Category: Ford

Ford’s fleet customers have had an increasing urge to shift to greener vehicle technologies. The customers purchase many vehicles after one year and they approximately take up 30 percent of Ford’s vehicle dealership (Reich et al., 2015). The main challenge is pinpointing the better vehicle option for the drivers involved. The other challenge is to financially justify the pricy initial investment costs resulting from utilizing fuel-efficient technologies. The solution developed was a combination of tools that start with easy-to-use calculators, which would slowly transform to accurate full-fleet optimization tools. The calculator would be used to compare the green vehicle technologies. Ford merged with Azure Dynamics to create an emission and fuel cost calculator that would respond to the frequent questions from the fleet customers (Reich et al., 2015). The fleet customers ask standard questions such as the extent to which the electric version is environmentally friendly, how much their organization will be saving up for fuel, and whether the vehicles’ emission is the same.

The release of the initial version of the calculators made Ford and Azure Dynamics understand the customers and their suggestions of the areas that could be improved. They realized that the customers were keen on comparing a wide range of technologies. Following the customers’ suggestions, they increased the calculator capacity by including flex-fuel, compressed natural gas, and plug-in hybrids (Reich et al., 2015). The fuel cost calculator was well developed for interactions with the consumers. The fuel cost calculator was implemented in Excel and specifically developed to allow customers to compare and contrast different vehicles. The calculator allowed the customers to compare two vehicles in terms of the fuel type, fuel price, and the power grid composition of electric vehicles. The calculator can produce a report to compare the cost and sustainability of the different vehicles.

The solution developed has many benefits to the fleet customers. The customers are now able to have solid discussions revolving around the rising green vehicle technology. The new technology produces statements that could be used to explain and justify investments in more sustainable vehicles. The main challenge of identifying the better vehicle option for each driver was solved because the new technology allows customers to see the type of drivers that could gain more advantages from driving an electric or hybrid vehicle (Reich et al., 2015). There are also the emissions and fuel-cost calculator done in batch mode. They are utilized by customers who have a fleet of more than 1000 vehicles. Organizations operate a large number of vehicles, and with the new emerging technology, they are in a good position to improve the sustainability sector. Sustainability is rapidly becoming significant because of the increasing population and the economic development in countries. The current vehicles technologies allow users to select vehicles from various options for reducing the car’s emissions.

The current Ford fleet purchase planner makes it possible for analysis and assessments that were time-consuming and labor-intensive for organizations to conduct. The innovative technology has brought about an analytical system that pinpoints the most cost-efficient vehicle for each driver in a fleet (Reich et al., 2015). Moreover, it enables the customers to identify the most cost-effective car to hit the sustainability target set by the customers. The Ford fleet purchase planner is one of the most outstanding solutions that use data and analytics to help consumers and the natural surroundings. The customers can make informed decisions and financially account for the pricy initial investment costs resulting from adopting fuel-efficient technologies without having any issues.

Reference

Reich, D., Winkler, S. L., Klampfl, E., & Olson, N. (2015). Ford uses analytics to help fleet customers buy more sustainable vehicles. Interfaces, 45(6), 543-553. Web.

Introduction

The automobile business is known for its fierce competition, and Ford has five significant opponents in the US marketplace. Most automakers are adopting similar efforts to achieve a competitive advantage, but Ford has its unique method for maximizing its value chain. Ford is now working to improve supplier relations. Ford intends to ensure regular manufacturing of components and consumables by enhancing these relationships. Ford wants to decrease costs while improving quality and consistency by reducing the number of competitors and delivering more lucrative and longer partnerships to the retaining vendors. If the component suppliers fail, the carmaker will risk crippling production interruptions as well as financial consequences.

Ford is one of America’s and the country’s biggest and most prestigious automobile manufacturers. The corporation, named after its creator Henry Ford, is famed for its inventive and innovative product strategy. He recognized the need to break down difficult jobs into subtests, as well as the use of specialized equipment and replaceable components. While Ford’s production system was a ground-breaking success, his work was founded on sound concepts and a desire to improve. Ford looked at transportation infrastructure and stripped them apart into its constituent parts before reassembling them. Specifically, a significant reduction in manufacturing costs, a dramatic simplification of the labor process, and a reduction in the workforce are necessary.

Ford Motor Company established a technique that enables them to reduce manufacturing costs by eliminating all of the unnecessary expenses associated with these processes. The significant spending on raw resources was reduced, and an online production method was established that focuses on automobile construction in one technique rather than having separate production and engineering segments. And in the meantime, the firm focused on developing intelligent automobiles that were not price-conscious and delivered the performance of typical Ford cars, establishing a cost leadership strategy and giving the corporation a blessing over its rival companies of cheaper costs.

Problems

Ford continues to lose revenue on several vehicle lines, notably in the United States. With significant fixed expenses, the automobile sector is extremely cutthroat. Furthermore, the industry needs ongoing long-term strategy and research, and technology. The car industry’s global surplus production is estimated to be millions of automobiles each year. During the worst economic crisis in recorded memory, Ford was selling durable products. Ford’s capital is being stretched although it does not require government assistance. Ford’s cash burn remains continuous, and many believe the company may be compelled to seek government aid unless demand improves.

Six Sigma

Regular examination of scorecard indicators to discover performance patterns is part of Ford Motor Company’s consumer-driven Six Sigma approach. Some executives at the organization’s Saarlouis office observed an increase in basecoat paint use during an average metrics assessment. Not only did the rise raise the cost of production, but it also indicated that solvent usage had risen, resulting in greater concentrations of volatile organic compound pollutants. A Six Sigma team tackled both physical and financial concerns while also uncovering an unanticipated solution that resulted in a startling change from an automated to a manual procedure.

Six Sigma is a very sustainable mindset, and Ford has used it to achieve some significant environmental improvements. Ford’s waste of critical resources was costly in the long run. They cut expenses, enhanced quality, and raised customer happiness by subscribing to a clean, corporate culture using Six Sigma. While most use the standard rate of 99 percent adequate, this allows for a startling number of flaws, up to 20,000 occurrences of insufficiency (Tomac et al., 2019). Ford has long been regarded for producing high-quality products, although its standards do occasionally drop.

Results

Because it has not been obliged to take bailout funds, Ford is seen as the most secure American vehicle maker, with minor improvements in market share. Human resource commitment has proven to be a significant challenge and rationale for the topic. Time restrictions and workers’ skepticism made it difficult for Ford to send its top-level management, top management, and apex experts through months of training. Time, money, and productivity constraints make employee training extremely difficult. Obtaining the essential statistics to accomplish the Six Sigma Project became another significant barrier. Ford’s infrastructure could no longer support the Six Sigma Initiative on its own. Six Sigma requires a tiny amount of data and internal measurements; thus, Ford had to construct size frameworks.

Conclusion

Ford is one of the largest and most renowned automotive manufacturers in America. While Ford’s manufacturing method was an achievement, his work was predicated on strong ideals and a commitment to improvement. A significant decrease in production costs, a radical streamlining of the birthing process, and a staff decrease are all required. Ford Motor Company developed a method for lowering production costs by removing all of the extraneous expenditures connected with these operations. Ford began losing money on several car lines, particularly in the United States. The car industry is particularly competitive due to its high fixed costs. Another significant roadblock was receiving the necessary information to complete the Six Sigma project.

Reference

Tomac, N., Radonja, R., & Bonato, J. (2019). Analysis of Henry Ford’s contribution to production and management. Pomorstvo, 33(1), 33-45.

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 Ford’s 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 competitor’s pace due to chip shortages and disruptions in the company’s 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 Tesla’s growth rates, proving that the technological environment is paramount for companies of any size.

Work Cited

Fosse, P. (2022). Why Tesla’s revenue will pass Ford’s within 6 months.CleanTechnica.

Plagiarism

Plagiarism presents itself as an academic offense where a writer copies another writer’s work or idea directly or indirectly without giving due credit to the author of the original work. It is a misdemeanor that presents itself in various forms in academic interactions and other forms of social interactions (The Writing Place, 2005).

Thus, it requires that any idea or any kind of information that is textual, graphical, or mathematical borrowed and used by another writer should be credited to the original source to avoid plagiarism. However, it is possible for one to avoid plagiarism by identifying plagiarism in its different forms. These forms of plagiarism include paraphrasing a piece of work by another writer, which includes distinguishing between acceptable and unacceptable paraphrasing (The Writing Place, 2005).

Acceptable paraphrasing allows for the use of different word from the original document while unacceptable paraphrasing involves copying and slightly changing or rearranging text in the original document. Due to the rise and use of the World Wide Web, many students find themselves tempted to plagiarize their work, which attracts severe penalties.

However, strategies suggested to avoid plagiarism include inserting original text within quotation marks if the text is not more than forty characters, paraphrase one’s work with original words but reflecting the original idea or meaning, and evaluating one’s work against the original text to ensure text used is not a copy of the original document. Despite applying such strategies to avoid plagiarism, it is important to give credit to the original source of the idea one has borrowed to incorporate in their work (The Writing Place, 2005).

It is possible for one to make accidental plagiarism despite stringently following the strategies outlined above, which includes paraphrasing an original idea or text without giving due credit to a source of information, or by simply inserting sources against the wrong section of an academic writing.

