Case Study of Ford Motor Company essay

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Ford Motor Company

Case Study of Ford Motor Company

History, Development and Growth

Ford Motor Company has been a vital American automaker since its incorporation in 1902. The car maker was started at that time by Henry Ford and has continued with some member of the family on the board of directors since that time. The company began selling individually manufactured vehicles, but moved to an innovation devised by the founder soon after. Henry Ford wanted to make a car that was easily mass manufactured. He came up with the Model A concept. Ford had all of the parts pre-made and then as the individual cars progressed through an "assembly line" parts were added at different stations until the car was complete at the other end of the line. With this new method of manufacture, Ford Motor Company was able to undercut the competition in price per vehicle. Following this, Ford grew astronomically.

Through the years since its inception Ford has had the ups and downs of any auto manufacture, mainly regarding the production of certain vehicle lines. The Model A was followed by the Model T. which became the standard vehicle for middle America. In 1958, Ford started a new line of cars called the Edsel (named after one of Henry's sons). This car was not popular with the public from the start, and production ended in 1960. In the 1960's two of Ford's vehicles lines started their runs as icons. The first pony car, the Ford Mustang, debuted and was an instant hit. The F-series pickup trucks also became the American standard during this time. The F-150 became the bestselling vehicle in the world in the 1980's and remains so. With a rich history of innovation and market leadership, Ford has always been a company that others looked to as an American ideal (Funding Universe, 2004).

Recently, the company has seen some of the same rough times as the rest of the country. The economic downturn hit the automobile industry especially hard, but Ford was the only one of the "Big Three" American automakers which did not take money from the federal government. The company remained true to its founding principles, and did not take a handout. One of the reasons that Ford has been able to successfully weather the difficult economic times is that they have been a leader in green technology (Ford, 2010). The company has become dedicated to producing cars which reduce the amount of gasoline that is required for operation. Because Ford has started to transition to alternative fuel technologies for all of its brands, has introduced new technology, and has continued to manufacture vehicles with impeccable safety records, they are uniquely positioned within the American market (Ford, 2010). Ford has streamlined operations by selling off some of its subsidiaries and discontinuing others. They have not had to close many plants, but have remained loyal to their customers and employees. Due to all of these factors, Ford remains a success.

SWOT

Strengths

Ford Motor Company has many strengths that have made it one of the strongest companies in America. It is the fifth largest automobile manufacturer in the world (second in America), the company is the number seven company of the Fortune 500 list, and they produced more than 5 million vehicles in 2009 (Ford, 2011). The company has a presence around the world that is rooted in strong sales in both North America and Europe. The Ford brand is known worldwide as one that promises quality and dependability. In 2010 Ford received more awards from JD Power & Associates for customer satisfaction than any other manufacturer (Nestor, 2010). Five of their vehicles were at the top of their category among all entries and 14 others were mentioned. Ford has also developed alliances with European and Asian automakers that have enhanced its innovation, quality and sales in foreign markets. In 2010 Ford motor produced a full-year profit of $2.6 billion. This was the first time in six years that they enjoyed a full-year profit gain.

Weaknesses

Ford has suffered, as have many other automakers, from the economic downturn that has threatened the world. The company had to sell off several of its subsidiaries (Land Rover and Jaguar to Tata Motors of India, and Volvo), and they have had to reduce their stock in other companies (Mazda and Aston Martin) (Nestor, 2010). This has reduced their overall sales capacity and has weakened their total worldwide stance. They have been forced to close some plants in foreign markets and sales have decreased in fiscal years 2008 and 2009. One major loss for Ford, especially in relation to stock price, was the massive recall it endured in its Explorer when it was determined that the vehicle was prone to roll over. Ford also saw a decline because of their association with Firestone Tire Company.

Opportunities

The future looks like it could be bright for the auto industry, and especially Ford, as new innovations in fuel efficiency are starting to come to the market. Ford is working to introduce a new line of fuel cell vehicle that are completely powered with hydrogen (Ford, 2009). The drawback at present is that there are very few refueling stations, so the cars are not widely feasible. But automakers are working with fuel suppliers to create the needed fueling station infrastructure. Hybrid cars have been popular sellers in the auto world for almost a decade now, but with new battery technology they are becoming even more popular. The problem in the past for these cars has been their resale value because replacing the battery is very expensive. However, new batteries will be smaller, lighter and less expensive to replace. Ford is also set to release the first fully plug-in electric vehicle to the market also. With people being increasingly environmentally conscious, this promises to be a bestselling item. The future also looks bright as Ford and other manufacturers work together on other green initiatives (Ford, 2010). Since people are looking at ways to completely make over their company processes, Ford has the chance to be a pioneer in new implementing new technologies at its plants that will reduce its carbon footprint and make it a more attractive company to consumers.

Threats

Like any other concern, Ford is always under the threat of competition. Since Ford is now only the fifth largest automaker in the world, they are fighting an uphill battle with companies that are better placed to enter new markets, and have more money for research and development. It is always a danger that a company will become irrelevant, and there are more entries every year into the marketplace (Nestor, 2010).. Ford is also susceptible to rising fuel prices around the globe. With the threat of more unrest in the Middle East, and unfriendly oil producing nations in Argentina and Mexico, car companies have to work harder on non-fossil fuel vehicles. There is always the danger that a company will have a recall that it cannot predict which will cause people to look at another brand. This happened to Ford in the early 2000's with the Explorer line and it is happening to Toyota at present. Also, like any other multinational corporation, Ford Motor Company is faced with unfamiliar regulations in other countries. Ford has to maintain friendly relations with the countries where it conducts business. Other threats such as substitute vehicles that reduce market share, currency fluctuations and a continued recession are real and have to be planned around.

Vision Audit

Ford Motor has been around long enough that they have gone through many different vision statements through the years. Currently they are using the "One Team, One Plan, One Goal." This vision statement means that Ford employees of all stripes are working together to forge a better overall environment for both the employee and the consumer.

This has become the rallying cry for the entire organization from the top tier of management personnel to the hourly employee. Ford is dedicated to making sure that the environment within the company is as strong as possible because it realizes that if it wants to maintain its quality, the company has to have employees that take pride in their work. This process is also designed to make Ford a leaner more responsive company. In the past, automakers have believed that to be successful they had to be larger than all of the competition. This meant growth through an increased number of product lines and acquisitions. However, Ford has learned that tying itself to these ideals was handicapping it and slowing overall productive growth. Therefore the company has successfully pared its divisions, and made it possible for all employees to have a voice in the decisions that are made with regard to the company.

Shared Vision

Ford has always been a company that is interested in the future. The status quo is not what the company was founded on, and its present leaders are equally interested in innovation and positive change. The company's…[continue]

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