StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

The Downslide of the American Auto Industry - Essay Example

Cite this document
Summary
This essay "The Downslide of the American Auto Industry" illustrates how the management of processes can help organizations to achieve competitive advantage. It discusses a case study of the troubled American auto industry. It brings out the primary cause of the industry’s downslide…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.8% of users find it useful
The Downslide of the American Auto Industry
Read Text Preview

Extract of sample "The Downslide of the American Auto Industry"

Management of Processes This topic illustrates how management of processes can help organizations to achieve competitive advantage. It discusses a case study of the troubled American auto industry. The case study clearly brings out the primary cause for the auto industry's downslide, which is the lack of proper business management process. As against this is the success of the Japanese auto giant, Toyota. Thereafter is a discussion on the "B200: Understanding Business Behavior" concept. The downslide of the American auto industry The U.S. auto industry ruled the country's economy and shaped its development for several decades. General Motors, Ford, and Chrysler created a huge number of jobs, while also influencing the country's culture and social life. However, the pressure of globalization and foreign competition had a big impact on the revenues of these companies (Emmons, Garry 2006). Lack of vision, corporate bureaucracy, bloated product lines or overcapacity, and lack of proper business management process started pulling down the sales of the American auto majors. Toyota - a success story Where the American auto companies lost, The Japanese auto major - Toyota - gained. Toyota acquired a significant market share by exporting attractive, low-cost, fuel-efficient vehicles to America. The Japanese auto giant achieved this by focusing on refreshing their products and having the flexibility in their factories. It stressed on the importance of lean manufacturing process and evolved the Toyota Production System (TPS). The company prefers to customize existing systems and equipment rather than installing the latest fancy technology. Their plants are in a state of continual improvement and repurposing, with input from everybody. Toyota uses technology not only in the manufacturing process, but also in engineering and designing. The objective of the 14 Principles of the Toyota Way is to base management decisions on a philosophical sense of purpose and think long term, to have a process for solving problems, to add value to the organization by developing its people, and to recognize that continuously solving root problems drives organizational learning (Liker, J. 2004). Behind Toyota's assembly line are sophisticated information systems supporting and enabling the business processes that help the automaker eliminate waste, limit inventory buildup and continually improve production. The main idea behind this business process management [BPM] is to blend machine-to-machine and human-to-machine connections to improve efficiency. What drives Toyota is its presumption of imperfection. The management encourages its work force to design and implement processes that help in getting it right the first time by reducing errors. It stress on continuous improvement and a pervasive lack of complacency with whatever was accomplished yesterday. B200 - Understanding Business: Processes Business organizations are considered as complex assemblies of interrelated sets of activities in which inputs are converted into outputs. This section helps us understand how business organizations apply the systems theory to perform their activities. It focuses on the importance of processes, and the resources that are needed for organizational success. Business management is now a systematic, methodical process that guarantees efficiency and effectiveness. Dr. Fahad Al Mekrad has discussed this topic at length in one of his works (B200 - Understanding Business: Processes). Transformation Process Model Organizations perform as systems and all parts the organization are operations. Organizations can either be 'closed or 'open' systems. Closed systems are completely self-supporting, while open systems interact with their environment. Open systems receive inputs from their environment, convert these inputs into outputs, and discharge their outputs into their environment. All operations are based on this input-transformation-output model. Competing on Capabilities The building blocks of corporate strategy are not products and markets, but business processes. Competitive success depends on transforming the company's key processes into strategic capabilities that consistently offer superior value to the customer. Organizations can prepare themselves for competition by shifting strategic framework to achieve aggressive goals and organizing around the chosen capability. Value Chain and Competitive Advantage A value chain is string of companies or departments working together to meet the demands of a product. Every value activity uses purchased inputs, human resources, and some form of technology to perform its function. Each value activity also uses and creates information, such as buyer data, performance parameters, and product failure statistics. Marketing in a Changing World Marketing is an activity directed at satisfying needs and wants through an exchange process. Marketing includes activities such as market research, product development, distribution, pricing, advertising, personal selling and others, designed to sense, serve, and satisfy consumer needs and also achieve organizational objectives. Relationship Marketing: Marketing is not just about developing, selling, and delivering products. It involves the development and maintenance of mutually satisfying long-term relationships with customers. Long lasting relationships with customers cannot be duplicated by competitors, and therefore offer a unique and sustained competitive advantage. Customer Processing Operation Framework Quality Strategy is a set of plans and policies to harness operations and resources to meet the customer's expectations and its purpose is to offer the business with a distinct advantage in the market place. A service operation could be considered as a customer processing operation (CPO). The CPO framework identifies the significant points and activities for the customer, before, during and after the service delivery system. Each point on the CPO framework has an impact upon the development of customer expectations and perceptions and thus identifies the factors that influence the provision of service quality. Logistics and Competitive Strategy The secret of success is a simple model based around the triangular linkage of the company, its Customers and its Competitors. The following figure illustrates the three way relationships (Source: Ohmase, K, The mind of the strategist Penguin Books 1983): Customers Company Competitor This model emphasizes on the ability of the organization to differentiate itself, in the eyes of the customer, from its competition. It enables the organization to operate at a lower cost and hence at greater profit. Business Process Reengineering Business process is a horizontal flow of activities while most business activities are formed into vertical functional groupings. Traditionally, all functions are viewed separately. Business Process Reengineering (BPR) views them as related. Successful processes need coordination. BPR focuses on lean production, time based competition, and Kaizen (continuous improvement). Conclusion When companies invest in setting up business processes and educating their employees in following these processes, they can be rest assured of long-term, rich dividends. Toyota is one good example for implementing such a model. Further to Toyota's success, companies around the world are considering management of processes as serious business to sustain and grow in this tough global market. Business and management organizations around the world are treating this subject with utmost seriousness. A lot of companies have started managing their business by following this prescribed, methodical approach. Works Cited list 1. Emmons, Garry. 2006, American Auto's Troubled Road Available at: http://hbswk.hbs.edu/item/5290.html 2. Liker, J. 2004, The Toyota Way: 14 Management Principles from the World's Greatest Manufacturer, McGraw-Hill. 3. Dr. Fahad Al Mekrad, B200 - Understanding Business: Processes Available at: http://www.arabou.org/Business/B200/chapter_1-12_(processes).doc Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Management of Processes Essay Example | Topics and Well Written Essays - 1500 words”, n.d.)
Retrieved from https://studentshare.org/miscellaneous/1523665-management-of-processes
(Management of Processes Essay Example | Topics and Well Written Essays - 1500 Words)
https://studentshare.org/miscellaneous/1523665-management-of-processes.
“Management of Processes Essay Example | Topics and Well Written Essays - 1500 Words”, n.d. https://studentshare.org/miscellaneous/1523665-management-of-processes.
  • Cited: 0 times

