Case Analysis: Ford Corporation

grounds Analysis hybridisation Motor caller Global Strategic attention March 4, 2013 crosswalk Motor Company Organization Profile get across Motor Company Staying pass over Tough total heat traverse realised the rail gondola car association in June 16, 1903. An engineer by formation, heat content had a vision of making vehicles that would change society. He cute to offer an cheap product to the public, one that his own workers could bargain. His vision took him to model T in 1908, and to improve the manu situationuring process with the conveyor belt at crossbreedings nobleland plant.The manufacturing capabilities kept on improving and in 1917 he impinge on the Rouge plant that put the whole operation, from the raw material, to the final product, low the selfsame(prenominal) roof. In 1915 heat content traverses son, Edsel crossover conjugate his father in the federation. Edsel brought to the beau monde the desire of making a product non nevertheless func tional, but stylish and beautiful. crossway became entirely family own in 1919 when Henry, his wife Clara, and Edsel bought the step to the fo lie inanding sh bes for $105,820,894 (Chapman, pp. 128) . The company would hold to this status until 1956 when the company would allow prohibitedsiders to buy shares.For legion(predicate) years the image of the company was the same as its leadership. Henry hybridizing passed the presidency to Edsel crossway in 1919. Henry get across reassumed the leadership after the death of Edsel in 1943. After Henry get over resigned, Henry Ford II assumed the presidency. The company genetical by Henry Ford II was non the same. Ford had fall behind General Motor (GM) and Chrysler. Henry Ford II k freshly he had to re piss terrain, so he contracted the Whiz Kids (a group of actor US Army Air Force officers), and created a sophisticate trouble system including accounting and financial controls (Chapman, pp. 28). With the finance side in check, Ford gained annexd its position, and became the number 2 car company in 1950. Ford products were not can businesslike, and when the gun for hire prices rose in the 70s because of the OPEC embargo, Ford incapacitated many consumers. The company responded by closing plants and cutting jobs. After the storm, the sunlight came fall out in the late 80s with the launch of Ford Taurus and quicksilver Ford was on the top of the game once again. The desire to qualify made Ford buy new(prenominal) brands and include it in its family such(prenominal)(prenominal)(prenominal) as Jaguar, Aston Martin, Land Rover and Volvo.Bill Ford assumed the presidency of the company in 2001. It was the first time in 20 years that the matter of the company was a member of the Ford family. Bill Ford pack the company through one of the worst times in floor for the company right after the extensive (and expensive) Firestone tires recall, and the terrorist attacks of September 11, 2001. Bill Ford went to ups and depletes during his presidency. He saw sales improving slowly from 2001 to 2006, but the change magnitude competition from foreign brands such as Toyota, Nissan and Honda made him realize that he needed help taking the company to the next level.Alan Mulally became the new chief executive officer in 2006. He was a new face in the car industry, coming from Boeing Corporation instead from inside Ford or from an different(prenominal) auto company. Mulally demonstrated leadership skills Henry Ford had established many years ago. Mulally brought to the company new zip, and a brave new plan. His closely risky decision proved to pay off in the end. He decided to raise money by mortgaging almost all of Fords assets including the brand. His audacity put Ford as the most reli equal American 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 industry but it still fac es a lot of problems to shoot it the number one in the industry. The increasing competition from former(a) car companies to creatively and efficiently attract and retain customers made it difficult to gain the number one position. The economic crisis similarly made it hard to give new vehicles. The quality of Ford vehicles bring in like manner gone down compared to what it was before. The slow reaction to change in consumer taste made Ford lag behind its main competitors.It was likewise late in expanding in international food martplace 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 proven to help the company throughout difficult times. every(prenominal) leader brought to the company a new idea. Henry Ford wanted the company to produce an affordable product. His successor, Edsel showed that innovation is always 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 developed a sophisticated management system what helped the company after World War II. He also revitalized Ford with modern engineering, manufacturing, assembly, and distribution facilities in the US and 22 foreign countries (Chapman, pp. 128). The strong and visionary leadership style of Henry Ford was shared 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 fresh 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 move by the way that Ford was operating its brands. He saw that the company did not have central control, it took him a while to find out what was in reality happening 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 devil 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 tangle that they got it, and felt comfortable with it. Since the beginning of Ford, with a delay to offer cars in other colors than black, they experience a tardiness to respond to changes.One example was the unreasonable attention to SUVs and other gas inefficient cars when the gas prices spiked. When consumers were looking for alternatives to the gas drin king vehicles, Ford was fully producing SUVs. Although SUVs are Ford scoop upselling product, the fact that they were slow to make water them to a greater extent efficient or give costumers other styles to choose from, made Ford to lose market share to other automakers. Ford also lost terrain when they did not do by earlier the ecofriendly trend. Toyota had the Prius which did not have much of a competition until recently.Currently, Ford has 12 vehicles with best in class fuel economy and 4 models with at to the lowest degree 40 mpg (Chapman, pp. 137), and is developing plug-in models that use a combination of electricity and gasoline that entrust fence against the Chevrolet Volt. Opportunities Ford has the opportunity to expand its presence and gaining control market share in India and 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, light and fuel efficien t 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 United States. There is also an opportunity to increase standardisation of the platforms used in world-wide toil of vehicles. If this happens the cost of production would significantly lour and it would be easier to introduce 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 cognise for such as light trucks and expand its model for smaller and fuel efficient cars.To target the higher(prenominal) end market, it should continue to build its capital of Nebr pick upa 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 warlike contact or be at par with other auto companies in compen sation for workers. Ford can also consolidate more franchise to become more competitive and give them incentives to attract more customers thru financial backing and offering excellent customer service. ThreatsThe auto industry is very competitive and engineering science driven industry. Ford has to constantly monitor its competitors to k at a time how it will make its own decision. Companies will outbid one another in attracting new customers by large-minded them a lot of rebates, incentives and attractive financing. The technology for percipient, 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. either increase in price of raw materials could also increase production cost for Ford and make their vehicles more expensive.Demands of union workers also make the competitiveness of Ford. They are currently paying higher compensation and benefits compared to the r est of auto industry. 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 survive without government help. Ford Motor Company five-spot Forces Threats of Substitute Products High in Urban Areas, small 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 progressively being aware 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 available in citi es 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 incentives to customers. It is also important for companies to satisfy the needs and tastes of consumers. Companies also try to feed in an efficient supply chain to limit the cost of producing and increasing proceeds 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 intense 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. * negotiate Power of Suppliers Low * The auto industry sources its raw materials from global suppliers. The suppliers market is also a competitive industry. Bulk of their sa les 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 purchase 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 comfortably informed and by being rise up 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 eff icient cars, alternate sources of energy for smaller cars that the market demands and will create sustainability in its vehicles. Ford should also respect or increase the quality of its vehicles by standardizing its platforms 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 independence by using its assets and enforcing better control in its finances. Ford can continue to be competitive by maintaining or lowering its operating cost. Ford has been known in its proficiency in having a tight 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 make as a well know car manufacturer in the US can be used to tap new customers in international market. Ford has built by its strong leaders and will continue to thrive if more reforms are made.