Ford Motor Company Analysis

Published: 2021-07-06 06:25:22
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IntroductionFord Motor Company is one of the largest and the most financially sound car manufacturer in America. The economic and stimulating crises placed for the firm to face strategic and management challenges. The operations and the functions of the firm are the forced to liquidate its assets and towards bankruptcy. The analyst is of the view that the company will be free from the funding of the government after its progression and the execution of proper strategic plans. Opportunities for the revitalization are existed for Ford Motor to flourish and dominate the competitors.DiscussionThe company was founded in the years of 1903. Henry Ford was the organizer and his family controlled the firm since the times of its birth. With the assembly line production, the company developed the vehicles and the planes for Allied forces in World War II. Since 1904 Ford is operating internationally, and it has opened its network in Canadian state in the same year. Ford remained dominant car manufacturer in the first half of the 21st century. In the second half of the century, Toyota shares the market by manufacturing cars and exporting them in the US market. The times were the turning point for the US economy and it was also difficult to share the business with the competitive global market.The company is significantly inhibited by the substantial legacy costs, from the healthcare and pension benefits and falling the demands for the lucrative lines of the vehicles. To streamline the lines of supply the company in 1996 launched the ‘Ford 2000’ initiative and confirm the worldwide operative in a systematic way (Bals, 67). Despite certain successes, like the Ford Focused model, the firm’s prices were high than its competitors. The biggest loss of the company’s history was during the year of 2006 and it costs 13 billion dollars. The consistent deterioration of the company in the market provides benefits to the Toyota and the General Motors, which enlarge their shares.In a decade the company’s US operations plummeted from the 25 percent to the 15 percent. During the failure times, Alan Mulally was hired as the chief executive officer of the company. The new restructuring plan was adopted and named as ‘The Way Forward’ for the purpose of the collaboration of aligned capacity with the demand. According to the new policy, seven assembly plants along were closed along with the strategic reorientation of the business. The plan involved the standard strategy and creation of the standard Ford personality. Many automobiles company have adopted the policy of Ford. More focus was on the plate of Ford name. The Ford mortgaged all the assets which include the intellectual and physical property.With the potentially desperate move, and timely acquisition of the capital has revealed Ford as the most stable among the other carmakers. During the crises company also divested some of the non-ford brands. Selling Jaguar and land rovers to Tata Motors for the 2 billion dollars was also divested investment (Becker, 45). At present Ford is selling the Volvo which is purchased in nineteen ninety-nine for 6 billion dollars. There are around two lac employees serving with the Ford Corporation. Four primary brands are composed by the company which is Lincoln, Volvo, Mercury and the ford. Two departments are working in the company the one is financial services and the other is Automotive. The Ford credit offer are accessible to the costumes and the dealers. Forty percent of the vehicles were sold by the Mercury, Lincoln, and the Ford dealership in US market were financed by the credit of Ford.The number remained stable during the past three years. A slight change in the European region which was twenty-seven percent. Financing for the purchases of wholesale is all done by the Food credit (Chen, 340). The number is slightly below eighty percent. The automotive segments of Fords Company are manufactures, cars, trucks, and the SUV’s vehicle part. The sector was broken by the regions of South and North America, Europe, and the Asia Pacific Africa. Volvo is the only exclusion in this regard. It manages the sale of the Volvo in the world business networks. The retail sales of the dealership model include the dealership signs and contracts with the companies to sell the Ford Vehicles.There were nearly four thousand dealerships which operated in the last decade. The half of the dealerships are sold with the brands of Mercury, Lincoln, and the Ford. The production of the vehicles for the company contains twenty days from the times of shipping. It means that Ford is not backlogging or facing the little inventory buildup. In the spring and summer due to high demand the production primarily high in the first two quarters of the business. The company is the largest automobile service providers in the world.The current market cap of the Ford Motors is ten billion dollars. Past few years are intimidating to the shareholders of the US automakers. The equity valuation of the General Motors and Ford Motors has distorted subsequently (Dennis, 