444 Chapter 14 Foreign Direct Investment and Collaborative Ventures Une Meanwhile, the products of Autolatina, built for W and Ford continued to compete with each other protected market, fol out of step with the rapidly evolve in the worldwide market, which hindered the sharing of ing marketplace Brazilian consumers began to show a technical knowledge and potential gains from joint R&D preference for lower-cost smalcars, and price competi Outside of the Autolatina collaboration, the partners tion intensified from the abundance of competing smal even competed against each other by launching new cars. Both GM and Flaunched popular cars (Corsa Cars in the same category and Uno, respectively for less than $7,000. The Closing Casetable presents the variety of offerings by four lead. The End of Autolatina ing firms. Although Autolaina had succeeded in reviving in 1995, Ford and WW dissolved their alliance. The the VW Beetle, customers deserted the Beetle for lower parting was so amicable that the employees were priced competing brands. With increased competition allowed to choose the company they wanted to con customer's choices expanded beyond low cost, increas. tinue to work for ing the pressure on manufacturers to improve quality Because the sale of subcompact vehicles, known as and offerings popular cars in Latin America, took off rapidly Volkswa gen's smaller cars benefited from the demise of the joint CRM Market Set Products venture Volkswagen held a third of the regional market Volkswagen Small Beetle, Gol The firm invested $25 bilion to expand capacity by one Mid-Sized Logus, Pointer Voyage third up to 2.500 vehicles a day and launched a new Large Santana truck plant and a line of new engines Ford Mid-sized Escort, Verona By contrast, Ford continued to specialize in midsized Large Versailles cars and was unable to respond to the regional demand for smalcans. Eventually Ford's image in Brazil was hurt General Soral Corsa It acquired a reputation for producing cars that few Motors Mid-Sized Kadett, Monza, Vectra wanted to buy. Ford began a $1.1 bilion investment on Large Omega own to build Fiestas in Brazil and Escorts in Asgentina Fiat Small But by then, WW, Fiat, and GM had attained big market Large Tempra shares in Brazil. Ford's market share fe to just 11 per cent. More recently. Ford now bulds the Fiesta, Focus, and a few other small cars in Brazil and Argentina. Each plant exports in large volumes to neighboring countries Conflicts between the Partners Ford is undertaking new investments in Brazil, mainly to In addition to dynamic changes in the market confists develop new products for the local market arose in the strateg os of Ford and W. Ford dealers in Brazil had been begging for smaller cars, better suited AACSB: Reflective Thinking to Latin American consumers. But Ford avoided the 0. sion of Autolatina's profits by competing with WW's Gol Case Questions from which it was receiving half the profits. Volkswagen management, on the other hand, avoided sharing its 1. What were Ford's motives and objectives for enter subcompact designs with Ford. Mutual willingness to ing its colaborative venture with Volkswagen? Eval Share technological knowledge and other key compe uate the extent to which Ford accomplished these tencies dedined over time. objectives Differences in the organizational cultures of the two 2 Weat type of collaborative vonture did Ford enter partners also contributed to deteriorating relations. The with Volkswagen? What were the advantages and German and the U.S. organizations had different history disadvantages of this venture from Ford's perspec and origins, as well as differing management styles Within the boundaries of Autolaina, WW and Ford were What strengths did Ford and WW bring to the Auto- reasonably wel integrated operationally, even exchanging to venture? Did these firms have any weak model fabrication. But outside the relationship, suppliers nesses? Elaborate continued to serve the two companies independently as well as the dealershos. Autolaina was not integrated 4. Did Ford commit any blunders in its the American with suppliers or dealers, leading to ineficiencies in the operations Specity ply chain. Although consolidation reduces cost of admins 5. What can other managers learn from Ford's experi tration and value chain activities, the two firms failed to con ence regarding international collaborative ven solidate their supply bases and dealerships tures? What should Ford do now? 444 Chapter 14 Foreign Direct Investment and Collaborative Ventures Une Meanwhile, the products of Autolatina, built for W and Ford continued to compete with each other protected market, fol out of step with the rapidly evolve in the worldwide market, which hindered the sharing of ing marketplace Brazilian consumers began to show a technical knowledge and potential gains from joint R&D preference for lower-cost smalcars, and price competi Outside of the Autolatina collaboration, the partners tion intensified from the abundance of competing smal even competed against each other by launching new cars. Both GM and Flaunched popular cars (Corsa Cars in the same category and Uno, respectively for less than $7,000. The Closing Casetable presents the variety of offerings by four lead. The End of Autolatina ing firms. Although Autolaina had succeeded in reviving in 1995, Ford and WW dissolved their alliance. The the VW Beetle, customers deserted the Beetle for lower parting was so amicable that the employees were priced competing brands. With increased competition allowed to choose the company they wanted to con customer's choices expanded beyond low cost, increas. tinue to work for ing the pressure on manufacturers to improve quality Because the sale of subcompact vehicles, known as and offerings popular cars in Latin America, took off rapidly Volkswa gen's smaller cars benefited from the demise of the joint CRM Market Set Products venture Volkswagen held a third of the regional market Volkswagen Small Beetle, Gol The firm invested $25 bilion to expand capacity by one Mid-Sized Logus, Pointer Voyage third up to 2.500 vehicles a day and launched a new Large Santana truck plant and a line of new engines Ford Mid-sized Escort, Verona By contrast, Ford continued to specialize in midsized Large Versailles cars and was unable to respond to the regional demand for smalcans. Eventually Ford's image in Brazil was hurt General Soral Corsa It acquired a reputation for producing cars that few Motors Mid-Sized Kadett, Monza, Vectra wanted to buy. Ford began a $1.1 bilion investment on Large Omega own to build Fiestas in Brazil and Escorts in Asgentina Fiat Small But by then, WW, Fiat, and GM had attained big market Large Tempra shares in Brazil. Ford's market share fe to just 11 per cent. More recently. Ford now bulds the Fiesta, Focus, and a few other small cars in Brazil and Argentina. Each plant exports in large volumes to neighboring countries Conflicts between the Partners Ford is undertaking new investments in Brazil, mainly to In addition to dynamic changes in the market confists develop new products for the local market arose in the strateg os of Ford and W. Ford dealers in Brazil had been begging for smaller cars, better suited AACSB: Reflective Thinking to Latin American consumers. But Ford avoided the 0. sion of Autolatina's profits by competing with WW's Gol Case Questions from which it was receiving half the profits. Volkswagen management, on the other hand, avoided sharing its 1. What were Ford's motives and objectives for enter subcompact designs with Ford. Mutual willingness to ing its colaborative venture with Volkswagen? Eval Share technological knowledge and other key compe uate the extent to which Ford accomplished these tencies dedined over time. objectives Differences in the organizational cultures of the two 2 Weat type of collaborative vonture did Ford enter partners also contributed to deteriorating relations. The with Volkswagen? What were the advantages and German and the U.S. organizations had different history disadvantages of this venture from Ford's perspec and origins, as well as differing management styles Within the boundaries of Autolaina, WW and Ford were What strengths did Ford and WW bring to the Auto- reasonably wel integrated operationally, even exchanging to venture? Did these firms have any weak model fabrication. But outside the relationship, suppliers nesses? Elaborate continued to serve the two companies independently as well as the dealershos. Autolaina was not integrated 4. Did Ford commit any blunders in its the American with suppliers or dealers, leading to ineficiencies in the operations Specity ply chain. Although consolidation reduces cost of admins 5. What can other managers learn from Ford's experi tration and value chain activities, the two firms failed to con ence regarding international collaborative ven solidate their supply bases and dealerships tures? What should Ford do now