Category: Ford

Introduction

Ford Motor Company was established in 1903 by Henry Ford. The company is based in Michigan and it is one of the three market leaders in the United States of America in the automotive industry. By 1996 Fords revenue base had grown to over $150 billion and employed an estimated three hundred and seventy thousand employees. The success of the company was interrupted in the 1970s after the invasion of Americas motor market by competitors from Japan such as Honda and Toyota who offered cheap vehicles that were also economical in fuel consumption.

In response to this, Ford decided to take an expansion strategy in which they acquired the Volvo model from Sweden in an attempt to gain a competitive edge over their competitors. They also adopted a business reengineering process dabbed Ford 2000 which sought to reduce the number of their vehicle centers to five and which were supposed to cover operations involving two hundred countries.

The aim of this also was to reduce the amount of redundancy in the company by making use of the information technology as the driving force and the link that connected Ford to the centers scattered in different countries (Monks, Robert and Nell, Minow 579).

The main focus of the company in the process of development of the information technology infrastructure was the implementation of a setup that would support TCP/IP protocol of communication that complied with the requirements of the department of defense in the United States of America. This communication network for the Ford Company was mainly meant to allow communication of files rather than sending e-mails as was the case with other companies.

Throughout this period, there was a conscious effort by Ford motors to develop an integration of the global enterprise network that would be cost-effective. This network was meant to provide a link between the companys headquarters and the branches that were spread across the world.

The company also increased the amount of information that was accessible on their website, created a business to a business model which would be used by business partners to interact with the companys intranet, and developed of intelligent applications on the web that would help in the process of promotion of the business and reduction of costs of operations.

Ford motors also realized the cost reduction benefits that could be accrued by cooperating with some of its competitors in the motor industry such as general motors and the Chrysler. Through this cooperation, there was establishment of certificate referred to as the automotive exchange of network (Monks, Robert and Nell, Minow 581).

The aim of this communication protocol was to provide a standard for communication that would provide a unified way through which automotive manufacturers could communicate to the industry. Since then Ford has continued to transform its business model through re-engineering and other activities that are aimed at improvement of market position of this company.

Value Investor versus Growth Investors

Investors in the stock market can be classified as either growth investors or value investors. A value investor in the type of an investor who buys stock at cheap prices holds them until their value appreciates. The main aim of the value investor is to purchase share below the intrinsic value of such shares. Therefore, the intrinsic value of the companys shares must be below the prices prevailing in the market for the shares of the company (Montier, James 344).

On the other hand, a growth investor is the kind of an investor who invests in the shares of a fast growing company regardless of the industry in which it operates. The main aim of the investor in this case is to get shares of a company that has growth sustainability and then leave these shares to grow in value with the growth of the company. Therefore, accurate estimation of growth is required for this approach to be successful.

The expectation of the value investor is low and the undervaluation of the stock is considered to be as a result of factors that are temporary in nature. However, the growth investors invest with high expectations that the company whose shares he invests will experience growth. He however bets that the expectations are too low and hopes these expectations would rise in the course of time. He has the belief that the expectations will continue to rise as the company continues to perform beyond expectations of the investors.

Value investors expect cash flow that is depressed. The main focus of this kind of investors is the value of assets which they use if they need to calculate the intrinsic value of their shares. They require making multiple decisions on when shares should be bought and the most appropriate time when shares should be sold in order to have a real reflection of expectations (Montier, James 354).

On the other hand the expectations of the growth investors are on the cash flows that are fast growing. Therefore they require high revenues growth driven by high rate of unit growth. They also believe in the ability of the company in which they invest to make enhanced value more than that which the market implies.

Value investor is more risk averse as compared to the growth investor. Absolute returns are the main expectation of the value investor who appears to be sensitive to the preservation of capital. Therefore, the value investors cannot take a bet about the future since they have that belief that future cannot be predicted with certainty. Therefore, they regard payment for the future as unrealistic. Growth investors on their part remains sensitive to growth rate changes with the main aim being to deliver relative performance that is more superior.

Determination of the Intrinsic Value

Intrinsic value of a share refers to the present value of the cash flow expected from that particular share. To get the intrinsic value of the share, the first step involves discounting of cash flows generated by the shares, by the use of an acceptable discounting rate, k. Therefore, by using dividend discount model, the intrinsic value of Ford stocks can be obtained as follows (Damodaran and Aswath 677);

V=D₁/(1+k)+D₂/(1+k)²+&&+ D_n/(1+k)ⁿ

For long term investors, the formulae above will be used to determine the intrinsic value of their shares. D in this formula refers to dividends paid, k refers to the expected return and V is the intrinsic value of the shares.

Assuming an investor bought 2000 shares of equity from Ford Motors Company, at $10.01 per share. This will give that investor a value of $20,200. The divided paid were $0.19796 for each shares held by the investor. Therefore, the dividend yield will be equal to 1.96%. This gives that investor a total of $395.95 in dividends. Assuming k to be equal to 10%, the intrinsic value of the Ford motors will be given as below, with assumption that constant dividends are received consequently for two years.

V=0.19796/(1+0.1)+ 0.19796 (1+0.1)²

=0.19796/(1.1)+ 0.19796 (1.21)

=0.1800+0.1630

=0.3436 Therefore, the intrinsic value of the stock will be $0.3436.

Determination of the Market Value of the Stock Based on the Intrinsic Value Calculated Above

The market value of Ford motors shares is $10.01 while the intrinsic value of the companys share is $0.3436. It is observed that the market value exceeds the intrinsic value of the companys share. This therefore means that the companys shares are over-valued.

Recommendations

From the above observation the value of Ford share is quite above what it should be. The main reason for this may be due to the returns expected by investors which exceed the returns that the company is able to pay to investors by a large margin. Therefore, the companys stock should trade at a price below this. Any investor who might invest in these shares at this time will be paying more than what market can price for a share with similar characteristics.

As a result of this, I would not advice an investor to use his money to invest in this stock since he can get a fair deal for his money elsewhere. However, I would advice a stock holder with Ford to sell his share at the prevailing market price since he will be in a better position to get a better bargain for his investment. By selling his shares at the prevailing market price, he will get more than the value of such shares.

Works Cited

Damodaran, Aswath. Investment Valuation: Tools and Techniques for Determining the Value of Any Asset. New York: John Wiley & Sons. 2012. Print.

Monks, Robert and Nell, Minow. Corporate Governance. New York: John Wiley & Sons. 2011. Print.

Montier, James. Value Investing: Tools and Techniques for Intelligent Investment. New York: John Wiley and Sons. 2011. Print.

Introduction

Ford Motor Company was incorporated on June 16, 1903 when Henry Ford and other eleven business associates signed articles of association and memorandum of understanding. The capital of the company was $28,000 (Nevins & Frank, 1962). It was listed in American stock exchange on February 24, 1956. The number of employees today is approximately 300,000 who are distributed in its 108 plants worldwide.

The headquarters for the company is Dearborn, Michigan (US). As market changes, there is a change in the technology adopted and currently the company is on track of making electric motor vehicles. It enjoys a strong brand name, which works to its benefit in todays motor industry.

