A-Level Edexcel Business Business Growth: Assess the likely consequences f

Question

Assess the likely consequences for Ford of its joint venture with Mahindra.

A joint venture may be a one-off or temporary arrangement, or a lasting collaboration in a specific market.
In this case, the Ford-Mahindra deal is for three years. There is no change of ownership and the businesses will be controlled by legal agreement.

Ford is likely to gain increased sales from its joint venture with Mahindra as they are likely to know the specific needs of the Indian market and have access to workers familiar with this market.
Ford may gain economies of scale and a lower cost structure from Mahindra's existing manufacturing plants, Mahindra will get access to Ford engineering knowledge and expertise in Sports Utility Vehicles.
As an American brand, Ford may be seen as desirable for aspirational consumers in an emerging market such as India. This is because Ford is associated with the USA and "Western lifestyles", that are desirable by some consumers in India.

Ford and Mahindra may have different visions for how the joint venture will work, which can lead to disagreements over business strategy such as pricing and marketing.
Indian consumers may be confused by the two businesses working together, which could limit sales. Mahindra is an established brand in the Indian market, Ford less so and their brand strength may be diluted by this arrangement.
As the joint venture develops, the aims of Mahindra and Ford might differ. Mahindra may want to focus on budget sales, while Ford may want to target higher socio-economic groups.
Mahindra might benefit from transferring of new technology and techniques, so once joint venture ends, it can use this knowledge to compete with Ford.

The joint venture is likely to benefit Ford as it could reduce its manufacturing costs as Mahindra provides the chassis for the new SUV enabling Ford to be more price competitive in an Indian market where incomes are relatively low so making the cars more affordable so sales may increase.
The main consequence of the joint venture is its likely success for Mahindra, rather than Ford, as it will come from the support of the Ford brand and their expertise in selling Sports Utility Vehicles in other markets. This success will depend on the degree to which Mahindra and Ford can agree on the overall strategy for the three years.

Assess the likely consequences for Ford of its joint venture with Mahindra - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1

Worked Solution & Example Answer:Assess the likely consequences for Ford of its joint venture with Mahindra - Edexcel - A-Level Business - Question 2 - 2022 - Paper 1

Assess the likely consequences for Ford of its joint venture with Mahindra.

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