7). The trade of Ford stocks was above to 14 dollars per share in the last decade. Burning through cash on hand and the unprecedented rate there were huge losses to the Ford Company in 2008. The estimates afterward predicted that company will not face any more losses in the future. The company is engaged in the strategic downsizing since the past few years (Macdonald, 13). The approach is applied in US market with ceding the market share to its competitors. The management is acknowledging the fact that company is not allied with request and has stripped its business from many corporations.Ford Motor, at the moment, maintains around 15 percent of the US market share. Fourteen million cars were traded in the United States in the recent years. The estimates are bleaker than the past year with the predictions ranging from the 10 to 12 million dollars. Sales were down from the increased rates which were around 38 percent. The market share of the Ford in the European region is currently ten percent. The strategically important places and the state are including the Russia and Turkey. The company has achieved above average market saturation. The shares of Fords in Mexico and Canada are hovering near twelve percent. However, in China and India, the ratios are extremely low.The financial conditions of the company show deteriorate able condition. Ford entered in the year of 2009 with the cash in hand of fifteen billion dollars. In the same way, GM, and Chrysler are also negotiating with the state to act as a lender and save the two companies from bankruptcy. The bailout package for the automakers provides them worth of the loans and financial assistance. According to the policy of bailout package, the companies were restricted for viability. The repurchase of the loans by the Ford Company is a productive and strategic step towards securing the long-term financial security (Macdonald, 15). Ford must strive for the best and push the rivals to be closed down especially those corporations working in the eurozone and America.The company must restructure its supply chain and change it according to the advanced rules of the strategic business management. There are sixteen hundred suppliers of the company which could be reduced to the half of the total numbers (Qi, 15). The current instability in the market, specifically the potential bankruptcy of the competitors, increase the importance of the reduction in supplier’s chain. The contracts of the Ford can be reduced for the economic stability of the market. Other than the critical suppliers the company must examine the overall performance and services of the suppliers. Those contractors should be given preferences over all the distributions made by the suppliers. The significant importance is for the Visteon which has the business of four million dollars during the last decade.Ford is applying certain strategies to boost its business. The target audience for the strategy is to or more segments by developing the marketing mix of each segment. The company has different types of cars and different consumers. The economic cars, vans, station wagons, trucks, sports cars, and the luxury cars are some of the samples of Ford Company. Focusing on the young males and females the company also has the Ford Fiesta car. Six-stigma applied by the Ford to control system by eliminating the data-driven deficits. The company has been regarding DAMAC approach over six sigma programs. Those include the Define, Measure, Analyze, improve and the control.To maintain the marketing edge over the competitors Ford is using different promotional strategies. Advertisement and the attractive logos with slap line and the amazing design are the features that provide the company an edge over the activities of its contenders. Below the line and above the line are the two promotional strategies of the Ford organization (Reich, 415). The definition of promotional strategy according to Ford’s strategy is the building of the long-lasting relationship with the previous and loyal customers. It also includes the potential and new costumes. The company despite the fact not sponsoring sports events and activities have the edge and exclusive opportunity in the challenging market.The sponsorship times helped the organization to tap the passion of sports of its customers and soared the brand names and images of the company in the eyes costumers and fans. This technique also provides them in handling the promotional side of the business with tactics to develop their brand name (Srinivasan, 641). Certain new changes could be seen in the strategy of the of the company as it will use ‘pull’ strategies for the new segments while ‘push’ strategies for the traditional segments. In the Company’s public relation strategies the sponsorship has the effective role. Two major objectives could be fulfilled through the public relation campaign the first one is the building of brand recognition and reinforcement while the second is to achieve good relation between costumers ad the company.The pricing strategies of the Fords are market-based pricing and the base for more demand. The company is applying innovative plans that