Executive Summary
The Ford Motor Company has gone through various strategic challenges especially during the recent harsh economic spells that have been witnessed. However despite all these tough times, Ford can be counted among the most financially stable American automobile manufacturers. This company holds sufficient resources to carry on with its operations through to the year 2015, providing we do not experience any unseen problems in our global markets. Financial analysts have projected that our company is not going to need any government funding in the near future not unless our sales for 2015 fall below 12 million.
We cannot deny the fact that Ford, same as other car manufacturers are facing serious financial problems at this time but we also believe that opportunities exist during any period of predicament. However, we are with the belief that our company will be able to break-even in fiscal year 2015 thus reducing more macroeconomic weakening if we put in place a proper plan and with the right effort.
Recommendations:
1) Ford Motor Company must increase the efforts of selling off Volvo. The proceeds from the sale would offer our company the much needed flexibility and an improvement to the strategic aims of the company.
2) Ford must get prepared in case any of its competitors become bankrupt as this would mean a great risk to the company. This is because some of these companies might come out of the financial crisis with a noteworthy cost benefit due to the bankruptcies of related suppliers. However, we will have to maximize our efforts to take advantage of on our opponents’ unsteadiness and increase our share of the market within a short-term period.
3) The management’s ‘One Ford’ strategy is a very important tactic a...
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...costly. There is need for the company to shift its production bases from these regions to other regions with lower labor costs such Mexico and Eastern Europe. These two regions will offer the much needed geographical proximity as well as lower labor and production costs .
• Increase the presence in the Chinese and Indian market
There has been a lot of growth in car making industry in China within the recent past. This growth has been very fast and has overtaken other world markets. Ford is in agreement with Chang’an Vehicle Company of China. This agreement enables Chang’an to produce the Ford Focus, Fiesta, and Mondeo brands.
The Indian market, however, is smaller compared to the Chinese as sales average around two million over the past two years. This market unlike china requires capital investment for the company to be able to improve its presence in the market .
The Ford Motor Company (FMC) was founded in Detroit in 1903 and began shortly thereafter exporting cars to European branches. Cross-border assembly started in Canada in 1904 and was later implemented in the European markets. The first European plant was established in 1911 in England, and this was followed with other lower volume assembly plants across the European continent. All the plants and branches assembled and sold the Model T, using American methods and practices. This proved to be a success in the beginning, but in the long run, “(…) this proved a costly and unsuccessful strategy in Europe’s diverse markets” (Bonin et al., p. 15). By the late 1920s most of its European subsidiaries were struggling and Ford had to change his approach to the European market.
Prior to January 4, 1914, the name Ford meant nothing. The Ford Motor Company paid its employees $2.34 for a nine-hour shift, and in 1912 the company made a profit of $13.5 million dollars (Raff 181). Raff continues in his article, “Looking back at the Five-Dollar Day,” that the Ford Motor Company had an employee turnover rate of 370%: “50,448 workers had to be hired during the course of 1913 to maintain an average labor force of 13,623” (181). These
Until recently, the Ford Motor Company has been one of the most dynastic of American enterprises, a factor which has both benefited the company and has brought it to the brink of disaster. Today Ford is the second largest manufacturer of automobiles and trucks in the world, and it’s operations are well diversified, both operationally and geographically. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel. It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over 100 countries.
Currently, the major competitors within the industry are Ford, DaimlerChrylser, General Motors (GM), Honda, Toyota, and Volkswagen. A few United States (US) manufacturers produce 23% of the world’s vehicles while Japan is responsible for 21%. The tendency for the industry is to be a global producer of automobiles; parts can be made throughout the world and assembled in many different places. The trend of consolidation has continued throughout today. Presently, this is evident in the recent acquisition of Chrysler by Daimler-Benz in late 1998, thus forming DaimlerChrylser. These consolidations have proved beneficial to consumers since companies have been able to reduce costs and pass those savings on to the customers. Some of the other major examples of consolidation are Nissan selling off a controlling 37% interest to Renault; General Motor’s 49% ownership of Isuzu; and Ford’s 33% majority of Mazda. Other efforts to become more competitive have translated into the European Union dropping trade barriers and European carmakers employing cost reducing efforts. American manufacturers have seen 2-3% growth over the last few years. Some current trends are the explosion in popularity of the Sport Utility Vehicle (SUV) and big luxury vehicles.
