Mazda: History, Business, And Strategies - An Essay.

History of Mazda Motor Corporation

Discuss about the International Business for Mazda Motor Corporation.
 

Mazda Motor Corporation was founded in 1920 in Japan below the name, Toyo Cork Kogyo. It is known as one of the most leading car manufacturing company with the net total sales of 2,535.9 billion Yen in the year 2009 (Mazda, 2018). Earlier, the company only used to deal with the various parts of cars but gradually, the company ventured itself in manufacturing commercial trucks as well. Mazda Motor Corporation has also spread its business operation in other many countries which include Mexico, Italy and Thailand. The company has also successfully established the research and development sites in many countries such as Germany, China and US. Mazda Motor Corporation basically aims at monitoring the two divisions of customers i.e. Commercial customers and Non-Commercial customers (MazdaUSA, 2018). Vehicles below the Mazda E-series and Mazda BT-50 are basically used for commercial uses. It includes vehicles like pickups, Lorries as well as vans which are used by many companies to transfer goods from one place to another. In addition to this, Mazda Motor Corporation also aims at helping noncommercial consumers by designing their vehicles which will satisfy the two segments of people i.e. both family and PMET (Professional, Managers, Executives and Technicians). Mazda is headquartered at 3-1 Shinchi, Fuchu-Cho, Aki-gun, Hiroshima, along with many branches located at different parts of Japan such as Osaka, Tokyo, Yamaguchi and many more which aims at easy accessibility of the consumers (Mazda, 2018). The company has successfully adopted the culture of B2B business and B2C business models. The company has also planned to adopt some strategy which will benefit the market share and other segments as well. 

In the year 2008 when the mutual growth became 30 years old, the partnership between Ford and Mazda dissolved because of the result of the global crisis. This crisis was because of the increasing pieces for the fuels of automotive and raw materials. This increase actually resulted in the decline of the automotive sales all through the world. Due to this decline, the automotive assets were returned and all the companies had to reduce their size (Robert Ulewicz & Kuc?ba, 2016). 20 percent of Mazda stake was also sold in this crisis and at the same time Mazda also bought back 6.8 percent of shares from Ford. At last, Mazda was left with 3 percent of shares only with Ford by the end of 2010. Even after the partnership of Ford and Mazda, it declined gradually. It had to go through financial crisis very badly even when Ford and Mazda decided to be strategic partners for long time. In the end, Mazda was left behind a lot and it had to then see whether it could survive or not as an individual company of automotive manufacturer.

Mazda's Business Model and Operations

Global financial crises made the automotive industry decline due to less demand and that negatively affected Mazda’s business overall. In the ear 2011, sales in Japan, America and Europe were 206,000, 342,000 and 212,000 units respectively (Kumar & Kumar, 2014). The overall sales of the company declined.  In addition to that, yen which is the currency of Japan was increasing day after day. Hence, it damaged the export business in Japan a lot as mostly products were assembled in Japan and then after assembling they were exported. As a result, Mazda became sensitive and vulnerable to the foreign exchange rates (Sakao, et al., 2011).

In the year 2008, the profit of the company went down to Yen 162 billion to Yen 23 billion which was a huge loss actually. Four consecutive net losses were bared by the company. In 2013, the partnership of Ford and Mazda came off the charts. Mazda then was trying to look at the changes in the business after bearing so much loss (Islam & Ali, 2015). 

The stakeholders of the company are always approximately the same. They include customers, shareholders, suppliers, community on the whole and the employees. The company when earn profits, it is shared by all such stakeholders who are related to the company (Mello, et al., 2011).

The CSR programs are designed to respond to these stakeholders of the firm and in the interest of the stakeholders. The issues which the stakeholders of Mazda had to face were:

1. Customers: The customers were not satisfied with the services offered by Mazda Motors. The products which Mazda sold were not safe and reliable. The products that were in demand were good looking attractive products. The clear information of product, services and the technical terms were needed by the customers. Customer also suffered when it came to customer support lines. Clear information was looked forward by them(Matuleviciene & Stravinskiene, 2015).
2. Shareholders: The shareholders should know each and every information as to what is going on in the company. Hence, the information should have been given to all the business partners from Mazda about the happenings of the company(Hester, et al., 2012). The corporate value after the downfall was to be maximized again. The relations with the investors were to be improved. 
3. Business Partners: The trading done should be fair and should not hamper the relationship with the community. The business opportunities should have been shared by the organization with the business partners. Information should also be shared very clearly with the business partners.
4. Employees: After the organization faced issues with the finances, the employees were the ones who were mostly in fear about their jobs. The employees should be treated nicely. Whether the company is making money or not, even with the small profit the employees could be treated in apt manner. The employees were too in fear about the company’s profit but were not satisfied as they were not listened to very much(Horstmansho & Moore, 2016).
5. The culture of the country is to be respected. When Japan Yen grew in the year 2008, Mazda had to go through a huge loss. It did not get along in good shape with the partners of Japan. The disaster should be foreseen by the company so that the community on the whole should not be impacted. There are people who also buy shares of the companies from the stock market. When the company’s profit came down, so were the shares and it impacted the community or one can say the people very much. 

