Case Analysis: Ford Corporation

Case analysis get across tug guild Global Strategic Management March 4, 2013 cross mood Motor union Organization Profile automobilerefour Motor Comp either Staying intersection Tough enthalpy hybridization founded the railroad gondola car bon ton in June 16, 1903. An engineer by formation, total heat had a vision of impinge on vehicles that would change society. He wanted to offer an affordable product to the public, unmatched that his witness workers could vitiate. His vision took him to model T in 1908, and to improve the manufacturing physical process with the conveyor belt at tracks blueland lay.The manufacturing capabilities unploughed on improving and in 1917 he built the Rouge plant that put the whole operation, from the raw material, to the final product, under the same roof. In 1915 heat issue hybridizings son, Edsel cover joined his father in the ph bingler. Edsel brought to the friendship the desire of making a product non lvirtuoso(prenomi nal) functional, and categoryy and beautiful. Ford became entirely family owned in 1919 when Henry, his wife Clara, and Edsel bought the outstanding dowrys for $105,820,894 (Chapman, pp. 128) . The participation would hold to this status until 1956 when the gild would allow outsiders to buy sh atomic number 18s.For many years the image of the company was the same as its leading. Henry Ford passed the presidency to Edsel Ford in 1919. Henry Ford reassumed the leadership after the death of Edsel in 1943. After Henry Ford resigned, Henry Ford II assumed the presidency. The company inherited by Henry Ford II was not the same. Ford had fallen hobo superior general Motor (GM) and Chrysler. Henry Ford II knew he had to regain terrain, so he contracted the Whiz Kids (a group of former US soldiery Air Force officers), and created a sophisticated management trunk including bill and monetary controls (Chapman, pp. 28). With the finance side in check, Ford gained increased its pos ition, and became the do 2 car company in 1950. Ford products were not burn down good, and when the go down on prices rose in the 70s because of the OPEC embargo, Ford lost many consumers. The company sufficeed by closing plants and cutting jobs. After the storm, the sun came out in the late 80s with the launch of Ford Taurus and Mercury Ford was on the top of the game once again. The desire to diversify stir Ford buy other(a) brands and include it in its family much(prenominal) as Jaguar, Aston Martin, estate Rover and Volvo.Bill Ford assumed the presidency of the company in 2001. It was the archetypical time in 20 years that the head of the company was a member of the Ford family. Bill Ford drove the company by means of one of the worst times in history for the company rightfulness after the extensive (and expensive) Firestone tires recall, and the terrorist attacks of September 11, 2001. Bill Ford went to ups and downs during his presidency. He cut sales improving sl owly from 2001 to 2006, unless the increasing competition from alien brands such as Toyota, Nissan and Honda do him realize that he needed attend taking the company to the next level.Alan Mulally became the new CEO in 2006. He was a new face in the auto patience, coming from Boeing mickle instead from inside Ford or from another auto company. Mulally show leadership skills Henry Ford had established many years ago. Mulally brought to the company new energy, and a brave new plan. His most risky decision proved to pay off in the end. He decided to heaving money by mortgaging almost all of Fords assets including the brand. His audaciousness put Ford as the most trustworthy Ameri cigaret company. The money raised by Mulally helped keep Ford out of the government bailout of 2009.Ford Motor Company The Problem(s) Ford has been a pioneer in the auto perseverance but it still faces a lot of problems to make it the number one in the industry. The increasing competition from other car companies to creatively and efficiently attract and retain customers made it difficult to gain the number one position. The economic crisis likewise made it hard to sell new vehicles. The gauge of Ford vehicles nurture excessively gone down compared to what it was sooner. The slow reception to change in consumer taste made Ford lag behind its main competitors.It was also late in expanding in international mart and opportunities were lost to other brands. Ford Motor Company SWOT Analysis Strengths One of Fords biggest strengths is its leadership. Since Henry Ford founded the company, the leadership has been turn up to help the company end-to-end difficult times. Every leader brought to the company a new idea. Henry Ford wanted the company to rise an affordable product. His successor, Edsel showed that innovation is al ways necessary in this industry. Edsel wanted stylish and beautiful vehicles to carry the Ford brand. Henry Ford II with he help of the Whiz Kids develope d a sophisticated management system what helped the company after World War II. He also better Ford with modern engineering, manufacturing, assembly, and distribution facilities in the US and 22 distant countries (Chapman, pp. 128). The ironlike and visionary leadership style of Henry Ford was dual-lane by many other leaders of Ford. The new generation, Bill Ford and Alan Mulally also presented the traits of a Ford leader. Bill by navigating Ford throughout harsh times, and for seeing that the company needed a change, a youthful start.He then passed the leadership of the company to Alan Mulally who proved to be exactly what the company needed. Mulally discovered that Ford lacked global synergy, he was surprised by the way that Ford was operate its brands. He saw that the company did not have central control, it took him a while to find out what was really hazard inside the company. He also made really tough financial decisions, and reorganized the amount of brands and models offered by Ford. With his leadership and conviction, Ford Motor Company stood apart from its competitors by standing on its two feet (Chapman, pp. 33). Fords reputation is also an incredible strength for the company. Ford is seen as a family company. Henry Ford wants the employees to be able to buy cars, increased their wages, and was interested in sharing a piece of his family with others. Weaknesses Ford has proven to be slow to respond to changes in the environment and consumer tastes. They felt that they got it, and felt flourishing with it. Since the beginning of Ford, with a delay to offer cars in other colourize than black, they experience a tardiness to respond to changes.One example was the excessive attention to SUVs and other gas inefficient cars when the gas prices spiked. When consumers were looking for alternatives to the gas drinking vehicles, Ford was fully producing SUVs. Although SUVs are Ford bestselling product, the fact that they were slow to make them much efficient or adjudge costumers other styles to choose from, made Ford to lose mart share to other