CHECK THESE SAMPLES OF The Downslide of the American Auto Industry

History of Unions in America

On arrival on the american land, Europeans found bountiful economic opportunities that were unavailable in their home countries and in order to perfectly exploit these opportunities, requests were made to home countries to supply them with craftsmen.... Nevertheless, even with this ruling, the industry growth in many parts of America continued to be witnessed and this led to the emergence of numerous challenges and problems for workers.... The Period from 1830-1870s The period saw America experience great transformation in terms of numerous reforms in both governance and industry organization....
10 Pages (2500 words) Term Paper

Business strategy report on Ford Company

The European auto industry has been declining for the past five years since 2007 and is now at a record low in 20 years.... Political / legal environment The political and legal environment governing the auto industry in Europe is quite... According to Healey (2012), the main problem of the industry is that the production capability of the industry is more than the demand, which is ever decreasing.... Ford Motor Company is a reliable name in the industry since the year 1903....
15 Pages (3750 words) Essay

The United Auto Workers Union and Its Effects on the City of Detroit

industry analysts expressed their agreement with this new UAW approach and further indicated that 'the union achieved its goals of balancing economic gains,' thereby effectively leaving the laborers satisfied and the employers competition-enabled.... A popular third-party representation for almost any labor or industry type is referred to as the labor unions.... These unions are comprised of workers from within the company and industry; their collective function is to bridge the gap between the employees and employer through communication and serve as an organized voice for all employees....
7 Pages (1750 words) Term Paper

Real World Event Case Study: The Financial Collapse of General Motors

The economic impact with respect to the collapse of the auto industry has resulted to be dramatic.... The auto industry is an important employer and there are many related industries attached to it.... As per the economic downturn, the american, during the financial crises bought few new cars.... General Motors which was the market leader in the automotive industry and the most recognized company across the world.... But with the fall of financial industry in 2007, things got worst across all the financial industries in America, including the automobile industry....
4 Pages (1000 words) Essay

Automobiles in the US

The economic aspect of this country relates to the high profits that it has been making in the automobile industry and boils down to the economic strength that America as a superpower has been deriving from the money it has been making in this sector.... The 20th century in America gave rise to the concept of auto mobility.... The social and cultural advancements in american society today depend largely on the reliance on cars and automobiles....
4 Pages (1000 words) Essay

Japanese And American Style Of Job: A Comparative Analysis

The auto industry of the world is witnessing a stiff competition between Japan and America.... The paper "Japanese And American Style Of Job: A Comparative Analysis" examines auto industry's strategy, its work structure and stakeholders attitude in Japan and USA.... the american people follow a flexible job process like the Japanese but they favor more autonomy and variety in their job responsibilities.... the american people are lagging behind in this case as they have to build a hierarchical system of a workforce into its work culture....
5 Pages (1250 words) Case Study

Restrictions on American Imports of Japanese Autos

The paper "Restrictions on American Imports of Japanese Autos" deals with the american auto industry.... The real responsibility for keeping american auto companies competitive lies with the management teams of those companies.... We have seen in the past how as foreign companies raise their prices to pay for tariffs the american companies follow suit and raise their prices as well.... As globalization has increased, competition from foreign competitors in the automobile industry has also increased....
2 Pages (500 words) Essay

Comment on the attached article

the american government has set a precedent of helping out other industries in trouble, such as the auto and financial industries, so it makes sense that the american government also helps the farming industry.... This is a key industry in the american economy because it provides food for the vast majority of Americans.... Because of the recession, many industries are struggling, and the farming industry is just one of those....
1 Pages (250 words) Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us