...th a growing proportion of elderly people. Global market dynamics and innovations in big data and social networking are transforming the business strategies of companies everywhere—and forcing them to rethink fundamental rules of engagement. For better or worse, the future entrepreneurs will have to surface as one the most disruptive forces. As big data pushes for alternative ways of working – proactive solutions that drive information must quickly figure out which new policies and tools can be utilized most effectively. This grants enormous opportunities for key technological breakthroughs that will be needed for the next generation of transport.
Ford Motor Company current mission statement is “committed to provide personal mobility for people around the world”. With that in mind their vision is to become the world’s leading Consumer Company for automotive products and services. By improving everything they do, the company provide superior returns to their shareholders (Vision, Mission, Values).
Ford Motor Company has been and till the date is known as the king of innovations in the automobile industry. Their research & development department and innovation of interchangeable parts in moving assembly lines resulted in extraordinary global extension for them. They are an old heritage who ruled and still doing impressive jobs in the global automobile market. Some prestigious motor brands are also owned by Ford.
Ford competes with other automobile industries on many factors such as price, quality, reliability, appearance, available features, and fuel economy just to name a few. Such intense competition within the automobile industry tends to put downwards pressure on prices, making it harder for Ford to put a price on vehicles that are similar to other cars produced by competitors. The challenging price environment puts pressure on Ford to increase value to customers while trying to dramatically reduce costs to achieve the similar pricing of competitors. Ford must be able to reasonably price vehicles so that customers still feel as if they are getting the best car for their money. Competitive pricing is a threat to Ford because it must increasingly rely on customer perceived value to differentiate its car quality from its competitors. Ford must be able to justify its pricing in an industry where resembling cars have similar pricing and nearly identical features. Ford’s pricing objectives must somehow be achieved as other competitors are cutting costs and improving their vehicles. Negative pricing pressure threatens Ford’s ability to provide outstanding value to its customers for smaller or comparable pricing within the competitive automobile
Ford- focused differentiation, medium pricing, breadth of product line is high. A strength is their pick-up truck market share, a weakness is perceived reliability and styling on some of the lines.
Many economic factors exist that impact the development of Ford Motor Company's strategic plan and it’s no small task to project how some of these factors might change as the strategy is being realized. Consider the prospect of expansion into a new market like China or Mexico. Economic changes like currency devaluation will make Ford’s product more expensive to their target market potentially reducing overall sales revenue. Oil prices as we’ve seen in the U.S. economy can also play a big factor as large vehicles become less desirable and more fuel efficient compact cars gain market share.
The Ford Motor Company inspired a manufacturing revolution with its mass production assembly lines in the early 20th century. Ford and Lincoln are one of world's most well known automotive brands, most known for the Ford Mustang, and F-Series pickup trucks. Henry Ford incorporated Ford Motor Company in 1903 at Dearborn, Michigan. Ford Motor Company is known as one of the largest automobile companies in the world. (DATAMONITOR: Ford Motor Company, 2010 p. 4). Since 1980, Ford has been able to remove $5 billion from its operating cost (Brady, 1986, p. 8). The Ford Motor Company has around 181,000 employees and 65 plants worldwide using the automotive brands Ford and Lincoln (FMC Annual Report 2013, p.149).
...e then. It has been the best selling truck for the past thirty-two years running. In 2013 Ford truck sales were up 17% over 2012 selling more than 763,000 F-Series trucks.
Ford adjusts production plan but still loosing money in North America. Automotive Digest Weekly. Retrieved June 4, 2008 from http://www.automotivedigest.com/weekly.shtml#6
Imagine that you are not that rich or not very poor. The very next day you are driving off the lot with a brand new Model T by Henry Ford. The car that is affordable for everyone to buy and it being safe to drive everyday and everywhere. Henry Ford led to the best car manufacturer in the world. The world knows this company because of how Henry Ford got his company to where it is now, how it is a unique company, and it rebounded time and time again. Ford was and is the greatest car company. It is here to stay.
Ford is forecasting that 2010 sales in industry will rise to between 11.5 million and 12.5 million vehicles, up considerably from last year’s 8.4 million. Boudette, and Dolan, 2010). Ford is about to launch its smaller vehicles; less than two years ago Ford Motor’s plant in Mexico was building big pick-up trucks. But Ford has retooled to produce Ford’s small Fiesta car, due to go on sale in America for the first time in June. Simon, 2010).Mulally is the architect of Ford’s remarkable recovery in its fortunes.