Thus, that approach is likely to cause others regard plagiarism as intentional, watering down to academic cheating. That invites problems and penalties associated with plagiarism. However, it is possible to overcome such plagiarism by adopting the strategies outlined above and ensuing that a reader is informed that the idea being presented at the beginning of a sentence is borrowed r by inserting a parenthetical citation at the end of a sentence (The Writing Place, 2005).

Thus, plagiarism is an academic misdemeanor or a form of cheating where a writer uses other writers’ ideas or text to present the ideas or text as one’s own, thus cheating about their source. Such forms of plagiarism can be avoided by giving due credit to the source of an idea or words otherwise it attracts penalties. However, plagiarism must be avoided as it unfolds itself in many forms due to the rise in the use of the World Wide Web (The Writing Place, 2005).

Executive Summary

Ford Mustang is one of the vehicle brands manufactured by Ford, a company that was started way back in 1896. However, the first Ford Mustang vehicle rolled off the assembly line in 1964 with subsequent models with variations of the Ford Mustang model manufactured in subsequent years to address the dynamic needs of the marketing environment and rising competition from other manufacturers.

Typically, the innovation and use of dynamically changing technologies including automation and use of marketing strategies has sustained the Ford Mustang as one of the leading models in the market, with the Ford company retaining a significant share of the local and international market.

Among the key elements integrated into the Ford Mustang marketing strategy that has favorably positioned the firm in the market include economic factors, environmental issues, marketing strategies, and the 4 Ps in the marketing of the Ford Mustang, the product identified in the current marketing research plan.

It is worth noting that the financial report of the Ford motor company has shown impressive and sustained existence since the inception of the company. That position has been sustained for the entire 20^th century period; however, a drop in financial performance has been witnessed due to prevailing market economic conditions and other financial conditions.

However, the changes in economic conditions has made the management strategize further, placing the Ford Company a third in performance in the international market. However, a number of recommendations which include further product differentiations, further automation of the manufacturing process, and revision of the supply chain could make the company attain higher levels of financial and market performance against traditional and new competitor.

Product analysis

In theory, product analysis entails a clear understanding of product features to understand why the product was designed and developed in its present form, why it has the design and integrated features, the purpose of the product for the target market, which constitutes the buyers, market segment in which the product sales well, and the cost associated with the product (Tutorial, n.d).

It entails understanding the attitude buyers develop toward the product and how it can be positioned in the market to meet user needs and expectations. That is the case with Mustang Ford. Mustang Ford is a model of a range of model vehicles developed and manufactured by the Ford Company (Tutorial, n.d).

In reviewing the product analysis, various models of the Ford Mustang have been designed and developed over the years reflecting dynamic consumer needs and expectations. Typical examples include the “Ford Mustang GTR concept Super Charged V8” (Ford Mustang History, n.d), which has a full GTR body kit a modified bonnet, exhaust pipes fitted to the side, with a GTR replicated suspension made of a replica alloy.

It has tailored head lambs that aesthetically appeal to the customer, with a supercharged brake and costs £29,995. Other examples include the Ford Mustang white which goes at £32,995. Others include the Ford Mustang GT COUPE which is blue in color with an adjustable steering, computerized, and incorporating electrical windows. However, it is worth examining the history of the Ford Mustang before examining the history of Ford, the manufacturer of the Ford Mustang (Ford Mustang History, n.d).

Company History and Background

According to Ford Mustang History (n.d), Ford Mustang is one of the brand vehicles manufactured by the Ford Company. Ford Mustang has been in the manufacturing line since the first generation was produced in 1964. In the following periods after the manufactured of the first vehicle, successive variants of the same brand were manufactured in the following years to accommodate the ever changing market needs and consumer behavior.

Typical changes made on the variant models included changing product characteristics such as manual transmission systems, vehicle capacity, addition of the fastback body, the number of occupants to carry, and aesthetical values. That was the trend observed for successive brands for the different Ford Mustang generations produced in the coming years (Ford Mustang History, n.d).

The first generation of Ford Mustang was manufactured in 1964 characterized as a two seater running on a V-4 engine with a front mounted engine. However, it was realized the machine did not position its self well on the market and the manufacturer was compelled to design and develop another variant model of the Ford Mustang to reflect changing market needs.

That was when the second generation was designed and manufactured. The second generation rolled off the assembly line in 1967 into a market that had started experiencing competition from other car manufactures at the time. At the time, the manufacturer of Ford Mustang introduced new features to address the competition including a brand with a larger interior space and improved aesthetical features.

Additional features included an engine with higher power production, a wider suspension, and multiple engines. By 1969, the manufacturer had settled on producing a new fashion of the Ford Mustang.

The new brand was the third generation Ford Mustang manufactured with new features such as new forms of head lights, a sharp nose to improve its aesthetical values, and higher power production. It was the third generation that offered the option of addressing the luxurious needs of customers by providing variants that addressed competition from other car manufacturers of luxurious cars.

Other successive generations of new models were designed and developed with additional and enhanced features to address completion from other manufactures that had either entered the market, or were already in the market. That included brands such as the Camaro Z28, which had acquired a significant share of the market and was gaining a successful and stri9ng position in the market at the time.

Such was the design and specifications that appeared in successive variants of the Ford Mustang in successive years. Having reviewed the Background history of the Ford Mustang and its successive generations, it is important to consider the history of Ford, the parent company which is the manufacturer of the Ford Mustang (Ford Mustang History, n.d).

Ford Motor company is the manufacturer of several brands including the Ford Mustang which is the focus in the current study. With its evolving product models and product brands, the Ford Mustang was first manufactured by the Ford Motor company in 1964 bearing in mind market characteristics such as the rise in baby boomers of the time.

It was Henry Ford, the founder of the Ford Company who built the first vehicle in 1896. The first vehicle was characterized by a ground breaking speed of 20 miles an hour; a feat that could be attained at the time when acquiring such high speed was rare (Ford Mustang History, n.d).

It was at the time that the Ford Company attained a market capitalization of $100,000 and a shareholding that had grown to 12 in number. The growth of the company at its initial stages was exponential with a production of 17,000 cars registered when it went into commercial production of the vehicles.

It was a time when the company ventured into producing different brands and models of the vehicle with different models to accommodate the ever changing market trends and needs of the time. Among the models manufactured at the beginning included the Model T which gained a great deal of popularity and a significant market share at the time.

At the same time, new and different models were produced at the times which were priced differently depending on the pricing mechanisms that reflected the customer trends and needs, and market trends. Other successive models produced at the time included the MA model that also gained a significant share in the market. A large consignment of the MA models was manufactured to address the rising demand in the market.

A total of 4.5 million vehicles of the model were sold after it came into the market in a space of 4 years. It is worth noting that the models were priced differently based on different pricing approaches. However, it was due to the rising competition from other manufacturers in the market that the company had to find innovative ways of creating new models to create appropriate models to compete in the market and enable the Ford Company to gain a strong hold and strong market position in the market (Ford Mustang History, n.d.

The justifications that support the fitting of the new model into the current marketing plan includes the approach where theory and practice are interwoven to answer the questions that arise when designing and developing models and positioning them in the market to offer significant competition against rivals and other competing trends in the market. It is typical of a background that one can learn from when formulating a marketing plan for the Ford Mustang mentioned elsewhere (Defining Marketing and the Marketing Process, n.d).

One of the learning points includes the marketing strategy adopted by the Ford Company when it first came into the market. In theory and based on practical observations, the marketing of the Ford Mustang, one of the variant products of the company was a customer driven strategy.

Evidence of this is based on the innovative approach used to create different models based on customer needs and expectations. In addition to that, it reflects customer taste and changing trends in consumer behavior. Typically, that is illustrated in the manufacture of the model MA brand of the Ford brand, among the other variants manufactured by the company.

One key distinguishing element here is creating value for the customer. Creating value for the customer is evident where the company started producing vehicles which could run at higher speeds, with different pricing approaches. It is worth noting that pricing is a key element in positioning a product in the market, a key element in understanding what the customer needs and the varied tastes a customer needs to satisfy.

In theory, that could also be classified under behavioral segmentation as a marketing strategy which the company adopted and which is reflected in the production of different models with different characteristics and product prices (Defining Marketing and the Marketing Process, n.d).

Another approach used in the marketing of the product that reflects an element that could be of value and that which fits well into the current model is by factoring user status. According to Ford Mustang History (n.d), the manufacturer of Ford models produced vehicles that reflected different user tastes and income levels by pricing the products differently to reflect the varied tastes and classes of the customers.

In the context of the current marketing plan research, pricing is a crucial component that in theory and practice is crucial in positioning a product in the market (Defining Marketing and the Marketing Process, n.d).

Additional elements that are projected to provide benefits to the current marketing research plan include the marketing strategy adopted by Ford in marketing its various models in the market and the sustained market position the firm has gained in the market until today. In theory, a marketing strategy which is related to the corporate strategy adopted by Ford that was the underlying component in the business level strategy.

The marketing strategy implied aligning the business level and corporate level strategies with the mission and vision of the Ford Company that propelled the company to higher levels of success and sustained operation in the market since the company was set up until today. Thus, that forms one of the fundamental components to learn based on the background history of the firm (Defining Marketing and the Marketing Process, n.d).

