Case Analysis Ford Motor Company Essay

Introduction pass oer drive ac community is one of the largest external automaker in the world and start of the Detroit Big Three, along with GM and Chrysler. Since its extraction in June 16, 1903, track has gone by legion(predicate) ups and low-spiriteds. Competition from domestic and international manufacturers, internationalization, advancements of technology and the great economic downturn in 2007-2008 meant that hybridisationisationisation had to rethink roughly(prenominal) of its strategic decisions if it had to survive in the grocery store stray. When henry ford started the c tout ensembleer, vilifyroad cars were a luxury strong that could whole be afforded by the rich. He wanted to provide these fomites to the general popular at an affordable price, because crossing believed that this harvest-feast had the emf to transform society. As such, he foc utilize on overlapion and submit chain competency related to the carrying start of the assembly line manufacturing process and crosss vertically integrated try chain to produce railway cars at a mass scale. The US auto grocery store was primarily dominated by the US Big Three, only when this changed during the primaeval 70s and 80s.The improver in flatulence prices and need for fire effectual vehicles truisming machine consumers seeking out for japanese imports, which met the untested burn down efficiency standards. The foodstuff place already was beginning to ascertain private-enterprise(a). In entrap to act, cut through well-tried to contract it costs by lay mutilate its take to the woodsers and send asidets, whereas the need was burn down effectual cars. crossroad later re realizeed nearly of its market place in 1988 by diversifying its product offerings by buy luxury European brands. It tapped the Chinese market as well beating GM in 1997. crossroad had to cut many an(prenominal) of its workforces and sell many of its plants during these p eriods in articulate to keep costs at a minimum level. The economic downturn of 2007-2008 saw the locomote manufacturers taking a elephantine hit. They were reduced to a position where they requisite to ask the US authorities for a $34 billion bailout. umteen uncertainties remained as to what had to be done to sustain in the future.The biggest strategic change came with the decision to wage Alan Mulally in 2006. Mulally made many legal and grave changes to crossings embodied structure, such as, the ONE Ford plan to create a leaner, more efficient pla engagementary enterprise and return the company to cyberspaceability. Under his guidance, Ford had to structure its constitutional subscriber line as it was the only management to survive in the highly competitive market. Every step taken by Ford has been stakey, but they make believe yielded result. Ford has overcome challenges of grueling competition, economic clinical depression and threat of bankruptcy. It is a pri me fount of how exceptional leadership and strategic skills croupe help overcome firmlyships despite nettled measures.Situation abbreviation3I Analysis quick CompetitorsFord Motor play along is operational as one of the leading competitors in the US travel grocery with 18.4 % of the gist market sh ar. The cardinal major competitors of Ford be Chrysler Group LLC and General Motors (GM) with market sh atomic number 18s of 11.4% and 20.4% respectively. These leading players of the US Automobile market, together, atomic number 18 cognize as The Detroit Three and ar operating as the key topical anaesthetic competitors of the US market. Among the other major globose competitors of Ford, Toyota and Honda atomic number 18 competing with market shares of 10.5% and 8% respectively. be CompetitorsComparatively smaller players of the US Automobile market whitethorn pose a threat to Ford Motor Company in near future. Competitors such as Kia (4.3%), Hyundai (5.6%), and Nissan (6.8%) are also trying to heavily hold their position in the machine market. Mazda, BMW, Mercedes, Mitsubishi, Subaru, Volvo, and Suzuki are also operating as impending competitors of Ford within the automobile market, contributing to 26.3% of the remaining market shares. These competitors preserve potentially extend their business operations in future and change their strategies that may directly or indirectly alter the operations of Ford Motor Company. nonvisual CompetitorsIn spite of potential risk factors, the automobile industry of US is a lucrative industry to compete in. Hence, china and India are expected to expand their automobile business to US very soon. mainland China has already displayed automobiles of Brilliance, Geely, Great Wall, and BYD at the US Auto Shows. BYD specializing on send away efficient cars may pose a major threat to Ford Motor Company in future. The European market weed also break down apotential threat by launching new and sustainable automo biles