When Mazda realized that it has started getting threats from the competitors, it started a plan of structural reform in the year 2012. This plan referred to the increasing of the competition in the competitive market globally (Yamamoto & Bellgran, 2013). This plan consisted of four initiatives for the future of the company. These four initiatives were: make sure to increase the innovative business by taking the help from the SKYACTIVE technologies; increase cost improvement with the help of monotsukuri innovation; to establish the business where the economy of the country is growing and establish itself there. By 2013, Mazda made sure that these initiatives were applied and start taking Mazda towards the gate of success. By 2016, the goals of the company were to be revised. In the year the CEO of the company also said that they gas revised the sales goals b then by 1.52 million units. The foreign exchange assumptions went up to Yen 100 and Yen 153 Euro. Operation were being done by 7 percent more margin (Baldwin & Yan, 2012). Marumoto realized very clearly that these strategies and changes were good for the company which brings success to the company. This was the combination of industries environment in terms of economy and the company’s performance in recent years with the help of sales incentives. SKYACTIVE technology also helped a lot in bringing the organization to the good level. Mazda went through a lot even after allowing the structure plan reform. The company had to go through sacrificing the economies of scale when it ended the partnership with Ford. The domestic operational cost increased. When Yen weakened while the structural plan reform was being operated, Mazda risked with the profits so that it could earn more profits when it grows. This risk was about to make them stay for long term in the automotive market.

Challenges faced by Mazda during global financial crisis

With the help of KODO motion design and SKYACTIVE technology, Mazda was able to prove that it is not at all behind the thinking and designing of new age cars and also stayed true to the basic roots for car making. Mazda has pretty much everything what Toyota was also looking for and they could make cars which were wanted. Even better cars were made by Mazda as compared to Toyota (Mazda, 2002). The vision of the two companies were shared and they could work together clearly and nicely in order to make better cars.

Mazda worked really hard to make sure that the company stays in the top list. There is some recommendation which can be helpful for Mazda.

Quality Culture: There are always some abnormalities which occur in the automotive industry but the operation department should never fear such abnormalities and keep the progress going. This fear should not reflect in the quality of work. The culture in the company should be created in a way that new ideas should be shared and welcomed and praised. The quality of work will automatically increase when the employees will give multiple good ideas.

Suppliers: The relation between manufacturers and suppliers have changed with time in a drastic way and the process of shifting from one supplier to another goes on.  There are now days’ efficient business models made for the manufacturers yet moving from one to different supplier brings changes in the quality of materials and at least in the products that are made. Manufacturer should work closely with the supplier so that they come to know what is the company paying them for. This will help organization to maintain the quality.

Technology in Supply Chain: While the supply chain business has now emerged globally, it is difficult for the manufacturer to know that whereabouts of the suppliers and their work. By using the technologies like cloud and mobile devices, company can connect with the supply chain and can make sure that the operations and the inspections are being done and it relates to what the company is looking for. These things can be accessed from anywhere. Hence, off-site work can also be done.

More than Inspection Report:  Usually there is this practice of making a report about the inspection being done at the company. In today’s days, it cannot be trusted as there is lot of fraud cases being seen now days. The visibility of the manufacturer should be more than just an inspection report. Real time visibility should be there all the time. This can be done with the help of again cloud systems or mobile devices.

Corporate Social Responsibility Programs of Mazda

Leveraging of Manufacturing Intelligence: The data which is gathered from time to time always offers two tier of information or manufacture intelligence which can be used for increasing the quality and efficiency and supply chain too. With the utilization of data analysis software, it is always possible to compare site to site or may be supplier to supplier and identify areas where improvement is needed. By extending the opportunity across the environment of manufacturing, it helps in increasing the effectiveness and improve operations overall.

Reduce warranty claims: Manufacturing intelligence helps the organization to drill down data of manufacturing from OEM business and supply chain for identifying when and where defective parts are being made. In case of product’s returning within warranty period because of the defective part, the software of quality could be used for identifying whether the return was due to a supplier inconsistency. When the issue is identifying with the source, organization can put measures to prevent such type of issues in the future sales. 

The managerial implication can be anything related to the employee handling or operations etc. A few managerial implications are:

Regulation and traceability: Regulation and compliance measures are increasing day after day with the growth of the business industry, especially in manufacturing sector. Red tape surrounds everything from waste management to health or safety. A few regulations are essential but to establish them is sometimes difficult for the operations or the management team as it varies from country to country (Silva & Hewings, 2010).

Development and Innovation:  Development of the product and new innovation is moving ahead with the speed of lightning as this is the consumer driven process. For staying relevant, the manufacturers always must be able to keep up with the pace of the market. But new innovations cannot occur when there are no leaders in the organization for motivating the employees and keep them happy (Gupta & Cawthon, 1996).

Skills gap: Baby boomer generation is now reaching at the retirement stage now and this will leave a gap in between in terms of the skill. New generation should be inspired to learn those skills to manage the gap in between the generations so that it is unable to keep up with the pace and techniques.

Costs in Healthcare: The manufacture industry can sometimes cause a lot of accidents and so healthcare costs are rising day after day. The manufacture industry is fragile and so is its healthcare cost structures. The managers should be able to keep information about the rising cost and also at the same time should be able to reduce the accidents in this industry. This is known to be a balancing the act between costs and reducing accidents (Hashmi, et al., 2015).

Stakeholder Groups of Mazda

Environment Concerns: The regulations in the environment could be very expensive for the firm in manufacturing industry. Maintaining internal environment is also a challenge sometimes. Costs should be judged on a quarterly basis as it is expensive.

Balancing Maintenance: Equipment’s should be managed on the must basis and should always be kept running in the industry. Regular maintenance can be helpful for the company and can help in increasing the throughput and this in the end will also ensure customer satisfaction (Alsughayir, 2013).

Conclusion

In the conclusion one can say that Mazda even after being a good company since last decades, it went through big downfall where it had to lose not just the partnerships with Ford but also suffered from the low shares and reduced profit from $163 billion to $23 billion. Yet it did not lose hope and went ahead in doing some of the changes due to which it not just came back into the industry but also earned profits in huge manner. This essay focusses on such problems which was given in the case study as to what Mazda went through and how did it come up again in the growing market. 

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