Ford Motor Company Management - Case Study Example

Strategic Audit Report Ford Motor Company Executive summary The success if a company is highly dependent on the management structure and the strategic plan of the company. Inferring to the ford motor company, the company has withstood market challenges over a period of more than 100 years making the company to be among the globally reputable motor vehicle manufacturing companies. The company has a well-structured business model where it organizes the employees in teams thus increasing the productivity per unit level. The business model of the company is equally designed in a manner that the company is segregated to the automotive and serves department and the dealership department ensuring the products of the company meets their market potentiality. The company trades in cars, trucks and heavy vehicles with the tractors of the company forming some of the global iconic brands. In an attempt to understand the ford motor company, this paper will focus on the business model, business line, the products, customers and analysis of the value chain. The paper will equally focus on the diversification of the company, overall performance and analysis of the mission statement. Current situation Business model Currently, Ford company trades its products under four main brands; Ford, Mercury, Lincoln, and Volvo. The company utilizes a labour force of more than 200, 000 employees who are specialized to work in different departments of the production process. The Ford Company has devised a strategy to make the feasibility of its products through separation of the firm into two segments. The company is separated into the automotive services production segments and the financial services. The financial segment of the company has the provision of the ford credit, which offers financing to vehicles in both merchant shoppers and retail shoppers. The automotive section of the Ford company is separated into districts according to the strategic plans of the company (Davis, 2013). The districts under this umbrella are thus; South America, North America, Asia, Pacific, Africa and Europe. The automotive section of the company is involved in the manufacturing and servicing of the cars. The Ford Company has a retail dealership program that works under the dealership model. Under this program, dealerships sigh specific contracts with companies that the Ford Motor Company supplies with vehicles and service their automotive. This works by increasing the sales of the products of the company through the formation of long-term partnerships. According to the 2008 Ford dealership statistics, the company secured approximately 4000 dealerships in the United States alone. Business line The Ford Motor Company trades in automobiles as the main line of business throughout all the districts where the company branches are stationed. The company offers in its cars the technology and high safety standards needed by the customers along with the fuel economy that enables a driver to go for long. The company thus trades in three kinds of automotive, which are the luxury cars, the commercial vehicles and the heavy machinery vehicles including trucks and tractors. In the line of luxury cars, the company is best known for iconic cars like the F-series truck line and the Mustang sports car. However, with the recent rise in the level of competition among the producers of the luxury cars like the Audi Company, Ford Motor Company has developed high-quality luxury cars like the Fiesta and the Focus. The production of the luxury cars by the Ford Company has gone to the extent of targeting the engines with the current Eco-Boost technology developing engines that are capable of both direct injections and turbocharging. Additionally to the own produced luxury cars, Ford Motor Company owns a small stake in Aston Martin and the Mazda company (Wee & Wu, 2009). Ford equally trades in the commercial vehicles like the Tourneo Custom that is one among its new models of the commercial vehicles. The intent of trading in the commercial vehicles is to tap into the business communities throughout the world for increased sales of the products of the company. The commercial vehicles are categorically the main basis through which the Ford Motor Company forms dealership with other companies whom it supplies with its models of commercial vehicles. Additionally in the business line, the company manufactures and trades in large trucks and heavy engine vehicles like the tractors, which for a long time has led to the association with the company to strength and durability. Studies show that the tractors of the Ford Company, in particular, have received recommendations throughout the world for their fuel economy and efficiency. Business products The Ford Motor Company produces an array of business products like the cars, crossovers and the SUVs, trucks and vans, Lincoln, Mercury and other allied automotive products that are a share in cooperation with other companies. The current production process in the manufacture of the cars under the trademark of the Ford Company ensures a production of technologically efficient and effective vehicles. The innovative design and the performance value of the cars produced by the company make the cars one of the major products of the company that receives the highest sale margin in the global market (Wee, 2009). The SUVs produced by the Ford Motor Company are among the products of the company that is regarded as luxurious in nature. The crossovers just like the SUVs are designed for luxury; however, the two products have possess the nature of towering trailers, space for keeping a large quantity of luggage and sets that can be reconfigured for everyone. These two sets of products by the Ford Motor Company offer the buyer convenience, capability, and versatility. The SUVs and the crossovers are among the globally recognized products of the Ford Company for both comfort and capability. Trucks and vans are equal the key business products of the Ford Motor Company. The Ford trucks are designed in a manner that they offer toughness and outstanding performance. The vans and trucks of the company are among the most durable vehicles in the automotive industry. This is because the company has maintained the production standards the initial trucks were developed from thus ensuring the trucks are made from among the most durable and tough materials offering services to all kinds of weather and situation. Additionally to the products of the company are the luxury vehicles like the Mercury, the Lincoln and other vehicles form