include the ‘Blue Tag’ means that reduction in the recommended list price of the small and medium cars from smaller to larger cars range. It also included the reduction of the dealers and discount. Six to fifteen percent prices discount is on the Ford Fiesta cars. The company is adjusting two types of prices which are penetration pricing and skimming pricing. The penetration pricing is the tool which includes the artificially low prices aims at attracting the larger number of costumers and influence the market share. In presence of many competitors, the strategy is good. Profits are mostly not the main concern in such kind of plans.The most important aspect of the pricing strategies is to get the product known and worry about the money by the particular product (Steiber, 13). The company’s pricing programs for the commercial and passenger vehicles is set to strengthen the appeal of brands for retail customers. It called up the benefits for the ultimate costumers. Ford’s strive for the balance between the technically advanced feature and the quality which results in the reasonable price. For the low-income group, the company provides reasonable prices along with the capacity of saving low maintenance and fuel consumption (Tewari, 25). The requirement of the business is the minimize costs which are connected with the software and managing of the specific software in the vehicles.The reduced costs provide the company to come up with the different way of dealing with the business. An innovative way of testing, managing and validating the software content is essential and goes on the vehicles of Ford’s Company. This is the most important aspect of the future supply and affecting the quality of the products delivered by the Fords. The reprogramming is the controller ad much quicker than the replacement of hardware, ultimately decreases the price of repairing. The practice also decreases the risk of about a party is out of the stock. It helps the customer to be satisfied while leaving the car overnight.By applying the research techniques Ford Motors classified the names of generous, elegant, and midsize cars. Use of blue oval symbolizes the ford brands along with the determent value-added and price to the cars. The Ford oval symbol has the historical value for the company, and it is also the most standard logo in the world. The US market position of the company provides it the strength in contrast with its competitors. Since America is the central to many states and people from across the globe visited and known to different professions. Those people also give benefit to the profit and business of the company.The financial performance of the company is its edge over other companies. It has the standard and value in the US business market (Qi, 15). The one growth of the company is also benefiting and strengthening its position in different parts and regions of the world. Significant growth of the Ford operations in China is the contribution besides the other weaknesses of the company. However, there are certain weaknesses of the company like the high-cost structure which prevents the common customer in buying the car or any vehicle (Reich, 417). The European operations of the company are unprofitable and there is no ideal growth which could enlarge the business of the corporation. In the same way, the company lacks its operations and business in the Asian region.The Asia Pacific region is also an important business hub for the company if due attention given to the operations. A reasonable investment in this region has the potential to repay the double amount to the company. The green vehicles can enhance the opportunities and value of the company. Increase in the fuel prices is also a good choice for the company to boost and enlarge its business. Partnership with the other leading organization can enhance the viability of the Fords Company. Most of the company’s vehicle and the operations rely on the high prices of the fuels. If it goes down it will significantly affect the business.The rising of the raw material is also big challenge and threat for the company. To modify and streamline the said material will influence the financial issues of the company. The most important of all the challenging for the Ford Corporation is the fluctuating prices which create a kind of uncertainty in the business market. Unstable prices in every business including the vehicles placed dangers for all the investors (Srinivasan, 648). The company will have to tackle the issue of changing the atmosphere of the stock exchange and the decline in certain prices. The five forces analysis of the Porter model reveals that the ford company maintains its position as one of the largest manufacturers of the automobiles.The external factors of the Michael Porter developed the five forces for the industrial environment. The company faces the toughest competition in its business market. The analysis shows that competing firms are influencing the atmosphere of the automobiles (Greenspan, 11). The high aggressiveness of the firms, the moderate number of firms, and the high exit barrier are the external factors that contribute towards the