Ford Motors Company activates in a mature and highly competitive market and threats come not only from within the United States, but also from abroad. Due to globalization and market liberalization, the automobile manufacturers from Asia are easily capable to sell their products to the American consumer. Brands play a pivotal role in competition as customers tend to make purchases based on it. The competition is also intensified by the vast offering of substitute products, often materialized in public transports or personal automobiles running on alternative combustibles. Another source of rivalry is that the products often seem to look alike, and there are few features that offer one vehicle a point of difference.
The effects of the intense competition are various and often depend on the unique characteristics of the company, its served customers and the market where it operates. There are two most common outcomes. The first one sees that the organization will further increase its efforts to overcome the competition; the second one sees that the manufacturer will reduce his efforts as it becomes too difficult to succeed in the dynamic environment. Given however that the automobile industry is a mature one, the threat of new entrants is quite reduced, implying as such that most of the players in the industry have a considerable status and sufficient resources to engage in market battles.
Among the strategies most often used to gain a net advantage over the competition, one could point out the offering of promotional sales, the offering of financial services upon purchase, the car redesigns to fit newer requirements or a wide array of complementary services. Ford has primarily engaged in promotional sales and financing opportunities to respond to the competition's actions. They have also redesigned their automobiles, but they mostly did this to comply with new fashion trends, rather than environmental demands.
4.5 Demographics and Labor Market
There are three major players in the American automobile industry and two in the global context: General Motors, Chrysler and Ford in the U.S. And Toyota and Honda from Japan. The automobile industry is one of the largest employers in the United States, with an estimated 1.1 million jobs. Twenty percent of these jobs are generally located in Michigan, in the Detroit area, but could also be found in the southern regions of the country. "The majority of jobs, about 61%, were in firms that make motor vehicle parts. About 23% of workers in the industry were employed in firms assembling complete motor vehicles, while about 16% worked in firms producing truck trailers; motor homes; travel trailers; campers; and car, truck, and bus bodies placed on separately purchased chassis" (Bureau of Labor Statistics, 2008).
Ford Motors is currently unable to maintain their level of employment, and have begun processes of downsizing the staff members. By 2012, they intend to close down 12 plants in North America (Brand, 2006).
4.6 Ethics and Social Responsibility
Ford has been engaged in disputes over the ethical implications of their operations. They for instance were accused of collaborating with mafia representatives to intimidate union leaders, force them to accept lower wages and increase as such the corporate profits. Violence was presented by the accusers as a means of resolving union disputes. Accusations of industrial espionage were also brought to Ford (Nolan, 1997).
Today, the organization is striving to behave according the highest standards of social responsibility and environmental sustainability. They have already commenced their efforts to better satisfy the changing needs of the customers. In this order of ideas, they managed to reduce the levels of waste eliminated by their vehicles (Business Wire). Through this, they hope to achieve a significant reduction in the emission of greenhouses gases, contributing as such to a better health of the environment and the individuals.
5. Potential Outcomes of the Propositions
The proposition to replace the technologies for the making of the large and luxurious vehicles with the technologies used in the manufacturing of smaller and more fuel efficient vehicles could generate numerous implications. First of all, it would imply additional costs, which could affect the corporate revenues. On the other hand, the current status quo is already generating losses and the implementation of the new strategy could result in costs savings in the long run.
Then, a change in the image promoted by Ford would occur in the meaning that they would be regarded as a more flexible and adaptable company. This could materialize in losing some of the customers that were loyal to the classic Ford brand; the customers gained however would significantly outnumber the lost ones. All in all, the strategy does pose some risks, but the gains are worth its implementation as it would materialize in more customers and increased revenues.
Ford Motors Company was established in 1903 and achieved national success by being the first automobile manufacturer to implement mass production practices. Through the commitment and dedication of their administrative and operational personnel, the company was able to consolidate its position as an international leader in the automotive industry. Their strategies had primarily been based on high levels of confidence and trust in the brand. The twenty-first century caught them producing large and luxurious vehicles designed to satisfy the growing needs of the American consumer.
As the international context mutated however, the demands of the customers changed. They now require small size and fuel efficient vehicles, which Ford failed to deliver. The immediate outcome resulted in decreasing net and operational revenues and a weakening position onto both American and international industries. The sole solution to repairing the damage is that of replacing the current technologies with ones specialized in the production of the desired vehicles. As a recommendation for the future, Ford should remain alter to all changes affecting the environments and implement strategies in response to the changes.
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