Other benefits derived from conducting studies based on the background history of the firm include a thorough comprehension of the company’s marketing plan that is the underlying component in the successful positioning of the company in the market. Typically, the business and marketing plan includes identifying approaches used in formulating the right marketing plan, just as was used formulated and used by Ford, to propel the firm to higher levels of revenue generation, profitability, and sustained brand positioning in the market.

Typically, that reflects the marketing environment the company has thrived in since it was started, which includes models manufactured by the company in response to the market trends, suppliers of raw materials and other components used in the manufacture of the models, dealers who sell the manufactured products which include the models, and other essential components integrated into the marketing strategy to position the firm and enable it gain a competitive advantage over its rivalries (Matsuno, n.d).

The background history, as mentioned above provides a marketing plan that envisages an analysis of the marketing opportunity which includes the prevailing market environment and changes occurring in the industry, approaches used in the customer segmentation, new markets, growth and decline in the markets, and the STP marketing process used by the firm in the growth of the firm.

However, it is crucial to understand that the STP process included segmentation of the market based on different and diverse approaches, targeting that includes identifying the specific market for entry and penetration, and the positioning of Ford products that have since the firm was created in 1896 until today (Matsuno, n.d).

Purpose/Aim of Ford

The mission of the current marketing plan research paper is defined by employees working as one team toward attaining a global automobile leadership position with a lean workforce working toward employee and customer satisfaction. It constitutes the firms working toward a firm that optimizes profits, consisting of a lean workforce, market oriented innovation, effective financial performance, and working toward the attainment of one goal as discussed in the following sections.

Financial Performance

According to the financial report, the company has for a long time since its inception has been on an impressive financial performance. That was realized almost for the entire 20^th century period when it financially performed impressively. However, changes in the market trend led the company to experience a net loss of $ 5.45 billion in 2001, making it the first kind of loss that the firm never fully recovered from.

According to the report, it was due to a poor strategy formulated at the time by Alex Trotman that was the underlying reason for the firm to attain the economic performance experienced by the company (Karadzhov & Blitterswijk, 2009).

The underlying strategy adopted that lead to the massive loss in profits was attributed to Lord Trotman’s Ford 2000 strategy. It was by mere implementation of new strategies and technical innovations that made Ford to sustain a position in the market that was significantly experiencing a decline (Karadzhov & Blitterswijk, 2009).

It is worth noting that the company had started facing competition from a number of new entrants into the market that it had dominated for a significant period. Among the new entrants into the market included the Japanese manufacturers and other European competitors.

Due to the rising completion and new entrants, and other forms of competition, Ford had lost a significant share in the market, causing a decline in profits and financial performance. A typical example is the following statement provided that shows the financial valuation of Ford’s indices (Karadzhov & Blitterswijk, 2009).

Threats and Opportunity Analysis

Typical of the threats and opportunities that might present themselves in any marketing environment, the Ford motor company experienced a number such threats and opportunities associated with Ford Mustang, one of the products manufactured by the Ford motor company as discussed below.

Threats

According to Porter’s five industry forces, in theory constitute 5 key elements that prevail in the current market in relation to the positioning of Ford Mustang. That includes the potential for new entrants into the market. In practice, the threat of new entrants included the threat of new models from Japan and Europe that provided competition for the Ford Mustang.

Another key element constituted as a threat included the threat from substitutes. Substitutes included new models from Japan such as the Toyota that were priced to provide a competitive edge against the Ford Mustang. Typically, that was based on the product features, the market segments, and the pricing strategies and variants of the Ford Mustang that were manufactured to provide the satisfaction different Ford Mustang models were providing the customer, thus meeting their needs based on the market segments.

In theory, when competitor prices are lower than the production costs of the competing firm, a rise in threats is likely to be experienced. Typically, that calls for the creation of other models that are able to compete with lower priced vehicles. That was the case with Ford Mustang. To address the challenges of new entrants into the Motor market, the Ford Company differentiated its products to address the new threats into the market in the form of variants of the product.

In theory, the critical element to consider include the attitude and propensity buyers developed toward the new and substitute products. Thus, the propensity sets stage for higher competition and production of a wide range of Ford Mustang models to address the threat from substitutes.

The critical elements here include approaches used by the Ford motor company to fight existing threats due to new entrants into the market dominated by the firm for many years. That includes creating more brands of the Ford Mustang as discussed elsewhere that addresses varying and dynamic customer needs in the target market.

Conducting market intelligence reports to identify what their competitors have to offer, differentiating their brands and pricing them strategically, to address existing threats from new entrants especially from China and Japan. In addition to that, the firm has endeavored to establish a brand identify with Ford Mustang to make consumers feel identified with the Ford Mustang brand.

Typically, the brand identity has significantly influenced the purchasing decisions made by consumers in the market when making the purchase of the Ford Mustang. Another approach used by the firm to address the existence of threats is to provide the customers with differentiated products in terms of a variety of Ford Mustang vehicles discussed in another section of the paper.

However, other threats in theory and practice regarded as threats of substitutes include providing a variety of products differentiated to address dynamic customer needs and consumer buyer abilities. Typically, Ford has variedly tried to create a variety of brands that are differentiated in prices, aesthetical values, performance, and other features that reflect higher classes, but cheaper in prices to cope with the threats from differentiated products.

A report on the motor vehicle sales and the market position attained by the Ford Company is demonstrated in a market survey that shows Ford to have had, by 2009, 13.3% market share, taking the second position in the global market. Toyota, one of the main competitors in the motor vehicle industry in the global market was taking the lead, constituting 17% of the global market.

The third position in the global market was taken by Honda consisting of 12.9% market share followed by Chevrolet occupying a 12.7% market share, and gradually Nissan taking the fifth position occupying an 8.7% market share. These are the key competitors in the global market against Ford.

Environmental Issues

Tow marketing environments are crucial for the operation of a company. These include the micro and macro environments. The microenvironment consists of “the company’s suppliers, customers, marketing intermediaries and competitors” (The chartered Institute of Marketing, 2009).

On the other hand, the microenvironment consists of the “wider forces that affect demand for a company’s goods, these forces include demographics, economics, nature, technology, politics and culture” (The chartered Institute of Marketing, 2009). It is worth noting that the microenvironment constitutes the external and internal environments.

The internal microenvironment is defined by Ford’s organizational structure, Ford’s strategies and objectives, and the organization’s departmentalization. On the other hand, the external microenvironment consists of “The external environment comprises suppliers, marketing intermediaries, customers, competitors and publics”.

“As well as obvious groups such as shareholders, publics can also include local interest groups who may have concerns about the marketer’s impact on the environment or on local employment” (The chartered Institute of Marketing, 2009).

On the other hand, the macro-environment consists of politics, cultural issues, and demographic trends in the market, technology, economic factors, and the natural environment. These issues are discussed elsewhere in the paper.

Social Factors

Buyer behavior is influenced by social factors which include cultural factors, political factors, subcultural factors, reference groups, and status issues. Typically, the cultural and sub-cultural factors include multicultural issues where the Ford Mustang is sold. That implies the Ford Mustang should be tailored to address the cultural factors that might influence customers to purchase the vehicle or not to.

In addition to that, it is crucial when developing a marketing plan research to identify the variations across cultures both in international markets and the local American market where the Ford Mustang is manufactured. In addition to that, in theory other social factors include the income level of the buyers, their occupations, their levels of education, the groups one identifies oneself with, the roles and status of each of the family members, and the influence these people have on the buyer of the Ford Mustang.

It is crucial, however, when formulating a marketing research plan to identify the social stratification in the American society.

Technological Factors

Technological factors constitute the technology used in the production of the Ford Mustang model, its effectiveness and efficiency in providing high quality products that meet user needs and expectations. One of the expectations is a fuels efficient vehicle with ample space and other specifications that the customer needs. In addition to that, other technological factors include the mode of assembling the vehicles to reduce the production costs.

One of the technological approaches integrated into the manufacturing of the Ford Mustang is the use of automation. Typically, it is an innovative approach that allows minimal use of human labor that is costly to a shift in the use of automated machines in the manufacturing and assembly lines. The key benefits associated with automation are a reduction in production costs that translates to low product prices, thus improving the market position in terms of pricing of the Ford Mustang.

In theory, technological factors significantly contribute to positioning a firm in the market. Analysing the market environment (n.d), underpins the threats and opportunities firms face in the market. Typically, the underlying reasons include technological innovations and advances in technology. However, it is crucial to note that not only are advances in technology a blessing to a firm, but might cause a firm to produce products that offer competition among themselves. Thus, making it practically important for firms to enter into strategic alliances with customers and other stakeholders to ensure products appeal to customers and maintain brand loyalty.

In practice, Ford has demonstrated how technology has significantly affected the positioning of its products in the market while ensuring that its brand name remains appealing to the customers. Typically, that is evident in the number of innovations done on the Ford Mustang over the years, evolving the model with the dynamic market needs and behavior. That is typically, discussed under the background history of the Ford and its product, the Ford Mustang (Analysing the market environment, n.d).

Economic Factors

Economic factors are associated with the level of income of the consumer of the Ford Mustang and the ability to raise sufficient funds to purchase the vehicle.

Typically, the when the income level of the customer is high, there is the possibility for the customer to go for and purchase expensive products, however, when the income level is low, there is every likelihood for the customer to purchase low priced products. However, the customer might want to purchase a product that has similar features to an expensive product to give the kind of satisfaction a low income earner could want that a high level income customer gets.

