Strategic Planning: Ford Motor Company Planning is an essential process in today’s organizations. Based on the three types of managers: top-level (strategic managers), middle-level (tactical managers), and frontline (operational managers), exist three corresponding levels of planning: strategic, tactical, and operational. The purpose of this essay is to focus on the strategic level of planning for the Ford Motor Company; a leader in the global automobile industry. Strategic planning, according to Bateman and Snell (2009), “involves making decisions about the organization’s long-term goals and strategies” (p. 137). This paper will elaborate on six key influential factors: economic, environmental, competition, foreign policy, domestic policy, and innovation; that shape this corporation’s strategic plan. Finally, a SWOTT analysis will be conducted covering the strengths, weaknesses, opportunities, threats, and trends, that the Ford Motor Company has in relation to its business environment. Economic Factors Many economic factors exist that impact the development of Ford Motor Company's strategic plan and it’s no small task to project how some of these factors might change as the strategy is being realized. Consider the prospect of expansion into a new market like China or Mexico. Economic changes like currency devaluation will make Ford’s product more expensive to their target market potentially reducing overall sales revenue. Oil prices as we’ve seen in the U.S. economy can also play a big factor as large vehicles become less desirable and more fuel efficient compact cars gain market share. Ford’s production plants rely on very high-tech computers and automated assembly. It takes a significant financial investment and time to reconfigure a production plant after a vehicle model is setup for assembly. Ford has made this mistake in the past and surprisingly hasn’t learned the valuable lesson as evidence from the hybrid revolution their missing out on today. Between 1927 and 1928, Ford set in motion their “1928 Plan” of establishing worldwide operations. Unfortunately, the strategic plan didn’t account for economic factors in Europe driving the demand for smaller vehicles. Henry Ford established plants in Europe for the larger North American model A. Their market share in 1929 was 5.7% in England and 7.2% in France (Dassbach, 1988). Economic changes can wreak havoc on a corporation’s bottom line and profitability as well as their brand. Environmental Factors Environment is another significant factor that affects the strategic plan. When a major environmental disaster occurs, such as a hurricane, it can affect a company’s production facilities, their sales facilities and the community that the company serves.
Until recently, the Ford Motor Company has been one of the most dynastic of American enterprises, a factor which has both benefited the company and has brought it to the brink of disaster. Today Ford is the second largest manufacturer of automobiles and trucks in the world, and it’s operations are well diversified, both operationally and geographically. The company operates the worlds second largest finance company in the world, and is a major producer of tractors, glass and steel. It is most prominent in the US, but also has plants in Canada, Britain and Germany, and facilities in over 100 countries.
The automobile went from being a toy for society’s elite to being an essential item within the economic reach of nearly every American, all thanks to the hard work and ingenuity of Henry Ford. His dedication to quality and attention to detail earned him not only dozens of racing titles, but also the reputation of a respectable businessman. Ford understood his market so well that he knew what the people wanted before they could even ask for it, always ahead of the curve. Ford was a pioneer of American commercialism, and so his production methods were centred around efficiency and mass production, thus allowing him to increase productivity and decrees cost to meet the demand of the masses. Lastly, consideration of the working class and philosophy of raising the wages instead of raising the price point and focusing only on profit. There are a great many lessons to be learned from distinguished businessmen in history, and Henry Ford is no
After the Ford Motor Company was founded, they began assembling cars in July 1903 at a plant on Mack Avenue, Detriot. It was not until five years later, in 1908, when the famed Model T was introduced. The constant growth in demand for this vehicle was the reason that Ford developed a mass-production method in order to create what we now know as economies of scale, where in producing
Strategic planning is crucial for the success of all business endeavors. Analyzing currents trends in technology, consumer markets, competition, and the workforce can play a pivotal part in whether or not the organization can survive. Overtime, strategic planning strategies must be modified in order to compensate for changes in the industry. Goals and strategic planning often necessitate change to ensure that the organization is performing at peak level, while offering the most beneficial and quality services to consumers.
The Ford Motor Company (FMC) was founded in Detroit in 1903 and began shortly thereafter exporting cars to European branches. Cross-border assembly started in Canada in 1904 and was later implemented in the European markets. The first European plant was established in 1911 in England, and this was followed with other lower volume assembly plants across the European continent. All the plants and branches assembled and sold the Model T, using American methods and practices. This proved to be a success in the beginning, but in the long run, “(…) this proved a costly and unsuccessful strategy in Europe’s diverse markets” (Bonin et al., p. 15). By the late 1920s most of its European subsidiaries were struggling and Ford had to change his approach to the European market.
