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Ford Paradigm Shift Essay

Words: 2945, Paragraphs: 32, Pages: 10

Paper type: Essay , Subject: Economics

Categories: Economics, Free Papers, Literature, Management

This report alms at critically reviewing, analyzing and evaluating ford’s present strategy. We will be Identifying the external factors that are impacting on the organization and evaluate why they have led to a paradigm shift. This report will also include our recommendations on how to improve the organizations competitiveness and efficiency. Brief History Ford is a motor company based in Dearborn, Michigan. It is one of the largest industrial corporations in the world with revenues exceeding IEEE billion and over 370,000 employees. They operated In over 200 countries.

Although Ford obtained significant revenues and profits from Its financial services subsidiaries, Ford’s company’s basic business still remains the design and manufacture of automobiles and founded by Henry ford. In addition to the Ford, Lincoln, and Mercury brands, Ford also owns a small stake in Mazda in Japan and Gaston Martin in the UK. Ford Introduced methods for large-scale manufacturing of cars and large-scale management of an Industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines hence I-J subsidiaries which was were sold off to India Data in March 2008.

Over the last two decades the competition in the auto industry has grown increasingly and since sass the biggest automakers have seen their home markets encroached upon the expansion of foreign-based auto manufacturers, such as Toyota and Honda. The automobile industry also faced over capacity as developing and industrialized nations began to recognize the wealth and lob-producing effects of automobile manufacturing, encouraged development and expansion of their own export-oriented auto Industries.

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Although manufacturers varied in their degree of market presence in different geographical regions, the battle or advantage in the industry was fast becoming global. Ford, faced with the challenges of gaining global presence had to look for a way of improving the quality, and reducing cycle while dramatically lowering the cost of developing and bulling cars. In other to achieve this, Ford acquired Swede’s Volvo in 1999 this was a movement towards industry consolidation. In 1995 Ford embarked on another strategic plan of restructuring is management and operations called Ford 2000.

The plan saw Ford’s North American, European and International automotive operations Into a single global organization. The restructure plan called for a massive cost cut through reengineering and globalization of corporate organizations and processes. 1 OF 7 Ford’s new global approach called for technology to be employed in other to overcome the difficulties brought about by geographical information flow. Teams on different continents needed to be able to work together as if they were in the same building.

These in turn have brought about a revolution in Ford’s information technology; in Ford 2000 restructuring information technology was placed within the process reengineering organization. External Factors Affecting Ford The Ford Motor Company has been facing a steady decline in market share for approximately the past twelve years. This decline is largely attributable to certain factor like consumers Behavior, Economic Factors (Rising Gas and Fuel Prices) and Government Policies / Economic Situation and Environment Need.

Consumer Behavior: Ford Motor Company Consumers’ behavior affects ford production and revenue, this could be seen from the Ford decline of market share where consumers where demanding for more cheap quality cars with less fuel consumption or fuel efficient. This gave their Japanese Toyota who is a competitor an edge because there auto products were known to be fuel efficient than fuel. Ford had suffered serious decline in revenue for the past decades and still effect Ford Production and Management Strategic policies.

Economic Factors and Government Policy The Economy is another factor that affects Ford Just like it affects other Automobile Industries. These could also be seen through the unstable price of Gas and Fuel which affects the choice of the Consumers. The Recession, Tax and also have much contribution to the growth, management and operation or production of Ford. Environmental Need: This is another factor that has cost Ford Motor Company some huge amount of assets and money. Ford being known to be environmental friendly does what ever it takes to respond to the need of environment or protect it.

They have invested heavily to reduce gas or CO emission hence their solar power plane and the hybrid cars Soot Analysis of Form Motor Company Strength I Diversity:Jaguar, Volvo, Mercury, Lincoln, Mazda, Land Rover Second Largest Auto Maker in the world, Ford Motor Credit I Supportive:Gives generously after Seep 11 attacks,Give generously to fight Breast Cancer, Support racing teams MASCARA, Formula 1 etc). 4th on the global 500 list. I Quality:Strong and Quality Productions of the world’s best known brands. Modern Technology e. G. Hybrid Cars.

Web strategy has cut car build costs as much as IEEE per car I Weakness I Firestone tire recall which caused stock price to suffer ,3. 5 billion to cover tire recalls. I Disharmony in Management leading to Bill Ford taking over as CEO. I High fuel consumption cars. Shortage of Cash reserve. I Opportunity I More environmentally friendlessness Power, clean the environment and cleaner engine emissions. I Generosity:Given more to charities I Investment in Solar Power very throng chance to become a market leader. They can use their web strategy to cut cost further.

I Threat I Competition in Automobile industry is very high I Recession is great Low to For a The paradigm shift. I stoutest products Like natural gas, electricity, water etc. Ford like most other high profile automotive industry has witness paradigm shift in their various stages of their existence and production which we consider to have been as a result of changes in technology, market competition, consumer behavior and regulation from Government. These in turn has been responded by Ford Motor which obviously affected it positively or negatively there by leading to either a new era of technology or product or management changes.

