Question

Why do you think the Ford-Mazda partnership has been so successful, while many others (including those at the beginning of the case) haven’t been? Case Study - A Successful Partnership at Ford-Mazda. Please anwers the question in minimun 200 words.

Case for Analysis:

A Successful Partnership at Ford-Mazda

While international joint ventures among auto manufacturers make great sense, often they don’t make great profits. For example, for many years, auto giant General Motors bailed out loss-plagued Isuzu, in which at one point it owned a 49 percent stake. The list of cross cultural disappointments goes on: Chrysler-Mitsubishi, Daimler-Chrysler, and Fiat-Nissan have all produced as much rancor as rewards.

Ford-Mazda is the exception. Their marriage has weathered disagreements over specific projects, trade disputes between Japan and the United States, and even allegations by the Big Three that Mazda and other Japanese rivals were dumping minivans in the United States. The alliance, founded when Ford stepped in to rescue the struggling Japanese carmaker in 1979, has stood firm for over 30 years. With Ford owning 11 percent of Mazda, the two companies have cooperated on several new vehicles and exchanged valuable expertise—Ford in international marketing and finance, Mazda in manufacturing and product development.

Ford and Mazda have worked jointly on several auto models; usually Ford would do most of the styling and Mazda would make key engineering contributions. Jointly worked cars include the Ford Escort and Mercury Tracer models, the subcompact Festiva, the sporty Ford Probe and Mercury Capri, and the Tribute and Explorer SUVs. The Ford-aided Mazdas are the MX-6, 323, Protégé, and Navajo. In all, approximately one of every four Ford cars sold in the United States has benefitted from some degree of Mazda involvement everything from manufacturing methods to steering designs whereas two of every five Mazdas has some Ford influence. The Ford-Mazda relationship extends beyond U.S. borders. In 2010, a joint venture between Ford and Mazda in Thailand began producing passenger cars export to several Asian countries. Ford and Mazda can call on some hard-learned principles for managing a successful strategic alliance, many of which would apply to ties in any industry. The secrets to the Ford-Mazda success are

Keep top management involved. The boss must set a tone for the relationship. Otherwise, middle managers will resist ceding partial control of a project to a partner.

Meet often, and often informally. Meetings should be at all levels and should include time for socializing. Trust can’t be built solely around a boardroom table.

Use a matchmaker. A third party can mediate disputes, suggest new ways of approaching the partner, and offer an independent sounding board.

Maintain your independence. Independence helps both parties hone the areas of expertise that made them desirable partners in the first place.

Allow no “sacrifice deals.” Every project must be viable for each partner. Senior management must see that an overall balance is maintained.

Appoint a monitor. Someone must take primary responsibility for monitoring all aspects of the alliance.

Anticipate cultural differences. Differences may be corporate or national. Stay flexible and try to place culturally sensitive executives in key posts.

Underlying these principles is the idea that benign neglect is no basis for a partnership. Or, as Ford president Phillip E. Benton Jr. stated, “There’s a lot of hard work in making it work.”

Answer 1

The Ford-Mazda partnership has been successful for several reasons. Firstly both the companies have clear and properly defined roles that they are supposed to play in the joint venture. Ford’s role is focused more on styling aspects of new automobiles while Mazda’s role is confined to its engineering capabilities. Both the companies acknowledge the role and the function that they have in the joint venture and this has resulted in value addition and synergy.

Secondly the joint venture between Ford and Mazda has active involvement of top management. The top management at both the companies has established the importance of this partnership and as such the joint venture has never witnessed a problem that middle managers may produce with regards to ceding of power.

Thirdly the joint venture between Ford and Mazda ensured that their management and employees met regularly but on an informal basis. This ensured that communication is smooth and open between the two companies and its employees. It also helped in building trust in the long run.

Fourthly both Ford and Mazda were allowed to maintain their independence and their separate identities. This enabled both Ford and Mazda to sharpen their areas of expertise.

Fifthly the joint venture was viable for both the partners and neither Ford nor Mazda had to bear a loss or sacrifice their business prospect for the venture.

It is on the basis of the above mentioned factors that the joint venture between Ford and Mazda has turned out to a successful venture. The success of the venture is striking given the fact that partnerships between other automobile companies are failing regularly.

(269 words).