Innovative Organizations: Ford Motors - Case Study Example

Innovative Organizations Ford Motors: Report Table of contents Executive summary……………………………………………………………………..3 Introduction……………………………………………………………………………4 The organizational characteristics of Ford……………………………………………..6 Ford’s Innovation: the Hybrid cars…………………………………………………….8 Reasons of the creation of the hybrids………………………………………………….8 Advantages to the Ford motors………………………………………………………….11 My contribution………………………………………………………………………….12 Discussion……………………………………………………………………………….13 References………………………………………………………………………………14 Executive summary The chosen organization in this case is the Ford motors. The Ford motors have been producing the greatest vehicles since many years which have been appreciated by the customers from all over the world. The report will be dealing mainly with the innovation as it is the constant changing pattern in the case of the manufacturing of the products which is brought about because of the changing customer demands in the market. The factors bringing about the innovation in the Ford motors will be dealt here and are the innovations properly implemented in the manufacturing of the vehicles. The main finding in this case is that the Ford motors have been very innovative enough. This can be proved by the fact that the hybrid motor is the product that has been on the street since 3 to 4 years now. The customers are very much appreciative of the product that the Ford motors have given to the customers. The hybrid cars are fuel efficient and they are environment friendly. Introduction History of the Ford motors Winnewisser (2006) says that the world’s greatest automotive industry Ford was invented in the year of 1903. The total cash was about US$ 28,000. There were 12 investors. Some sources also say that the foundations were laid down in the presence of Malcomson group. The Ford headquarters are in Michigan saling out their products to around 200 countries and across six continents. This helps the Ford motors to get the best of the innovation and the best of the marketing strategy that they have these days to be successful in the market. Ford motors has around 330,000 employees which includes the employees that work in the official head quarters working in the management positions and the mechanics who have there expertise in the car assembling process. Figure 1: The Market Shares of Ford in the recent years Ford motors are a multi branded industry and the other car brands that are associated with it include the Jaguar, Aston martin, Volvo, Land rover and Mazda. Umphlett (2006) says that in the case of the market share, in the year of 2002, it was 20%. It is because of the diverse markets that Ford has reached to. Ford was just behind General motors having the market share of 25%. And Toyota motors were having the market share of 16%. Figure 2: Comparative Market share of Ford Since two years it has been seen that the market share of the Ford in the US market has been dropping. The market share that Ford now holds is around 14%. Figure 3: Current Market share of Ford One of the main competitive strategies that Ford has is to target many markets that are still untouched. The market research in the proper manner should be conducted so as to gain the maximum information in this case. Ford should reach out to the customers giving them the most innovative products that have attracted many customers in the past few years. The hybrid cars are one of the examples. Savitz and Weber (2006) argue that the challenges that Ford faces in the future are to increase the falling share holder value. The share holder value up to 25% has been snatched away by the major rivalries that Ford has, it has to make sure that all the competitive strategies are properly followed. The increase in the sales by attracting, more and more customer is one of the main targets that will help the Ford motors to stabilize in the future. The competition that the Ford motors faces is as hard as it gets. The Ford motors have to design new strategies that help them compete in the market against the rivals. The organizational characteristics of Ford The organizations at the Ford motors consist of the best personnel that any organization can have. The people carrying out the market research at there level best. All the possible angles that the research needs are completely fulfilled. In this way the successful marketing is done by the talented, marketing researchers employed at the Ford motors and the customers are attracted in the best way so they rely on the Ford motors. Next comes the designers of the cars that the Ford gives to their customers. In this case it has been seen that the cars that Ford motors present to there customers are appreciated by the customers. The innovation is the only way by which the customers can be reached and can be made to buy there products. The talented and the well trained personnel are hired for the purpose of giving the innovation to the Ford motors which helps the Ford motors lead the market. Noguez (2002) says that