Case Overview:
It all started in 1979. Mazda, a relatively small player in the world automobile market in the automobile market at that time, wanted a string international partner in order to make the transformation from being a small niche player to becoming a major global automaker. At the same time Ford was also looking for a partner to help it design and produce smaller automobiles. The two firms agreed that they were logical partners.
Ford is a major USA firm and Mazda is based in Japan. Mazda sold 25 percent of its stock to the Ford and a collaborative arrangement started.
This case depicts about the success stories of the collaboration in the automobile industry by the Japanese and US firm though they were obviously competitors. One significant success story emerging from the alliance involves Ford probe and Mazda MX-6. There were swapping of resources and capabilities between the two firms. Mazda designers design the basic platform, engine and drive train for the cars. Mazda then design the outside of the MX-6 and Ford does same for the probe. Finally both cars are assembled at a factory owned by the two firms. Ford escort was another successful offspring of the alliance where again the Mazda engineers designed the car and Ford made it. But the alliance was not without spots. Mazda Navaho one of the offspring of the alliance which was basically build upon the on of the Ford popular product Ford explorer and build by the Ford makers. Ford made an opposite step by denying to provide the Japanese partners Navaho production to continue production of its own product line. The partner Mazda in addition fell into financial distress and Ford got the effective management control of Mazda and took some bold steps which eventually went against the collaboration.
Case Query Statement:
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Query Answers:
Query 1 :
Strategic alliance:
Two or more firms combined together to face the competitive situation. It refers to the combination of different firms for their mutual benefits.
Different types of Alliance:
Licensing
Franchising
Management contract
Turnkey operation
Shared ownership
Equity alliance.
The strategic alliance approached by selling Mazda’s 25% share to Ford motor company. So it was a strategic alliance and shared ownership type. Shared ownership alliance is actually one special form of joint venture.
Query 2 :
Before the alliance the two firms were in totally different market and they were also in different country but the industry was of same type. Both of the firms were aware about their future plan and lacking.
...a 25% share of Toyo Kogyo in November 1979, when a Ford subsidiary merged with the company). Ford imported Mazda cars and trucks, and in many ways treated Toyo Kogyo as a small car division.
Proper explanation of the current situation, involving the type and extent of the current problems. And the merger will bring progress over the current situation.
FHI has a long history dating back to 1917 when Chikuhei Nakajima founded The Aircraft Research Laboratory, then it was reorganized in 1932 and was renamed the Nakajima Aircraft Company, Ltd (NAC) a major producer of aircraft for Japan in the years leading up to and during World War II (Subaru of America, n.d.). After Japan's defeat and occupation, aircraft production was forbidden by the Supreme Commander of Allied Powers, as a result, many of the aeronautical engineers started to work in the automobile industry (Odagiri, 1996, p. 216). NAC again reorganized and became Fuji Sangyo Company, Ltd (FCS), and began producing the Fuji Rabbit Motor Scooter. In 1950, due to the Corporate Credit Rearrangement Act, FCS was required to separate into 12 smaller corporations. On July 15, 1953, five of those corporations: a coachbuilder, an engine manufacturer, a chassis builder, a trading company, and a scooter manufacturer, merged to form what is known today as Fuji Heavy Industries. (Subaru of America, n.d.) In 1954, FHI began production of automobiles. The president of the company Kenji Kita searched for a Japa...
BMW soon realized that many threats impacted its market share in U.S. The Japanese auto manufacturers started building plants in the U.S. to deal with the increased U.S. demand at a lower cost than importing their cars. BMW's U.S. export situation was made even worse by the appreciation of German mark and additionally the higher German labor costs. As a result, the decision was made in 1991 to bui...
How can firms minimize or manage the bumps, hurdles, or conflicts that often occur when firms join together in an alliance or partnership?
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