Abstract
The Ford Motor Company is an international business organization focusing on the vehicle industry. It has large quantities of manufacturing plants all over the world. The company developed through the years due to the innovative and revolutionary ideas regarding their manufacturing assembly lines as well as their corporate management and leadership. The Ford Motor Company remains in the list of the Fortune-500 and it is considered as one of the most successful automobile companies in the world. Their main strength lies in their mix marketing strategy which depends on the market condition of every country they are distributing into. Their focus is to use the lean manufacturing strategy in order to overcome the changes and disturbances within their organization. The company experienced a financial crisis due to the recession at the start of the 21st century. However, their company is now becoming stronger due to their acceptance of several important social changes.
Company Overview
Ford Motor Company is an international business organization focused on mobility and automotive industry. It is included in the list of the Fortune-500. The company is based on Dearborn, Michigan although several plants and main offices are scattered around the world. The main business of the Ford Motor Company revolves around manufacturing, designing, financing and marketing automobile parts and products. Some of the main products of Ford Motor Company include trucks, Ford vehicles, SUVs and Lincoln Luxury vehicles. In the modern times, the Ford Motor Company also included electrical vehicle and electrical vehicle parts as one of their main products (Bayou & Korvin, 2008). The company also involves servicing full line of their main products in most of their plants worldwide (Gearan et al., 2006). The company also has relatively large quantities of joint ventures among automobile industries in some of the developed countries including Japan and China.
The main vehicle brand of the Ford Motor company is the Ford and the Lincoln. The Ford Motor Company also introduced the methods of manufacturing vehicles and vehicle parts using moving assembly lines. This method become known as Fordism and it is coined by several engineering manufacturers during the 1920s (Blitterswijk & Karadzhov, 2009). The international company is mainly composed of 67 plants scattered worldwide and 199,000 employees. The business core of the Ford Motor Company is divided into two major sectors. One is the automotive business and the other one is the financial services through the Ford Motor Credit Company.
History
Henry Ford, a revolutionary and visionary entrepreneur, was the one who established and created the Ford Motor Company in 1903 (Ford Motor Company, 2016). The initial business strategy of the company is to sell and automobiles which was created or designed by Henry Ford himself. The plant operation of the company started in Dearborn, Michigan which is also the current base company of the Ford Motor Company. During its first few years, the company became famous or popular due to its unique practices in manufacturing processes as well as in leadership. The ideas of Henry Ford became revolutionary during the first few years of his company which is the reason why it grew into a large international company.
Henry Ford also designed and introduced the moving assembly lines for the manufacturing of automobile products or parts. By 1911, the first manufacturing plant outside the United States was established. The second manufacturing plant of the Ford Motor Company was established in Trafford Park, Manchester (Blitterswijk & Karadzhov, 2009). By the end of the 20th century, the Ford Motor Company was recognized as the second largest automobile industry which was based in the United States. However, the company experienced a financial crisis during the start of the 21st century due to the recession. The profitability of the company returned during the past few years and remained as one of the largest automobile business in the world.
Mission and Vision
According to the Ford Motor Company, their main statement is “people working together as lean, global enterprise for automotive leadership.” In analysing the vision statement of the Ford Motor Company, it could be recognized that their main focus is to global leadership, stakeholder’s interest and lean business strategy (Bayou & Korvin, 2008). Their vision statement drives all of their manufacturing plants all over the world to become the organization with the highest performance level. In the case of leadership, they want to become the top automobile industry in the world. On the case of stakeholder’s interest, they wanted to enhance corporate social responsibility for satisfaction of the employees, investors and customers. Lastly, they highlighted the lean manufacturing process which is already achieved at the early years of the company (Gearan et al., 2006).
The Ford Motor Company’s mission statement includes some of the actions and plans for the company to achieve their main goals or objective. Their mission statement is “one team, one plan, one goal”. Their mission statement guides their strategy to achieve their market position which is considered to be high due to their performance level. Their mission statement is also considered as one of their major response to the company challenges such as market risks and globalization risks. In their mission statement, it could be recognized that they value the teamwork which is considered as one of their main characteristic.