for the integration of the innovation in the case of producing newer products, the organization needs changing and innovative minds. The minds hired at the organization should be able to think at the level of the customers. The minds should have the capability to think that these days as the awareness of the customers is increasing day by day, the customers’ demands are also changing. Not only the demands of the customers are increasing, the demands seem to be getting more and more complex and they need the manufacturers to design the product that are les damaging to the environment. The media has played a very important role in increasing the awareness of the customers with regards to the environment and this is the issue which should be on the list of the organization in every aspect. Mitchell and Paine (2007) argue that in the case of the Ford motors, it has been seen that the innovation has been integrated very successfully in all of the automobiles that have been presented to the customers. The market researchers are the ones who have successfully read the minds of the customers regarding the awareness of the environmental issues and the researchers are well aware of the fact that the customers need the vehicles that do not damage the environment any more. But the vehicles that the customers are demanding these days are the ones that help in the healing of the environment. This has been successful done by the Ford motors and they have produced the vehicles as the hybrids cars that not only are independent of the petroleum fuel usage abut also use the cheap sources of fuels as the electricity. Ford’s Innovation: the Hybrid cars McCarthy (2007) says that these days the greatest demands that the customers that drive the cars have is that the vehicle should not be damaging the environment in the long run. It has been seen that the cars and the vehicles that depend on the petroleum and diesel fuels in the end are responsible for damaging the environment. The awareness of the customers in this case has been increasing day by day and the demands are thereby reshaping of the customers. These days the customers are not in the need of the good looking cars they are in need of the cars that are environment friendly. Figure 4: Ford Escape Hybrid Reasons of the creation of the hybrids The second demand that has been taken into account by the Ford motors is that the fuel whether the gas, the petroleum or the diesel products are the ones whose prices are rising day by day. This changed the demands of the customers in the way that they are in need of the vehicles which in addition to being environment friendly are also lesser expensive in terms of the fuel usage. Thus we see that there are some external factors which shape the demands of the customers. Michie and Burchell (2003) say that in the case of Ford motors, all the customer demands regarding the vehicles being fuel friendly and the being lesser expensive have been taken up and the end product in this case is the hybrid cars. Ford has the strategy since many years to produce the cars that work on the renewable energy resource. One of the resources includes the ethanol. The strategy includes that Ford plans to double the manufacture of the vehicles on the roads that run on the renewable energy sources. This is the strategy that has been loved and welcomed by the customers. Ford Escape Hybrid E85 Hughes (2004) argues that the Ford Escape Hybrid E85 that was released to be used by the customers is one of the first innovative vehicles that have been released by the Ford motors. It is the beautiful blend of the hybrid electric power and the greater fuel capacity. Thereby this is the innovative product that works on the electricity. As the name indicates the fuels that this particular vehicle uses consists of 85 percent ethanol. In addition only rest of the 15% of the fuel is composed of the gasoline. This is the fuel that can be produced by the fermentation process of the corn and the molasses. In addition to this as the main concern of the customers is the vehicles being environment friendly as the vehicles that use the petroleum fuels release the green house gases in the environment which in the end are damaging to the environment. In the case of ethanol, no carbon dioxide is released into the environment. Figure 6: Ford Escape Hybrid E85 Ford (2008) truly argues that it has been shown through proper testing conducted at the labs of the Ford motors that this is the vehicle that will release 25% lesser carbon dioxide as compared to the rest of the vehicles on the roads. Flexible Fuel Vehicles (FFVs) Davila and Epstein (2007) say that these are again the vehicles which use ethanol as the fuel. As the name indicates these are the kinds of the vehicles that are not strict upon the usage of the specific kinds of the vehicles. In this case the cars can be filled up with the 85% of the ethanol and the rest of the 15% with the gasoline or the vehicle can be filled up completely with the gasoline in this case. In the year of 2006 Ford manufactured 