In theory, economic factors significantly affect the rate and level of consumption of products in the market and the kind of products buyers are willing to purchase. That is the case with the Ford manufacturer. In practice, the Ford manufacturer has manufactured differentiated products to address the economic conditions in the USA and in the international market. Typically, that is evident in the number of Ford Mustang models that have been manufactured over time.

In theory, economic factors strongly influence the business cycle of a firm and the purchasing abilities of the customers for various products in this case the Ford Mustang. Typically, in theory when there is an economic boom, it has been demonstrated that the purchasing power of the population.

Typically, the business cycle includes periods of economic boom as had been experienced in the United States. The business cycle is strongly related to the growth of a firm in any economy while other economic factors such as inflation, level of employment, and economic growth are directly related to the economic abilities of the customer in purchasing products in the market.

According to the report, Defining Marketing and the Marketing Process (n.d), inflation is a measure of the increase in the price of products in the market. One of the products in this category is the Ford Mustang. However, it might require a more detailed analysis to determine how inflation has impacted on the sales of the Ford Mustang in the local and international market (The chartered Institute of Marketing, 2009).

Another economic factor that theoretically impacts on the purchase of the Ford Mustang in the market is the employment and unemployment level of people. It is a generally accepted and observed trend in the market that rising unemployment might impact negatively on the turnover rate of the Ford Mustang in the local and international market.

However, it might also require a detailed analysis to determine eth impact of these economic factors on the performance of the Ford Mustang in the market today (Defining Marketing and the Marketing Process, n.d).

Regulatory factors affecting the strategic planning of Ford in the production and positioning of Ford Mustang in the market are directly related to government policies and legislations. One of the requirements includes abiding by the

Competitive factors

In theory, competitive forces are identifiably direct and indirect. Direct completion typically includes understanding the competitors based on market intelligence reports about their strengths.

That includes identifying the top competitors in the market, examine and identify the elements that constitute their market planning, know their weaknesses and strengths, strategize on the best approach to gain an upper hand over the competitors, identify their market trends, and identify the marketing approach they use toward reaching and winning over the customers. It is crucial to note that indirect forces have similar impact as direct forces on the positioning of the product on the market.

Typically, indirect forces are associated with educational and cultural issues and other social issues that determine the willingness of the customer to purchase the products. In practice, Ford Mustang, one of the variant models manufactured by the Ford Motor Company has direct and indirect forces that affect its position in the market (The chartered Institute of Marketing, 2009).

According to the marketing research findings, among the direct competitive factors affecting Ford Mustang, a variant product of Ford motors company include competition from General Motors, Toyota Motor company from Japan, and internati0nal competitors from China. One of the characteristics of the Chinese vehicles is the low pricing strategy used by the Ford manufacturer.

Typically, the manufacturers have a strategy of pricing their products with low prices as a technique to offer competition toward the Ford manufacturers. Typically, that compels ford Motors to lower the price of their products specifically, by adopting a differentiation strategy based on consumer needs and expectations.

Marketing strategy

A marketing Strategy is defined as “is a long-term course of action designed to optimize allocation of the scarce resources at the disposal of a firm in delivering superior customer experiences and promotes the interests of other stakeholders” (The chartered Institute of Marketing, 2009). The current strategy factors segmentation, and marketing strategies which include integrating and marketing the Ford Mustang product based on the 4 Ps in marketing as discussed below.

Segmentation

The three bases for segmentation for the Ford Mustang are defined in the STP process. Typically, the STP process defines the segmentation strategies Ford adopts or should adopt in formulating a marketing plan research project. Segmentation is a marketing strategy marketer, and in this case the Ford Mustang manufacturer puts in place to penetrate the market and maintain a strong position in the market.

According to the paper, Defining Marketing and the Marketing Process. (n.d), the first step in based on the STP concept is to divide the current and target market into an homogeneous group of consumers which can be within reach of the marketers of the Ford Mustang, sizeable based on the marketing budget available, and that which could easily be reached.

The approach allows for identification of a specific market of consumers of the Ford mustang based on demographic characteristics of the consumers, age, income level of the population, education, and psychographic characteristics that influence buyer behavior. Typically, the segmentation strategy factors beneficiaries, buyer behavior, and usage of the Ford Mustang (Defining Marketing and the Marketing Process, n.d).

Another strategy includes targeting a specific market segment as discussed above to identify who should benefit from the product and how. In addition to that, the entire process is concluded by developing a distinctive appeal to the customers on the Ford Mustang to take and accept it as a brand name (Defining Marketing and the Marketing Process, n.d).

Marketing Mix (4 Ps)

A marketing mix is defined in theory as “a combination of tactics and used by a business to achieve its objectives by marketing its products or services effectively to a particular target customer” (The chartered Institute of Marketing, 2009).Typically, a marketing mix is defined by the products being positioned in the market, the place that the product is intended to be sold, the pricing strategy of the product, and the promotional strategies used in positioning the product competitively on the market.

Pricing

One of the strategies used in positioning Ford Mustang competitively in the market is pricing. In practice and theory, pricing is a crucial element that symbolizes the price pegged on a product. Price is defined as “the amount of money charged for a product or service” (The chartered Institute of Marketing, 2009).

Typically, pricing is crucial when assigning a price to a specific product. In theory, pricing includes assessing the markup percentage of the product required for a service or a product and in this case the variant of Ford models that includes the Ford Mustang, which is the current product under consideration.

An addition to that is the gross margin percentage associated with the retailing price of the Ford Mustang. However, in theory there are internal and external factors that influence the pricing process that Ford the manufacturer of Ford Mustang makes (The chartered Institute of Marketing, 2009).

These include external and internal factors. External factors are associated with the prevailing market conditions while internal pricing factors are associated with the cost of production, distribution, and other cost overheads. In addition to that, distribution costs incurred in the distribution channel also contribute to the total cost of the vehicle. Therefore, it is crucial for the manufacturer to identify the best strategy to price their products to remain competitive in the market.

However, it is important to examine the strategies that in theory the firm could adopt to price Ford Mustang to remain competitive in the market while maintaining its position in the market. These include skimming, market penetration, follower pricing, production costs, and follower pricing strategies.

Follower pricing includes identifying competitor prices and pricing their Ford Mustang against what other leading market players in the motor vehicle industry have to offer.

Product

Ford’s product offering should consist of various models of the Ford Mustang. Typically, the product should be tailored to fit into the dynamic needs of the customer based on the segmentation strategy makes (The chartered Institute of Marketing, 2009).

In theory, the approach used to formulate the product based on the market conditions include identifying product characteristics that fit into different markets segmentations, new and current markets, and with due consideration of the underlying industry competition practices. That is also based on technical and aesthetical specifications unique to the vehicle.

Place

The place constitutes where the product, Ford Mustang, is to be sold. Typically, the current strategy identifies the use of local and international markets makes (The chartered Institute of Marketing, 2009).

Promotion

The promotional strategies include identifying an appropriate market segment and informing them of the Ford Mustang. Perhaps, it is proposed that different selling and promotional techniques including offerings or reducing prices or adopting mass discounts constitute some of the approaches used in promoting the product.

In addition to that, potential customers will be approached, and the quality of the product varied to address the demographic distributions and levels of income, besides addressing needs in the international and national markets (The chartered Institute of Marketing, 2009).

Recommendations

Recommendations based on the above study shows the need for Ford the manufacturer of Ford Mustang to consider reevaluating the reasons for the rising trend in competition from Japan and Chinese manufactures and take stringent steps to retain their position in the market.

These include identifying new models for their products, differentiating their products further to address ever rising competition from cheaper models from China, reevaluating the supply chain to take the most cost effective supply and marketing chain of the Ford Mustang. In addition to that, the fir should consider automating most of their manufacturing to drastically reduce the end product costs, making the Ford Mustang more competitive to retain and compete in the current local and international markets.

References

Analysing the market environment. (n.d). In Kotler, P. and G. Armstrong Principles of Marketing. (Upper Saddle River, NJ: Prentice Hall, 2004) tenth edition. Web.

Defining Marketing and the Marketing Process. (n.d). Customer-Driven Marketing Strategy. Creating Value for Target Customers. Web.

Ford Mustang History. (n.d). Edminds.com. Retrieved from https://www.edmunds.com/ford/mustang/

Karadzhov, R., & Blitterswijk, V.M. (2009). Financial and Strategic Analysis of Ford Motor Company and Tata Motors.

Matsuno, K. (n.d). Note on Targeting and Positioning. Babson College to the Babson College Case Development Center. Development Center, Olin Hall, Babson College, Babson Park, MA 02157.

The chartered Institute of Marketing. (2009). How to Achieve an Effective Marketing Mix, Marketing Mix. Moor, Hall: Maindenhead, UK.

The Writing Place. (2005). Avoiding Plagiarism. Web.

University Library, North Tower, Second Floor. Tutorial. (n.d). Product Analysis. Retrieved from http://www-materials.eng.cam.ac.uk/mpsite/tutorial/non_IE/prodanal.html

Background of the Company

Established in 1903 by Henry Ford, the Ford Motor Company has expanded its operations into different global locations and consumer markets making it one of the best known brands in the world. Unfortunately, within the U.S., Ford Motors has been experiencing an influx of competition from local and international brands that focus on affordability and gas mileage as their means of competing against ford (Brown, 2006). Evidence of this can be seen in the growing demand in local markets for foreign made cars that are cheaper than locally made cars.