competitive challenge for Ford Motors. In the same way, certain external factors that influence the bargaining power of the company. Those include the moderate switching costs, availability of the substitutes, and the moderate size of the individual.The suppliers also have the moderate influence on the company. Overall supply, the moderate population of the suppliers, and the low vertical integrative forces significantly destruct the Ford’s supplier’s forces. Similarly, the substitution and the availability of the substitute affects the products of Ford’s company. The low performance of the substitutive forces enhances the quality and the reliability of Ford’s products (Greenspan, 13). The costumes can easily switch towards other company because of the attractiveness and easy integration, which could be a challenge for the company. In the industrial environment, the company feels that new entrants are influencing the business of the company. Based on the analysis of the Michael Porter the company have the weak threat from its competitors.There are certain problems faced by the Ford Motors. After averting the issue of bankruptcy the company desirable problem is the demand which outstripping its production capacity. Despite getting away from the demand and building plants the destructive carmaker is finding ways for more production from the existing factories located in North America. The company is decreasing the blockages of the suppliers and increasing the assembly line speed. It also started the round the clock production to roll out more production with the passage of per hour (Dennis, 11). Company’s rivals are also getting increased demands. Honda will invest two hundred million dollars to boost the capacity in Ohio. I80 million dollars will be spent on the engine plant speed up the services.Chrysler is also formulating developmental and reformative plans for the competition in the automobile industry. It is adding the capacity which will ultimately create jobs of around three hundred at the Michigan engine plant. Another competitor is the General Motors which is planning for the launching of the eighteen updated and new vehicles in the coming year. It has announced that the company will enhance its investment of two million dollars in Tennessee plant (Tewari, 25). The purpose of the investment is to build new midsize cars. Increase competition and the challenges show that Ford Motor Company will have to devise a strategy that could effectively tackle with the rivalries in the business environment of the automobile industry. The corporation is trying to cope with the problem by launching multiple programs but needs more to sustain in such a complex environment.Conclusion Concluding the discussion, Ford Motor Company is one of the largest and financially rigorous car manufacturer industry in the United States. The corporation needs to decrease the cash burns and bring prices downcast as quickly as possible in order to stay inundated in problematic economy of the modern era. Similarly, a highly managed liquidation can influence the business of the company. Ford Motor must differentiate itself from the competitors by executing the One Ford vision. The company must not misplace vision of the larger picture while bidding to make the most of Chrysler’s and GM faintness.Works CitedBals, Lydia, and Wendy Tate. “A mixed-methods analysis of the effect of global sustainable supply chain management on firm performance………… Jean-Paul Meutcheho, Lawrence Technological University, USA.” Implementing Triple Bottom Line Sustainability into Global Supply Chains. Routledge, 2017. 66-88.Becker, D’Arcy, Marcy Orwig, and Aimee Pernsteiner. “SYMBOLIC VERSUS SUBSTANTIVE REGULATORY DISCLOSURE REQUIREMENTS: THE CASE OF FORD MOTOR COMPANY IN THE EARLY 1900s.” Accounting Historians Journal 42.2 (2015): 35-61.Chen, Yi-Su, Kevin Dooley, and M. Johnny Rungtusanatham. “Using text analysis and process modeling to examine buyer-supplier relationship dissolution: The Ford-Firestone breakup.” Journal of Purchasing and Supply Management 22.4 (2016): 325-337.Dennis, Pascal. Lean Production simplified: A plain-language guide to the world’s most powerful production system. Crc press, 2016.Greenspan, Roberta. “Walmart: Five forces analysis (Porter’s model).” Panamore Institute (2015).Macdonald, Dwight. Ford Foundation. Routledge, 2017.Qi, W. A. N. G. “A Study about Gene of Succession of Ford Motor Company Based on Grounded Theory.” DEStech Transactions on Economics, Business, and Managementicssed (2018).Reich, Daniel, et al. “Scheduling Crash Tests at Ford Motor Company.” Interfaces 46.5 (2016): 409-423.Srinivasan, Hari, et al. “Software architecture for developing in-vehicle software applications.” U.S. Patent No. 9,081,648. 14 Jul. 2015.Steiber, Annika. “A New Model for a New World: Why It’s Needed and What It Consists of.” Management in the Digital Age. Springer, Cham, 2018. 7-14.Tewari, Devanshi, Amrik Singh, and P. C. Tewari. “Ranking of Performance Indicators in JIT-Based Production System for Manufacturing Industries.” IUP Journal of Operations Management 15.1 (2016): 25.

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