Market Focus
The Ford Motor Company focused on the relatively small amount of customer market since their product is only suitable for middle class and upper class families. However, their used the market mix strategy in order to acquire wider range of customers from these available customer market. The company has products such as trucks and tractors which could be suitable for industrial firms and agricultural firms. The company also sell high end cars which could be suitable for higher class families in the developed countries. The company also manufacture sports car and provides vehicles for sports events. In general, the company is designed to appeal to a wide range of consumer types.
Financial Background
SEC Filings (Form 10-K and Form DEF-14A)
The revenue of the Ford Motor Company primarily came from the sales of their major products which include vehicles, vehicle parts and vehicle accessories. The cost and expenses of the manufacturing of their products could come from the costs of sales and the costs of selling and administrative actions. The economic factors which could greatly influence the industry of the Ford Motor Company include currency exchange rate volatility, excess capacity, trade policy, pricing pressure, energy price changes, increasing sales of smaller vehicles and vehicle profitability (Blitterswijk & Karadzhov, 2009). The average revenue of the Ford Motor Company each year is about $2.3 trillion. The share of the company among the total sales of vehicles around the world is about 6%. The company is expected to invest $4.5 billion for the development and manufacturing of electric and hybrid vehicles which is considered a common trend among automobile industries. There is also upcoming release of new models from the company which could expect to be the cause of their increase in revenue for the next coming years. Their new model considers green innovation which is the trend in the automobile industry (Seligman, 2005).
Industry Analysis
External Stakeholders
Competitors
The Ford Motor Company is composed of many producers from different manufacturing plants all over the world. However, there is no single producer from their company which is considered dominant in those countries. There are also countries in which the total sales of the Ford Motor Company accounts for the major percentage of all vehicle and vehicle parts sales. One of these countries is the United States which is the country of origin of the Ford Motor Company. The main competitors of the company include General Motors Company, Hyundai-Kia Automotive Group, Toyota Motor Corporation, Honda Motor Company, Fiat Chrysler Automobiles, Renault-Nissan B.V., Volkswagen AG Group, Suzuki Motor Corporation and PSA Peugeot Citroen (Ford Motor Company, 2016).
Vendors
The Ford Motor Company manufactures automobile parts and vehicles which are distributed to their distributors from various parts of the world. The vendors of the Ford Motor Company products are also established by the companies. In most cases, their vendors are based near the manufacturing plants of the company. On the other hand, the Ford Motor Company is associated to about 100 suppliers from various parts of the world. Almost 80 % of their vehicle parts are acquired from their suppliers which is part of their supply chain. Some of the key suppliers of the company include NHK Spring, Valeo Electric and Electronic Systems and Flex-N-Gate Seeburn (Ford Motor Company, 2016).
Customers
The market mix strategy of the Ford Motor Company became their tool for acquiring wide range of customer types. One of their key customers is the agricultural and industrial firms buying trucks and tractors from them. Their also sell vehicle parts from these firms and acquire large profit. Another key customer for the Ford Motor Company is the higher class and the middle class from the developed countries. The company is popular for manufacturing high end products suitable for their customers from high and middle class families. Their new and innovative products are also developed in order to acquire more women and young buyers (Ford Motor Company, 2016).
Government Entities
Political factors are also considered as one of the major stakeholders of the Ford Motor Company. In general, their vehicle design is influenced by the regulations and policies regarding the gas emission of the vehicles. Most of the countries are now concern with the environmental problems which results to their promotion of more eco-friendly vehicles. The production or manufacturing of their products should abide the policies and regulations set by the government of various countries as well as the international union or organizations. In addition, their expansion is also affected by the trade policies established by the State government or the international union (Ford Motor Company, 2016).
