| Strengths 1. The only car manufacturer that have cars with Wankel engines 2. Mazda was able to survive the US policy on protectionism when all other Japanese cars were taxed excessively by the government 3. Mazda maintained ownership and production of iconic cars such as the RX-7, RX-8, and Mazdaspeed, and with other crossovers 4. Mazda has global market reputation and dominance 5. It is still one of Japan's largest car producers 6. Mazda cars are known for their efficiency in terms of fuel and in their power performance 7. Mazda cars are able to comply with the demand of the Euro Stage 5 emission test | Weaknesses 1. Though Mazda has been in the market for long, it has not yet achieved major global player status 2. Lack of effective branding and marketing techniques; slow growth is attributed to poor marketing 3. Mazda's brand perception is lower than the brand's competitors |
| Opportunities 1. Growth of the SKYACTIV technologies will be a great opportunity for Mazda to enjoy market dominance 2. Appreciation of hybrid cars among consumers across demographic markets 3. Bio-Car of Mazda is setting standard for the meaning of environmentally friendly cars. 4. Green cars are currently being consumed at best by consumers around the world | Threats 1. Wankel engines are not yet properly accepted by consumers due to the problem of finding manpower trained to service these engines 2. Government policies that are curbing the growth of Mazda cars 3. Cost of fuel is rising 4. Global mass transport is appreciating |
Prior to Mazda's merger with Ford, the Japanese car manufacturer was struggling from low market engagement. The company was only able to sell cars that were considered as fun cars. In a sense, it was hard for Mazda to enter the global mainstream market. In the same manner, the car manufacturer also suffered from a problem of economies of scale. Due to the fact that the company was not able to sell many cars, production cost per unit was also higher. This was also worsened by the fact that Mazda cars had to face the competition in the Japan market as other Japanese car manufacturers were gaining momentum. It was difficult for Mazda to gain momentum because its growth areas were already exhausted and there was no more space for breathing.
After the merger, Mazda was able to use the skill and know-how of Ford to its advantage. It provided strength in producing cars that were acceptable in the global market. Ford's capability advanced Mazda's small-car idea to a new level, thereby bringing the brand into global acknowledgment. In the same manner, Mazda was also able to market its cars to global markets as the infrastructure of Ford (its distribution channels) was used by Mazda cars to penetrate the market. Through this, Mazda cars were able to see their day in the market with increase presence and branding.
However, with the merger, there are also threats that must be considered and most of these threats were internal. The wide disparity between the management culture of Americans and Japanese resulted to resistance to change. Japanese leaders were unwilling to accept the radical changes that were being implemented by Ford into Mazda to change the direction of the company and make it a strong contributor to the success of Ford. However, when the end of the merger, it should be noted that while Mazda gained too much from it, Mazda was still not able to attain a major global player status in the automobile industry.
Overall Analysis
Merger of Mazda and Ford was one of the most important acquisitions of the automobile industry history. It provided a glimpse on how economies of scale would work and how sharing of resources would benefit two companies. Before the acquisition, Mazda was a struggling Japanese brand, but now it has become a global brand. Core competencies and features of Mazda cars evolved into the Mazda3, which is considered as the primary driver of sales and growth of Mazda after divorce of the merger in 2010 (Turkus, 2013). After the divorce of the merger, Mazda continued its growth of claiming market share as an independent brand without the reinforcement of Ford brand.
In terms of global market behavior, it is important to note that most consumers are moving from luxury cars to cheaper cars of small package. This is very important to the market trend advantages of Mazda because it poses its cars in the right position of market attitude. According to Mazda UK (2014), consumers are downsizing to smaller and cheaper cars that they can use in the city. With the global urbanization, consumers are moving toward the usage of city cars than rural cars. City cars are sporty and smaller in size are the market points for Mazda3 and other iconic Mazda cars.
On the other hand, Ford remained a strong market player of the industry. Even prior to the merger, Ford already had its advantages in the right places. Being the oldest car manufacturer, the company has a strong market reputation. In the same manner, the company also maintained a strong channel of distribution network that helped the company to market its products throughout the country. For a note, Ford had been a global brand for quite a long time with products ranging from small-mix to large-vehicles mix.
With the merger with Mazda, Ford was able to strengthen its position as a global brand. Prior to the merger, Ford had been producing large vehicles and even trucks. Most of its products were marketed and designed to meet the demands of rural America. But with the merger, Ford was able to make use of Mazda's small-car competency to produce small-vehicle mix. This is an important phase of Ford's marketing strategy because it allowed the company to meet the growing demand for cheaper and smaller cars that are more sporty for city use.
In today's trend, Ford's R&D gives the company a better opportunity of meeting the demand of hybrid cars or green cars. More and more consumers are looking for cars that can provide them better chances in terms of saving cost of fuel and that can meet requirements of environmental compliance. With the already divorced merger, Ford is moving toward the establishment of Ford's own hybrid cars separate from the combined branding of hybrid cars as produced with Mazda. This is a market opportunity that will also widen the scope of
Merger between Mazda and Ford had been beneficial for the two companies. But if you look closely at the results of the merger, it is easy to note that Mazda got the most benefits. With the merger, Mazda was able to grow its global strength and explore its capabilities and market opportunities. On the other hand, Ford was able to learn how make smaller and cheaper cars to compete with Japanese car manufacturers.
References
Dash, A.P. (2010). Mergers And Acquisitions. I. K. International Pvt Ltd.
Ford Motor Company. (2012). Ford Motor Company’s Annual Report on Form 10-K. Ford Motor Company.
Mazda UK. (2014). Car Buying Trends 2014. Retrieved from https://www.mazdasocial.co.uk/2014/03/26/car-buying-trends-2014/
Schmitt, B. (2010). Ford And Mazda To Sign Divorce Papers Tomorrow. Retrieved from http://www.thetruthaboutcars.com/2010/11/ford-and-mazda-to-sign-divorce-papers- tomorrow/
Turkus, B. (2013). Mazda CEO predicts record US sales in next 2 years. Retrieved from http://www.autoblog.com/2013/11/18/mazda-ceo-predicts-record-us-sales-in-next-2- years/