As it can be seen from the graph, Ford Motors has been experiencing a steep decline in the amount of vehicles sold under its ranger brand which is unfortunately endemic in its other brands as well (Hartley, 2008). While car models from Ford always rank the highest in terms of horsepower and appearance; they unfortunately rank the lowest in terms of affordability. It is based on this that the company is currently evaluating its operational infrastructure in order to develop a means of more affordable production while at the same time meeting the stringent quality standards that it holds itself too (Hartley, 2008).

Ford Benefitting from Kelly Services

When examining the case of Ford Motors, it becomes immediately apparent that what the company needs is a considerable degree of operational flexibility in order to meet the shifting demands of present day consumers while at the same time maintain the viability of its operations from a financial standpoint. Basically, the company would need to shift operations “at the drop of a hat” so to speak when it comes to satisfying consumer demand or reducing operations due to ill timed shifts in the market as a direct result of economic instability as seen during the 2008 financial crisis which adversely affected the sales of the company. One possible solution to this apparent need was presented by Tan, Denton, Rae & Chung (2013) who stated that in order for a company to achieve extreme levels of flexibility in its operations, it would need to have a human resources approach that allows it to increase or reduce employees at will depending on what the company needs at an given production quarter. The approach suggested would be to shift its current permanent workforce into one that is on a contractual basis.

The effectiveness of this approach was seen in SM Supermalls which was featured recently on several prominent websites due to errors in the type of message that was being broadcast by one of their products which cast the company in a negative light. Further examination of the company’s operations reveals that it utilizes workers on a 3 to 6 month contractual basis and increases or reduces them as needed. This enables the company to respond to the increased influx of customers during the holiday season by hiring more workers while at the same time allows the company to reduce the amount of employees by not renewing the contracts once the holiday season is over (Weick, 2014).

A similar strategy can also be utilized by Ford Motors in order to increase or reduce its workforce depending on current trends within consumer markets. However, the main issue that they would encounter would be to find the necessary contractual agency that would assist in providing the necessary labour force that the company would need. This is where Kelly Services enters into the picture as the aforementioned contractual agency. As one of the largest temporary staffing agencies within the U.S., Kelly Services can provide the temporary workers that the company would need in order to meet market demand. Not only that, given the nature of Kelly Services, it can also act as a recruiter of sufficiently capable blue collared workers that could stay with the company for extended contracts of a year or more depending on the need of Ford Motors. Lastly, while Kelly Services does not specialize in the training of assembly line workers, some form of training can be implemented which would enable workers to adapt to the working environment that they would be placed into.

Given the level of automation inherent in the production processes of Ford Motors, the combined training of both Kelly Services and Ford Motors within a span of one to two weeks can be considered as sufficient enough to bring an ordinary blue collar worker up to speed as to how a particular machine and process works. Overall, when examining the needs of Ford Motors and the capacity of Kelly Services, it can be stated that the latter would be the best solution to the problems of the former given the present need for flexibility yet affordability in the present day hypercompetitive market of car sales.

Reference List

Brown, S. (2006, July). Down, but not out regional focus. Automotive Manufacturing Solutions, 67-73.

Hartley, T. (2008). More auto industry buyouts will shrink WNY workforce. Business First Of Buffalo, 24(20), 4.

Tan, K., Denton, P., Rae, R., & Chung, L. (2013). Managing lean capabilities through flexible workforce development: a process and framework. ProductionPlanning & Control, 24(12), 1066-1076.

Weick, R. (2014). Businesses and workforce planning learn to be flexible. Grand Rapids Business Journal, 32(19), 13.

Profitability

Table 1: Net Income Comparison

Ford Motor Company and General Motor Company are two of America’s most prominent motor vehicle manufacturers. In the fiscal years ended December 2021 and December 2020, both companies posted varied net income results. In 2021, Ford’s net income was 80.36% higher than General Motor Company’s net income. However, in 2020, Ford Motor Company made a loss of $(1,279) million while General Motor Company made a profit of $6,321 million (SEC, 2021). The loss by Ford was attributed to the negative effects of COVID-19, which negatively affected demand.

Working Capital

The working capital represents the operating liquidity available to the two companies. It is calculated by deducting the current liabilities of a company from its current assets (Keown, et al., 2020). The table below shows General Motors and Ford Motors’ working capital for the fiscal year ending December 31, 2021.

Table 2: Working Capital Comparison

From this table, Ford Motor Company’s working capital for the fiscal year ended 2021 was $19.6 billion while General Motor Company’s working capital for the same period was $7.7 billion (SEC, 2021).

Price-Earnings (P/E) Ratio

The Price – Earnings ratio measures how much investors are willing to pay for a company relative to its current earnings. A higher P/E ratio could mean that a company is overvalued, while a lower P/E ratio could mean that a company is undervalued (Keown, et al., 2022). The lower the P/E ratio is, the better for investors and the business. Generally, a P/E ratio of 20-25 is considered the average P/E. The P/E ratio is calculated by dividing the current share price by a company’s earnings per share. The table below shows Ford and General Motor Companies’ P/E ratios.

Table 3: P/E ratio

Based on both companies’ earnings per share for the fiscal year ended 2021 and the current share prices, Ford and General Motor Companies’ P/E ratio is 2.70 and 5.33 respectively.

Debt to Equity Ratio

The debt-to-equity ratio measures to what extent a company can cover its debts. This ratio is calculated by dividing a company’s total debt by its total shareholders’ equity (Keown, et al., 2020). The table below shows the debt-to-equity ratios of General and Ford Motor Companies. The ideal debt-equity ratio is 2 or 2.5 because a higher ratio indicates an increased risk for lenders and investors, as it shows that the company’s growth is financed through borrowing.

Table 4: Debt-Equity Ratio

Table 4 shows the debt-equity ratios of Ford and General Motor Companies, where Ford’s debt-to-equity ratio is 7.67 and General Motors’ is 2.99.

Discussion

From the analysis of Ford Motor Company and General Motor Company’s net income, working capital, P/E ratio, and Debt-Equity ratios, it is apparent that General Motor Company is the better investment. General Motors is the best investment because despite making a higher profit in 2021, it was unable to withstand COVID-19 effects in 2020 and made a huge loss. Additionally, both companies have positive working capital. However, Ford Motors has a lot of current assets that are not optimal for the business. Further, despite both companies having lower P/E ratios, none has reached the recommended ratio of 20-25, indicating that their shares are undervalued. Finally, General Motors’ debt-equity ratio is lower than that of Ford Motors, which presents a limited risk for lenders and investors. Other ratios that could have been utilized include liquidity ratios, such as current and quick ratios; leverage ratios, such as debt-to-asset and debt-to-capital ratios, and profitability ratios, such as the gross margin ratio.

References

Keown, A. J., Martin, J. D., & Petty, J. W. (2020). Foundations of finance: The logic and practice of financial management (10 th ed.). Prentice Hall.

SEC. (2021). General Motor Company – Form 10-K. Securities Exchange Commission, Web.

SEC. (2021). Ford Motor Company – Form 10-K. Securities Exchange Commission, Web.

When establishing a successful export strategy, there is a need for management to consider a number of steps. The major six stages include: undertaking a research study, developing a powerful plan, identifying the right exportation channel, locating opportunities and legal considerations, analysis of transport needs, and execution. The first stage focuses on a detailed study to understand the consumption rate, needs, and expectations of different markets (Daniels, Radebaugh, & Sullivan, 2015). Issues such as demographics, cultural attributes, and competition are monitored during this stage. Leaders use this study to make the right choice for exporting the targeted materials or goods. The second stage is the development of an effective plan to achieve the targeted goals. The plan should be managed by competent persons. The company’s capacity to export its services/products is analyzed during this stage. The next one is coming up with the right channel for exportation. The selected choice should be informed by the targeted goals and existing business model. The purpose of this stage is to ensure that the export strategy supports the company’s mission and vision.

The fourth stage is the identification of existing opportunities in the targeted foreign country. This stage is undertaken in order to understand the major aspects that can promote business performance. Different platforms such as social media networks can be considered in order to understand how performance or profitability can be maximized. Trade fairs and expositions can also be identified to ensure that more people in a foreign country are aware of the company’s export intentions. Additionally, this stage will reveal the major legal issues that should be considered throughout the implementation process (Daniels et al., 2015).

For example, subsidies, taxes, and employment laws in the targeted country will be used to inform the best strategy. The next stage that is considered to develop an appropriate export strategy is analyzing the company’s transport needs. Dubrovski (2016) asserts that a powerful logistical strategy will be needed for a company that intends to export its products. The model should focus on every issue existing in the targeted destination country. Costs, expenses, and transport networks will be considered in an attempt to develop an effective export strategy. The final stage is called execution. This phase is critical because it guides managers to take into consideration every concern raised throughout the process. Different individuals will be involved to launch the strategy successfully. This stage, therefore, ensures that the proposed strategy becomes a reality and eventually supports the company’s business goals.

