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Copy of Autolatina

Description of joint venture - Case Analysis
by

Yoan Olva

on 2 June 2013

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Transcript of Copy of Autolatina

Case Summary -Ford and VW collaborated in 1987
-Formed Autolatina
-Found early success
-Dominated Brazil/Argentina car industry
-MERCOSUR introduced
-Conflict between Ford/Volkswagen, resulted in the end of Autolatina •The two companies created a new partnership to provide for the highly protected car markets in Brazil & Argentina, from within
•The goals include:
1. Establish an unbeatable presence in Latin America
2. Share the risk of operating in a volatile market
3. Offer a wide range of car models to Latin American customers Objectives •Their strategy was:
To share the risk of operating in a volatile market
Support a wide range of car models Autolatina market share reached 60% in the Brazilian market and 30% in Argentina #1
- Create better communication between Ford/Volkswagen
#2
- Create more flexibility amongst the venture Alternatives Two experienced Companies joining together Strengths Entering into "Green Field Market" - Minimizes competition upon entry Both companies can share ideas to create a new and improved product Risk is shared between both companies considering the economy was rough at this point in time (created "financial cushion" Foreign tariff barriers and government policies upon entry Weaknesses Surrounded by poor economic conditions Difficult to find local buyers Potential conflict between both companies can take a massive toll on the Joint Venture Opportunity to expand their reputation by providing affordable cars Opportunities To provide employment opportunities for locals Opportunity to emphasize on quality followed by a reasonable price After the Mercosur trading bloc, they had opportunity to:

-More distribution opportunities
-Broader markets
-Knowledge of new consumers
-New partnerships Threats Competion based from: Pricing of product Product quality comparison Export conditions Potential conflict amongst venture can cause failure regarding: Partnership Investors Financial Economic Recommendations Better Communication 1. What were Ford's motives and objectives for entering it collaborative venture with Volkswagen? Evaluate the extent to which Ford accomplished there objectives.

2. What type collaborative venture did Ford have with Volkswagen? What were the advantages and disadvantages of this venture from Ford's perspective? 3. What strengths did Ford and VW bring to the Autolatina venture? Did these firms have any weaknesses? Elaborate.
4. Did Ford commit any blunders in its Latin American operations? Specify.
The Ford Motor Company was established in 1903
Volkswagen, founded in 1937 is a German car manufacturer that has helped create the stellar reputation for German car manufactures ever since its inception.
In 1987, the two major car manufacturers decided to collaborate in a joint venture called Autolatina. Introduction Autolatina was seeded in Latin America and targeted the Brazilian and Argentinean markets. Identify Problem The major problem facing Autolatina was the emergence of new competition and the Mercosur free trade agreement
Ford and Volkswagen did also not fully commit to the joint venture. Thank You Conclusion
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