Its first managing director was Henry Ford while the current managing director is Alan Mulally. This paper takes a look at the mythology of Ford Motor Company; it will give a brief history of the companys founder (Ford Company Limited official website, 2010).

Henry Ford

He was born on 30^th July, 1863. Henry was the initiator of Ford Company and an esteemed American entrepreneur. He was born to William Ford (18261905) and Mary Litogot Ford (18391876), in Greenfield Township near Detroit, Michigan.

In 1888, he got married to Clara Ala Bryant (18651950) and was blessed with one child called Edsel Bryant Ford (18931943). A professional engineer, Ford worked as a chief engineer (1883) with Edison Illuminating Company. He is said to be an aggressive intelligent man. He died 7^th April, 1947(Baldwin, 2000).

Henry at 25 years

Henry in 1919.

Mission statement and vision of Ford Motor Company

The mission and vision statement of the company is as follows.

The company aims at continuously improving its processes to satisfy the needs of various classes of customers that it enjoys. To do this it empowers its staffs through appropriate training and offering a good career path. There is an environmental policy, which is managed at a departmental level where the company is responsive to dangers that its processes would cause to the environment. This is on top of its social corporate responsibilities.

Basic Product Classes

Ford is an American motor vehicle producing company which employs different strategies to remain competitive in motor industry. It manufactures passenger cars and trucks for various purposes. Currently, there are eight brands from the company, which are Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury, and Volvo.

Ford motor vehicle model are known to be fuel efficient and last longer (Rubenstein, 1992). They are made in response to the needs of customers and every measure taken to ensure that customer feedback is acted upon.

A timeline of Ford firsts which consist of stated accomplishments by Ford that were initiated by other automobile companies.

Ford has been producing different brands with some being a success whereas others have failed. It has also sold some of its branches to international firms for instance, it sold Jaguar (in March 2008) to Tata limited (of India); the sold plant was in United Kingdom.

The above is a sample diagram of a ford model of 1919 pickup. The company is known for production of long distance trucks.

Reference List

Baldwin, N. (2000). Henry Ford and the Jews: The Mass Production of Hate; PublicAffairs, ISBN 1-58648-163-0

Ford Company Limited official website (2010). Ford. Retrieved from https://www.ford.com/

Nevins, A., and Frank, E. (1962). Ford: Decline and Rebirth, 1933-1962. New York: Charles Scribners Sons.

Rubenstein, M. (1992). The Changing U.S. Auto Industry: A Geographical Analysis. London: Routledge.

Introduction

In the recent past, there has been a shifting paradigm from Taylors model of organizational management to more productive methods of production. The new methods aim at increasing production through efficient management of human and capital resources. A number of scholars have conducted extensive research to establish the effects of various managerial techniques on the performance of employees.

Some researchers note that task formulation is the most notable aspect of management, whereas others observe that the availability of human resources is the crucial factor that influences the performance of the management team. However, scholars concur that three factors are essential as far as the best managerial practices are concerned.

One of the factors is production management while the other is the organization of work. In addition, the relationship between various groups in the organization influences the performance of employees. Scholars agree that a new model of management should be applied in case the organization is to achieve high results. The new model must incorporate the tenets of neo-liberalism into its productivity structures.

Currently, scholars focus on exploring the new management dynamics that relate to post-Ford model of production. Scholars in the UK and the US perceive that the model should be adopted in order to enhance productivity in organizations.

However, changing the work structure has micro and macro implications. Scholars of political economy and ethnographic sociology have posted their findings on the topic given its importance in the performance of organizations. This paper reviews a number of articles in order to shed some light on the topic.

Views of Various Scholars on Post-Ford Production Model

As earlier noted, scholars have posted various views regarding the management models in the current managerial systems. Their views can be categorized into a number of models. Under high performance work systems model, scholars such as Danford and Thompson have contributed enormously in enriching the topic.

Handel and Gittleman are some of the scholars who have contributed to the development of high-performance work practices model. Ashton and Sung have conducted extensive research to establish the influence of high-performance work on organizations.

A number of scholars have also discussed the issue of high involvement in detail. Some have talked about high involvement work systems while others stick to high involvement work practices. Harmon is one such scholar who talks about high involvement work systems while Fuertes and Sanchez capitalize their study on high involvement practices.

The issue of high involvement management is also of importance to scholars. Forth and Millward are some of the scholars who analyze the relationship between high involvement practices and the management strategies. Scholars such as Brown and Reich have postulated their findings regarding the relationship between high performance and employment systems.

High commitment management is another model employed in analyzing the performance of employees. Baird, Whitefield, and Poole are some of the scholars who have posted their findings on commitment management model.

Danford (2004) notes that the idea of high performance work systems is a mechanistic model that does not take into account the demands of human beings. He conducted a study on JetCo manufacturing company and came up with a number of suggestions. The company had a number of efficient practices at the start, but ended up with practices that were unpleasant to the workforce.

The company had prolific initiatives aimed at improving the quality of production. The introduction of team leaders created tension among employees, which lowered the firms productivity. Employees perceived that their views were not given serious attention. On his part, Thompson (2003) notes that a significant factor regarding high performance work systems is reciprocity.

In this regard, employers have a responsibility of ensuring that they develop trust and commitment towards employees. Therefore, the employer is charged with the responsibility of ensuring that the employee is provided with adequate training and efficient reward system. However, Thomson admits that employers in the neo-liberal economy are unable to fulfill the wishes of employees due to the challenges posed by the economy.

On high performance work practices, Handel and Gittleman (2004) criticize the model by observing that it does not create a working relationship between workers and employers. The model is only known to increase wages. Therefore, the new model of high performance management is simply aimed at benefitting an individual, but does not increase productivity in the organization.

Ashton and Sung (2002) assert that it is proven scientifically that a strong relationship between human resource practices and improved performance exist. In particular, the relationship is strong in matters related to profitability and productivity. Therefore, the two scholars suggest that performance practices are closely related to the skills acquired by the employee.

The relationship serves to strengthen the effectiveness and efficiency of the organization. However, the scholars caution that the model is only applicable to certain industries. This means that the model does not solve managerial problems in all scenarios.

Harmon (2003) conducted a research to explore the efficiency of the American health care sector. In the study, a conclusion was drawn suggesting that a relationship between high performance management and employee efficiency existed. The study can be interpreted to mean that high involvement work systems are related to financial aspects.

Fuertes and Sanchez (2003) extend the works of Harmon by observing that some factors motivate employers to adopt certain models. Employers calculate the benefits of the model before adopting it. Employers might prefer using less costly strategies, as opposed to using strategies that would drain their resources.

Employers do not prefer some of the practices, such as rewarding employees with financial benefits because they eat up their profits. Employers prefer using non-financial rewards to appreciate their employees, such as awarding a promotion.

Forth and Millward (2004) assert that high performance management is a concept that cannot be neglected given its effectiveness and influence on the performance of the organization. They further observe that all management practices are related to the high performance management model in one way or the other.

Forth and Millward note that the high performance management model might be interrupted by deregulation of financial markets. Organizations in the modern financial markets go through a number of challenges that make it hard for employers to implement high performance management models.