Technology Technology has the potentials of changing in lesser time than many other things. In Ford, the development of feature for comfort like Air condition, Heater, etc shifted Ford Automobile technology from the simple vintage cars to more luxury with currently unlimited features www. Overlord. Com/PDF/Deathwatches_BP_report. PDF Consumer’s Behavior The choices of Consumers have also lead to certain level of shift in Ford Production. These could be seen from general demand for Fuel Economy Care.

The demand for fuel economy cars has affected Ford that it has to respond by cutting down the rate of their fuel consumption Just like the need for more Automatic gearing system vehicles has lead Ford to shifting from Manual handling to Automatic. Environmental Need Environmental need has lead Ford to complying with Cafe© and CO Emission Regulation which obvious is leading to a new shift of Technology and production hence the new Ford Fusion and Hybrid cars Economic Position and Government Policy The need also to reduce the Gas (CO) Emission has lead to certain Regulation by

Government which is leading to a shift in technology like the environmental need. Ford has adopted a strategy that focus on CO Emission reduction and regulation which ultimately has lead to the production of Ford Fusion 2010 (Hybrid Cars). Market (Demand and Supply) Ford like other automotive industry remains concern over the unstable prices of oil and fuel which has influenced the choice for cars with fuel economy or efficient. These gave Japanese Auto Industries like Toyota an edge over Ford that Ford has lost some its market share to its competitor whose production technology and high fuel efficient cars products has been in high demand.

The lost of market shares has lead to lost of revenue and in effect has created or added more problem to Ford. In an effort to address this, new strategic policies has been strategists by the new CEO Alan Manually that focused on cost cutting and consumers / market demand responsive approach. This has seen a new shift in Ford where for example new Hybrid Car Technology is available which still keeps the competitive edge of Ford and increases its market share product. For Hybrid Fusion Ford Monde Fuel Car Foray’s Present strategy an a ten Review

Ford being a multinational company has been faced with challenges and factors ranging from internal and external, environment, technology advancement, competition, government policies etc and these entire factors has not been without either negative or positive effect. These factors have lead to either improvement or change of plans or strategy to achieve its vision. This plans or strategy is very vital to the well being of organization. No organization has existed without making the management of these policies or plan know as Strategic Management.

Many authors have written on strategic management. Alfred D. Chandler (1962) defined it as the determination of the basic long time goals and the objectives of an enterprise, and the adoption of courses of action and the relocation of resources necessary for carrying out these goals. According to G. A Cole (2004, IPPP) Chandler sees strategy as combined goal setting and the planning / action elements required to achieve goals. Kenneth Andrews in his work combined goal- setting with the policies and plans needed to achieve the goal.

G. A Cole (2004, IPPP). He distinguished between corporate strategies which defined the businesses the organization is to compete tit. H. L Anions point of view separated goal or what he called objectives from strategy however, he envisaged a relationship between the two in which an objectives (end) is followed by strategy (means) which is evaluated and may lead to a revision of the original objective (ibid). He argued that here typed of decision need to be made and they are, Strategic, Administrative and operating decision.

Andrews view that literature of organization theory is by itself of very little use in managing a live organization according to J. ‘ Moor (1992 up). And that case studies resent, not illustrations of principle, but data from which generalization may to a limited degree be derived and to which the idea of strategy may be applied is very paramount when considering Ford strategic Management policies and Plane. Ford Motors considered Strategic Management policies / plane as the life wire to existence hence its’ clear Vision, Mission and Value definition which they called: Our Vision, Our Mission, and Our Value.

This serves as a standard by which they could judge or be Judged Our vision: to become the world’s leading company for automotive products and services. Our mission: we are a globally diverse family, with a proud heritage, that’s passionately committed to providing outstanding products and services. Our values: we do the right thing for our people, our environment and our society, but above all for our customers or personal mobility for everyone around the globe. Www. Ford. Co. UK/Abductors/Confrontational The (above) has been a frame work by which Ford had recorded its long time success history.

They anticipate consumer needs and deliver high quality products and services that will help improve the lives of the people around them (Ford Motor Co. , 2005, April 27). The current President and the CEO Mr.. Manually have made a new innovative and result achieving oriented move in strategist the strategic policies aimed at repositioning, turning Ford around and creating a global multi-national corporation that is self-sustaining and viable according to Ford official online report following the negative effect of the recession on Ford Motor Company.

To accomplish these, significant changes were made as and in the strategic Management Polices wanly was Disloyally on Ana Includes developing Ana sustaining a competitive advantage for the goods and services that are produced. At the equines level, Ford’s strategy formulation phase should deal with positioning the company against rivals, anticipating changes in demand and technologies and then adjusting the strategy to accommodate them, and influencing the nature of competition by strategic actions such as vertical integration and through political actions such as lobbying.