collaborating companies like the Aston Martin, which form part of the significant business products of the Ford Company. Customers The Ford Motor Company has launched several programs to increase the car-owner satisfaction after purchase, which portrays the high level of concern the company has for its customers. According to (Wee & Wu, 2009) 90 percent of the customers of the Ford Motor Company are a recommendation from friends thus the company must maintain close ties with the customer base to ensure a continuous attraction of more customers. The company has customers globally including individual car owners, associations, and companies. The company manages to attract its customers through a meticulous advertisement program in addition to the offer of services to the customers like servicing the vehicles for the customers for free within a specified duration. The company equally offers consultancy services to the customers thus enabling it to maintain a closer tie with the customer base. The maintenance of closer relationships between the company and its customers enables Ford Motor Company to sustain its products in the market amidst high levels of competition in the automotive industry. Value chain analysis Having operated for more than a century, the company has in the past experienced increased arbitrary demands on suppliers thus leading to the poor supplier relations. Currently, the company is taking new approaches in reinventing its value chain. Procurement sums to about a quarter of the value chain, in this regard; the Ford Motor Company has focused its efforts on procurement. Ford Company is currently working closer with its suppliers to eliminate wastage thus lowering the cost for both companies. Closer working relation with suppliers results to a win-win situation that is posed to help the company escalate the ladder from the companies with the poor supplier relations. The design phase is another value impact for the Ford Motor Company value chain. The company has begun understanding the value of consumer input for the success of the design of the modern technology. The Ford Motor Company has designed a tailoring design model following the public demand to ensure in cooperation of the customers’ specifications for the design of the vehicles. The initiation of consumer input in the design of the vehicles has proved successful for the company in terms of financial benefit (Wee, 2009). Additionally, marketing is a significant component of the value chain of the Ford Motor Company. Marketing is considered a high value added the part in the value chain. The Ford Motor Company has been working closely with dealers in the creation of marketing strategy that helps in boosting the sales. Close association with dealers has been perceived to be the basis of consumers’ high level of satisfaction with the products of the company. Additionally, the company is utilizing information technology in the improvement of its value chain. This is through collaboration with Caterpillar Logistics and SAP in the improvement of warehousing and the daily part advantage networking for getting spare parts to the dealers. Diversification The Ford Motor Company has embraced the art of diversification in its production line and trade. The company produces different kinds of vehicles ranging from cars, commercial vehicles and large trucks. In an effort to embrace diversification, the company has partnered with other automotive companies where it borrows ideas and production process for continued improvement of the products of the company. Diversification by Ford Motor Company is equally witnessed in the nature of customer relations where the company has adopted a system of using dealers to sell the products of the company as opposed to the traditional sale process where vehicles were directly purchased from the company (Wernle, 2013). Overall performance As at 2004, the Ford Company registered a revenue of US $ 144.1 billion with operating income of $ 4.342 billion. The company had a net income of $3.187 billion in the year with the total assets of $208.5billion. The performance index of the company was a slight reduction from that of 2013 owing to the general decline in the global economy. Nevertheless, with the improvement in service delivery and new designs developed for the next generation of the company vehicles, the company is anticipated to register an increased margin of profit. Mission statement analysis The Ford Motor Company operates under a mission statement of one team, one plan one goal. In accordance with the mission statement, teamwork is an integral component for the success in productivity of the company. The company thus bestows a significant amount of resources in the training of teams for improvement in the performance outcome. With the development of teams, the company can plan effectively where all team players are incorporated and participates in the plan for the achievement of a unified goal for the company(Bart, Baetz, & Pancer, 2009). Conclusion The ford motor company is among the biggest brands in the motor vehicle companies. Through analysis of the past records of the company, it is evident the company has faced several challenges in an attempt to maintain a competitive level in the industry. However, there appear to be an improvement in the management structure of the company that is evidenced through the application of the modern trends in the management of the operational structures of the company. The adoption of the dealership program and the customer impute in the design of the vehicles, the company is posed to renew its competitiveness among the major motor producers. The company has not been successful in the Asia thus the company should consolidate more of their European and Chinese markets and reduce the threat of competition by developing flexible product lines for their customers. References Bart, C., Baetz, M. C., & Pancer, S. M. (2009). Leveraging human capital through an employee volunteer program: The case of Ford Motor Company of Canada. Journal of Intellectual Capital. Davis, M. (2003). A history of the Ford Motor Co. Ward’s Auto World, 39, 31. Wee, H. M. (2009). How lean supply chain effects product cost and quality - A case study of the ford motor company. In 2009 6th International Conference on Service Systems and Service Management (pp. 236–241). Wee, H. M., & Wu, S. (2009). Lean supply chain and its effect on product cost and quality: a case study on Ford Motor Company. Supply Chain Management: An International Journal. Wernle, B. (2013). Looking at Henry Ford the man. Automotive News, 87, 12. Read More