Competition in the market is stiff implying that employers are concerned with sustaining market competition, not enhancing structural organization of firms. Brown and Reich (1999) conducted a study on one of the Australian manufacturing companies. The company formulated a number of strategies aimed at improving the performance of the organization.

The firm emphasized on team building, development of staff, and training. The firm adjusted its policies that focused on Taylors model to reflect modern managerial practices. Efficient planning and role allocation were some of the new strategies employed by the firm. The new tactics improved the performance of the organization in a number of ways.

Whitefield and Poole (1997) observe that high commitment management is a highly sensitive issue. Therefore, it must be handled carefully. The main concern of employers is to increase production and organize work. The scholars note that before talking about performance management, the causes of perennial problems in the organization must be handled.

The above scholars suggest that organizations utilize their competitive advantages in the market to formulate innovative practices. The researchers conclude that implementation of high performance managerial practices generate new techniques that improve the performance of the organization. High performance management strategies are extremely costly, but their outcomes are productive.

In this regard, they observe that high performance management models must produce high results for them to be maintained. In a study conducted in Europe, it was established that organizations with comprehensive new work practices tended to have high training needs. Regarding high commitment management, Baird (2002) notes that all stakeholders in the organization must be consulted before formulating any policy.

Through consultative forum, the organization utilizes its resources in the most cost effective way. Moreover, embracing dialogue helps the firm in achieving its competitive advantage in the market. The role of professionals in the organization is to ensure social bonding and commitment to the new techniques of production.

Conclusions

Model managerial theories suggest that the work place is the main learning institution that enhances the capacity of employees. Older models suggest that employees are expected to join organizations when they are already equipped with adequate knowledge from colleges and universities. Things have since changed in the modern society.

For instance, the works of modern scholars suggest that teamwork is one of the most crucial aspects of management. Employees are expected to be given chances to explore their potentials in the organization. This implies that employers are expected to allow some flexibility that permits sovereignty.

References

Ashton, D., & Sung, J. (2002). Supporting Workplace Learning for High Performance Working. Geneva: International Labor Office.

Baird, M. (2002). Changes, Dangers, Choice and Voice: Understanding What High Commitment Management Means for Employees and Unions. The Journal of Industrial Relations, 44(3), 359-375.

Brown, C., & Reich, M. (1997). Micro-Macro Linkages in High Performance Employment Systems. Organizational Studies, 18(5), 765-781.

Danford, A. (2004). High Performance Work Systems and Workplace Partnership: A Case Study of Aerospace Workers. New Technology, Work and Employment, 19(1), 14-29.

Forth, J., & Millward, N. (2004). High-Involvement Management and Pay in Britain, Industrial Relations, 43(1), 98-119.

Fuertes, M., & Sanchez, F. (2003). High-Involvement Practices in Human Resource Management: Concept and Factors that Motivate their Adoption. International Journal of Human Resource Management, 14(4), 511-529.

Handel, J., & Gittleman, M. (2004). Is There a Wage Pay-off to Innovative Work Practices? Industrial Relations, 43(1), 67-97.

Harmon, J., (2003). Effects of High-Involvement Work Systems on Employee Satisfaction and Service Costs in Veteran Healthcare. Journal of Health Management, 48(16), 393-418.

Thompson, P. (2003). Disconnected Capitalism: Or Why Employers Cannot Keep Their Side of the Bargain. Work Employment and Society, 17(2), 359-378.

Whitefield, K., & Poole, M. (1997). Organizing Employment for High Performance: Theories, Evidence, and Policy. Organization Studies, 18(5), 745-764.

The Ford Case Analysis

Opinion one: when every stakeholder matters

Defining the specifics of the corporate governance strategy, which Ford has chosen as its key guideline in defining the companys goals, its strategies, and the relationships between the staff and the managers, one must admit that it has a range of positive aspects. To be more exact, the Ford Company CEO has stressed several times that the cooperation between the firms members and the satisfaction of all its stakeholders are currently at the top of the priorities list (Andress, Bolin, Horton, Cleven, McCullar & Stevens, 2012, p. 146).

Opinion two: when a little more perspective is desirable

Although the model of corporate governance, which is currently used at Ford, proves quite efficient as a tool for the companys global success, it is worth keeping in mind that the company is represented by a range of affiliates in a variety of states (Affiliates, n. d.). In order to coordinate the work of all these affiliates, retaining the role of the leader and maintaining the corporate governance model,

Ford will have to make a very serious effort. Seeing that the company is currently quite busy defining its position in the market and competing with such successful brands as Toyota and Honda (Andress, Bolin, Horton, Cleven, McCullar & Stevens, 2012, p. 132), it will not be able to coordinate the work of all its departments successfully, which will lead to an ultimate failure. Therefore, a more flexible model of leadership should be executed.

Cooperative Strategies and the Companies Objectives

Thunderbird and Laureate Education

Though the agreement concluded between Thunderbird and Laureate Education has only been touched upon briefly in the article by Hommel (2013), the author still has shed some light on the nature of the relationships between the companies, pointing at the fact that the two are going to base their relationships on equity (Hommel, 2013). The goals of the companies are, therefore, to reduce the risks and to enter the global market.

WSE and its has-been rival

The same can be said about the strategic alliance, which the Warsaw Stock Exchange is about to undertake (Stratford, 2014). Even though the alliance is only a project at present, it is obviously going to become a major step towards the company reconstruction and its further economic growth. In fact, Adam Maciejewski, the companys CEO, specifies that expansion is the current objective of the organization, which the strategic alliance is supposed to facilitate: We want to build a strong company so we can discuss potential moves.

We dont want to be a younger brother in such discussions (Stratford, 2014). It should be noted, though, that the strategic alliance formed by the WSE and the companys former rival, a Viennese company, is somewhat different from the one described above. In contrast to the previous alliance, this one is not only attempting at entering the global market, but also tries to analyze its assets and weaknesses, working on the latter and developing the former. Therefore, the given cooperation can be defined as a non-equity strategic alliance.

Hakassah Group Meets MGM

The last, but definitely not the least, the joint venture formed by the Hakassah Group and the MGM Studio (Kerr & Blitz, 2014) should be mentioned. This project is obviously different from the two types of cooperation mentioned above. In contrast to equity and non-equity strategic alliances, a joint venture is formed to create an entirely new enterprise. What MGM and The Hakassah Group have designed is clearly a new venture, and it is evidently being built by two independent, worldly renowned companies.

Reference List

Affiliates. Web.

Andress, J., Bolin, M., Horton, D., Cleven, C., McCullar, M. & Stevens, H. (2012).Ford Motor Company: Staying Ford tough! Strategic management cases: Competitiveness and globalization (pp. 127151). Stanford, CT: Cengage Learning.

Hommel, U. (2013). Moocs herald the disruption to come. Financial Times. Web.

Kerr, S. & Blitz, D. (2014). Jumeirah to manage luxury hotel complex in Mauritius. Financial Times. Web.

Stratford, P. (2014). Warsaw Stock Exchange eyes investments with other bourses. Financial Times. Web.