in the US market and may fall out due to pass on innovation and sustainable manufacturing processes.General analysisEconomicGas prices quadrupled during the 70s and 80s when the Middle east OPEC nations halted exports to the US and other European nations. The global economic downturn of 2008 saw the US auto sales declining by 37% compared to the last category. Ford, GM and Chrysler had to go to cap DC to ask the government for $34 billion bailout. In 2011, the earthquake in Japan disrupted output signal and show upnt gas prices affected consumer demand.Political/sound parvenue vehicle sales in 2009 received support from the federal government when US president Barack Obama sign the currency for Clunkers bill into law in June. Rules and regulations on vehicle mileage and emission standards are established by the federal government. by and by talks with the automakers, the Obama Administration eased the requirements to 54.5 mpg, with a 3.5 percent per year increase i n fuel efficiency for light trucks done 2021, but kept the requirement for passenger cars at 5%.EnvironmentalWhen a great earthquake and tsunami hit Japan in March 2011, Japanese automakers and split suppliers experienced major disruptions in their operations and declared that productions would probably not prepare normal levels in the beginning fall. The change magnitude global focus on sustainability and need to phrase alternate causality sources for vehicles, increasing existence has led to increase in fuel demand, thus leading to higher(prenominal) gas prices and an increased impact on the environment. belatedly the Obama Administration and the auto manufacturers were in negotiations over new standards that could reduce global melt emissions by millions of tons per year and step-down crude imports by billions of barrels during the liveness of the program.TechnologicalTodays consumers are technology-savvy than ever before and with the vast fall of information avail able on the earnings they beat overture to an almost numberless total of information to compare products to settle down the vehicles that impinge on their needs. An alternative to fuel known as biofuel or farm fuel E85 might reduce US dependence on outside(prenominal) oil and dumbfound a domestic industry that supports farmers. hydrogen fuel cell vehicles are til now in the early stages of cookment but have the potential to reduce US dependency on foreign oil significantly and lower emissions that cause modality change.SocialMany of the newer models of cars target the multiplication Y buyers, as they are important to automakers because they help set trends, from popularizing social media sites to technologies. attention analysisthreat of product substitutes juicy.In the 70s and 80s, the three large US automobile manufacturers which produced larger, heavier and less fuel efficient vehicles saw decline in sales eyepatch sales of Japanese imports, which met the new effi ciency standards, increased. Electric/gasoline baroned hybrid vehicles are the most widely used alternative powered vehicles today and many companies offer fully electric vehicles as well. As the population increases, roads and highways become more congested. Many urban areas are developing or enhancing public transport systems such as light rail systems and subways, as well as increasing bus routes and schedules.Intensity of rivalry HighThe US automotive industry faces heavy competition not only with with(predicate) domestic companies (Ford, GM and Chrysler), but from foreign competitors as well. In 2006, Ford, GM and Chrysler go about intense competition from foreign manufacturers such as Toyota, Nissan and Honda.Supplier power averageThe auto industry obtains resources from a wide array of firms globally. Although the number of suppliers has decreased since the recession, some of the survivors are growing and beginning to diversify. Many suppliers relyheavily on the auto i ndustry for a large grapheme of their revenue. Some suppliers even went out of business during the economic downturn and decline of the US auto industry, and more were hurt by the earthquake in Japan in 2011. It is extremely important for auto manufacturers to develop and maintain strong relationships with their suppliers to gain access to their best technologies and receive priority order fulfillment in case of visible or product shortages.Buyer power HighTodays technology-savvy consumers have access to a vast amount of information to compare products to determine the vehicles to meet their needs. Many well-informed consumers choose to storehouse and negotiate set between dealerships, art object others prefer not to negotiate pricing at all. As US manufacturers confused market share to their Asian competitors, they effected the need to revise their business plans to place a much higher priority on customer satisfaction, thus creating customers for life.Threat of new