Critique And Summarise Mazda-Ford Case Assignment (Case Study Sample)

Mazda-Ford Case Analysis
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INTRODUCTION
Case Summary
In the late 70s, Mazda a small firm by then was in financial distress and was looking for a strategic partner to enhance it to shoot and enter the global automobile market. Ford, on the other hand was having a deficit in technology and engineers to produce small-sized recreational vehicles. The need to collaborate was inevitable; both firms needed a solution which could only be offered by either of the partners. 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. The acquisition process worked well for Mazda as it was able to penetrate the international market using Ford brand name. This enhanced the Mazda sales volume to increase cumulatively up to 10 million units. To reduce the cost of production and improve efficiency, the two firms started sharing some spare parts and even manufacturing formula. Ford was able to release Laser and Escort vehicles using Mazda’s Familia platform, Telstar and probe models using Mazda Capella formula. Ford Explorer and Mazda Navaho were also offspring of the partnership (Heath and Scott, 2016). These vehicles attracted huge sales globally and they were the source of friction in the partnership.
Ford ended up adopting a firm in Hofu Japan and used it to boost production in Mexico. Mazda later moved out and planted a firm in Columbia which was followed by a research firm in Michigan in the USA. The financial woes struck Mazda and Ford increased shares by 35%. As the majority shareholder, Ford ended up taking control measures which were contrary to the alliance’s contract leading to termination of the partnership in 2010 (Funiko kigitawa ,2012).
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). In the process of forming a partnership, some factors had to be considered and analyzed critically.The various motives and benefit had to be analyzed and ascertain whether the partnership was worth forming.The partnership was supposed to achieve both general and specific motives of both firms to cultivate mutual benefit and balance (Czinkota and Ronkainen, 2013). Mazda was having a major problem of financial resources and marketing its products, this was its specific objective in the coalition which hindered its growth both domestic and global market. Colluding with Ford which was financially stable and had a reputable brand name would have helped it access the US market which had viable consumers, Moreover, the financial support would enable Mazda to manufacture the desired and tailored product to a specific market. Mazda was an appropriate partner to Ford Corporation; Mazda was technologically endowed but has no resources. Forming a partnership with Mazda will help it not only to have the quality product at the right time but also in designing some products which were highly required by its customers (Gamble and Thompson, 2014). It will also increase its sales volume if it produced high-quality products and sell in the domestic market where it had a relatively good reputation. Generally, one was the solution to the other, receiving a mutual benefit. No firm could have undue advantage over the other (Ehrenberg and Smith, 2016).
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. Both Ford and Mazda had some knowledge gap which needed to be filled by either of the partners, Mazda was ready to acquire marketing skills to penetrate the global market (Argote, L, 2012). Ford was eager to acquire manufacturing technology which it was ready to acquire at the expense of its resources, it was very crucial for its success and survival in the automotive industry and market. This learning potential made the alliance to be perfect and evidenced by the long duration it lasted. Both partners were ready and focused to achieve the strategic goal of the partnership which was success and supporting one another to reduce production costs and profit maximization (Lorange and Brønn, 2017). Initially, both firms shared the same vision on the success of the alliance, but after both firms stabilizing, they started being opportunistic on one another. In the end, the partnership was strained due to over-expansion of both firms hence unmanageability and the need for each partner to be the sole head resulting to its termination.
Major Stakeholders and their Relevance to the Problem(s)
Ford and Mazda motor company are the major stakeholders and had varied general motives to accomplish. The general motives of Ford Company included;
Learning from Mazda. It was willing to learn technology from Mazda, this is because its labor especially engineers in the company had challenges in designing and accomplishing of targets in time (Cranswick, M, 2016). Mazda helped Ford company in time management during designing and implementation stage to ensure timely delivery of results through ensuring commitment and focussedness of the involved team of engineers. 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.Specialized in competencies-Ford was dealing with the production of trucks and heavy commercial vehicles. Through the alliance, it was able to produce small-sized recreational vehicles which were not its initial line of production by gaining the skills from the Mazda Corporation (Cranswick, M, 2016).This reduced market uncertainty due to the diversification of its products.Achievement of specific motives. Ford specific motive was to gain knowledge in producing small vehicles, in the process of partnering with Mazda; it achieved the goal only a few years of association. It was able to expand and reach the far flank global market and achieved high competitive strength to forge ahead in the automotive industry (Funiko kigitawa, 2012).
Mazda Corporation also achieved from the Strategic alliance where most of the general and specific objectives were achieved such as; specialized competencies. Ford was a specialist in marketing compared to Mazda; it helped Mazda in marketing, distribution and logistics matters which assisted the company to spread its brand name to international Arena. Through Ford, Mazda was able to penetrate the US market and other European markets where there was high demand for small vehicles.Avoiding competition: Competition was high in the industry and threatened many firms to the extent of exit, but the alliance with ford reduced the risk of failure and enhanced the company to go global instead of over-concentrating with the domestic market which was suicidal. 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. Mazda gained immensely from Ford excellent brand name and superb distribution channel internationally. The Proliferation of product- Mazda was initially a niche specialist in small recreational car manufacturing with a narrow market segment. By forming a...