Introduction

Today, most businesses have understood the significant importance of carrying out marketing research with a view of analyzing the market. Among its benefits, there is a significant improvement in the quality of the product and service line resulting in an increase in market share, and understanding the consumer tastes and preferences better (LearnMarketing.net 2011). The United States motor market has developed in terms of its needs, number, and complexity.

Today, any vehicle developed endeavors not just to transport one from one place to another, but also to make such movement as exciting, comforting, relaxing, and convenient as possible. The same applies to the wider international market in light of increasing globalization. Today, the majority of the population seeks a car that is easy to drive, park, latest technology coupled with an intriguing sleek, fun, and sporty design (Grewal and Levy, 2012).

Analyzing the Market in the Reintroduction of the Ford Fiesta

Ford Fiesta was first developed in 1976 at a time when the fuel prices were too high. In this effort, the fiesta was meant to have minimum fuel consumption. The car experienced high sales in Europe unlike in the United States. Nevertheless, the history of this car does not end at this time. In late 2000, Ford reintroduced the Ford Fiesta with a view of meeting the market needs and preferences. The Ford Fiesta targeted the younger customer of the millennium age (1979 -1994).

The fiesta was reintroduced in the United States market in late 2000 in light of the growing number of personal cars. These cars were preferred because of fuel efficiency as well as its cheaper price. In this respect, the launching of the Ford Fiesta came with an intensive and extensive analysis of the market including macro-environmental factors, political environment, and competitors among others.

Ford analyzed the market with a sense of innovativeness and customers in mind. Since the company targeted the young Millennial customers in a model called Kristen, in 2008, key macroeconomic factors considered were the social trend, culture, demographics, political and economic condition (Kotler and Lane, 2006 p. 89).

Ford analyzed the market and targeted the millennial customers modeled as Kristen who constituted a significant number of individuals purchasing cars. This segment liked to buy subcompact cars with aspects beyond the normal basic features. The market had potential demand and Ford wanted to direct this demand for compact cars to the fiesta. As such, to reach Kristen, the features of the Fiesta were designed for a youth from college who consider communication and social media as important needs of her life worth finding in a car.

The fiesta was also developed to meet the needs of a user in the urban areas. The world today is defined by increasing economic recession and inflation. Fuel prices are not an exception, as such, the Ford Fiesta targeted customers in the city who ran their vehicles regularly. Car fuel consumption is efficient. Again, it is easier to park small compact and one can easily manoeuver in the city. With fully-sized features of the Ford, its prices were also competitive. To penetrate the market, the car was designed in different colors featured in different parts of the car. For instance, the lighting had red colors while the vehicle came in green, white, orange, etc. colors (Marconi, 2000).

According to Grewal and Levy (2012), technology is important in penetrating the market and enabling customers to continuously grow in number and loyalty. In an effort to reach the market, considered both technologically endowed customers and those that had little information about technology. As such, the Fiesta was made simple and easy to understand for the user. This comes with exciting features like the moon roof, forward sing system. For instance, the forward sing system enabled the customer experience with the vehicle to be more exciting and convenient. This is a great in-car hands-free communication facility that also enables the customer to get in touch with friends and relatives.

The social trends today point to environmental conservation and preservation. This is a significant feature in analyzing the market (Marconi, 2000). The Ford Fiesta launch in late 2000 integrated this feature in fuel efficiency. The effectiveness and efficiency of the fiesta come with its ability to consume less fuel as per the US environmental standard of 40 miles per gallon (mpg), significantly beating the 35.5 mpg.

Conclusion

Analyzing the market is significant in developing a quality product or service that increases market share and enables one to understand consumer tastes and preferences (Grewal, and Levy, 2012). Cars developed today are meant to transport one in the best exciting, comforting, relaxing, and convenient experience. The success of the fiesta since its reintroduction in late 2000 reflects in the efficiency, extensiveness, and intensiveness of the market analysis undertaken by Ford.

The Ford Fiesta targeted the younger customer of the millennium age (1979 -1994). In this respect, the launching of the Ford Fiesta came with an intensive and extensive analysis of the market including macro-environmental factors, political environment, and competitors among others.

References

Grewal, D., & Levy, M (2012). Marketing, (3rd Ed.). New York: McGraw-Hill Irwin.

Kotler, P., & Lane, K (2006). Marketing Management, (12 edn). Pearson Education, Inc.: Published by Prentice-Hall, 60-190.

LearnMarketing.net. (2011), Factors influencing the behavior of buyers. Web.

Marconi, J. (2000). The brand-marketing book in creating, managing, and extending the value of market analysis. London: McGraw-Hill Professional.

Introduction

The exterior environment according to which business actions may create instances which business is able to operate, moreover to the threats which could harm the business project. Nevertheless, to be in a location to enhance opportunities or counter to dangers, a commerce necessity to have the right capital and capabilities in place.

A significant part of the commerce approach is regarded with ensuring that these reserves and capabilities are realized and appraised  a process that is often known as a Strategic Audit.

Resource Audit

The resource audit classifies the resources obtainable to commerce. Some of these can be held (e.g. plant and equipment, brand names, trade openings) whereas other reserves can be acquired through corporations, joint schemes, or simply dealer agreements with other industries.

Value Chain Analysis

Value Chain Analysis defines the actions that take place in commerce and is connected to an investigation of the competitive power of the business. Powerful work by Michael Porter offered that the movements of a business could be divided into two titles:

1. Primary Activities  those that are straightforwardly anxious with producing and shipping a product (e.g. component assembly);
2. Support Activities, which whilst they are not straightforwardly included in manufacture, may enlarge efficiency or competence (e.g. HR management).

It is unusual for a business to commence all primary and sustain activities. Value Chain Analysis is one way of classifying which activities are best undertaken by commerce and which are best offered by others (outsourced).

Core Competence Analysis

Core competencies are those features that are decisive to commerce achieving competitive benefit. The starting point for analyzing core competencies is recognizing that competition among different businesses is as much a race for capability mastery as it is for market location and market power. Senior administration cannot concentrate on all activities of an industry and the competencies required commencing them. So the aim is for the administration to focus concentration on competencies that really affect competitive advantage.

Performance Analysis

The resource audit, charge chain analysis, and core competence analysis help to define the strategic capabilities of a business. After finishing such a study, questions can be inquired that assess the general presentation of the commerce. These queries include:

• How have the resources deployed in the business changed over time; this is a historical analysis
• How do the resources and capabilities of the business compare with others in the industry  industry norm analysis
• How do the resources and capabilities of the business compare with best-in-class  wherever that is to be found- benchmarking
• How has the financial performance of the business changed over time and how does it compare with key competitors and the industry as a whole?  ratio analysis

Portfolio Analysis

Portfolio Analysis analyses the total equilibrium of the tactical business units of industry. Most huge businesses have actions in more than one market section, and often in dissimilar physical markets. Superior, expanded collections often have numerous sections (each including lots of business spheres) acting in quite dissimilar spheres.