Communities
The entities in the community are also considered as an environmental factor or major stakeholder of the Ford Motor Company. Large proportion of their customers belongs to the middle and high class families. These families could influence the production, manufacturing and design of their major products. In most cases, the models of their vehicles are dependent on the customer requirements. These costumers are commonly from the high and middle class communities. Vehicles or cars are considered as status symbol of most people especially in the developing countries. The communities mainly composed of higher and middle class families could greatly influence the progress of the Ford Motor Company (Ford Motor Company, 2016).
Internal Stakeholders
Shareholders
The major shareholders of the Ford Motor Company are mainly composed on individual fund owners and institutional shareholders. Their major direct holders include William Clay Ford Jr., Mark Fields, Edsel Ford II, Joseph Hinrichs, and Ziad Ojakli. Some of their major institutional shareholders include Vanguard Group, Inc., State Street Corporation, Evercore Trust Company, BlackRock Institutional Trust Company, Wellington Management Company, BlackRock Fund Advisors, Northern Trust Corporation, Goldman Sach Group, Inc., and Franklin Resource, Inc. The total number of Institution holding shares of the Ford Motor Company is 1126 excluding the mutual fund holders (Ford Motor Company, 2016).
Board of Directors
The current executive chairman of the Ford Motor Company is William Clay Ford Jr. He is the great-grandson of the company founder which is Henry Ford. The current President and chief executive officer (CEO) of the Ford Motor Company is Mark Fields. He has been the President and CEO of the company since 2014. There are about 15 Board of Directors in the Ford Motor Company including Executive Chairman and the CEO. The other members of the Board of Directors include Stephen Butler, Kimberly Casiano, Anthony Earley, Jr., Edsel Ford II, James Hackett, James Hance, Jr., William Helman IV, Jon Hunstman, Jr., William Kennard, John LechLeiter, Ellen Marram, Gerald Shaneen, and John Thornton (Ford Motor Company, 2016).
Management
The management structure of the Ford Motor Company depends on the business requirements or strategies for varying market conditions from various manufacturing plants all over the world. The major features of the management structure of the Ford Motor Company are their corporate hierarchy, different regional geographic conditions and global functional groups. The corporate hierarchy of the company illustrates the traditional management approach which is considered as an effective strategy for large business organization. Since the Ford Motor Company also has various plants in several countries, Regional Geographic Divisions are necessary in order to divide the operations within the region (Ford Motor Company, 2016).
Employees
The employees from the Ford Motor Company are usually engaged in the manufacturing, marketing, distributing, and servicing vehicle parts and products. The company could provide a wide range of job opportunities for people. The company requires engineers and technicians for the manufacturing and designing of vehicle products. On the other hand, several professional jobs are required for the marketing of their products. In the modern times, the Ford Motor Company is mainly composed of 67 plants scattered worldwide and 199,000 employees working at various levels of positions. In general, the company usually requires mechanical engineers, chemical engineers, electrical engineers, and product design engineers (Ford Motor Company, 2016).
Competitive Advantages
SWOT Analysis
The main strength of the Ford Motor Company lies in the innovations and revolutionary ideas regarding the manufacturing assembly lines which were designed originally by Henry Ford. The company is also concerned with the environmental problems due to their products which could be advantageous for market expansion (Blitterswijk & Karadzhov, 2009). The engineering and production workforce of the company could be competitive with their international competitors. Their global strategy is also innovative and well planned which is the reason why they established many manufacturing plants all over the world. The company also created some of the best car models which was made (Selignan, 2005). Their vision is also committed with the enhancement or improvement of their leadership management which is suited for a large company. Lastly, they have an excellent market suppliers and supply chain management (Wee & Wu, 2009).
One of the main weaknesses of the Ford Motor Company is that it could not be dominant to some of the competitors to some of the developed countries such as the Toyota Company in Japan (Wee & Wu, 2009). The company also experienced a financial crisis at the start of the 21st century and the revenue loss continued for several years. The Ford Motor Company could not compete with their high end model cars such as the Jaguar car models and the Land Rover. The company is also experiencing loss of market even in the United States. Another main weakness of the Ford Motor Company is that there is no diversification of products or supply (Selignan, 2005). The entire company is only focused on the automotive manufacturing which could be disadvantageous for the company if their sales went down. Lastly, the Ford Motor Company has no parent company which means the accountability of their success and failures only lies within the company.