Globalization is a powerful wave that has transformed the way different companies pursue their goals. For instance, corporations can decide to join or merge temporarily in an attempt to pursue a specific task or project. This kind of model is called “joint venture” (Dubrovski, 2016). Russo and Cesarani (2017) define “non-equity joint ventures” as agreements between corporations to acquire technical services or rental agreements. More often than not, such ventures make it easier for involved companies to gain access to new or foreign markets.

Ford Motor Company’s decision to engage in a non-equity joint venture can present numerous benefits. To begin with, the approach or agreement can make it easier for the corporation to gain access to different foreign markets (Russo & Cesarani, 2017). This means that the company will be in a position to maximize or expand its distribution networks. The strategy will also increase the company’s capacity and make it more competitive.

A non-equity joint venture will make it easier for Ford to share risks with its business partner. This means that the targeted project or activity will be pursued efficiently and eventually improve business performance. Daniels et al. (2015) acknowledge that any form of joint venture will empower companies to share resources and improve performance. Ford Motor Company will be able to access advanced technologies from its partner, form powerful teams, and increase its financial capability.

Several risks might also arise if the company engages in a non-equity joint venture. To begin with, the objectives of such agreements are not communicated to different stakeholders. This gap can affect the effectiveness and success of the intended project. During the period, each company will focus on its business aims (Russo & Cesarani, 2017). This means that any negative outcome can affect the performance of the company. The existence of legal challenges can result in various complications and affect the corporation’s performance or profitability.

Ford can also partner with a company that lacks adequate resources or expertise to support its new goals. This means that the company will incur numerous expenses in order to achieve its potential. During the initial phases of the partnership, the level of leadership can be affected, thereby undermining the effectiveness or success of the non-equity joint venture (Daniels et al., 2015). Managerial challenges might also arise during the first stages of the non-equity joint venture. This analysis, therefore, explains why the company should be prepared for these challenges and risks in order to achieve its potential.

References

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

Dubrovski, D. (2016). Strategic partnership and equity alliances in the function of crisis prevention and elimination. Modern Economy, 7, 1385-1395. Web.

Russo, M., & Cesarani, M. (2017). Strategic alliance success factors: A literature review on alliance lifecycle. International Journal of Business Administration, 8(3), 1-9. Web.

Introduction

In 2009, Ford Motors was rated the second motor vehicle manufacturer in the world according to Standard & Poor’s. 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 & Poor’s (2009) as the world’s 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 world’s second in the vehicle automotive industry. General Motors was once the world’s 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 Ford’s pick-up trucks. Ford’s sales were down during the period 2008-2009. (Standard & Poor’s, 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 Ford’s 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)

Ford‘s 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, Ford’s 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 & Poor’s (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 & Poor’s, 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 organisation’s 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 & Poor’s, 2009, p. 212)

What is needed inside Ford?

Ford’s 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 & Poor’s, 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. Ford’s pride, the pickup trucks, was no longer selling.

With the recession, car and vehicle lovers wanted affordable cars, but full of quality. And that’s not enough. For instance, in India when there has been a desire for cheaper cars, Tata Motors manufactured the world’s 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 Motors’s manufacturing of the small cars was a mistake. The cheap cars flopped.

Corporate Governance

Another problem is corporate governance. Ford’s 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. Ford’s finances for the future were to be diluted with this sale because according to Standard & Poor’s, Hertz contributed to Ford’s 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 & Poor’s, 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 & Poor’s (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 Ford’s 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. Ford’s 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.

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Introduction

The Ford Company is an American-based automaker. The company’s headquarters is located in Michigan. The company was started by Henry Ford and was incorporated later, in 1903. The company trades its commercial vehicles ad automobiles under the Ford brand. The company trades its luxury cars under the name Lincoln (Reuters, 2013). The company also produces tractors, heavy trucks, and automobile parts.

The Ford Company controls some stake in the Japanese company Mazda and the UK Company Aston Martin. The company is listed on the NYSE and is managed by the Ford family (Reuters, 2013). The Ford Company introduced models of large scale car manufactory, and the large scale management of productive resources, based on elaborately designed manufactory sequences. The sequences are characterized by moving assembly models. During the 1914, these sequential models were globally known as Fordism (Reuters, 2013).

Brief History of the Company

Ford Motor Company was launched in 1903, starting with a capital base of USD 28,000 contributed by twelve depositors. In the early years, the company produced only a few cars daily, using the parts supplied by contracted suppliers (Bryant.edu, n.d). A decade later, the company developed the refined assembly model concept. In 1908, the company introduced a revolutionary engine, the Model, which had removable cylinder heads. In 1930, the company introduced a safer car with a windshield.

Later in 1932, it launched a low-cost V8 powered car (Bryant.edu, n.d). During the 1950s, the company introduced more safety specifications, including childproof door locks. During the 1980s, the company introduced successful vehicles into the market. In 1990 and 1994 the company acquired Jaguar and Aston Martin, respectively (Ford Foundation, 2013). In 2005, the company developed survival strategies, including downsizing, dropping some models, closing 14 production outlets, and reducing employee count by 30,000.

These strategies were meant to get the company out of the slowdown (Bryant.edu, n.d). The company continued to introduce new brands. In 2009, the company sold Landover and Jaguar to Tata motors. In 2009, the company reported losses of $ 14.6 billion, depicting a challenge to profitability.

How Ford Motor Company Applied Goods, Services and Operations Management

Since the 1920s, the operations of Ford motors are embodied in a number of scientific management elements. These include standardized product designs, mass production, mechanized assembly lines, low manufacturing costs, interchangeable parts and the specialization of labor.

Through the standardization of product designs, the designing of vehicles is done in ways that are accepted. These include the use of uniform procedures, materials and dimensions. For example, during the early years, 1903 and ahead, the company produced their cars using inputs collected from the contracted suppliers (Bryant.edu, n.d). Through the outscoring and the production of standardized vehicles, the company was able to develop strong product platforms, lower supply chain expenses, and design their products faster.

Through mass production, the company produces cars in high numbers, which they supply to the market. For example, after its launch in 1903, the company produced a few cars daily, at its plant on Mack Avenue, Detroit (Bryant.edu, n.d).

Through the mechanized assembly lines, Ford Company was able to develop the vertical integration that seemed to work well for their vehicle production. The company realized the reduction of manufacturing costs, through reducing the labor force, for example, during the 2005 proposal to reduce their employee count by 30,000 (Maynard, 2006).

Through the use of interchangeable parts outsourced from the contracted producers, the company ensured that production did not delay due to the limitations of supply chain management. Through labor specialization, the Ford Company, since its start has been able to manage its human resources, ensuring that the workforce is optimally utilized. For example, after the 1903 launch, a group of two or three workers would work on the assembly of one car everyday (Bryant.edu, n.d).

Management of Value Chains

The supply chain profile of Ford Motor Company is characterized by different products, suppliers and locations that contribute to the manufactory of vehicles.

These include more than 60 countries where suppliers are sourced, 38 emerging markets where suppliers are sourced, 17 emerging markets characterized by inferior working conditions, 70 Ford vehicle production centers, and more than 1300 supplier corporations (Ford Company, 2012). There are also 4,400 supplier production centers, more than 130,000 parts under production at any time, and more than 500 manufacture commodities to be administrated (Ford Company, 2012).

The long value chain, which relies on thousands of input suppliers who deliver parts, materials and services used in the production of the end product, is characterized by a complex value chain. Many of the suppliers serve different automakers, and the suppliers also have numerous vehicle makers (Ford Company, 2012a).

At Ford, there are approximately 6 to 10 supplier levels between the source of the raw materials and the ford company. Value chain management is administered by the company through a number of strategies. This includes building strong relationships with suppliers, developing shared capacity and commitment to uphold sustainability, and aligning the business structure (Ford Company, 2012a).

These three strategies are actualized through a number of actions, including developing a global, product development model that implements product plans, enhancing the re-usability, stability and the commonality of production processes, and increasing communication levels with suppliers.

The Ford Company also allows the suppliers, contact with the company’s managers. It also fosters organizational stability in product development, manufactory and purchasing, including the improvement of order fulfillment, and engaging suppliers in discussions related to quality, process stability, and CSR (Ford Company, 2012a).

Ford Motors’ Measure of Performance in Operations

The Ford Company has identified key performance areas, where improvements in the performance of the company reflect a good or bad change in their operations (Ford Company, 2012b). These performance areas include financial health, water usage, climate change and environmental impact, vehicle safety levels, supply chain management and its relations with different stakeholders.

Under the area of financial health, effective operational performance is marked by increasing net income and revenue and sales levels, which should be accompanies by overall service and product satisfaction at the company operational points. In the area of climate change and environmental protection, improved operational performance is marked by a number of indicators (Ford Company, 2012b). The indicators include an increase in miles per gallon covered by Ford vehicles, among truck and car owners.

The indicator implies increased fuel efficiency of the cars produced by the company towards protecting the strained fuel economy. A reduction in the CO2 footprint, in grams per mile, marks an improvement in the production operations of the company’s products (Ford Company, 2012b). In the area of water consumption, a reduction in the company’s water usage marks an improvement in their operational performance.

Also, a reduction in the water used by ford vehicles, per cubic meters, marks an increase in the efficiency of the cars produced by the company, as well as a reduction of the impact caused to the environment. In the area of vehicle safety, the improvement of safety standards in Ford vehicles marks increase in operational performance (Ford Company, 2012b).

