Custom Ford Motor Company Case Analysis essay paper sample
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Ford Motor Company is one of the most successful companies in the automobile industry. Founded in 1903 by Henry Ford, it has come to be an icon of U.S manufacturing industry for the past 100 years. The vision of Henry Ford was to produce cars that were affordable to the majority of the citizens. Ford has overtime expanded and today, it is a major company. Its product lines include Ford, Aston Martin, Jaguar, Mercury, Land Rover, Lincoln and Volvo.
Ford may be having an increased numbers in name plates, but it is not as perfect either. Despite all those product lines, it has been experiencing loses for a number of years now. In its operations carried out in North America, Ford has been producing more cars than it is able to sell in the market (Ford Motor Company, 2007). This is done despite the fact that the personnel conditions in the company are not conducive. Generous conditions for the retirement, benefits and job protection that were present in the company when it was started have been dwindling over the years. This has an effect on the company as it weighs down its operations. The Premium Automotive Group, which makes the company's Aston-martin, Jaguar, Land Rover, and Volvo brands, was originally brought up in order to make a platform for the company to explore the luxury vehicle market. That was however not successful. It has lost billions year after the other. Operations in these losses are slowly lowering the financial safety net for the company day by day (Cisco, 2003).
In an effort to redeem itself, Ford had to look for solutions to its crippling problems. The older plants that did not produce a lot of the company's present cars were wasteful. A lot of money went into them and very little came out. There was the idea to close down these plants in order to change the sequence in production and sales. Moving the car industry to the production of small cars only was also an option. Due to the way that gas has become expensive; most people do not buy the SUV and truck lines. This is because of the high fuel consumption that they have. With the economy of the country still dropping, most people prefer smaller cars. Focus on the international market where the company is successful was thought to be redeeming. In China, Europe and South America, the company did well in sales compared to the North America. This would help boost the profits as the products would be sold easily. The PAG group did not achieve what it was set out to do. Instead of fitting in the luxury vehicle industry, it sold very few vehicles in a year compared to what it produced. This was due to the external factors like the credit crunch in the US economy and most people did not deem them as convenient (Ford Motor Company, 2009).
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With all this ideas and options, the company had to come up with a solution for its crisis. The closure of the older plants would have been good in the sense that, they would produce just a bit less than the company could sell. However, resurgence in the customer numbers on the rise would leave the company with limited capacity, and the customers may move to competitors' products. Focusing on the smaller cars would be convenient in that the company will be dealing with cars that are selling in the present expensive gas market. Focus on the international markets would help boost the company's sales and also avoid wasting time on markets that do not sell. To sell out the entire PAG group would off load the task of thinking how the company can sell so few products in a year and still realize profits. This was not the tradition of Ford Motors; they are known to produce and sell in huge numbers (Hitt, M, Ireland, R and Hoskisson, R, pg 123).
Comparing the strategies in the business level to those in the corporate level, the idea of focusing on the international markets and selling out on the PAG groups came up as the best. Closure of the company's older plants would cause so many devoted employees in the Ford motor company to lose their jobs. In addition, the elimination of the SUVs and truck lines from the Ford Motor production lines would take them off the competitive market. The idea was to redeem the Ford industry and not to sink it.
Based on the Analysis of the case, the best recommendation would be the focus on the international market and the selling out of the PAGs. With regards to the current economic state, the company could not continue to focus on the productions which as a matter of fact did not contribute to making it profit. For any businessman, you would want your products to be in a market with the highest number of customers. Thus focusing on the international markets of South America, China and Europe, the company would experience high returns from its product sales and this would go a long way in expanding the company's' wide scope in Motor Industry (Ford Motor Company, 2010).