The Case of Joint Venture Between Fuji and Xerox

Introduction

With the development of globalisation, more and more company expand through international Joint venture to achieve external growth. However, the involved company not always get the benefit through the joint venture actives. Evaluate the processes of the joint venture activities between two companies is worth to explore. The joint venture between Xerox and Fuji is one of the successful cases in the1990s.  These cases provide many experiences to help other companies ensure the success of the joint venture activities in the future. Hence, this paper will specifically focus on the joint venture between Xerox and Fuji Xerox cases and discuss the motivation of joint venture. Through the cases explore the factors influencing the process of the joint venture and provide the concrete steps help to implement the joint venture actives.

The motivation of joint venture

There are three main factors promote the joint venture between the Xerox and Fuji Xerox. First of all, the same common objective is the main reason of joint venture between the Xerox and Fuji Xerox. Xerox and Fuji Xerox are in the same business scope. At same times, both companies have the same common interest in the similar goal and global market vision. Therefore, the two companies could share the technology and strategy carry out the best outcome.

The second motivation of joint venture is to provide the opportunity to each company access another company overseas market. In 1958，Xerox start to consider entering the Japanese market. Under the Japanese regulation, Xerox needs to find a local partner company to permit entry the market. Therefore, Joint venture with Fuji Xerox is needed for entering the Japanese market. As mentioned in cases, Fuji Xerox’s products based on the single-points production distribution to others countries. The production volume is small if Fuji Xerox only depends on the demand from Japanese and adjacent markets. At same times,  an external market condition in US and Europe, Fuji Xerox required local manufacturing product. Therefore, Fuji Xerox also needs to find a local manufacturer to support.

Finally, The increasing competitive of copier market, the joint venture is necessary to both companies increase the competitiveness. In Japanese copier market, the competitor's number and develope are fast that threat the leading positioning of Fuji Xerox. Canon is seizing market share in the low-end copier in word wide range. Rioch relies on the RCA technology based electrostatic copier to targeting the middle classification market. The Fuji  Xerox’s market is squeezed from the competitors. The large number competitor entry the US market through export. Meanwhile, the new substitute technologies stop the Xerox virtual monopoly of the xerography patent. Xerox sale performance decreases significantly influenced by the competitors. The joint venture between Xerox and Fuji Xerox is a needed which related the survive.  Also, the joint venture provides a strong competitive advantage to both companies face competing with the strong global competitors.

The main factors that influenced the negotiation and implementation phases

The level of trust and honesty between the two companies plays an important role in the success of joint venture activities. High-level trust between Xerox and Fuji Xerox provide the consolidated foundation for long-term success. Xerox always have a good relationship between Fuji Xerox in different aspects. Based on trust, the two companies conducted an efficient exchange of information, such as in research, development,  manufacturing, and managerial levels. In 1978 Fuji Xerox offers 25000 FX2202 copiers to help Xerox to compete with the Japanese brands in US and Europe market. Despite a large amount of machine is hard for Xerox sale in two months. Xerox received the offer based on the high level of trust of joint venture partner. However, the FX2202 has a good response from US and Europe consumers and sell out all machine. After that Xerox continuing leading the copier market in those market. At same times,  Fuji Xerox has a benefit through export.

The successful collaboration between two companies is based on effective communication when implementing the joint venture. Effective communication between the parent companies also built upon the trust. Since the 1970s, Xerox through exchange the engineers achieve effective transfer of technology to Fuji Xerox. Over 1000  engineers and managers have short visits to the partner company until 1989.  These exchanges and frequent meetings contributed base of the success of two companies.

The flexible contract agreement also impacts on the overall success. As the Exhibit 4 shows the conditions and terms between Xerox and Fuji Xerox are updates with the changes of the external competitive environment and the capability changes of each company. The flexible contract agreement could help keep the long-term competitive advantage of the Joint venture companies. The strong competitive advantages make sure both companies success.

The win-win strategy in the implementation is important. Both companies take the advantage through the alliance. Xerox technology Assistance contract helps Fuji Xerox manufacturing. The Fuji Xerox share the Total Quality Control (TQC) with Xerox. It leading the Xerox to introduce the most successful copiers 10 series in the history.

The national cultural difference between Fuji and Xerox.

Xerox is an American company which first success in the automatic plain paper copier. Fuji is a company initial mainly focus on film the Japanese company. There are significantly different national cultures of those two company. In this question will through the Hofstede's model to discuss will the different national cultural between the Japan company and the US company. Hofstede identified five cultural dimensions for understanding cultural difference(Hofstede and Bond, 1984). There are significant difference nation cultural between Japanese company Fiji and American company Xerox in long term or short term orientation. Japan is a long-term oriented society which the company more focus on the long term development. American society more trend to the pursuit of short-term profit rather than long-term investment. Fuji Xerox has emphasized the importance long-term R&d capabilities develop planning. independent research and development high-performance and small size copier in order to comply the market demand in the future. On the contrast, Xerox is not seem put this aspect technology development in priority as Xerox is not concentrated on the low-end copier market at that times.