Business Operations of Ford Motor Company - Essay Example

Ford Motor business analysis Executive summary Ford Motor Company is a U.S. international corporation and it is the fourth largest automaker company in the world. The company is based on global vehicle sales, following companies like Toyota, Volkswagen, and General Motors. The company was founded by CEO Henry Ford. In addition to Mercury, Lincoln, and Ford brands, the company also own Sweden’s Volvo Cars and has small stakes in England and Japan. The Ford Motor Company was founded in the year 1903 in a place known as Dearborn, Michigan by Henry Ford when he commissioned the manufacture of its Model A automobile. Ford Motor Company also introduced a new production process known as “assembly lines” fostered to make mass production. The new production process enabled the company to make huge productions at more affordable prices (Adkins 2003, p. 15). The company later started to manufacture Lincoln brands and got temporary ownership of Aston Martin as well as Mazda. Today, Ford Motor Company is the second largest vehicle manufacturer in America and ranks fifth in the world. The company initially introduced Ford Fiesta in the American market during 1970s. However, this new product failed to grab a large percentage of the automobile market. Although Ford Fiesta did not sell in the American market, the product grabbed a place in the market of Europe and its sales volume has been good for more than four decades now. Business operation (the Ford Fiesta) The Fiesta car is changing the preference of buyers in fairly quicker rate. Particularly, in Britain, Fiesta car model has the largest market compared to other car models. Based on the results of recent researches that customers are more willing to buy low CO2 automatic and low cost vehicle, Ford has used Fiesta strategy to accommodate these preferences. The Fiesta’s gearbox is different from traditional torque converters. It is a dual-clutch transmitter and this enables it to drain less power, thus having a decent fuel economy. The Ford Fiesta car has a kinematic design. Ford Company uses this design to ensure minimal noise, harshness,vibration, and smooth ride. This product also has many features like 6-Speed Power shift Automatic Transmission (SPAT), Ti-VCT Engine (Twin Independent Variable Camshaft Timing), ESP (Electronic Stability Programme that has TSC (Traction Control System), fuel efficiency, easy fuel, seductive centre console, and Bluetooth that has voice control. The company represents this new brand with a better warranty and services. The buyers of Ford Fiesta are given a 3 year warranty that is only valid when the vehicle is in the appropriate condition prescribed in the owners’ manual that is authorized by Ford Service Center. The following flowchart is a representation of the operations that take place if a customer returns a car to the company. Available from: http://t2.gstatic.com/images?q=tbn:ANd9GcQLhNupIiM__l-KmUD-QLpdNmiCQGtjv0UwK0HJQ_6W3EMPDhf6 accessed 25 Feb. 2015 Ford Fiesta is the car that many people are dreaming to buy, but for those who have not driven one will be okay for them to ask why. This class of product has a sky high standard with many good qualities making the qualities of great cars like Honda, Nissan March, Kia Rio, Suzuki Swift, Fiat Punto, and Jazz be overlooked by many buyers (Watts 2009, p. 56). Although these performance objectives vary from product to product, Ford Fiesta is one of the best cars in terms of Size class. Despite the view challenges that the product faces, Ford Company continues to gain more Fiesta sells. The above discussed qualities are the key to the reason why many buyers prefer Ford Fiesta to other car models. The sales volume of Ford Fiesta has dramatically increased, thus increasing the company’s profits with a higher percentage compared to other models of the company. For instance, the car had a total registration of 10,250, in May 2013, which was more by 26.8% than that of April. Currently, Fiesta remains the UK’s best seller (Genat2004, p. 67). The figure below shows the impressive features of the new Fiesta models that enable the product to gain more value. Available from http://www.drivingford.in/wp-content/uploads/2011/07/Fiesta_interior-quietness-features.jpg Accessed 25 Feb. 2015 Challenges facing operations of Ford Motor Company It is not a secret that Ford Company has sold more for a long period. The Company has been launching competitive and strong products that have been helping it to stay ahead of its rivals, and gaining more profit in America (Baldwin 2002, p.14). The profit margin of the company in North America has been the highest. Despite its success in the home country, Ford has been facing various challenges. Discussed below are two main challenges. Challenge 1: competition The company is facing a very stiff competition in Europe. Many may wonder why Europe matters to Ford. It matters because it is Ford’s biggest business part and the company is of late, losing a lot of money there. This is not because the company is making big mistakes, but it is because its rivals in Europe are selling cars at lower prices (Bak, Studer-Noguez, Meyer, Hooker, Meyer, Shiomi& Rae 2002, p. 23). The sales of Fiesta in Europe are drastically decreasing because many buyers prefer the cheap cars. As a result, the company has cut down its production rate by closing its three factories, two in U.K and another one in Belgium. Challenge 2: quality Owners and reviewers of Ford cars, especially Fiesta say that this new product is a great improvement compared with the old models. However, there are getting knocked when it comes to quality surveys. The latest quality survey showed that Ford Company products have low quality compared to those of another manufacturer even if its sales were still high. First of all, Ford has been facing challenges when launching its new products like Fiesta (Sorensen & Williamson 2007, p. 45). To some extent the challenge is not caused by the company but its suppliers. For instance, the company has been facing issues of faulty parts. However, the company is taking new measures to fix these challenges. The company is working with its suppliers more carefully as well as changing its procedures for it to launch new products more smoothly. However, there is another big challenge that is affecting Ford Motor Company in terms of quality rankings. Customers are highly complaining about the famous MyFord Touch System. MyFord Touch System is a touchscreen found in the company’s system that accepts voice commands linking them with the customers’ smartphone (Brown 2010, p. 78). This new technology was to take the company very far but it has failed because of troubles buyers are facing. Improvements proposed to address the identified challenges There are two main improvements that Ford Motor Company must make inorder to address the above discussed challenges. To begin with, the company should start selling its products at fair and slightly lower prices than its rivals (Sandoval 2006, p. 56). This is because the sales of the product are decreasing because many car buyers are going for cheaper cars since they have almost similar features. Failure to reduce its prices, Ford Motor Company will put itself in a condition that it will suffer huge loses. In addition, many buyers are currently preferring old cars than new models just because of the higher prices that these new models are being sold at. Secondly, Ford Motor Company need to ensure that the quality of its products fully meet the requirements and needs of the customers. In order to improve the perception of customers and continue with its progress, the company should maintain a strong focus on the quality of its products as well as communicating these gains to the customers. Maintain high quality product is the back born of all global leading companies. Therefore, failure to focus on the quality of the products will definitely result in sales reduction. Bibliography Adkins, E. W. (2003). A history of the Ford Motor Company archives, with reflections on archival documentation of Ford of Europe's history. 2003): Ford, 2003, 27-69. Bak, R., Studer-Noguez, I., Meyer, S., Hooker, C., Meyer, S., Shiomi, H., ...& Rae, J. B. (2002). Henry and Edsel: the creation of the Ford Empire. Michigan Historical Review, 28(1). Baldwin, N. (2002). Henry Ford and the Jews: the mass production of hate. PublicAffairs. Brown, E. (2010). How implementing social media strategies (the right way) attracts customer loyalty. The Faculty of the Public Communication Graduate Program School of Communication American University Washington, DC, 1-39. Genat, R. (2004). The American car dealership. Motorbooks. Sandoval, G. (2006). GM slow to react to nasty ads. cnet news. Sorensen, C. E., & Williamson, S. T. (2007). Forty years with Ford. Cape. Watts, S. (2009). The people's tycoon: Henry Ford and the American century. Vintage. Read More