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Ford Motor Company
Alan Mulally has transformed Ford Motor Company from a firm that only a few short years ago was floundering in an industry-wide morass of mismanagement, inefficiencies and no sense of direction. Since assuming the helm at Ford he has devised a plan that identifies specific, communicated goals for both management and labor that ensures that the transformation from the brink of insolvency to profitability not only takes place, but does so with a minimum of distraction to the company's focus. Mulally understands that the company's competition is not only from Ford's direct competitors but that other competitive forces are at work as well. He also understands that Ford must adhere to a business-level strategy that includes all aspects of automobile sales; not just the ones that take place at the dealership's lot.
Considering the fact that Mullally seems to be the type of leader that is "involved in overcoming difficult experiences and uses these events to give meaning to their lives" (George, Sims, Mclean, Mayer, 2007, p. 129) one could say that Mullally is a good example of an 'authentic leader' (at least according to George et al.). Knowing that Mullally is an authentic leader, and also knowing that he listens well to his employees, it is important to provide a solution to the current strong competitive winds that are buffeting the company. Accordingly, one must understand how the five forces of competition work to undermine the company and the company's goals and objectives.
The company is seeking to maintain and grow the bottom line, or profitability, of the company in order to maintain the company's place at the top of the industry as a leader in providing quality vehicles at a competitive price to a worldwide marketplace.
It is important then to understand that it is not only the other vehicle manufacturers around the world that are the company's competitors, but the customers, suppliers, other possible products, and potential competitors that the company must be aware of as well. The plan should take into account these five forces of competition and develop a plan to combat those forces.
One method the company can use to maximize its resources against its foes is to create a step-by-step plan to reach its goals and objectives and then to implement that plan in an orderly manner. The plan should take into account all markets, including the less profitable basic automobile market that is a constant in the industry.
As an example, Amazon recently introduced a low-priced iPad to compete with Apple's high-end tablet. The Amazon product does not have nearly the capacity or capabilities of the Apple product, but it is an excellent product for the beginning iPad user or a consumer with little discretionary funds available for extravagances. Amazon is looking to compete at the lower end. Apple could, of course, just ignore the possibility that Amazon could be establishing a foothold, and do nothing, or it could offer a stripped-down version of its own high-end product to compete with Amazon, thereby staving off any possible competition. Ford, too, can do the same thing. By offering a stripped-down, bare necessity vehicle for the consumer who does not need all the bells and whistles, or to those consumers making their first foray into the automobile market, Ford can capture the loyalty of these individuals that will translate into additional future sales.
Ford has other competitors to worry about other than the low-end market; it also has the high-end market, truck sales, financial services, supplies that may or may not be forthcoming, green products and regulations, and other automobile manufacturers that could offer some or all of the above products and services in a less expensive or more efficient manner. Ford's value chain activities can assist in addressing the forces of competition by focusing the company's attention on the items that are most important. Value chain activities are company activities that help in creating and manufacturing the company's product(s). The product passes through the chain of activities one-by-one in an orderly process with the end result being a product that gains from value from each step along the way. The completed project has more value because it has gone through the process than the sum of all its part.
Ford's value chain addresses a number of different areas. According to the Ford website the value chain includes components such as; Product Planning and Design, Logistics, Raw Material Extraction, Parts and Components, Assembly and Painting, Sales, and Use (Ford, 2011). Each component has a specific plan that encompasses the strategic planning process model. Three of the primary attributes to strategic planning are providing for and preserving a natural environment, employing information technology in a comprehensive and efficient manner to enhance the overall process, and consideration of global events, as well as the needs and desires of the global marketplace consumer.
The purpose of this paper is to present a possible scenario for enhancing the current value chain process using the strategic management process.
Since Ford Motor Company seems to have an effective value chain in place, the key for any improvements is to improve the manner in which the value chain is used. Improvements can be made to almost any process or system, in order to determine which improvements will work best for Ford, it is also necessary to understand the manner in which the system currently works. When Alan Mulally, CEO, first took the reins at Ford Motor, he implemented weekly meetings with the managers of the various divisions throughout Ford. Much of the success that Mulally has achieved so far at Ford can be attributed to the way in which he asks for information from his employees, digests it, and then asks them to provide solutions to ongoing problems or scenarios. At his weekly meetings with all the senior leadership and divisional managers he receives weekly reports from these individuals that cover the day-to-day operations of each division. Much of his success can be credited to the manner in which Mulally approaches and listens to these (and other) employees. Instead of berating his employees for the problems, he asks them to determine what went wrong and then provide solutions. Peter Drucker, a management guru and consultant, feels that the good business leader allows their employees to feel a sense of control; Mulally seems to be giving his support to that theory by allowing Ford employees to give input in a non-threatening environment; thereby giving the employees a sense of control. In Concept of the Corporation, Drucker states that "both leaders and employees will benefit" (Drucker, 1983) when the employees feel that sense of control.
Perhaps the Mulally approach that seems to be working so well on the company level can also be implemented on the divisional level; taking into account as well the value chain process.
Ford Motor Company's value chain provides the arena in which the product is enhanced as it goes through the process. Each part of the process can implement the same type of weekly meetings, on a smaller scale, within their respective divisions as well as with the other divisions in order to more fully understand how each division is not only important as a stand-alone unit, but as an integral part of the entire process.
Using technology to implement these ongoing meetings is an important part of the process. There are a number of software programs available to assist in this important venture. Some of the programs available include Clarizen, At Task, Celoxis, Project Insight, and Project Manager.com. Choosing the software that will be the closest fit should be an easy matter, one it is determined exactly what is needed. Since information technology is constantly changing and it is one of the primary tenets of the strategic planning process, care should be taken to develop a consensus on what program will work best for the entire company, rather than focusing on a division by division assessment.
Each of the above software programs will assist in tracking project aspects; however, it seems as if Clarizen is the most flexible and user-friendly software for project use. What will still need to be determined is if the software can be manipulated to work for the entire company, rather than just one division or project. It would also have to be determined if the software is conducive enough to handle a company the size of Ford, or if other software would be better suited for Ford's needs. The new software will help to track progress and results, but more importantly it could also help in creating more effective communications between the departments, and other internal and external entities.
Efficient communications between the various stakeholders is another important concept when addressing the five forces of competition. When a company establishes efficient, effective and open communications internally, and then supports the same efforts externally, all areas benefit.
Instituting new software is just one aspect of addressing the competition. Other areas of concern would be to host regular meetings with suppliers.…[continue]
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