The Ford Motor Company commonly relies on customers from developed countries. However, he emerging small and medium segments in the developing countries could be advantageous for the company (Blitterswijk & Karadzhov, 2009). The Ford Motor Company also included hybrid and electric vehicles as one of their products. The development of these types of technology could be a good opportunity for the company to survive in the future. The Ford Motor Company is also committed to the sustainable development. Their promotion of fuel efficient cars could be a great opportunity for them to acquire customers which are also concern about the environmental effects of carbon emission. The Ford Company could also easily enter the developing economies of Asian Countries such as Japan and China (Selignan, 2005). Another main opportunity for the Company is their collaboration with the other developed automobile industries such as the Tata motors. Lastly, the trend of globalization could be advantageous for the company especially when developing countries are easily accepting American products or Brands such as the Ford Motors.
Most of the big car industries have been experiencing a decline in their sales due to the stagnation and financial crisis that occurred during the start of the 21st century. In the United States alone, the total car sales have declined up to 36 % during the 1st decade of the 21st century. In Europe, car industries have experienced about 38 % decline in sales (Yang, 2014). The decrease in the car sales could be a treat for the development of the company in the future. Most of the western countries are experiencing financial crisis due to the Sub-Prime crisis. This could restrict the progress of the Ford Motor Company since most of their manufacturing plants are based on the western countries (Blitterswijk & Karadzhov, 2009). The Ford Motor Company is also losing grip on the United States market due to the revolutionary and aggressive strategies of their competitors such as the Suzuki and Toyota Automotive.
Market Analysis
In analysing the market strategy of the Ford Motor Company, it could be recognized that the company only rely on one single industry which is the vehicle industry. When the car sales went down, the company could experience an extreme profit loss which could result to their bankruptcy (Bayou & Korvin, 2008). The product of Ford Company is only suitable for higher income families which results to their relatively low market on the developing countries. The Ford Motor Company also relies on their products which are suitable for middle class families and could not easily compete with the high end luxury cars of other automobile industries (Yang, 2014).
Conclusion
The Ford Motor Company is considered to be one of the oldest and most successful business organizations focusing on the automobile industry. Their focused on the innovative and revolutionary ideas became their main weapon in competing with the other large automobile companies around the world. The main strength of the company lies on their flexibility to handle changes in the society as well as the diversity of market costumers from varying plant manufacturers. However, they only rely on a single industry which could be problematic if this industry went down. The greatest opportunity for the Ford Motor Company is their investment on the eco-friendly vehicles. Lastly, the Ford Motor Company should remain their grip on their usual market.
References
Bayou, M., & Korvin, A. (2008). Measuring the leanness of manufacturing systems—A case study of Ford Motor Company and General Motors. Journal of Engineering and Technology Management, 25(4): 287-304.
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Ford Motor Company. (2016). Ford Motor Company Annual Report on Form 10-K. Retrieved from https://www.sec.gov/Archives/edgar/data/37996/000003799616000092/f10k12312015.pdf.
Ford Motor Company. (2016). Ford Motor Company 2015 Proxy Statement. Retrieved from https://www.sec.gov/Archives/edgar/data/37996/000104746915002836/a2223357zdef14a.htm#Role_in_Risk_Management.
Ford Motor Company. (2016). Looking Forward with Ford – 2016 Trends. Retrieved from https://social.ford.com/content/dam/campaign/media-trends/pdf/Ford-Trends-Book-2016-Interactive.pdf.
Gearan, J. et al. (2006). Strategic transformation of Ford Motor Company. University of Michigan. Retrieved from https://deepblue.lib.umich.edu/bitstream/handle/2027.42/48792/FMFinal_121306.pdf;jsessionid=A0F945BF3D802F76D2911D68A22CF4CD?sequence=1.
Seligman, J. (2005). Building a system thinking culture at Ford Motor Company. The Society of Organization Learning Journal, 6(5): 1-11
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