Henry Ford was one of the principle illustrators of Scientific Management. He revolutionized the concept of mass production and changed the world by developing new, innovative business practices that enhanced efficiency and productivity. He created a manufacturing model that marked an era and led industrial manufacturing to continuously grow around the world, a model that is known as Fordism. Fordism brought success and innovation, not only to the whole American manufacturing industry, but also all over the world between the years 1903 and 1926 (Smith, 2011). However, these practices were not always as perfect, as there are many drawbacks within his practices that influenced both Ford Motor Company and the motor industry as a whole, which brought
As demand for automobiles grew to unexpected heights in the 1920s, General Motors set the pace of production, design, and marketing innovation for others to follow. During their success in the 20’s GM added overseas operations, “ including
on October of 1908 Henry Ford proclaimed “...I will build a motor car for the great multitude...,” (Steven C. Stanford). To Ford, this meant that an average American worker would be able to afford the automobile, with no need of a chauffeur conversant to its mechanics. Although many believed, that the idea of an Average american, being able to afford and operate an automobile was absurd, Ford was determined to provide for the “...great multitude…”.Out of this determination, Ford developed the Model T, and the assembly line. Two innovations that “...Revolutionized American Society and Modeled the world we live in today…-Charles, E. “...My Forty Years with Ford…” (1956);
The history of the automobile begins with the technological advances that occurred in the USA with Henry Ford’s Model T. Since then, the automobile market has had its ups and downs, but it has no doubt flourished into an industry that is the cornerstone of many economies. The world economic collapse due to the Great Depression caused consolidation in the manufacturing market. However, after World War II, an expanding highway network fueled by economic growth as well as television advertising spurred sales for car companies in many countries. The globalization of the industry accelerated during the late 1990 's due to the establishment of overseas plants and the merging of large multinational corporations.
Henry Ford originally intended the Model T to be the “farmer’s car.” But in order to make a car that was financially available to the common man, Ford needed an industrial revolution that would allow him to produce numerous automobiles at an inexpensive price. He succeeded in doing so by implementing his innovative assembly line and specialized labor for the production of the Ford Model T. By the 1920s, car manufacturing exploded due to Ford’s cheap and simplistic methods of production causing prices to drop significantly and allowing the Model T to fit within the average ...
Today the automobile industry is stronger than ever, selling millions of cars to eager consumers. Every year new models are released with newer features and technology to lure the purchaser. Every manufacturer today should thank Ford for what it has done in the past, whether it was the assembly line, interchangeable parts, strong quality of the Model T, it's undeniable what Ford has done for the industry, economy and transportation.
The One Plan and One Goal components also indicate that the mission statement focuses and unifies Ford’s global organizational efforts to improve business performance and achieve the global leadership point in the company’s vision statement” (Ford). Ford’s vision statement is “people working together as a lean, global enterprise for automotive leadership.” (Ford). The company also explains that organizational performance is measured by the satisfaction of their customers, employees, investors, dealers, suppliers, and communities. Ford’s vision statement states that the company places a great deal of emphases on global leadership, stakeholder relations, and lean business in their quest to become the world’s leading automotive brand in products and services. Ford Motor Company prides itself as a company that is passionately committed to providing personal mobility for people around the
So the discussion on internal and external analysis clearly defines that where the competitive advantage of Ford Motors is and where it is lacking. People who have durability as their first priority will go for Ford but they lack in some of their strategies which the management should consider and work on it. We also came to know that Ford is an innovative company from the very first and also serves local demands with the help of related and supporting industry. But in some points they have taken wrong decisions which compel them to sell some of their brands to others. The good news is they are doing hard job to maintain their performance regarding their star and cash cow products to remain in the competition.
Environmental: Current environmental factor that can have effects on the strategic plan would be the earthquake. Changes in, the climate can affect the environment
The Ford Motor Company has been in business since the nineteenth century, and it has enjoyed a rather successful run as one of the top automobile-making industries in the United States. Ford Motor Company is a prosperous business because of strategic planning and changes that it was willing to take a risk on developing and implementing. Successful corporations have to adapt to the constantly changing environment or the company will be doomed to failure. In other words, customer shopping habits change as new products are introduced to the market or when other factors beyond Ford Motor Company’s control affect which vehicles are sold. For example, there is an increased demand for fuel efficient cars when the average price per gallon