Ford and Toyota
Customer Inserts His/her Name
Abstract
Ford Motors is the largest as well as the oldest automobile manufacturing company in the world. Founded in 1903, it is the pioneer of innovation with its unique manufacturing technology known as Fordism. Toyota is also one of the leading automobile manufacturing company in the world. It is the founder of world class manufacturing methodologies such as JIT, Kanban, Kaizen Costing and Total Quality Management principles. During the last couple of years, Toyota has been suffering from quality non conformance issues and its production and procurement facilities have been damaged by natural disasters and uncertain climatic conditions. While Ford is lagging behind in sustaining its market shares in the European market mainly because of economic downturn and Euro Zone crisis. The second reason is the rising competition from different companies and hike in oil prices. The inappropriate lending systems of the banks have also resulted in the declining sales of the company. On the other hand, Toyota’s profitability has also decreased because of rising input prices and instability of exchange rates. Both the companies have the option to form strategic alliance by sharing core assets to outperform rivals. Secondly, they can shift their operations in BRICS countries to enjoy cost effective manufacturing, skilled human resources and massive customer base because of large population.
Recommendations
There is an expected shift in the international economic order. The BRICS grouping has a tremendous potential of playing a significant role in global politics and business decisions. BRICS is an acronym of association or alliance for emerging economies of Brazil, South Africa, Russia, India and China. All these countries do not only provide cost effective manufacturing facilities but also constitutes more than twenty five percent of the World’s population. The massive and large customer base and the availability of efficient human resource enhance the business prospects in the region. I would recommend both the companies to form strategic partnership and establish their production facilities in any of the above countries whichever seems feasible and then target their product to specific market segments in different regions. For instance, Toyota can take advantage of its location and can expand its presence in China and India by establishing production facilities and also by acquiring competitor firms and investing in supplier’s businesses. China and India are world’s most populous countries with rising middle class which is a main target group for Toyota. On the contrary, Ford can exploit the social and cultural similarities in the Americas and Europe by offering new and innovative products that exceeds customer demands. Secondly, the strategic alliance between the two could out perform strong aggressive competitors such as General Motors, Hyundai, Nissan and Honda. The changing weather patterns have severely damaged Toyota’s production in last couple of years but Ford can take advantage of the global warming phenomenon because the melting of Arctic Ocean will open new trade routes for Canada and Russia hence increasing demand for Trucks and heavy vehicles. By establishing its niche in the North America Free Trade Area and the European hemisphere Ford can reach at the apex of success. But the fuel efficient, environment friendly, innovative and economical product at affordable price will be the essential characteristics for corporate success.
References
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Zigu (2012). Ford Motor Company | SWOT Analysis | BrandGuide | MBA Skool-Study.Learn.Share.. [online] Retrieved from: http://www.mbaskool.com/brandguide/automobiles/1499-ford-motor-company.html [Accessed: 5 Mar 2013].
