To buy the engineering product from Fiat. This shows that Volkswagen does not want to share their technology much to Suzuki. However, Suzuki have spoiled too many information to Volkswagen. Their disagreement on sharing cause them to split their alliance. Which means they have the lack of trust between both companies. Volkswagen does not trust Suzuki with their technology and also Suzuki did not trust Volkswagen with the information. From Suzuki point of view, Volkswagen benefit while Suzuki did not benefited anything from the partnership because of the disagreement.
The next factor is the different in Culture. The way Japanese and German does business are completely different, which caused conflict between those two companies in the alliance. Both companies have different way of doing business as they have different culture. Japanese are more slow, decision-making where the Western-culture are more decisive. According to Volkswagen, the progress of the project are going slower than it was expected. The most common factor why strategic alliances fail is the cross-cultural differences.
Many Japanese company and the other country company often fail in strategic alliance is because of the cultural differences (Align, Dusters and Meijer 2010). According to Volkswagen, because of the slow decision-making of Suzuki makes the lack of progress (Fuhrman 2012). Because of several factors, this has caused the strategic alliance between Volkswagen GAG and Suzuki Motors Corporation to end. Suzuki insists to buy back the 19. 9% of share their holdings that are bought by Volkswagen back in 2009. As a result they separated their partnership in the end of year 2011. Recommendation Sony and Google have been a successful alliances.
In this part we will explain how can Suzuki and Volkswagen be able to improve so that their alliance did not ended and could achieve their goals. The factors that have made Suzuki and Volkswagen failed could be managed and could be successful if they have managed it well. The first is the cultural differences between Japanese and German company. This should be managed from the beginning before their alliances start. Both company should research about the country culture well so they are be able to understand one another. So, Volkswagen should research and know that Suzuki is a Japanese company that do things slow, decision-making slow.
The Japanese also have to understand that they are more decisive. The second is the different in demand between Suzuki and Volkswagen, this s because the demand are not stated clearly in the beginning of the partnership. They should clearly state their goals to prevent any conflicts. Because the unclear of their goals in the beginning is not clear enough. They said their goals is to enter the Indian market and to build an efficient fuel cars. However, Volkswagen more to know about the information about small cars but not the fuel efficient project.
Volkswagen wants to know more about the small cars and Suzuki does not know much about the fuel efficient. They were not clear in the beginning about their goals. Therefore, clear statement about the goals is very important. The last one is the disagreement of technology sharing. This is the miscommunication that Suzuki and Volkswagen have. To improve this they should agree at the beginning of their agreement, what and what is not to be share together. The agreement should be clear, so there will be no conflict like when Suzuki bought an engines from Fiat, which was a problem for Volkswagen.
This is also because of trust. Suzuki and Volkswagen does not trust one another, which they happen to have a conflict. The trust issue should be managed where Volkswagen and Suzuki should trust in one another. Volkswagen should not accused of Suzuki of anything as it mentioned in the case study. With the well management of cultural mismatch, the clear statement of the goals and demand and the agreement of the sharing of technology they would have been a successful alliances that enter the market in India.