To maintain a competitive advantage, two companies focused on the production of glass-related items have established an alliance that was meant to benefit them both. In fact, Vitro Sociedad Anonima and Corning Inc. supposedly shared similar corporate values and business strategies, which implied that a great joint venture could be formed between them. Therefore, the rationale for this collaboration was based on the following process: Corning Inc. is responsible for making glass and supplying Vitro so that the company could produce mirrors. Low labor costs in Mexico would give a competitive advantage to Vitro, while Corning Inc. could financially benefit as well from the high demand for Vitro’s products. As a result, two mirror companies were established, both run by respective firms that followed the same guidelines for business operations.
Yet a sudden decrease in the costs of flat glass in the US is a critical issue to the competitive advantage of Vitro in the form of low production costs. To reduce the costs spent on advertising for independent firms (Corning–Vitro and Vitro–Corning) and other maintenance prices, Vitro and Corning Inc. should consider operating jointly but as separate entities. As a matter of fact, the existence of two exact firms does not benefit both of them, as on the market, they are considered competitors, meaning that one is more successful than another. Thus, Corning Inc. should focus on making flat glass and directly providing it to Vintro for further mirror production. This way, both companies are responsible for their initial tasks, and the costs for maintenance of two identical companies would be reduced.
It seems that the failure of this particular joint venture stems not only from poor strategic decisions but from companies’ corporate cultures and values. Evidently, Vitro’s CEO Ernesto Martens Rebolledo stated that they had unique relationships with employees and the Mexican culture of the labor market within the company. In fact, Mexicans are responsible and hardworking people when it comes to working, and their corporate culture seeks mutual support and respect from employers. However, Vitro failed at its statement of being an authentic Mexican company when it fired more than 3000 workers as a strategic move. At the same time, Corning Inc. has better corporate values and is more reliable when it comes to joint ventures as opposed to Vitro. That is why empty words from Vitro might have been another critical issue for maintaining an effective and authentic alliance between both companies.
What is more, the partnership did not meet set expectations because of the significant differences in legal terms of the joint ventures. Mexican companies tend to view such alliances as mutual, while American businesses are serious about signing contracts. Besides, when it comes to trust in such joint ventures, Mexican companies find it harder to share responsibilities with others and rely on them. Consequently, many differences in the business culture of the two companies led to disagreements in operating and managing the partnership.
To sum up, it is unlikely that Vitro and Corning Inc. would be able to restart their joint venture and make it work after such setbacks in their alliance. Naturally, the businesses may opt for separating their forces and focusing on their own markets – Corning Inc. on glass and Vitro on mirrors. However, it is not sure that they would manage to meet expectations for their partnership, considering the drastic differences in their corporate cultures and beliefs.