Introduction
The case study is about Ford Motor Company and its product warranty program. The company is a large American car manufacturer and seller globally. In 1987, Ford Motors went through a tremendous change in its external business environment as a result of the announcements that were made by its primary competitors regarding their new policies on product warranty. These changes in the policies may adversely impact not only the company’s sales, as well as, market but also other important departments of manufacturing e.g. quality assurance, dealer networks, and extended services. As a remedy, the managers of Ford Motor Company must immediately respond by a careful analysis of the present market variables. It is thus on this basis that the following article will present the recommendations that can be undertaken by the company to ensure that it maintains its operations and market despite the changes. It is aimed at assisting the business to attain more success by choosing the best strategy of company warranty.
On the first account, it is worth noting that Ford Motor Company boasts of a huge customer base. However, it must work towards converting the American consumers who buy foreign vehicles over to their locally produced cars. A significant attraction for these customers to the foreign motor vehicles is their dependability, as well as, serviceability. Most consumers have also reneged in purchasing Ford products because the company has been deemed as putting more focus on its profits margins as opposed to the consumers' safety. Therefore, the company should first find ways of improving the qualities of the motor vehicles. Through this, it can restore the confidence of its customers on the products in the face of the new warranty policies that are being introduced by the competitors. This will immediately increase the sales of the company as a result of the high number of customers that Ford Motors will be receiving stemming from the high quality of its products.
The second recommendation is having different warranty programs for various categories of cars manufactured by Ford Motors. There are multiple models that are manufactured by Ford. Such encompass Ford Focus, Ford Explorer, Ford Taurus, and Ford Ranger among others. These models differ in terms of their costs since they have been manufactured for various uses. Therefore, having a different warranty for every model will be of the essence because it will resonate with the use that the vehicle will be put. There are also luxury and non-luxury vehicles that are manufactured by Ford Motors. The assertion by some of the managers that the non-luxury vehicles should have better terms of warranty is true. It is because the luxury vehicles, on the other hand, would have costly terms stemming from the fact that even their initial costs is higher. As a result, having similar warranty programs will dent the revenues of the Ford Motors in case the buyers experience challenges with their vehicles.
Another recommendation would be Ford Motor Company collaborating with another established automobile maker which has successfully developed and implemented a product warranty program such as Chrysler (Menezes, 1990, p. 11). This can significantly assist it in avoiding possible losses that stem from the fact that the company lacks an efficient program. The warranty in comparison to its competitors should be superior while also costing less so that the company receives a higher traffic from possible buyers. For instance, Ford Motor Company can offer corrosion warranty for seven years to the buyers that are found along the coastal regions. As is evidently portrayed, these areas have salty waters and as such, the vehicles that may be affected will be repaired. The company will be bear all the costs associated with the repairs. The collaboration will also assist Ford Motors Company in discerning the areas that it needs to improve its programs.
The last recommendation is one that would assist the entire motor vehicle industry in the United States to boost their proceeds. Essentially, Ford Motor Company can petition the American government to decrease the taxes levied on gas consequently lowering the gas prices and enabling the consumers to have an increased disposable income. The recommendation also has the propensity of revitalizing the demands of motor vehicles thereby increasing the profits realized by all the players in this industry. The aspect will assist in offering better terms of product warranties because of the availability more revenues that can be harnessed to sort out issues that may be brought about by the consumers of the products.
Conclusion
The article above has conclusively provided a discussion on the recommendations to Ford Motors concerning its warranty programs. The Company should increasingly identify its success factors and in particular to the product warranty programs in order to be able to compete with its competitors and other external variables. Also, this is essential for the maintenance of its ranking on the international platform. The above article has thus provided a discussion on Ford Motors Company. It has mentioned the recommendations that can be applied by the management such as increasing the vehicles' dependability and serviceability that will limit the repairs done after a short period. The company should also work towards introducing various warranty programs for different models produced. Lastly, the article has discussed an issue concerning petitioning the American government to cut down the prices of gas to increase the profitability of the motor vehicle industry.
Reference
Menezes, M. (1990). Ford Motor Company: The Product Warranty Program (A) (1st ed., p. 18). America: Harvard Business Publishing.
