Analysis Of The Factors Making Ford The Leader In The Automotive Industry Of The 21St Century

In 1903, Henry Ford founded the company “Ford” which is now the second largest car manufacturing company in the world. It is also the fifth largest “Vehicles Manufacturer” in the world. The very first car that was launched by Ford was “Ford Model A” that was built with gasoline powered carriage. But after the company was founded in 1903 the first car that was released is “Model T”. As a 115 year old company, it has made history by creating the best brand name in the world thus proving that broad vision is always achievable. With over 225, 000 employees and around 90, 000 manufacturing plants worldwide, its global achievement is just outstanding. The way they sustain internationally by adopting the latest technology, eco-friendly initiative, huge investments has been the best strategies for their success on the road.

Global Car Industry’s characteristics

• Innovation has been their priority
• Uniqueness in competing at high level
• Line/Category extension
• Brand image & positioning
• More convenient
• Very much customer friendly
• Cost efficient
• Good R&D
• Corporate strategy changes, marketing, operations etc.

Having the above characteristics has made them to be the leader in the automotive industry of the 21st century.

Strategies

The company used and derived mass production concept. They learned the demands of the customers by deeply understanding it and planned their strategies accordingly. A few of them were the production plans in large, easy availability of the car parts if any changes are required, mobility of assembly line, standardizing the product. It not only helped them to establish a brand name but also production frame which allowed them to bring down the cost of production as well. Their strategy is their competitive advantage and innovating in labor, efficiency and production had direct impact on their brand.

Upgrading horse power and brakes in their new production changed their product category that gained them to be the largest automobile industry in the world. In the early 19th century, Ford’s aim was to attract the working community in America for which they created the assembly line method to reduce the cost and increase the manufacturing. To meet the challenges given by GM and Toyota who are the market leaders in America, Ford has adjusted their strategy by going for new innovative products to take competitive advantage.

Their intensive growth strategies are:

• Market Penetration
• Product Development
• Market Development.

Applying regional, transnational strategies are their global strategy they used when they went global to mark their international presence in the market. Product, Price, Place and Promotion are the four Ps of the marketing mix product that helps to explain the company’s international market approach. Balancing between standardization and customization in international markets and treating the domestic market as a unique entity from world markets is the key strategy maintained by Ford Motor Company. In general, cost leadership is company’s strategy by which it wants to produce the best quality cars at mainstream price points. By offering less expensive vehicles in each category, its product lines consist of vehicle range in different categories. Ford has split the international market into different regions and offered determined product for each region. For example, North American market has trucks and muscle cars which is not its style of production in other parts of the world. Ford can offer different vehicles for different markets depending on their need.

Key Decisions for Ford were Invest in Brand, Efficient Distribution Channel, Cash Flow Management, and Compliance with Standards, Changing Needs, Organizational Size Management, Mergers, New markets, Strategic Way forward, Strategic Implementation Challenges, Formulation of Strategy, Creating Synergies, Commitment of Managers, Communication of Plans, Consensus, Top Management Commitment & Consistency, and Organizational Structure.

By using standardization strategy Ford has succeeded for the past one decade. Moving from standardization to adaptation their change in strategy has gained them to be more competitive since 1994.

Product Design

Their product development is to bring engineering ideas to life. They make driving more exciting, enjoyable and sustainable in their product development. The current ways of designing are the new methods of recycling, alternative fuel vehicles, voice-activated technologies and leading vehicle safety initiatives. Their product design team is called FordLabs which consists of group of passionate designers, product managers and software engineers who collaborate together and work with various lines of business and IT professionals to design tested software at market speed.

