Review Paper on Ford Car Company

Think Globally And Act Locally, Globalization And Global Market

Size of Ford’s Global Market

According to Grant, Ford enjoyed superior car sales due to a flourishing American economy, unwavering and swiftly budding stock markets, coupled with low energy prices1.

However, towards the culmination of the preceding century, its domestic market began to waver. Grant attributes this phenomenon to corporate and market issues such as elevated cost of health care, mounting fuel prices, and irresolute economy. Rivalry from other manufacturers, like Toyota, equally posed threats.

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Grant reports this ideology as the rationale behind the restructuring that is aimed at returning the company to a distinct level of effectiveness2. Such a fresh economic and investment policy lead to the relocation to the overseas areas in search for inexpensive effort, unrefined resources, and a ready market. Ford Corporation was humbly established in the early years of the last century.

Hitt, Ireland & Hoskisson note that Henry Ford and colleagues instituted a company that is legendary for championing the assemblage line, industrial upheaval, and the coinage of the reputable slogan of the American reverie3. The early years of the preceding century the company saw thrust through a series of succession tribulations. It survived the subsequent fiscal recessions to emerge as one of the pinnacle carmakers of the contemporary society4.

American and the Global market

Currently, Ford is the fourth prevalent global carmaker. It prides itself in brands such as Lincoln, jaguar, and other countless products. Notable, it is the capacity of the company to develop personalized brands for dissimilar markets5. In his article, Grant denotes the wide spread global market is enjoyed by Ford. This trade spreads from the establishments of North America and Europe to the new and dynamically emergent “Chinese and Indian economies”. The conglomerate has had a significant influence on other sectors, such as Latin America.

Local market

Modi establishes that Ford has a robust presence in North America. It commands over 20% of the region’s market. Reportedly, this is comparatively large upon comprehending its dismal, 10 percentages distribute in the Japanese market. Modi et.al observe that, this is the stimuli for its gigantic promotion campaigns in the continent6. In the article, Modi et.al observe that the corporation intends to ascertain itself as a manufacturing force within the continent.

This is evident in the gigantic investment carried by the conglomerate in India together with china. These two nations have the advantage of cheap labor and an enormous market. Grant’s analysis established that recently more American automobiles find marketplace in the Asian continent. Furthermore, Hitt, Ireland & Hoskisson note that the continent has a supply of immeasurably skilled labor.

Responding to Dynamic Business Challenges – Strategically & Operationally

Challenges

According to Hitt, Ireland & Hoskisson, Ford’s tribulations ensued at the beginning of the preceding decade. Throughout this epoch, the company experienced an assortment of economic troubles. Towering care cost, an endlessly mounting petroleum prices, and an irresolute economy. This led to a decline in the company’s global market share prices, reduced global sales and unsustainably thin profit margin7. Grant observes that many of these tribulations resulted from an overreliance on the originally blossoming SUV sales. The pinnacle of this came in the year 2005 when reportedly, Ford’s shares downgraded to scrap.

Way Forward

The corporation dealt with this problem by designing a rescue strategy. Firstly, they diversified their products by introducing a new range of fuel competent automobiles. Grant reports that this was in retort to the consumer shift to “fuel-efficient vehicles” whilst responding to the international fuel crisis. Additionally, there was an intensified pursuance of other unexploited markets within “Europe and Asia”. According to Grant, Ford intensified its study in fuel-efficient autos.

This is evident in their recognition of advancement, in “lithium iron battery”, as poignant in the enhancement of future automobile technologies like the battery dependant and the hybrid automobiles. Fiscally, Ford responded to the comprehensive economic predicament by borrowing to salvage the corporation from insolvency. In light of the impending fiscal kismet, they struggled to keep together a hugely expensive labor force. Grant notes that only Ford failed to succumb to the economic downturn of preceding years.

Dealing with Recession

The premeditated map anchored by the leadership at Ford aimed at restoring the group to profitability. Modi 8asserts that the plan was aimed at achieving massive cuts in operation cost. The road map to achieving this reportedly ensured restructuring the Ford’s business model by plucking off non-profitable and inefficient ventures.