A significant purpose of a strategic audit is to guarantee that the industry portfolio is well-built and that industry units requiring venture and administration concentration are emphasized. This is significant  a business should always judge which advertises is most beautiful and which business units have the possibility to attain benefit in the most attractive markets.

The economic bases of The Ford Corporation (the Corporation) are created on the increased origin which is in agreement with office standards normally conventional in the USA.

The monetary announcements and linked information offered here have been offered accordingly to the commonly established accounting rules and principles, which necessitate the dimension of monetary situation and products of procedures in terms of historical income flows without regarding changes in the comparative purchasing capability of money over time because of inflation. Unlike most industrial Corporations, virtually all of the benefits and responsibilities of the Company are economic in the environment. Consequently, interest charges have a more important influence on the Companys presentation than the impacts of universal inflation ranks. Interest rates do not essentially move in the same course or to the same extent as the prices of superiors and overhauls.

Investments

Impartiality and permanent takings investments are usually estimated grounds upon the concluding trades value as stated in major replaces. Though, confident preset revenue safeties are an estimation based upon capitulates or prices of securities of analogous quality, ticket, adulthood, and type as well as suggestions as to estimations from agents and traders. Short-term investments usually symbolize safeties with the ripeness of 1 year or less and are appreciated at repaid cost.

Restricted marketability investments, on behalf of amounts in project resources and fairness cooperation, are estimated at the stated market price for securities for which market statements are willingly obtainable or an approximation of value as defined in good faith by the universal associate. Important modifications impacting the charges of these restricted marketability investments that take place among the time net asset charges are last discussed by the general collaborator and the close of the Corporations financial year are replicated in the fair value proved in the economic bases.

Contracts are recorded on a trade date basis. Brought to life and unrealized attainment or failures on ventures are classified by the contrast of precise costs of acquirement (acknowledged lot grounds) to continues at the time of removal, or advertise estimations at the last day of the fiscal year, correspondingly, and contain the consequences of coinage conversion with respect to businesses and holdings of overseas safeties. Bonuses and attention are identified when received.

Program-Related Investments

The Company invests in projects that progress humanitarian aims. These program-oriented investments are primarily loans marvelous for up to 10 years comportment interest at 1%. These advances are regarded as succeeding divisions for tax treatment aims. Loans are supervised to resolve net reachable value grounded on a valuation of recoverability that operates experience and may reproduce episodic alterations to terms as considered apposite.

Fixed Assets

Land, projects, equipment, equipment, and leasehold enhancements owned by the Corporation are regarded at cost. Reduction is charged using the straight-line technique grounded on valued functional survives of the fastidious advantages normally valued as follows: structures, predominantly 50 years, equipment and tools 3 to 15 years, and leasehold enhancements over the lesser of the term of the rent or the life of the advantage.

Expenditures and Appropriations

Grant spending is considered incurred at the moment of endorsement. Unattached misappropriations that have been permitted by the Board of Trustees are incorporated in appropriated unobstructed net benefits.

Taxes

The Corporation is qualified as a tax-excused company under Section 501(c)(3) of the Internal Revenue Code and, therefore, is not theme to federal profits taxes. Though, the Corporation is a matter of a centralized remove tax. The Corporation observes the policy of supplying for centralized excise taxes on net admiration (both realized and unrealized) on investments. The postponed condition for federal expunges tax characterizes taxes offered on net unrealized enjoyment (downgrading) on investments.

Risks and Uncertainties

The Corporation uses values in preparing the monetary declarations which require the administration to make values and postulations. These impact the accounted quantities of assets and liabilities at the date of the speech of financial situation and the accounted quantities of profits and expenses throughout the coverage stage. Definite consequences may differ from these approximations. The most important approximations and hypotheses are linked to the assessment of restricted marketable safeties, payments for possible losses on program-connected speculations, and employee benefit plans.

Statements of activities

Investment

The Corporation obtains and sells forward currency contracts whereby the Corporation concurs to swap one currency for another on a previously discussed date at a previously discussed swap rate to diminish the experience of certain of its speculations to unpleasant variations in exchange markets. As of September 30, 2007, and 2006, the Corporation had foreign coinage conventions with notional quantities totaling $114.6 million and $170.7 million, correspondingly.

Such agreements include too unreliable levels, risks of loss from the probable incapability of counterparties to assemble the conditions of their agreements. Modifications in the value of onward money contracts are realized as unrealized gains or losses until such agreements are closed.

The Internal Revenue Code imposes an excise tax on confidential Corporations equal to 2 percent of net speculation takings, which is classified as interest, bonuses and net realized increases less working and capital losses on business investments and expenditures incurred in the construction of revenue. The tax is reduced to 1 percent for Corporations that meet positive delivery necessities. The condition for federal remove tax grounded on a 2 percent rate in economic years 2007 and 2006 comprise of a modern condition on net speculation earnings and a deferred condition on present net unrealized increases on investments. The numbers of expurgating taxes paid were $29.3 million and $21.3 million in fiscal years 2007 and 2006, correspondingly.

Retirement Plans

The Companys defined advantage annuity plans and the classified donation diagrams cover considerably all New York employed workers (staffs who are nearby assigned by abroad offices are covered by other departure agreements). Pension revenues normally depend upon age, length of service, and wages rank. The Corporation also offers retirees at least five years of work and those who are at least age 55 with non-pension other postretirement advantages which embrace medicinal, dental, and life indemnity. The described profit pension plans are yearly grounded accordingly with the smallest funding prerequisites of the Employee departure Income Security Act.

The non-pension other postretirement advantages are not funded by the Corporation. In 2007, the Corporation adopted FAS 158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, which necessitates undistinguished numbers to be recognized as modifications to unobstructed net assets and that those quantities be regulated as they are afterward recognized as elements of the net periodic pension cost. FAS 158 outlined in the gratitude of a $3.2 million loss reported on the Statement of Activities as a modification in office standard.

The Corporation is concerned with numerous legal actions. Management of the Corporation supposes that it has resistances for all such claims, believes the asserts are considerable without merit, and is energetically protecting the actions. In the estimation of organization, the final nature of these matters will not have a stuff effect on the Corporations monetary location. As part of its program-oriented investment activities, the Corporation is assigned to provide $23.7 million of loans to not-for-profit associations once certain situations are met. Further, as part of its speculation administration activity, the Corporation is assigned to supplementary funding of $1.2 billion in confidential equity and other speculation promises.

Conclusion

Ford Motor Company is an organization of a disparate combination of local and district secretarial schemes that based architectural and managerial blockades to the smooth process of Fords global shades. Many of Fords organizations were more than a decade old, necessitated a high level of preservation expense, and were challenging to inform in global surroundings. Ford necessitates a new, combined explanation to regulate and modernize global monetary business procedures and attain a single account of the monetary truth for reliable data and actionable commerce imminent.

Ford decides to improve and regulate PeopleSoft Enterprise Financial Management Solutions to found global secretarial procedures with a solitary database situated in Dearborn, Michigan. PeopleSoft helped Ford establish an ordinary chart of descriptions with steady financial business procedures across 22 countries in more than 120 locations.

Though Ford Motor Company is identical with American manufacturing, global trade, plays a gradually more significant role in the automakers $170 billion income torrent, thanks to global brand names like Land Rover and Volvo.