A reduction in the number of recalled cars in a year indicates an improvement in production operations. Under supply chain management, employee training on chain management and working conditions standards marks an improvement in the performance of the company. Under stakeholder relationships, employee satisfaction, improvement in dealer attitude and the company’s corporate contribution show improvements in operational performance (Ford Company, 2012b).

Ford Motors’ Operation Strategy

Ford Motors is the only vehicle producing corporation implementing a global Powertrain approach. This global operational strategy started with the production of the Ford F-150, when the company developed networks of designing transmission models and engine models that can be changed with changes in market needs (MediaFord, 2013).

The strategy is also aimed at increasing manufacturing efficiency and the quality of the vehicles produced by the company. The Powertrain manufacturing strategy is the most innovative approach since the deployment of the assembly line (MediaFord, 2013).

Among the operations that characterize the new operational strategy is the deployment of medium-sized production, which is expected to yield about 325,000 vehicles annually. The approach will enable the company to improve its efficiency, respond to changing market needs, and improve the efficiency of the company (MediaFord, 2013). The strategy also entailed the development of plant-floor layouts and manufactory equipment that are universally similar throughout the world.

As a result, the strategy will reduce the costs of capital investment in the management and the redesigning of the different production plants. The strategy is aimed at improving cross shipping, which allows for the shipping of production inputs and components between different plants (MediaFord, 2013). As a result, the company will be able to ease the startup of different plants, as well as increase the rate of product delivery to target markets.

The operational strategy is characterized by the standardization of production facilities, which is expected to reduce operating costs as well as improve the deployment of best practices. The strategy employs the use of computer-controlled machines, which are expected to increase the company’s adoption to changing customer demands and needs (MediaFord, 2013).

Ford Motors Companies Forecasting and Demand Planning Style

The demand forecasting and planning style of Ford motors are adjusted according to the company’s evaluation of customer preferences and changing product needs. Ford’s demand planning style and forecasting are exemplified by the account of Healey (2012), which notes that Ford Motors is responding to the changing needs of customers. Healey (2012) noted that Americans are increasingly changing their preferences from automatic to stick transmissions.

This is the change that has considerably shifted the demand planning of the company. From the report, the change of consumption patterns is based on the price preference on manual cars, as they come at $ 1,000 less than similar automatic transmission vehicles (Healey, 2012). The increased preference for manuals is based on the view that many drivers consider driving manual vehicles fun to drive compared to automatic transmission vehicles.

Modern manual transmission cars are more user-friendly, and the drivers that used to drive a manual transmission cars are going back to them, which has shifted the demand for manual transmission cars. In response to the changing preferences, the forecasting and the demand planning of Ford has been continually changing, from time to time (Healey, 2012).

An example is the case of the redesigned Ford focus, whose demand is rising towards 10 percent. According to the report by Paul Russel, the marketing manager in charge of the brand noted that the company had planned to offer between 4 and 4.5percent. However, due to the change in the demand for the manual transmission version, the company demand forecasts were increased to meet the 10 percent demand increase (Healey, 2012).

For instance, during March 2012, Ford started offering stick transmission cars in many brands, including the high-end Titanium edition of the Ford Focus, despite earlier projections that Titanium buyers preferred only automatics. The new projections are incorporated into the planning for Dodge, Dart compact, which the company predicts will offer 20 percent in manual versions (Healey, 2012).

Ford’s Management of Inventories

Ford manages its inventory on the basis of the Just In Time (JIT) inventory control model. The strategy aims at cutting costs and eliminating waste, through reducing inventory levels (Ford, 2008).

Through the strategy, the company ensures that they uphold the continuous improvement of their vehicles as well as eliminate any materials that are wasted due to inventory management. The wastes reduced through Ford’s JIT include those related to the usage of finished inventory and raw materials, as well as those related to stocking (Ford, 2008).

The earliest usage of JIT at Ford was practiced by Henry Ford, as an effort towards managing production materials during the period between 1903 and 1920. Among the areas covered by the JIT inventory management model of Ford are order taking, operations, purchasing, sales, distribution, accounting, Sales, Human resources, designing, and other production areas. One of the major areas covered in the JIT model of Ford is ensuring that waste through surplus inventory is reduced (Ford, 2008).

The model entails areas like eliminating unnecessary production stages, correcting defective working techniques, and reducing the idling time of company machines and plants. The JIT strategy of Ford entails the elimination of product defects, eliminating overproduction and ensuring that unnecessary transportation is not incurred by the company (Ford, 2008).

References

Bryant.edu. HISTORY of Ford Motor Company. Web.

Ford Company. (2012). Sustainability 2011/12: Supply chain profile. Web.

Ford Company. (2012a). Sustainability 2011/12: Creating a Sustainable Supply Chain: Strong Relationships, Shared Commitment, and Capacity Building. Web.

Ford Company. (2012b). Sustainability 2011/12: Performance Summary. Web.

Ford Foundation. (2013). Ford Foundation: Overview. Web.

Ford. (2008). Sustainability Report 2007/8. Web.

Healey, J. (2012). Stick shifts popular again, despite lower gas mileage. Web.

Maynard, M. (2006). Ford to Cut Up to 30,000 Jobs and 14 Plants in Next 6 Years. The NewYork Times. Web.

MediaFord. (2013). Global Manufacturing Strategy Gives Ford Competitive Advantage. Web.

Reuters. (2013). Profile: Ford Motor Co (F.N). Web.

Introduction

Ford Motors Asia Pacific is one of the many branches of Ford Motors Corporation that serves the countries in Asia Pacific. Worldwide, Ford Motors has been rated the second motor vehicle manufacturer according to Standard & Poor’s. But Ford encountered external and internal problems which hampered its growth.

Ford Motors was started in the United States of America with Henry Ford as its founder. Henry Ford introduced many innovations 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. Ford further 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 the Asia Pacific region, Ford was consolidated with further product development and designs which were originally Asian.

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

Financial services included 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.

Ford has planned to grow and expand in Asia, particularly in Thailand and other emerging markets in Asia, as announced by CEO Bill Ford. (Business in Asia.com, 2005)

Quality Imperatives

One reason why Ford Motors declined in sales and has lost a considerable place in the competition is due to lack of quality in many of its cars. Quality imperatives for Ford Motors have to be discussed in the light of the present decline in customer loyalty and therefore sales.

The Economic Imperative

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.

Economic imperatives can cut down the quality of a firm’s products. Ford Motors was once the world’s leader in vehicle manufacturing but with the recent global economic downturn, there are doubts as to its leadership and the quality of the cars that it once manufactured and delivered to its loyal customers.

Recently, Ford Motors needed government bailout in order to survive and stay in the competition. The government of the United States had to reinforce financial losses because of the purported mass layoff of customers.

As we know, the automobile industry is a labour-intensive industry, and if one car-manufacturing company closes down, it will have a great impact in the economy.

In the Asia Pacific region, Ford Motors has made its mark by addressing the demands of the riding public or the growing interest of customers to Ford products, including parts and servies.

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

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.

With market shares 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 & Poor’s (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.

Social Imperative

Quality is as important to the company as to the community and the loyal customers of Ford Motors. In some countries, public services particularly the transportation sector is being held by government-controlled corporations. There is discontent and lack of quality in this kind of service.

Governments are trying to decentralize or liberalize transportation to infuse quality in public service. (Beckford, 2002, p. 6)

Since the beginning of the industry, stiff competition has always been a big challenge for Ford. One of the fiercest competitors is Toyota, 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 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)

Western companies have to adapt to the emerging markets in Asia or what are now called the “Tiger economies of Asia”, like Singapore, Hong Kong and Taiwan. Emerging China and India are a temptation for the industry players. Organizations that want to penetrate these markets have to infuse quality in their products and services.

Ford also has a problem of dealing with labour unions, and this is one big challenge in the years ahead. The automobile industry is one of the most labour-intensive industries in the world. Labour unions have to be dealt with squarely and provided affordable benefits.

Environmental Imperative

Ford has to adapt to technological advancement and continuous innovations; this sacrifices the environment. In many parts of the Asia-Pacific region, Ford has manufacturing plants and production facilities. However, it also outsources many of its parts from mainland China.

Outsourcing and in-house manufacturing both have repercussions on the environment; but it all depends in the management and the programmes and policies of the organization. This is one of the challenges of Ford Motors Asia Pacific. Environmental degradation is one of the outcomes of manufacturing.

Moreover, cars of all sorts produce carbon dioxide emissions which are harmful to the environment. Greenhouse gas emissions have been the topic of various international groups to reduce climate change and global warming.

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 Ford’s pick-up trucks. Ford’s sales were down during the period 2008-2009. (Standard & Poor’s, 2009, p. 211)

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 used companies in China which manufacture cheap parts.

Strategic Importance of Quality

The operational and administrative functions of a corporation should reflect the quality policies of a corporation. The other important levels include strategic and normative levels which must also reflect quality policies as significant as the operational and administrative levels. (Beckford, 2002, p. 15)

During the initial period of the 2009 recession, Ford’s 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 & Poor’s (2009, p. 211), Ford lost market shares in 2008, the problem, quality.