Although this operation helped consolidate the company’s operations, it led to lose of thousands of jobs. Since then, the firm has realized significant profits and a reported decline in company debts. Furthermore, the continuous economic growth witnessed in the Asian continent has helped lift pressure on the saturated American market.

Bowner’s article reports that the financial difficulties witnessed in the foregoing two years significantly affect the automobile industry. All the leading U.S. automobile manufacturers received rescue packages from the state. While a majority filled for impoverishment, Ford stood on its own.

Bowner reports that Ford survived the recession through massive borrowing and careful planning and expenditure. The recession lasted a short duration, and two years later, Ford announced its first profits in years. Reportedly, the auto industry is still suffering from the shadows of the recession.

Foreign automakers still command a whopping chunk of the market. The three corporations expect substantial profits in the coming years and Ford is expectedly going to announce full recovery. Grant observes that the year 2008 witnessed some of the worst fiscal downturns ever experienced in the entire globe. The slump’s effects are still present and will predictably last long into the prospect. Grant associates this with the record “foreign direct investment” proceeding the year before recession.

Conclusion

Ford started as humble company back in the commencement of twentieth century. Through the visionary leadership of its authoritarian executives, it championed the first assemblage line technology that revolutionized the global auto industry.

It managed to endure the slump preceding the First World War. After WWII, the company embarked into massive scientific revolutions. The biggest test the auto industry ever experienced was the recession of the 2009. While many multinationals in the American continent failed to foresee it, Ford had envisioned it and formulated a plan that could save the company.

This is particularly evident in its ability to stay put midst fiscal turmoil. The brave leaders at Ford reputed for announcing irreproachable results hardly two years after the recession. Additionally, the company managed to identify non-profitable branches, and cut them off to offload high operations cost. Browner reports an ongoing rehiring of workers. Ireland & Hoskisson report that the company stands a favorable chance of securing a sizeable portion of the Asian market.

Endnotes

Robert Grant, Ford and the World Automobile Industry, accessed October 25, 2011, http://www.blackwellpublishing.com/.
Ibid.
Robert Hitt, Ireland Duane and Michael Hoskisson, Strategic management: competitiveness and globalization: cases (Ohio, OH: South Western Cengage, 2008), 124.
Ibid.
Robert Grant, Ford and the World Automobile Industry, accessed October, 25, 2011, http://www.blackwellpublishing.com/.
Modi Chirag, Zein Rashad and Leslie Kramer, Comparison of Asian and North American Automobile Manufacturing practices, accessed October 25, 2011, http://www2.egr.uh.edu/~cmodi/projects/proj_ppt/supply_chain_analysis.pdfgrant/docs/04autos.pdf.
Robert Hitt, Ireland Duane and Michael Hoskisson, Strategic management. p. 124.
Modi Chirag , Zein Rashad, and Leslie Kramer, Comparison of Asian and North American Automobile Manufacturing practices, accessed October 25, 2011, http://www2.egr.uh.edu/~cmodi/projects/proj_ppt/supply_chain_analysis.pdfgrant/docs/04autos.pdf.

Bibliography

Bowner, Rick. “Automotive Industry Crisis.” The New York Times, last modified October 25, 2011, http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_crisis/auto_industry/index.html.

Grant, Robert. “Ford and the World Automobile Industry.” Blackwell publishing. Accessed October 25, 2011, http://www.blackwellpublishing.com/

Modi, Chirag, Zein, Rashad and Kramer, Leslie. Comparison of Asian and North American Automobile Manufacturing practices. Accessed October 25, 2011, http://www2.egr.uh.edu/~cmodi/projects/proj_ppt/supply_chain_analysis.pdfgrant/docs/04autos.pdf

Robert, Hitt, Ireland, Duane and Hoskisson, Michael. Strategic management: competitiveness and globalization: cases. Ohio, OH: South Western Cengage, 2008 124.

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