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 …show more content…
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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Ford motor company offers a wealth of variety to the automotive consumer. As they start their second century of business, they are now in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality
Ford Motor Company, American automotive corporation founded in 1903 by Henry Ford and 11 associate investors. (htt28) It is the multinational corporation and the world's third largest automaker based on worldwide vehicle sales. The Company operates in two segments: Automotive and Financial Services. Automotive includes Ford North America, Ford South America, Ford Europe, and Ford Asia Pacific Africa region. Financial services include Ford Motor Credit Company and Other Financial Service. The Company manufactures or distributes automobiles across six continents. Its automotive brands include Ford and Lincoln. Other Financial Services includes a range of businesses, including holding companies and real
Every external factor exhibits an open door or risk that the business must address through vital activity. As one of the main five players in the worldwide car industry, Ford guarantees that it addresses the issues in its PESTLE analysis. These issues are an immediate determinant of the hierarchical advancement direction of Ford.
The research and development of Ford is very strong because every time they have introduced many new cars and brands and also represents renowned brands like Formula One.
Ford Motor Company is America's one of the largest car manufacturer and seller. In year 1987 it faces an external business environment change in the form of new warranty policy announcement by its major competitors General Motor, which changes the current philosophy of warranty in U.S car market. This policy change may have implications not only on Ford’s sales and market share but also on various departments within organization (such as manufacturing, quality assurance, parts and service, and extended service plans) and their dealer network. In answer, Ford executives have to respond through a best suitable course of action by carefully analyzing the current market variables.
In April 2000, Ford Motor Co. announced a shareholder Value Enhancement Plan (VEP) to significantly recapitalize the firm's ownership structure. Ford had accumulated $23 billion in cash reserves and under the VEP would return as much as $10 billion of this cash to shareholders. In exchange for each share currently held, the plan would give stockholders one new share plus the choice of receiving $20 in either cash or additional new Ford common shares. Shareholders electing to receive cash would be taxed on these distributions at capital gain rates. Among other things, the plan provided a means for the Ford family to obtain liquidity without having to dilute their 40% voting interest (even though they own
Ideas introduced in the article assist in understanding Ford’s current situation. Ford reported sharp falls in U.S. auto sales in May 2008. Sales of its most profitable pickups and SUVs suffered the most (“US Auto Sales Slide”). Some of the main
General Motors incorporates entrepreneurship and innovation into its business objectives. This is evident in General Motors Vision statement which states that its goal is to “lead in advanced technologies and quality by creating the world’s best vehicles”. (1) For instance General Motors has an extensive R & D, Design, and Engineering department that oversees the creativity, innovation, and invention of its strategic technologies and innovation programs which are aligned with its corporate vision. In order to lead in advanced technologies of the world’s best vehicles General Motors incorporates entrepreneurship and innovation concepts, which are essential to competing in the global market place.(2) In the spirit of entrepreneurship, which
Henry Ford was an engineer from Detroit, Michigan who had an idea. By 1902, Ford had attempted several times to produce a gas powered vehicle, but with little capital, he realized that his attempts were futile. Ford approached a man by the name of Alexander T. Malcomson about the possibility of manufacturing an automobile. Malcomson, a friend of the family and wealthy coal merchant was reluctant at first but finally agreed with Ford, and decided to assit Ford financially with his endeavor. With Malcomsons investment and Ford's engineering skills a partnership was formed and in mid June of 1903, papers of incorporation for the Ford Motor Company were filed in Dearborn, Michigan.
Alan Mulally, who was hired as CEO of Ford in September 2006, had not engineered, designed, or built any cars. He came from Boeing. After joining Ford, he devised a plan that identified specific goals for the company, created a process that moved it toward those goals, and installed a management system to make sure the company reaches those goals. Mulally demands weekly, sometimes daily, updates. “Alan's style is pretty relentless,” says chief financial officer Lewis Booth, a 31-year Ford veteran. “He says, ‘If this is the reality, what are we going to do about it?' not ‘We're going to work our way through it.'”
This recession hits home with the automobile industry. During this current recession GM is facing the possibility of bankruptcy, but is hoping to be helped out by the government. History
In 1913, Henry Ford revolutionized product manufacturing by introducing the first assembly line to the automotive industry. Ford’s hallmark of achievement proved to be a key competence for the motor company as the low cost of the Model T attracted a broader, new range of prospective car-owners. However, after many decades of success, customers have become harder to find. Due to relatively new threats to the industry, increasing numbers of cars and trucks are parked in dealer lots and showrooms creating an alarming trend of stagnation and profit erosion. Foreign-based automakers, such as Toyota and Honda, have expanded operations onto domestic shores and, in turn, have wrestled
Ford has two unique ways to protect its market share. Ford has a renting car system which you can rent a car rather than buying a care. According to Penn Schoen Berland, an independent research company, one third of millennial has interest to rent a car rather than buy a car. In renting system, Ford adopts one way journey system which you “pay as you go” and “you pay how much miles you go.” Another unique system is Ford Credit which Ford offer credit card to customers. Ford Credit helps Youngers to rent a car or lease a car from Ford.