On supplier development, Ford management has realized the importance of supply chain. Some of its automotive parts are being outsourced from China.

Ford Motors has realized that supply chain management excellence is crucial for customer satisfaction. Understanding customers is critical to their satisfaction and loyalty. Product innovation is one of the solutions. Supply chain learning should be a part of the firm’s strategy.

As stated earlier, Ford had practiced outsourcing in production and manufacturing. Many of the of a Ford vehicle are outsourced from China. The process of outsourcing has reduced the quality of a product.

The level of operational management has reduced the quality of Ford’s cars and vehicles. This is also affected by the processes of supply chain that Ford has practiced all through the years. In the Asia Pacific Region, Thailand is one of the center points or the source of Ford cars. Cars are assembled in the Philippines and shipped to Thailand. (Business in Asia.com, 2010)

This is majority of the orders from customers are coursed through the Thailand branch of Ford Motors. Parts come from China and the Philippines but assembly are done in the Philippines. This process hampers quality in the operation.

Parts pass through many barriers before they can become functional in the core product. Quality is sacrificed in order to reduce cost.

The level of administration which defines the control and allocation of operational resources affect the quality or the outcome of the product. There is lack of balance in the level of administrative management at Ford Motors Asia Pacific.

They rely much on technology, such as the Internet and Information Technology, and other tools such teleconferencing into order to communicate with employees.

There is still vertical set up or integration, and decentralization is not yet an option, making the operational process a hindrance to the produce quality products for Ford Motors Asia Pacific.

The level of strategy is also disadvantageous. Ford’s 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 & Poor’s, 2009 p. 212)

This is one of the reasons why Ford Motors Asia is pushing for growth and expansion. The management believes the emerging markets of Asia can drive the growth of the company.

The level of normative management which is responsible for the ethical issues and the expectations of the community on the organization’s programs and actions, also affect the performance and the quality of its services.

Ford Motors Corporation made some mergers and acquisitions which were quite not sure if the company and the community benefited at all.

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)

But these acquisitions produced negative results to the general public in the sense that the quality had to be sacrificed. Many of the cars which were the results of mergers were not performing well.

Quality Philosophies

W. Edwards Deming

Philosophies on quality centred on Deming’s failure to convince the American manufacturing sector in his ways of quality and methods. Deming’s quality methods were rejected by the American industry strategies. He wanted that management should focus on manufacturing processes that should have constant variations.

Quality, according to Deming, can have common and special problems. Examples of special causes are the ones which are caused by machines that need special attention. Common causes are systems causes and which should be looked upon by management. (Beckford, 2002, p. 66)

Deming’s philosophies were widely accepted in Japan; that is why he was considered a hero in that country. His methods became the basis for Japan’s quality processes.

The Deming Prize was formed to determine and define quality in production and manufacturing. In 1960, Deming was honoured with the Second Order of the Sacred Treasure, an honour bestowed upon him by the Imperial Majesty. (Beckford, 2002, p. 67)

Philip B. Crosby

Crosby stressed the importance of quality in the design of a product. There are organizations that should first solve its own troubles before they can infuse quality in their products. Crosby (1984) outlined the characteristics of troubled organizations:

• One common defect of a product that reflects a problem organization is that the product deviates from the normal requirements, including the announced or published ‘make’ of the product. There are inconsistencies in the product that when it goes to the customer, the latter finds it difficult to use or adapt.
• The company employs dealer networks that try to infuse some corrective actions on the product. This occurrence will result in the product being introduced with many innovations. It may result in the dissatisfaction on the part of the customers.
• The company does not have a clear program for quality allowing the employees to provide their own quality standards on the product. The job is supposed to be the job of management but employees are forced to do it for the management.

Ford Motors Asia Pacific has its own standards that it cannot be said that its cars declined because of lack of quality standards. As said earlier, there have been some factors that resulted in the dwindling of the quality of Ford vehicles.

Quality Tools and Strategies

Statistical Process Control

Deming advocated the use of a tool called statistical process control (SPC) charts which can be utilized to identify the special and common causes of quality problems. Deming wanted to identify and eradicate the so-called ‘outliers’. These are the problems in quality that can identify special causes.

Some of the remedies include training and good maintenance of machinery and equipment, and other possible means for improvement. Other problems can be considered common problems or causes and can be pinpointed to the system which is the production process.

Statistical process control literally means bringing the processes “under control”; that means the production processes or other activities involving product quality should be controlled in order to find solutions to problems.

Pareto charts are used to diagnose the problems in the production processes and identify the problems, and find solutions to the problems.

The Malcolm Bridge Award

The Malcolm Baldridge Award is a set of criteria that provides guidelines for the effective operation of an organization. It was originally intended for the manufacturing processes but later it evolved and is now applied to other service organizations including educational, health care and non-profit organizations.

The military also uses the Baldridge Award in infusing quality in their branches or to assess the different departments. Federal governments also use the Baldridge to assess the different agencies of the government.

States of the federal government have made Baldridge-inspired awards to remind personnel and organizations of the importance of instilling quality in their jobs and services. (Brown, 2006, p. ix)

Human Resource Management

Human resource management must be a major activity of an organisation because it was created to promote and pursue the aims and objectives of the organization. It also aims to have a quality human resource that will sell its products or serve the customers.

HRM was not a regular part of management personnel a few decades ago; the job of HRM was performed by personnel management. Now, an organization cannot function well with human resource management.

This function and part of the organisation identifies the organisation itself. If the people are not well trained, then that organisation is not an effective organisation.

Human resource management is the proper handling or management of the organization’s most valued asset, the people working as a team. It is the responsibility of management and the people working there to work as a team for the promotion or furtherance of the organization’s objectives.

In HRM, there is the central involvement of middle and low level management in order to have a good relationship with everyone working in the organization.

Emphasis is on people management, from top to middle- and low-level employees, and a division of labor in the handling of people in the workplace and in the field.

Human resource management should provide Ford Motors Asia Pacific with the necessary management strategies and tools for an effective implementation of product quality.

Management of Quality

In order for a workforce to be effective, there has to be a careful and deliberate workforce planning and employee development. Workforce planning is the initial stage of training and development and is an important aspect of human resource management.

Organizations have to introduce various changes in their marketing strategies, product orientation, employee management, and other organizational strategies. Cultural diversity is a trend in the age of globalization.

And organizations have to choose between adaptation and standardization in their products and marketing strategies in order to gain an edge in the competition. The demand for localized products is also growing.

Adaptation is one innovation that global organizations have to apply in their marketing strategies to adjust to cultural differences.

Since Ford Motors Corporation is penetrating Asia Pacific, it has to adapt to the local culture and the changing demographic in Asia and the emerging markets of China and India.

Deming introduced method which is the systematic process to solving problems of quality. His ways were copied and used in such processes as the EPDCA cycle in Oakland’s work. This method is used in the application of the standardization, the ISO 9001, 2000.

Deming’s method is the PDCA cycle or “plan, do, check, action”. This is also connected to Crosby’s process, which is to repeat the process.

This approach is considered a re-emphasis of management’s responsibility to focus its attention to infuse quality in its many activities. Logothetis (1992 cited in Beckford, 2002, p. 67) stressed that it can be considered a basis for a quality program which is self-sustaining.

Total Quality Management

Total quality management is a management framework that encompasses different areas that ensure the benefits of business are delivered to the fullest.

There are six concepts developed over the years by experts in the field of management, some of which are inter-related and connect to the concept of quality management as expounded in the previous sections related to Deming and other quality gurus of the century.

The six concepts are mentioned by Hakes (1991), and these are:

• Customers – the concept related to customers include external and internal; internal because there are customers inside the organization that need or patronize the product, while external are those not belonging to the organization that buy or patronize the products. The organization should focus along these two customers.
• Never-ending improvement – This refers to continual improvement on the product and the workplace.
• Control of business processes – There must be control of the production to ensure quality.
• Preventive Management – This may refer to upstream or looking for possible problems that may come along the way.
• Preventive action – this is done to institute corrective measures while the problem is about to occur.
• Leadership and teamwork – The leader and his team should be able to work together to provide quality product and service for the organization.

ISO Quality System Standard

The International Organization for Standardization is a standardization body that verifies the quality standards and compliance of organizations. The ISO 9000 certification is issued by the Standards Body to firms and organizations that comply with the procedures of the Body.

This is not a compulsory certification, but organizations adhere to the procedures and submit for certification in order to raise their standards of quality and excellence. Organizations which are issued with this certification improve their performance and raise their competitive standing to their particular industry.

Ford Motors’ Quality Problems

Ford made some mergers and acquisitions which were financial flops. As a result, production of quality products was sacrificed. In December 2005, it sold its Hertz Corporation unit for $15 billion.

Ford’s finances for the future were to be diluted with this sale because according to Standard & Poor’s, Hertz contributed to Ford’s profits.. (Standard & Poor’s, 2009, p. 213)

Mergers and acquisitions (M&A) should be properly planned and executed. There are many requirements and preparations before the actual execution of M&A. 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.

Ford had also 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. In Asia, some labour problems occurred in China because of the big demand of labour in the automotive industry.

Conclusion

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. Some of Ford’s cars are no longer selling.

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

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 Motors’s manufacturing of the small cars was a mistake. The cheap cars flopped.

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.

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 organisation’s 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.

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