Rover was an ailing car manufacturer in the 70's, owned by the British government, which was losing a significant amount of money. It was having trouble with quality control mechanisms and needed a new product in the "lower-medium" sector to plug a gap in its product range. At the same time, Honda was becoming a larger player in the automobile sector. After laying its foundation as a high quality motorcycle manufacturer, Honda needed a stronger presence in Europe and in 1979 an alliance was formed between Rover and Honda to leverage each other's resources and capabilities. Rover would leverage Honda's quality controls and high reputation, and Honda could use Rover's manufacturing facilities, which were running under-capacity. The relationship developed much further over the years, to the point of minority ownership in each other's companies.

Key Success Factors of the automobile industry in the middle of the 1970's

The 70's were an era of industrial change in the world. The word „globalization" was being used more and more, especially in the automobile industry, where names such as General Motors and Ford were becoming synonymous the world ove

o With new markets opening up in Europe, related diversification took place to develop products beyond their present state and market, but still within the confines of the auto industry. Companies that acted proactively and diversified to created synergies ended up doing very well into the late 1990's (eg: GM)

Troubled by the recession of the early 1990's, car manufacturers were in a state of despair. The large campanies would stay afloat (Ford, Toyota, GM, Volkswagon and Nissan) and the rest of the companies would get swallowed up by these larger ones. It was a time of collaboration and of mergers and acquisitions and one had to be very proactive to be successful. Other key success factors included:

r. Managing all this change and converging marketplaces meant a great deal of work for existing companies wishing to compete on the global scale. Key factors necessary for success included:

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Approximate Word count = 1442
Approximate Pages = 6 (250 words per page double spaced)