PSA Peugeot Citroen - Strategic Alliances for Competitive Advantage

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Case Details:

Case Code : BSTR211
Case Length : 22 Pages
Pages Period : 1966-2006
Organization : PSA Peugeot CitroŽn
Pub Date : 2006
Teaching Note : Available
Countries : France, Western Europe
Industry : Automobile

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

About Peugeot

The history of PSA dates back to the nineteenth century. In 1810, Jean-Frederic Peugeot, together with his brother Jean-Pierre Peugeot (Jean Pierre), transformed their textile mill in Alsace, France into a foundry. The brothers invented a new process of making sprung steel. Using this new technology, they started making saws, watch springs and other products. In 1858, Peugeot adopted the now familiar lion logo as its symbol.

In the 1880s, Peugeot was managed by Armand Peugeot, Jean Pierre's grandson. In 1885, Peugeot started producing bicycles. In 1889, Peugeot unveiled its first automobile - a steam powered three-wheeler. However, almost immediately, the steam engine was dropped in favor of the petrol engine patented by Gottlieb Daimler. The first 'customer' car was delivered in 1891.

In 1892, Peugeot made 29 cars and by 1899, production had increased to 300 cars a year. Peugeot made its presence felt in several rallies and competitions in the 1890s. The first appearance of a Peugeot in a race was in the 1894 Paris-Rouen Trial (which is widely considered as the world's first motor race).

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Peugeot tasted its first success in the 1895 Paris-Bordeaux-Paris race. In 1896, Peugeot started making its own engines. The same year, Societe Anonyme des Automobiles Peugeot, a separate automobile company, was set up by Peugeot. In 1900, the company's first small car christened Bebe was launched.

In 1902, the company opened a new factory in Lille. Soon, the factory started making motorbikes as well. With the success of its products, yet another factory was opened in 1910 in Sochaux. All this time, the company's cars continued to do well at motor races. After the First World War, the company began to concentrate on making diesel-powered cars. In 1922, Peugeot Quadrilette, a diesel car replaced the Bebe. The Quadrilette was a huge success. In subsequent years, Peugeot acquired several companies like Bellanger Car Company in Neuilly, and De Dion Bouton factory in Puteaux. In 1929, Peugeot launched the 201 model. The 1930s saw the launch of the 202 and 402 models, which went on to become best-sellers...

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