By K.Milinda(1234108116) K.Prianca(1234108111) L.Rakesh(1234108115) D.

Gautham(1234108105

INTRODUCTION
This case simulation focuses on the response of two

North American firms -- Vitro and Corning -- to the challenges presented by economic integration and globalization. Some of the information and observations are draw from the authors personal experiences. The case is not intended to support a particular approach to management, nor is there a correct solution to the case analysis. Key issues include international strategic alliances and joint ventures, corporate response to trade liberalization, organizational and national culture, and cross-cultural management and negotiation.

 During the NAFTA negotiations, many U.S. firms were

concerned about the reduction of U.S. tariffs on flat glass, which averaged 20%, and the perceived competitive advantages Mexican glass firms would have in the event these tariffs were removed. In the fall of 1991, in the midst of the NAFTA negotiations, Vitro, S.A., the $3 billion Mexican glass maker, signed a tentative $800 million joint venture with Corning Inc

 Vitro completed a hostile takeover of Anchor Glass

Container Corporation and in 1992, Vitro laid off some 3,000 workers, an unusual move in Mexico at that time, given traditional notions about labormanagement relations and job security. Corning is an Upstate- New York maker of glass that traces its routes back to the mid-1800s In recent years, Corning has diversified into fiber optics and other high technology applications of glass, ceramics, and composite materials.

Mexico as a market for kitchenware products

Although Corning and Vitro are comparable in size--

each with annual sales of slightly less than $3 billion-Corning's consumer products division is about three times as big as Vitrocrisa. The agreement calls for Vitro to pay Corning more than $130 million in forming the joint venture. The agreement is the latest example of a developing trend among North American manufacturers to complement rather than compete with each other as the countries negotiate a free-trade agreement.

 Because Mexican companies operated in a protected

market for four decades, they seldom exported and did not develop distribution networks outside their own borders. Similarly, U.S. manufacturers did not develop distribution systems in Mexico, because they could not get their products past customs. Now that Mexico is opening its borders, though, U.S. companies eager to sell goods need distributors here.

 Mexican manufacturers, meanwhile, are dropping

product lines that cannot compete with imports and expanding production of goods that meet international standards for price and quality. They need help marketing their products abroad, along with imported goods to fill gaps in their product lines. The result is a good fit for marketing joint ventures such as the one announced by Corning and Vitro.

 Through the joint venture, the two glass companies

will provide each other distribution channels in their respective countries. Both companies operate modern, efficient factories for the goods they make, so they have no plans to shift production--or jobs--across the international border. Vitro and Corning agreed to take the concept a step further by setting up a double joint venture--that is, two separate companies in the United States and Mexico. Corning will own a 51% controlling interest in the U.S. company; Vitro will own a 51% stake in the Mexican company. Each will own 49% of the company that the other controls.

 The companies see the joint venture as an opportunity

to improve the profitability of consumer glassware divisions whose performance has lagged behind that of other parts of the parent corporations. Besides providing new, Vitro-made products for Corning's well-developed U.S. distribution network, the joint venture will allow Corning better access to the Mexican market, said Dulude.

CONCLUSION
Many cultural differences led to the end of the joint-

venture. First of all, the companies had differing ideas about how products should be marketed and sold. Corning thought that Vitro was too slow with their sales and production. The Americans accused the Mexicans not being aggressive enough and wasting too much time by being polite.

 On the other side, Vitro thought the Americans were

too forward and that they moved too quickly. There were major differences in the way the two company's management was organized and in the way they made decisions. Corning could not deal with the timeliness and hierarchy of Vitro's decision making process, implying it took too much time and was inefficient. The Americans felt that the decision making process used by the Mexicans was inefficient and was detrimental to the company

 In addition to the differing managing styles, problems

arose due to financial and commercial concerns between the two companies. A strong Mexican peso and increased overseas competition caused economic concern for Corning. The joint venture between Vitro and Corning had differences in administrative practices, management structures, and accounting style. Due to the...

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