Since then, the company has gone through various transformations, manufacturing and selling a diversified range of groundbreaking products (cold rolling, saws, watch and clock mechanisms, coffee mills, sewing machines, bicycles, irons, washing machines, food processors, radio sets, and so on). The era of car manufacturing, which is the firm’s core business activity, could be said to have begun in the late 19th century after a landmark agreement with Gottlieb Daimler and the company Panhard et Levassor.

Armand Peugeot, a dominant figure in the company’s history, separated the automobile business unit from the firm’s other manufacturing divisions (tools, two-wheeled vehicles, tricycles, and quadricycles with a saddle), and in 1896, he founded the company called Société des Automobiles Peugeot. After some strife between cousins who inherited the original company at the beginning of the 20th century, the company reached a point at which it accounted for almost half of French car production (just before World War I). The postwar era, however, raised the threat of financial difficulties for Peugeot, which led to the separation and independence of the automobile and cycling units again.

In the following years, Peugeot’s strategy included various decisions such as concentrating mass production in one site, launching popular brands (such as the 201), and minimizing product offering (such as the single-model policy with the 203). Later, Peugeot created a holding company that could control all the group companies, and more production sites were built. A major feature of this era was the commencement of collaboration with other major car manufacturers, such as Renault (late 1960s), Volvo (early 1970s), Fiat (early 1980s for the production of utility vehicles and people carriers), Ford (late 1990s for the development of diesel engines), and Toyota and BMW (2000s for small engine models and petrol engines).

International Expansion

In addition to these decisions, some of the firm’s most notable strategic decisions lay in its policy for mergers and acquisitions and its international expansion. Taking control of Citroën in 1976 and taking over Chrysler’s European subsidiaries two years afterward provided growth for the firm, but this growth often was hard to handle. The company expanded to major developing countries such as China in 1985 and Brazil in 2001, and countries such as Russia are now major target markets. The firm proactively seeks to expand operations in developing markets that feature attractive segments for medium-size cars and can sustain international growth.

Currently, Peugeot sells some of the most popular brands in the global automobile market. Part of this success can be attributed to the cars’ design and engineering. The firm proactively enhances its design capacity for the Peugeot and Citroën brands through a dedicated design center named Automotive Design Network (AND). Located on the outskirts of Paris, the center incorporates the firm’s styling, vehicle architecture, and innovation teams, consisting of skilled individuals from more than 20 countries.

What was originally a family business is now a multinational giant with 24 production sites delivering 34 families of products and 160 models. The newly formed PSA Peugeot Citroën strives to diversify in more spheres of related business activity and develop existing strengths even further. Feasibility studies are also under way with firms such as Mitsubishi Motors to examine the possibility of extending operations in such fields as manufacturing electric power trains. In line with its Strategy and Ambition Plan for 2010–2015, the firm seeks to exploit synergies with leading car manufacturers and maintain its leadership in the manufacturing of environmentally friendly cars.

Bibliography:

David S. Landes, Dynasties: Fortunes and Misfortunes of the World’s Great Family Businesses (Viking, 2006);
Peugeot, www.peugeot.com (cited March 2009).

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