Analysis of Ford Motor Company Essay

1056 Words 5 Pages
Analysis of Ford Motor Company

External Factors and Economic Environment 1) Market and Customers
Between 22% and 23% (average over past five years) of Ford’s customers are defined as fleet customers as described above. The residual 77%to 78% of customers are private individuals who purchase Ford vehicles through licensed dealers. Ford customers come from all demographic strata given the diverse brand lineup and product mix, and Ford’s products are purchased and driven the world over.
Argus Research estimates that the car market will decrease 3.8% in terms of units sold during 2003, and that light truck sales will increase 0.2%. The company predicts an decrease of 3.9% in car sales and an increase of 0.7% in light truck sales
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Rebuilding Ford’s “depleted talent bank” could take many years. In the meantime, the lack of talent will prevent the company from being able to rapidly design and manufacture innovative car and truck models. Given shrinking sales levels, the company also needs to quickly reduce capacity, and should shut down two or three assembly plants, according to analysts. But the company is hampered on the technology end because of strict labor agreements with the UAW, and will therefore likely reduce shifts and slow down assembly lines rather than close plants completely. During Jack Nasser’s tenure, the company pursued a downstream vertical integration strategy, acquiring various replacement parts and maintenance companies such as Kwik-Fit in Europe. In order to generate cash flow and reduce expenses, the company is now seeking tooffload such subsidiaries. Nasser also invested heavily in various eBusiness ventures such as Covisint, believing that Ford would be able to benefit from the dot.com boom. As the prospects for the success of such ventures have all but evaporated, Ford is now seeking to exit such eCommerce related
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