Mazda Ford Case Analysis
The firm could complement each other with the deficit and this created the backbone of the coalition. Ford bought a quarter of Mazda’s shares cementing the alliance (Dong and Yang, 2015). The two companies developed positively due to the partnership. For instance, in 1971 Ford courier for Western market was developed by the Mazda B-series which penetrated the market easily (Lorange and Brønn, 2017). Mazda on its side bulged its sales volume to reach a global production of 5million units within a short period. Identification of Problem Mazda Corporation and Ford were competitors who were producing similar commodities and aiming the same global market. The two firms had to form a strategic alliance in order to work together and achieve their aimed objectives.
There were various challenges facing them such as partner selection, Getting compatible partner, Trust, Management of partnership, learning Potential of the Partner, Possibility of getting an opportunistic partner and how to achieve both specific and general objectives. Criteria of Partner Selection The two firms existed in different countries and were operating in a totally different market and in the same industry of automotive manufacturing. Initially, each had its own development plans and was aware of the shortages it was experiencing (Arnheiter and Maleyeffn, 2015). The nature of product was also a major factor to determine the viability of partnership (Lavie and Khanna, 2012). Both Mazda and Ford Corporation had a similar but differentiated product, so they could form a viable partnership by bridging the technological gap and both benefit from the partnership.
The production process was similar hence no major changes in the already existing infrastructures. There was no outstanding facility that was required to planted hence the alliance was economical both in the short run and in the long run. The learning potential from both partners was vital in the alliance. The focused nature of Mazda and stringent management technique was realized when the first new escort vehicle was manufactured and completed within the budget and timely (Heath and Scott, 2016). Reduction of cost. Ford realized the potential of Mazda and noted that the partnership could act as a cost-saving strategy. Ford actually saved an estimated amount of more than 1 billion dollars on the designing and production of vehicles (Funiko kigitawa, 2012). This was a good sign of Mazda contribution using its superior technical know-how and time precision.
With ford expertise in strategic marketing, Mazda was able to compete with market leaders such as Toyota in the international market interns of sales volume (Lorange and Brønn, 2017). A strong international partner- Mazda was also able to achieve its specific motives such, acquiring an international partner who was able to transform the shape of Mazda’s initial constricted domestic market to a worldwide player in the automotive industry. A global automaker-The two companies were able to share manufacturing platform and technology. This reduced production cost by half, they produced Ford Probe and Mazda mx-6 using the same design and quality although they were bearing different brand name (Czinkota and Ronkainen , 2013). Mazda Navaho and Ford Explorer were also produced by sharing the same platform and they both attracted excellent sales globally.
There was no dictatorship in the alliance and every activity involved a lot of negotiation (Fukushima and Yokomizo, 2012). When Ford paid the lump sum of 130 billion dollars once, it cultivated a lot of trust from Mazda as it portrayed commitment to the alliance. This cleared any doubt and removed the thought of opportunistic suspicion. Analysis of Alternative Solutions Minimizing exposure in risky environment. Ford Corporation was not a specialist in production of small vehicles. This model was the initiative of Ford in early 1990 which used the platform of earlier Ford explorer. The models Ford Explorer and Mazda Navaho were competing in the market despite the fact that they were from partners firms (Thomas and Trevino, 2013). Due to over contribution of Ford in Providing Mazda Navaho to the over expanded Mazda firm in Japan, Ford was not meeting its market supply of its Model the Explorer, and this created a distress in the alliance when Ford announced its intention to halt providing the Mazda Navaho to Mazda corporation (Ehrenberg and Smith, 2016).
Mazda’s financial distress. In the mid-90s, Mazda Corporation was faced with a financial turmoil as it had outgrown its capability, fuel inefficient models, and global financial recession. The two Firms were supposed to be fierce rivals instead of being strategic partners. Moreover, the two firms were from different continents. What makes the partnership appear unique is the extent of success and the duration of the “marriage” and the great achievements. The alliance was initially an experimental one for both partners as they were not sure of the success and compatibility of the firms. Other automakers seemed skeptical on the ability of the partnership success. , Mazda had to release Its Structural Reform Plans as a tool to make it relevant in the global automotive industry.
The reforms had to meet various objectives such as increasing business innovation using Skyactiv technology, accelerating the cost of improvement through Monotsukuri innovation(Dong and Yang, 2015). It was also to improve business in new markets and to establish a global production footprints in promotion of global alliances. It was also focused in improving the partnership with Toyota as strategic partner in development. The revisions of the plans were aimed to increase global presence of Mazda brand and also push for increased performance in terms of sales and technology development References 1. The changing role of marketing in the corporation. The Journal of Marketing, 1-17. Varadarajan and Cunningham (2015). Strategic alliances: a synthesis of conceptual foundations. Journal of the academy of marketing science, 23(4), 282. Cranswick, M.
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