The purpose of this paper is to discuss the shift in Ford`s Global Strategy that took place under Alan Mulally`s watch. What was the previous strategy that Ford was following? What is the new one? What are the pros and cons for each methodology? Let`s take a closer look on this topic.
The old method for ford`s global strategy was a consumer customized one; meaning that the same car model can be different in the US market compared to the European one. The advantage of using such method was customizing the product according to the consumer needs. The European consumer usually goes for small, economic cars for example while the US one goes for large SUVs. On the other hand, not sharing development costs and using different tools during the manufacturing process, increased the cost significantly for this method.
During the 2008-2008 global financial crisis which is considered to be the worst since the Great Depression (The Strategy of International Business 367), Alan decided to shift to a more centralized global strategy in order to survive the economic crisis. The lead to a tremendous decrease in the cost due to sharing platforms, tools and facilitating the knowledge transfer between identical platforms all around the globe. Moreover, it provided a larger profit margin for the company in developed margins and a higher endurance for competition in competitive markets, such as the Chinese one. However, using this method will ignore the regional differences of consumer demands globally.
In conclusion, Alan`s decision to shift to the new strategy was the perfect call to save the Ford during the financial crisis and it increased the company`s profitability during the present time.
Works Cited.
The Strategy of International Business. Chapter 12. P 367.