Manufacturing

Ford Motor Company Fund, a nonprofit corporation financed by contributions from Ford Motor Company has contributed $58. 9 million to different needs that were focused on education, driving safely and community building. Its important programs are Ford Driving Skills for Life Program, a driver safety program aimed at teens, which was developed together with the Governors Highway Safety Association and safety experts. Ford is building on a century on innovation in manufacturing to shape the future of mass production. It innovates for a sustainable tomorrow and gives back to the community. An assembly line is a manufacturing process often called a progressive assembly in which parts; usually interchangeable parts are added as the semi-finished assembly moves from workstation to workstation where the parts are added in sequence until the final assembly is produced.

Marketing

Ford Motor Company’s marketing mix (four Ps) is its key strategy to stay connected with its aimed customers. How to use the marketing plan is the approach refereed to its marketing mix. The market that they target is very much different and expands in the global economy. Therefore it is also comprehensive. Being the fifth in the world and the second largest US based automaker, it is critical to maintain its performance by adopting a comprehensive marketing mix. Along with the related strategies it also moves around through time to be competitive in the global market. Offering a variety of products considerably its organizational outputs are included in the element of its marketing mix. Automobiles, Trucks, Buses, Tractors, Automotive parts/Components, Financial Services, Leasing are some of the main product lines that they have, to be competitive in the market. Dealership, Auto parts stores, Ford parts website, Ford Motor Credit Company are the main areas of product distribution. Its promotional activities are advertising, personal selling, direct selling, sales promotions and public relations.

Corporate Culture

Ford Motor Company’s Corporate Culture motivates the company’s development to high performance for achieving its vision of industry leadership. It is used to maintain a high performance workforce. High productivity and effective support for technological and process innovation is maintained as the fifth biggest player in the global market in the automobile industry through an organizational culture that embodies Ford’s vision and mission statements, with emphasis on excellence and teamwork.

Ford’s organizational culture is defined in the company’s One Ford plan, which was implemented under former CEO Mulally’s leadership in 2008. The plan is to unify its global organization to achieve consistency and synergy. The main characteristics of Ford’s organizational culture based on this plan are as follows:

• F: Foster Functional and Technical Excellence
• O: Own Working Together
• R: Role Model Ford Values
• D: Deliver Results.

Suggestions

Currently Ford and GM are caught up in trade war and the only option for them is to expand its production in China. Automakers should “expand capacity in China” General Motor’s former CAO Peter Bible. After China implemented trade tariffs followed by USA, the shares of US automakers were in a mix. “Any Government intervention in the market is not good, ” Peter Bible in a phone interview to The Street. China is becoming an increasingly important market. “China is very important to our global strategy for an all-electric future, ” says chief executive Mary Barra. Ford is also gaining a good market in India after the increase in sales from the previous years. It has to concentrate more on the Indian market to because of the development it has found there after expanding the parts distributor network and making parts price transparent on its website which has gained strong momentum in Indian market. A growth in auto sales is expected in India after a hike in salaries of 10 million people by the Seventh Pay Commission. Ford’s stock has remained stable in the NYSE:F for the past five years and its ability to break the range of barriers is fully dependant on its global prospects. Since India is the world’s fastest growing major economy and Ford being able to gain more market share in India, the market focus becomes more important.

Ford of Europe is also going to play a major role in its global presence. The effects on the company’s restructuring plans on Ford of Europe, meeting the challenges that are resulting from the difficult state of economy, dealing with future trends and challenges on the European operations, role to be played in bringing the company back into profit are the major areas that are to be analyzed to get back into the European market.

Five key challenges facing the car market in the coming years are:

• The Chinese Market – Potential Opportunity and Risk
• The Connected Car – Industry Evolution or Transformation?
• Increased Competition – How Can Automakers Find Growth?
• New Powertrains and New Regulations – Balancing the Demands of Technology and Government
• Globalization and Consolidation of Platforms – Welcome to the Age of the Mega platform.

Ford has to be global and innovative to win the market share and increase their profits. The needs of the customers are to be learned and with the improvement of technology it has to be more innovative and should focus on delivering the best product in the market. Their one goal strategy should focus more on knowing the actual need of the customer and grab the attention of the end users.