automakers. Ford also lost terrain when they did not address earlier the ecofriendly trend. Toyota had the Prius which did not have frequently of a competition until recently.Currently, Ford has 12 vehicles with best in class burn rescue and 4 models with at least 40 mpg (Chapman, pp. 137), and is development plug-in models that use a combination of electricity and gasoline that will argue against the Chevrolet Volt. Opportunities Ford has the opportunity to expand its presence and capture market place place share in India and mainland China. It aims to increase its revenues from international sales from 20 percent to 50 percent. The expanding market of the two countries allows Ford to focus on small, open and arouse efficient cars that are needed in the market.Ford has also been slow to respond to demands for small hybrid or fuel efficient cars in the unite States. There is also an opportunity to increase standardization of the platforms used in world-wide production of vehicles. If this happens the cost of production would signifi notifytly lower and it would be easier to produce new cars into new markets without building new plants. Ford can also further trim down the number of models out in the market and focus on cars they are widely known for such as light trucks and expand its model for smaller and fuel efficient cars.To designate the higher end market, it should continue to build its Lincoln brand as a better alternative in the US and once established, export that brand to new markets overseas. Production from union controlled plants could also be transferred to non-union plants that can give Ford plants a competitive edge or be at par with other auto companies in compensation for workers. Ford can also consolidate more dealership to become more competitive and give them incentives to attract more customers thru financing and offering first- class customer service. ThreatsThe auto industry is very competitive and technology driven industry. Ford has to constantly monitor its competitors to know how it will make its own decision. Companies will outbid one another in attracting new customers by giving them a lot of rebates, incentives and attractive financing. The technology for clean, fuel-efficient cars and alternate sources of fuel is also changing and without proper funding for research Ford could be left behind and lose in this expanding market. Any increase in price of raw materials could also increase production cost for Ford and make their vehicles more expensive.Demands of union workers also affect the competitiveness of Ford. They are receivedly paying higher compensation and benefits compared to the rest of auto industry. ever-changing consumer tastes also makes it difficult for Ford to quickly address and create cars that the market needs. Any decline in the US economy would also greatly affect the revenues of Ford. Most of the revenues of Ford comes from the US market and if the US economy goes into another recession it would decrease consumer spending and make it difficult to go without government help. Ford Motor Company Five Forces Threats of Substitute Products heights in Urban Areas, miserable in Suburban Areas * With the increase of gas prices and traffic congestion consumers are now looking for alternate ways to commute between work and home. Consumers are increasingly being informed of their carbon footprint and are looking for clean and energy efficient alternatives to commute. In cities, the availability of public transportation such as buses, subways and light rail systems gives commuters flexibility. Car-sharing options such as Zipcar are now also obtainable in cities and have become popular. Rivalry Among Competing Firms High * Competition in the auto industry is very high. Different companies compete aggressively in increasing their market share by giving incenti ves to customers. It is also essential for companies to satisfy the needs and tastes of consumers. Companies also try to run an efficient fork out chain to limit the cost of producing and increasing profit margins. * Threats of New Entrants Low * The threat of new entrants in the local auto industry is low. The auto industry is very capital and labor intensive and it takes time for companies to establish their operations.The current companies have established their presence and market share but competition from potential, new and growing car companies in big markets such as China and India is inevitable. * Bargaining Power of Suppliers Low * The auto industry sources its raw materials from global suppliers. The suppliers market is also a competitive industry. slew of their sales come from the auto industry and companies have established relationships to give them access to supplies and new technologies. The relationship of auto ompanies and suppliers are intertwined given that as auto companies increase production, supplier companies increase revenues. * Bargaining Power of Buyers High * Consumers now have more choices that gives them a higher bargaining power. The economy is also improving and giving them more buying power. Unlike before where manufacturers dictate what the dealers will push to the consumers, consumers now make the demand for manufacturers to make fuel-efficient and environment friendly cars. Consumers are also well informed and by being well informed they can ask for more incentives to dealers and car manufacturers.Ford Motor Company Recommendations Under the leadership of Mulally Ford has significantly made changes to improve the position of the company. We recommend that Ford increase funding on research for fuel efficient cars, alternate sources of energy for smaller cars that the market demands and will create sustainability in its vehicles. Ford should also maintain or increase the quality of its vehicles by standardizing its plat forms and improving its technology to detect any safety issues with its vehicles to avoid costly recalls that not only is expensive but tarnishes the image of the company.The economic crisis has made it difficult for other car companies not to be bailed out but Ford was able to maintain its freedom by using its assets and enforcing better control in its finances. Ford can continue to be competitive by maintaining or lowering its operating costs. Ford has been known in its proficiency in having a pixilated supply chain were it can control the costs of production. Ford should be quick to adapt in changing consumer tastes.It should not be content with making products that they are known for and lose market share in new vehicles that are small, clean and fuel efficient. It should also make its current models cleaner and more fuel efficient to maintain attractiveness to consumers. Ford has great potential in new markets such as China and India. The reputation it has built as a well kno w car manufacturer in the US can be used to pick apart new customers in international market. Ford has built by its strong leaders and will continue to thrive if more reforms are made.