Ford developed strategies for cost leadership, differentiation, and focus to create a competitive advantage. Ford recommitted itself to sustainable and profitable growth, to a renewed focus on customers, and to boundless innovation in everything they do: from design, to safety, to fuel-efficiency, o efficiency on the factory floors. They are using their size to accelerate change, and build a culture that encourages fresh new thinking and breakthrough ideas.

They concentrated on improving their core automotive business and divested several non- core companies, lowered costs, refocused financial operations on supporting the automotive business and launched the biggest wave of new products in history. To strengthen the balance sheet and cut costs, Ford sold The Hertz Corporation and restructured its agreement with Visited, their parts supplier spin-off. Http:// www. Papers. Mom/sub]sects/strategic-management-and-business-policy-ford-motor- company-page. HTML. However, the strategy has found no whole or basic place with the previous Six Sigma Management Rule based Strategy .

The Six Sigma Management Rule seeks to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability in manufacturing and business processes. Ford and Alan Manually have done an outstanding Job however, the biggest challenge lies ahead in continuing to keep his management team and employee’s focused, whilst managing others expectations at the same time. Part of the strategy is a policy on Environment which contributed to stabilizing the climate by considering reducing long-term emission.

Ford reported that they will achieve this goal by continuously reducing the GOGH emissions and energy usage of their operations, developing more products that lower GOGH-emissions, and establishing an effective and predictable market policy and technological framework for reducing road transport GOGH emissions. Another one of their goals is to promote the development of an infrastructure that will expand the use of bio-fuels and help reduce our dependence on oil. One more goal of theirs is to cut the usage of global energy by 27% and the usage of water by 25% which they have been working on since 2000.

Some of their major timeshare targets they are currently working on to contribute to the climate are to reduce North American facility emissions by 6% by 2010, voluntarily offset 2007 and 2008 CO emissions from manufacturing facilities, and reduce U. S. Facility emissions by 10% per vehicle produced by 2012. Http:// company-page. HTML The new strategy has no doubt paid off going by the Ford 2009 financial report that Ford Motor Corporation made $2. Billion, the first after about four years and without taken any federal loan. Www. Unpredictability’s. Mom/ industry-focus/world-class-operations/ford-CEO-Alan-manually-turnaround-specialist Recommendation After reviewing the current strategic policies Ford adopted, it is easy to see that they are Touching on tenet products, as tenet Dragon name Is tenet Deluges strength a very strong brand name as well. But their policy might not go far enough in preparing for the future in terms of alternate, greener fuels. The importance of this sector will become paramount in the near future especially with more competition ND as well as the situation in the Middle East if this deteriorates and oil crisis develops then Ford will lose out.

In other to achieve the above mentioned objectives, it is pretty obvious that Ford cannot only rely on their strength they have to think about the future which is more and more technological evolutions taking place hereby increasing the competitors in the automobile industries. Japanese competitors such as Honda are well advanced in developing “hybrid” engines and new fuel sources and in retrenching to cut costs and focusing inwards, Ford are in danger of missing out on the bigger world market picture. So we would recommend a strategic thinking with more emphasis being put on emerging technologies.

With campaigns and slogans that stresses Ford’s position as a leading world company and at the fore front of development of a greener, cleaner future. This would also help to negate a little bit of the “boring” image people have of the company. Another strategic thinking I would recommend is the Total Quality Management (TXT) based on Redefined Six Sigma Rule. It was developed in the sass and has been employed by companies to help manage qualities through various processes. TXT is another approach to improving effectiveness, competitiveness, efficiency and flexibility in order to best suit customer needs.

Globalization in the world right now means consumers are first in every aspect. There is so much competition at the moment which can only mean one thing consumers have more options and so without smart thinking and planning Ford could easily lose out on the bigger world market picture. Total quality Management is broken down like this: T: quality involves everyone and every activities taking place in the organization Q: Conformance to Requirements (Meeting Customer Requirements). M: Quality can and must be managed.

The process of TXT involves various responsibilities such as; meeting customer satisfaction and requirements, reducing time, demand flow manufacturing, improvement teams, reducing costs of service and cost, and improving training. TXT has been successful at reducing costs and improving quality at several companies. Ford Motor Company, Toyota Motor Company and Motorola are Just a few of the major companies who have used the TXT process. By using TXT it will also help Ford to divert attention from the recent history of in-fighting within the organization cause TXT involves that everyone is in the same boat heading in the same direction.

Conclusion Ford Like we pointed at above is one of the largest Automobile Industry who has made name and based globally, It has had a decline in revenue and Market share for some years now, these are attributable to certain factor ranging from Consumers behavior, Technology Environmental need, Economic situation etc. These factors that have affected Ford have in some extent lead to another era of management or Production (Paradigm Shift). Ford management has called for a drastic measure that saw ten emergence AT ten new CEO Mr..

Ford Paradigm Shift

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