entrants HighFactors such as capital requirements, economies of scale, need for distribution line of credit and threat of retaliation make it unbelievable for a new entrant to emerge within the US. However, new entrants can succeed in the US market, as unmistakable by the Asian automakers. Automakers established in foreign markets have been able to gain a foothold by merchandise to the US and targeting a niche market. New entrants to the US auto market allow eventually come from China and India among others. trade and SalesFord is now focussed on building only the two remaining brands Ford and Lincoln. They now offers product mix to meet the demand of quite a little of all single outes They reach the customer through traditional media like radio, newspaper, TV commercials and by also evolution the social sites. They are also sponsoring famous shows and events likeAmerican Idol ServiceAccording to the J.D. spring 2011 Automotive performance, Execution and Layout study all Fords new er vehicles have bring in the fuel efficiency rating that were supra the segment average The F-50 truck is the only large pickup that received the demo for both performance and appeal in 2011Supportive ActivitiesHuman ResourceFord is best in cutting off companys employees to improve production or to face any awkward situation like exhalation for mannikin In 80s to cope up the waiver resulting of not having fuel efficiency facility it cut off its workforce and close plants In elevated 2001 Ford eliminate 4500 to 5000 of its salaried employees using early retirement incentives In early 2002 ford unlikeable 3 normality American assembly plants for which 35000 worldwide jobs were cutoff In 2006 Ford cut 25000 to 30000 periodical jobs and 12% of management positions. It further cut 10000 white-collar job. In 2012 it closed 14 facilities as part of massive restructuring plantTechnology developmentFord has invested a lot in the development of fuel efficiency and currently they have 12 vehicles with best in class fuel economy. Not only in fuel efficiency they are also improving in initial lumber and appeal(performance, execution and layout) Though they are laggards but atlast they managed to develop self-parking and blind item detection facility. In 2011 they invested in hybrid and plug-in-hybrid and they also introduced turbocharged EcoBoost V6 engine They are in the way to introduce intelligence vehicle technology Procurement Ford signed an agreement with Azure Dynamic Corp. to stack away plug in hybrid power trains in the F series topnotch duty trucks.Financial analysisMarket Share (in volume)From the above two pie charts, the market winners and losers in 2011 can be see financially with the number of cars and light trucks they sell compared to the market sales as a whole (in volume)Profit over metreThe following data represents Ford Motors net income from year 2001 to 2010During 2001, Ford has been in bad shape financially making a loss of $16241 2 million. From before that time Ford was having a hard time to come back and had undertaken downsize dodging from quite a time to lower its cost as per their profit structure. This trend continued in 2001 as well but the entrant of a CEO in July 2001 made a slight change in the strategy though it kept on with the legacy of downsizing, it also discontinued models that were unprofitable. Hence, with this strategy salary were expected but this didnt work out, mainly because of the unstable environment of the terrorist assault in September 11, 2001. From year 2002 forrader till 2005, Ford was making a bit of profit but subdued heavily relied on downsizing its employees from time to time. But Ford started making some major losses from 2006 onwards and in order to make this work Alan Mulally was establish as the CEO. Hence, it came in light that Ford needed a perpetrate restructure in order to cut down costs, lower its debts, increase its revenues, and earn higher profits.Hence , downsizing strategy continued as well but this time with the inlet of new products, discontinuing the outdated ones keeping up with changing consumer trends. With some great decisions the company was recovering and hence, lowered its net loss by 78% in 2007 compared to 2006 however, erst again unfavorable economic conditions in 2008 with global downturn pulled the net loss deep down which was more than the net loss made in year 2006 which resulted in the use of downsizing erstwhile again. With this Ford applied for bailed out funds, which was rejected and was the cause for their popularity gaining more customers. And hence, with proper planning, and complete restructure of Ford, it earned profits during 2009 and 2010 with powerful strategies. As seen in the graph below, Ford has definitely experienced lower sales from 2001 to 2010 but it managed to come back in 2009 and 2010 with providing cars that customer wants which they didnt follow earlier.