References

Cocheo, Steve. Does Ford Credit Have a Better Idea?. ABA Banking Journal 88.5 (1996): 58.

Fleming, Michael J. Financial Market Implications of the Federal Debt Paydown. Brookings Papers on Economic Activity (2000): 221.

Knell, Keith R. Dont Invest for Clients  Plan for Them: Why Investing Is Not Financial Planning. Journal of Accountancy 193.1 (2002): 32.

Lozada, Hector R., and Roger J. Calantone. Scanning Behavior and the Process of Organizational Innovation. Journal of Managerial Issues 8.3 (1996): 310.

Mccarthy, Tom. Henry Ford, Industrial Ecologist or Industrial Conservationist? Waste Reduction and Recycling at the Rouge. Michigan Historical Review 27.2 (2001): 53.

Mcmenamin, Jim. Financial Management: An Introduction. London: Routledge, 1999.

Meyer, Stephen. The Five Dollar Day : Labor Management and Social Control in the Ford Motor Company, 1908-1921 /. Albany, NY: State University of New York Press, 1981.

Yelpaala, Kojo. Strategy and Planning in Global Product Distribution  beyond the Distribution Contract. Law and Policy in International Business 25.3 (1994): 839-944.

Ford Motor Company has been negatively impacted by the technological environment in the following manner: it has to adapt to complex integrated digital solutions in the majority of modern cars. This effect is apparent if Ford is put up for comparison with Tesla, Inc. According to the article by Fosse (2022), Tesla will make and sell more vehicles than Ford in a little more than a year (para. 9). Despite Fords immensely long history of success in the automobile market, technological progress pushes classic cars away from the spotlight. At the same time, the number of digital features integrated into vehicles increases annually as chips become more complex and new software for automobiles achieves unimaginable heights. However, Ford struggles to match its competitors pace due to chip shortages and disruptions in the companys supply chain (Fosse, 2022). This issue indicates that the firm was not prepared adequately for this technological shift. Moreover, the financial burden of an electric car is significantly lower than that of one that runs on gas or diesel, especially considering their soaring prices (Fosse, 2022). At the same time, with the expansion of manufacturing facilities that focus on electric cars or hybrids and the increased availability of charging stations, this type of automobile will continue its takeover. In conclusion, the technological environment is prone to rapid changes that can force even major companies to change their perspective on the industry. Disruptive innovation is a common method for modern companies to establish their presence in the market. Ford Motor Company suffers from its lagging innovative capabilities that do not match Teslas growth rates, proving that the technological environment is paramount for companies of any size.

Work Cited

Fosse, P. (2022). Why Teslas revenue will pass Fords within 6 months.CleanTechnica.

Introduction

In 2009, Ford Motors was rated the second motor vehicle manufacturer in the world according to Standard & Poors. However, negative forces to include the rumblings of its shareholders made Ford to encounter environmental forces, which were not favourable for its growth.

Henry Ford founded the company with many innovations introduced in manufacturing. One of these is the best-known Model T of mass production, the moving assembly line  which is actually composed of conveyor belts  where time of work was reduced (Goh & Garg, 2008, p. 57). Ford revolutionized the car industry, paid higher wages to factory workers, and made cars affordable to anyone.

The company became a multinational corporation in 1970 but was predominantly operating in North America with subsidiaries in major markets in countries like Britain, Germany or Australia. These subsidiaries however have their own manufacturing plants. With intense globalisation, the Ford organization started to restructure internationally. In Europe, Ford was consolidated with further product development and designs which were originally European. (Grant, 2005, p. 440)

Ford is best known in the United States for its cars, trucks, crossovers and SUVs (Ford, 2010). In 2008, Ford was adjudged by Standard & Poors (2009) as the worlds second largest motor vehicle manufacturer, producing cars and trucks, including plastic and glass parts of the cars they make, and replacement parts.

Financial services include Ford Motor Credit (automotive financing and insurance) and American Road Insurance. Ford has a big share in the world market. It has a 33% stake in Mazda Motor Corp. It has ventured in many countries, trying to feel its presence even in China, which is the fastest growing market in the automobile industry. (Rushton & Walker, 2007, p. 32)

The World Automobile Industry

Automobile industries around the world have a great part in the nation states gross national product (GNP), accounting for at least ten percent or more. These industries have evolved and encountered many changes over the years. (Shimokawa, 2010, p. 1)

Technological advancement and continuous innovations have motivated organisations and businesses to react to changes in the global competition. Organisations have to reorganise, re-evaluate and reprogram outdated functional programs and activities, and realign them to the present trends for improvement and competition.

Personnel and field people, ordinary employees, including middle-level and top management have to refocus along the line of technological innovations. External and internal environments in organisations are becoming complex; thus they are handled with a globally-oriented brand of management.

Ford Motors is a knowledge-based, global firm, the worlds second in the vehicle automotive industry. General Motors was once the worlds leader in vehicle manufacturing but with the recent global economic downturn, there are doubts now to its leadership since it needed government bailout.

Data for the world automotive markets are confusing. Different companies publish their own information on sales and market shares based on some segmentation.

GM, for example, defines its markets to include trucks and vehicles like buses and lorries. With these data and profiles, it is really difficult to have a comparison among the different vehicle manufacturers. Most world automotive companies are involved in the commercial and passenger markets. This is because the technology and the production systems are the same. (Lynch, 2006, p. 767)

Globalisation impacted on the automobile industry which resulted in mergers and acquisitions of well known car brands. Ford acquired Jaguar and Volvo and also partnered with Mazda Motor Corporation. (Plunkett, 2006, p. 18)

The automobile industry has been characterised by intense competition, lower market share, and there are many products coming from different competitors. Other environmental forces include high prices of gasoline and a sudden change in the demand for Fords pick-up trucks. Fords sales were down during the period 2008-2009. (Standard & Poors, 2009, p. 211)

Leading car manufacturers in the United States have been threatened by the Japanese car firms, forcing them to modernise their plants and cut costs of parts, or introducing new designs of vehicles. In 2003, Toyota was the second largest car producer, with seven million vehicles to boast.

Ford then was tailing Toyota, having a market share of 12 percent. Ford was followed by two German firms, Volkswagen and DaimlerChrysler. Others in the competition were Fiat, PSA Peugoet Citroen and Renault of France, the Japanese Honda and Nissan, and the Korean Hyundai. (Lynch, 2006, p. 767)

The rising costs of manufacturing have forced car makers to find ways and implement innovative solutions. Outsourcing of parts and car components is now a trend, and many of them have merged or have used companies in China which manufacture cheap parts.

Stiff competition is a big challenge to the automotive industry, and this is of Fords problems. Consider Toyota. This is a fast growing company and a threat to American car manufacturers. Toyota has been in the forefront of car making because of an effective strategic and operational management coupled with an efficient and s competitive workforce.

Toyota strategies involve innovations in production, marketing, sales and promotions, and branding. But to top it all, it has been able to handle knowledge management like it is a part of ordinary business. Along with a determined workforce, Toyota introduced the kaizen and kanban concept of production.

