Ford was founded by Henry Ford in 1903 ford is present in more than 200 countries and had 245,000 staff worldwide manufacturing in about 100 factories around the world. Ford was the only manufacturer that did not borrowed money from government at 2009-09 financial crisis. This was because it had successfully negotiated on a favorable terms on a substantial loan just before the banking crisis become apparent. Substantially it sold the significant part of the stack it owned in Mazda, and later divested the Volvo brand further reinforcing its balance sheet. Ford also owned a sound portfolio of models, many highly successful.
Strength of Joint Venture (JV): The main reason seeking alliance type such as JV is to maximize profits. Profits are strength allowing the companies to improve their operation by having more capital to invest in departments assets or having advanced employee training projects thus improving business. Team work becomes strength because both parties are operating as one in order to achieve the same goal. When operating in JV it makes easy to penetrate the local market because now JV has strength of local knowledge that makes it easy to identify customer base, segments and so on by having a local team of analysts in the field. Two heads are better the one JV has increased problem solving ability due to creation of this alliance. Partners will share expenses and tax and technically reducing their effect that benefit JVs business operations.
There are some weaknesses to JV. Managers will disagree between each other decisions making decision making slow and frustrating. Management style is very different therefore some employees will experience lose in motivation and low performance at work place leading to failure. Culture difference is a barrier for example: An American manager will expect more individualism and less power distance from its employees where as Chinese employees cultured to inherit high power distance toward its superiors and incline to teamwork rather than individualistic performance. Initially disputes may arise because over all culture differences as two companies coming from completely different cultural back ground.
Having Joint Venture will open up new opportunities such as an opportunity to understand foreign culture and be part of it. This alone will improve relationship between companies. Managers have an opportunity to learn different methods of management style and understand working styles of other employees to come up with the best fit management leading. New market is a new opportunity for Ford because this will increase customer base, expand operation field. New product will benefit Changan Auto Co. Ltd. Partner can learn new technology and get new ideas from each other benefiting them even after brake up of JV. Having JV is a great opportunity to view new training ways and learning different approaches, strategies and so on to improve and globalize business operations.
There are many threats and simple act of creating JV will send a message to its competition and the competition will respond aggressively. Internally culture difference will lead to disputes misunderstanding and threat of JV brake up. Managers may disagree with each other in terms of decision making and it may lead to arguments or in some cases some managers will have autocratic and hypocritical personality and will look down on other managers and question and dislike every decision. After JV brake up two companies threaten to become each other competition as the both learned each other tech. and operation in the same market.
Culture difference is can be a problem for both parties to collaborate together at least at the beginning of partnership. Time and good management of cultural development, gradually common ground can be achieved for the companies to allow synergistic development or at very least reduction of conflicts and disagreements with...