250,000 of these cars which were available to be used by the customers. Figure 7: Ford Flexible Fuel Vehicles It is also being planned that the sports utility vehicles that are \running on the rods will all be replaced by the Ford hybrids in the next coming year. The innovative part in this is that the organization and the management have done quiet a research in the case of making a decision as to use ethanol as the furl for the hybrids. The reasons because of which the ethanol has been used as the fuel include that it is one of the most easily renewable source as it can be easily produced from the fermentation process and the most important property being that it generated around 30%lesser carbon dioxide as compared to the rest of the gasoline utilizing vehicles. Escape Hybrid It is the hybrids SUV tat has been made available for the customers. The reason and the rationale that it was manufactured was that most of the hybrids that were released in the previous years were small, had little horsepower and lesser space in the vehicle. This is the SIUV that is hybrid, environment friendly, fuel efficient this it fulfills all of the customer demands. The Escape Hybrid is the hybrid that requires only one gallon of the fuel for running up to the distance of one gallon. Advantages to the Ford motors Crainer and Dearlove (2006) discuss that because the creation of the hybrid cars, it can be seen that the automotive organization has gained a lot of respect and the authorization from the customers. Because of the production of the hybrids the market share of the Ford motors in the market had increased and the sales figure had shown an increase. The customers have shown quiet an appreciation toward the Ford motors creating the innovative product. Figure 8: Sales Comparison of the Ford Hybrids My contribution I have seen that the Ford motors is in need of the brains that understand the demands of the customers in the changing world. The only thing that changes the perspective and the changing of the organization in the market is the changing customer behaviors which depend on the changing external factors as the economy and the social or the economical trends. I can help the company by keeping myself update with the customer demands that are changing on the day to day basis and will let the customers know about the demands. I will help, in every way possible, and I will contribute in the company’s success by making the changes that are needed for the company to excel in the market by giving my best. Discussion Ford motors are one of the fourth largest automobile manufacturers after the General motors, the Toyota, and the Volkswagen. Since two years it has been seen that the market share if the Ford in the US market has been dropping. The market share that Ford now holds is around 14%. One of the reasons that re related to the falling market share is the slowing and falling US economy that has affected many industries. In the year of 2007 the shareholder value of the Ford has fallen down to as minimum as 10%. The challenges that Ford faces are to increase the falling share holder value. The share holder value up to 25% has been snatched away by the major rivalries that Ford has, it has to make sure that all the competitive strategies are properly followed. The increase in the sales by attracting more and more customer is one of the main targets that will help the Ford motors to stabilize in the future. These days he greatest demands that the customer s that drive the cars have is that the vehicle should not be damaging the environment in the long run. This has made the Ford motors to come on the surface and emerge as one of the greatest automobile manufactures. References Crainer, S., and Dearlove, D. (2006) The Business World Atlas: navigation for innovative organizations. Meteor Press. Davila, T., and Epstein, M. (2007) The Creative Enterprise: Strategy. Greenwood Publishing Group. Ford, T. (2008) Changing Tides. Kensington Publishing Corporation. Hughes, T. (2004). American genesis: a century of invention and technological enthusiasm, 1870-1970.University of Chicago Press. McCarthy, T. (2007). Auto mania: cars, consumers, and the environment.Yale University Press. Michie, J.,and Burchell, B. (2003) Systems of Production: Markets, Organisations and Performance. Routledge. Mitchell, J., and Paine, N. (2007) New Leadership for Innovative Organisations: Models Ideas and Challenges. John Mitchell and Associates. Noguez, S. (2002) Ford and the global strategies of multinationals: the North American auto industry. Routledge. Savitz, W., and Weber, K. (2006) The Triple Bottom Line: How Todays Best-run Companies are Achieving Economic, Social, and Environmental Success-and how You Can Too. Wiley and Sons. Umphlett, W. (2006) From Television to the Internet: Postmodern Visions of American Media Culture in the Twentieth Century. Fairleigh Dickinson Univ Press. Winnewisser, P. (2006) The Legendary Model A Ford: The Ultimate History of One of Americas Great Automobiles. Krause Publications. Read More