Kaizen means continual improvement. Toyota engineers cut or shortened some stages of production to save time and provide flexibility. (Gourlay, 1994, p7, cited in Lynch, 2008, p. 773)

Fords Performance

Labour unions have to be dealt with squarely and provided affordable benefits. The automobile industry is one of the most labour-intensive industries in the world. Labour unrest is one challenge Ford has to face.

Additionally, Fords products were becoming less in demand; it needed successful products to be on the competition again. This is one of the most important needs for Ford. According to Standard & Poors (2009, p. 211), Ford lost market shares in 2008. That year, Ford had trouble reaching an agreement with the labour union, UAW.

It was crucial and one that involved life or death, and it still is a question whether Ford chose the former. Having an agreement with the demands of UAW was a big challenge for Ford.

The agreement included unprecedented benefits and giving in to some of the demands of the union like changing some work rules. The company had also to establish the health care trust system to be managed by union people.

In other words, Ford was freeing on the reins, leaving some of the responsibilities and allowing the workers to hold power. This is a question whether this strategic move put Ford into a competitive advantage or into a suicidal situation.

But UAW won, and it is believed Ford got its share of successes too, in terms of providing health and other benefits for its thousands of employees. Satisfied labourers create a wholesome atmosphere in the workplace, and satisfied workers will rebound into satisfied customers. (Standard & Poors, 2009, p. 212)

In terms of work and life balance for the Ford employees and workers, Ford management may have done its share of promoting the well-being of its employees and providing inspiration and motivation. The management believes that when people are motivated, they accomplish goals.

Workers become productive when they feel they are a part of a team, or part-owners of the organisation. They feel this sense of belongingness and so they strive for the organisations improvement. They do not regard money as an objective, and work becomes a part of life.

However, the Ford management has not yet freed itself from the traditional form of management. Some members of the Board are chosen from the members of the Ford clan and decisions are biased to the side of the family rather than the organisation. (Standard & Poors, 2009, p. 212)

What is needed inside Ford?

Fords vehicles are not anymore the quality-oriented vehicles that it used to be. During 2008, revenues fell and it was not yet clear when it was going to go up. This has been made complicated by the supply and demand scenario. Up to 2010, there has been a weakening demand of cars in the United States and Europe. (Standard & Poors, 2009 p. 212)

Intense competition, a lowering of the market share, and gas hikes have characterized the dilemma in the automobile industry in the different areas of the globe. Fords pride, the pickup trucks, was no longer selling.

With the recession, car and vehicle lovers wanted affordable cars, but full of quality. And thats not enough. For instance, in India when there has been a desire for cheaper cars, Tata Motors manufactured the worlds cheapest car, the Tata Nano, but it was not selling.

Ford Motors came in to the rescue, or, it wanted to have a share of the losses that Tata Motors was having. Ford penetrated the India market, made some acquisitions, and introduced its own small cars at a time when Tata Motors was not reaping the gains of the cheapest cars in the world. Ford announced to build a new model, the Figo. (Canis, 2011, p. 49)

The Indians were laughing at the Tata Nano cars. Many commentators have said that Tata Motorss manufacturing of the small cars was a mistake. The cheap cars flopped.

Corporate Governance

Another problem is corporate governance. Fords family members have more voting rights than other shareholders. This has been a problem of the Board and the rest of the company. This could be the answer to the negative show in the stockholders equity.

Ford has a reputation of high sales in new light vehicles, but its leadership has been threatened by the increase in competition by Asian companies, the Tata Motors from India, and the merged companies in China.

There is also a shift from the large SUV to smaller crossover utility vehicles (CUVs). In 2008, Ford has to introduce its own CUVs. In 2010, Ford has diversified some of its vehicle designs, such as the CUVs.

Ford made some mergers and acquisitions to be able to compete financially. In December 2005, it sold its Hertz Corporation unit for $15 billion. Fords finances for the future were to be diluted with this sale because according to Standard & Poors, Hertz contributed to Fords profits.

Ford also acquired AB Volvo for $6.45 billion, and in 2000, Land Rover was bought from BMW for $1.9 billion. Moreover, Ford sold Jaguar and Land Rover to Tata Motors for $2.3 billion. There was sort of discrepancy in the goals of Ford because it used $600 million from the sales acquired from Tata Motors for the pension plans of Jaguar and Land Rover. (Standard & Poors, 2009, p. 213)

Corporate Strategy

With U.S. market share down, Ford started to restructure plans so that it could lower down the costs of production and operations. Ford made a shabby performance for its corporate strategy in 2008-2009. The reason for this is that it received some obligations out of its partnership with Visteon Corporation, the parts manufacturing firm to whom Ford had some obligations that had to be ironed out. It had to face additional expenses at a time when it was struggling to reduce costs of production and operations.

Out of these transactions, Ford acquired 23 manufacturing plants from Visteon which were considered additional obligations and not real assets.

Standard & Poors (2009) says they were money-losing plants delivered to them by Visteon Corporation. Ford had to provide financial assistance to this company in exchange for warrants for company shares of Visteon. It was not a good deal after all.

Mergers and acquisitions

Was Fords continued effort of M&A a necessary strategic move? Ford acquired various companies in the different areas of the globe.

According to Grubb & Lamb (2000, p. 24), mergers and acquisitions (M&A) should be properly planned and executed. In other words, there are many requirements and preparations before the actual execution of M&A; otherwise, this will fail. M&A should not be executed for the sole purpose of expanding (because this is now the age of globalisation) or to fulfil the goals of some ego-boasting managers.

Careful study and preparation can minimise financial losses and prevent the flight of significant and top talents of the organisations. There are long-term benefits that a firm can attain, not just market share gains. One is the vital core competency as a Great Acquirer with benefits such as financial, managerial, and reputational aspects of M&A moves. Great Acquirers are approached by competing companies if they have such reputation.

Grubb and Lamb (2000) praised Ford Motor Company for reaping big dividends as the world automotive industry scampered to find partners in the rush for M&A. (Simison, 1999, p. A3)

Conclusion

Ford Motors follows the present trend in global organizations, the horizontal structures of business organizations. The traditional structure uses the vertical set up where top management takes the reins of power from the top down to the low level employees.

Ford Motors have subsidiaries worldwide, a characteristic of multinationals. However, these subsidiaries have their own independence. They manage and rule themselves and manufacture their own products.

Mergers and acquisitions are a normal activity among global organisations. How can this be properly managed is still a question. Ford should pause and think before taking another M&A activity. Fords decision to build small cars in India, in reaction to the launching of the Tata Nano was not a good choice. Manufacture of a new product has to be afforded with serious study and R&D.

References

Canis, B. (2011). U.S. motor vehicle industry: confronting a new dynamic in the global economy. United States of America: Diane Publishing. p. 49.

Ford (2010). The Ford story. Retrieved from https://social.ford.com/en_US.html.

Goh, M. & Garg, M. (2008). ChangAn Automotive Co.  making supply chains work. Asian Journal of Management Cases, 5 (2), 2008: 57:71. DOI: 10.1177/097282010800500203.

