BUS Unit 3 Individual Project - Essay Example

Since then the firm has contributed in production of a large number of commercial cars (PRLOG, 2013). Several automotive components are also manufactured by the company. Apart from America, Ford Motors operates across all the continents in the globe. It offers a substantial amount of employment opportunities in all the economies in which it operates (Webster, 1995). Perhaps, that is the reason for which the Australian government fears for job losses, when Ford decided to cease its manufacturing outlet in Geelong by 2013 due to high manufacturing costs (News Geelong, 2013).

Despite of being an American company, Ford cars were visible in the streets of London since 1903. At present its European branch serves 42 countries in the continent with excellent cars, buses and trucks (Banham, 2002). Answer 2: Ford Motors Company has many comparative advantages in the highly competitive market of automobile industry. It has an establish business and enjoys the benefits of a big learning curve. Its expertise has introduced varied cars in terms of designs and prices, so it targets consumers of all income groups.

It comprises of a big pool of resources, like 160000 employees across the world. Its visibility and marketing strategies are excellent. It participates in sponsorship programs in sports events like Formula 1 and taps the young potential consumers. As the company enjoys a wide customer base, it experiences lower cost of production due to economies of scale. The unique design and quality of the Ford cars have substantially helped its brand worth in the market (Moffett, n.d.). Answer 3: The current recession and the economic crisis in the European nations have reduced the overall circulation of money in the economy (Rogers, 2001).

Low purchasing powers have created detrimental effect in the aggregate demand for cars in the automobile industry. Ford can always use its experienced technical expertise to feature new models of cars that are less in price and are affordable in the current crisis situations. The company has large pool of financial resources, these resources of the company should be utilized to open more branches and tap the potential customers of the emerging economies in the world like China and India. This would help the company augment its sales in this scarce epoch (Volti, 2004).

Answer 4: The governments of most of the nations impose lot of rules and regulations in the automobile industry, primarily due to issues relating to environment. The automobile companies are now forced to pay higher taxes of manufacturing traditional petrol cars. This is a pivotal reason for which giant firms like Ford are engaging in the manufacture of hybrid or electric cars. The gross manufacturing costs of such cars are very high and require high investments in its required car technologies.

The total number of consumers for such expensive cars is also less. ‘Focus Electric’ is the electric car manufactured by Ford (Ford, 2013). The company desires to successfully launch the pricy car in 2014 worldwide. The taxes imposed by the governments on companies like Ford are high as Ford cars are considered as luxury items. This reduces the economic reserves of the company, which could be otherwise used in the innovation and development purposes. Since the company operates across many nations in the world, it faces the exchange rate or currency fluctuations risks.

Like the high value of Australian