Grant, R. (2005). Contemporary strategy analysis (fifth edition). Oxford, UK: Blackwell Publishing. p. 440.

Grubb, T. M. & Lamb, R. B. (2000). Capitalize on merger chaos. New York: Simon & Schuster, Inc. p. 24.

Lynch, R. (2006). Global Automotive Vehicle  Strategy in a Mature Market and Toyota: What is its Strategy for World Leadership. In Strategic Management, 5th edition (Financial Times/ Prentice Hall), pp. 767-773.

Plunkett, J. (2006). Plunketts automobile industry almanac 2007 (e-book): automobile, truck and specialty vehicle industry. Houston, Texas: Plunkett Research, Ltd. p. 18.

Rushton, A. & Walker, S. (2007). International logistics and supply chain outsourcing: from local to global. UK: Kogan Page Ltd. p. 32.

Shimokawa, K. (2010). Japan and the global automotive industry. UK: Cambridge University Press. p. 1.

Simison, R. L. (1999). Ford to Acquire Volvos auto operations, The Wall Street Journal, January 28, 1999, p. A3. Cited in: Grubb, T. M. & Lamb, R. B. (2000). Capitalize on merger chaos, pp. 24-5. New York: Simon & Schuster, Inc.Standard & Poors (2009). Standard & Poors 500 guide 2009 edition: Americas most watched companies. United States of America: The McGraw-Hill Companies, Inc.

Introduction

The Ford Motor Company was founded in 1903 by Henry Ford and it has grown into a multinational company with operations in different nations. One of its most significant markets outside America is the Chinese population. In America, the Ford Motor Companys Headquarters is in Dearborn.

This essay seeks to discuss the external influences that impacts Fords operation in the global market in relations to Competition, Cultural, Legal/political, Economic, and Geographical factors.

External factors affecting a companys operation in the global market

There are several factors that influence the operations of a business both locally and internationally. Such factors include cultural differences, competition, legal and political issues, economic environments, as well as geographical factors. All these factors emanate from outside the business which means the company has no control over them.

The Ford Motor Company has been successful in the business and its years of existence have enabled it to establish foreign operations. China is one of the biggest Fords markets in the East.

Cultural factors

Unlike Americans, the Chinese are slightly conservative. The Chinese use small vehicles with sophisticated technology. On the contrary, Ford specializes in SUVs and their vehicles are simple in design and technology. This may prove to be a challenge in a culture that is used to complex technology in a car.

In addition to this, the Chinese are very loyal to their own products hence penetrating this market will affect the strategies used by Ford in their normal operations. Setting up a company in a foreign land requires a clear understanding of the cultural differences between the home and the foreign market.

Fords management will have to compromise some aspects of leadership in order to appeal for Chinas cooperation in trade.

In china, for a foreign company to establish a business it must establish a relationship first. In other regions, a business starts its operations then it builds a relationship there after. In China, hierarchy is an important cultural aspect. Therefore, setting a business in the country Ford has to pay attention to hierarchy.

Another cultural aspect that is important and will change Fords operations is the culture of Guanxi (Pradhan, 2012). This means that actions are reciprocal in nature. When someone grants you a favor, you are indebted to grant a favor back as well.

Legal /political factors

Currently, Ford has not recorded any interference from the ongoing political changes in China. There have been major changes in the leadership structure and this was influenced by a recent scandal that exposed Chinas political elites underground indecency.

However, the Ford Motor Company has not been affected by the political tension in and party wrangles in the country.

However, in China there are laws that govern the entrance of a foreign investor, one of these legislations include the mandatory requirement for an investor to obtain an approval license from the Commerce Committee (Lanteigne, 2012).

Another legal and political restriction that the Ford Motor Company has to endure is the joint ventures law. Joint ventures are not allowed to hold shareholders meetings as the ultimate decision-making authority (Daniels, Radebaugh, & Sullivan, 2015).

The government has also passed a law that requires all the foreign investors such as the Ford Motor Company to operate under the corporate governance rules as stipulated in the Company Laws.

Economic factors

Majority of the Chinese people are middle-class individuals and the economic environment in the country is friendly to foreign business. China is one of the greatest economies of the world and the financial market in the country is very stable.

Therefore, the Ford Motor Company is safe to invest in the country. Another economic factor that can influence Fords operation in the country is the population. China is the most populated country in the world. This creates a large market for Fords products in the country.

Therefore, the company has to come up with the right strategy to satisfy the vast market.

Competition

The main competitors in the Chinese market include General Motors and Volkswagen. The Chinese market is the worlds fastest growing automobile market and the major industry players are moving in speed to cease the opportunities presented by this market.

Comparing GM and Fords sales, the difference is quite evident. GMs sales increased by 21% while Fords sales rose by 23% (Ramasamy, Yeung, & Laforet, 2012). However, this is a close range meaning that the competition is very high.

Geographical location

China is the most accessible platform to launch products in the bigger Asian region. The country is surrounded by international seaways making it easy for companies to export their products by sea.

From china, it is easier to supply products to other regions like India, Dubai, Africa and other economically viable regions (Ramasamy, Yeung, & Laforet, 2012). Therefore, Fords opportunities are unlimited.

Nonetheless, the geographical location of the target market is very humid which may force the company to change its production processes to address the climatic conditions in the country.

References

Daniels, J. D., Radebaugh, L.H., & Sullivan, D. P. (2015). International business: Environments and operations (15th ed.). Upper Saddle River, NJ: Pea.

Lanteigne, M. (2012). Chinese foreign policy: an introduction. New York, NY: Routledge.

Pradhan, J. P. (2012). Emerging multinationals: A comparison of Chinese and Indian outward foreign direct investment. Institutions and Economies, 3(1): 10.

Ramasamy, B., Yeung, M., & Laforet, S. (2012). Chinas outward foreign direct investment: Location choice and firm ownership. Journal of World Business, 47(1): 17-25.

Stakeholder Interest

In this paper, I would like to carry out a stakeholder analysis of such an organization as the Ford Motor Company, one of the largest car manufacturers in the world. My cousin works in this organization and he has agreed to share his views on this enterprise. Overall, the values of this company mostly because it offers a high degree of job security and provides adequate compensation for the job. We need to show how various groups of people affect the functioning of Ford Motor Company, and how the company affects them. The findings can be presented in table format:

We can single out several potential conflicts of interest, which may arise between various stakeholders, for instance, if the investors and stockholders force the company to outsource some of its business processes to make the company, more profitable, this policy inevitably affects employees who could lose their jobs. Another possible conflict is the collision between the government and suppliers.

If the policy-makers force Ford to use eco-friendly technologies during the production process, the company will have to abandon many of its current suppliers. These are only potential conflicts that may occur in the future. At the given moment, the main purpose of Ford Motor Company is to raise their profitability and avoid conflicts among various stakeholders.

Reference List

Faurote F. & Arnold H. 1998 Ford Methods and the Ford Shops. New Jersey: Elibron.

Kreipke Robert. 2003. Ford Motor Company, the first 100 years: a chronological picture history of Ford Motor Company over the first century. NY: Turner Pub. Co.