Ford Motor Company Essay

Developing sound strategic plans to address the changing business climate is crucial to organizations operating in today’s global environment. Throughout its history, Ford Motor Company has developed effective strategic plans to adapt the business to the changing economy while addressing the needs of their customers and employees. By analyzing the company’s strategic planning, along with its financial standing, an investor can make an informed investment decision. “Global strategy involves thinking in an integrated way about all aspects of a business- its suppliers, production sites, markets and competition.

This approach considers all activity centres in the supply chain as one entity, not just looking at bits of it. It involves understanding and accommodating local variations and cultures, striving for open “world” standards and understanding international issues. All this needs to be part of the process and product design of the organization, not added as an afterthought when seeking entry into a new market. A good example of a global attitude is at Ford Motor Company. Their “global car” concept consists of a basic engineering design, accompanied by regional variations to suit local tastes.

Final assembly of models is postponed where possible to react effectively to local demands. ” (McAdam, McCormack, 2001). Ford has embodied vision and forward thinking when addressing the needs of a global economy. They have embraced innovative concepts and philosophies to better serve competition, many CEOs view innovation as critical to corporate success. Williams Ford Jr. , chairman and CO of Ford Motor Co. , recently announced that, “from this point onward, innovation will be the compass by which the company set its direction” and that Ford “will adopt innovation as its core business strategy going forward.

” (Sawhney, Wolcott, Arroniz, 2006). Ford has set the mark for innovation in business throughout the years, adapting their brand message, tailoring their product to suit the needs of the consumer and restructuring the organization to reflect the changing environment. “When a company identifies and pursues neglected innovation dimensions, it can change the basis of competition and leave other firms at a distinct disadvantage because each dimension requires a different set of capabilities that cannot be developed or acquired overnight. ” (Sawhney, Wolcott, Arroniz, 2006).

“By strategically outsourcing and emphasizing a company’s core competencies, managers can leverage their firm’s skills and resources for increased competitiveness. ” (Quinn, Hilmer, 1994). Ford has looked at the costs of producing their products in whole and part and analyzed the production costs from insourcing versus outsourcing and made decisions reflecting that analysis. “Ford Motor Company found that many of its internal suppliers’ quality practices and costs were nowhere near those of external suppliers when it began its famous “best in class” worldwide benchmarking studies on 400 subassemblies for the Taurus-Sable line.

” (Quinn, Hilmer,1994). Deciding how to manage a company globally is a top strategic issue for managers today. “Product development costs can be reduced by developing a few global or regional products rather that many national products. The Ford Motor Company’s “Centers of Excellence” program aims to reduce these duplicating efforts and to exploit the differing expertise of Ford specialists worldwide. As part of the concentrated effort, Ford of Europe is designing a common platform for all compacts, while Ford of North America is developing platforms for the replacement of the midsized Taurus and Sable.

This concentration of design is estimated to save “hundreds of millions of dollars per model by eliminating duplicative efforts and saving on retooling factories. ”(Yip, 1989). Ford has also approached the global concern for their environment in their strategic planning. “Of all the industries on the front line in the struggle between corporate objectives and environmental activism, the automotive industry is perhaps the most visible. ” (Foss, Gonzalez, Noyen). In a recent article from the Energy Institute, the authors stated:

“It is unrealistic to expect firms operating in competitive markets to develop environmental initiatives that incur costs but not positive returns. Even public perception of a company ultimately can affect profitability in terms of sales of that company’s products or services, ease with which that company can compete for top workers or exposure of the company to litigation. Direct financial returns in cost savings associated with environmental initiatives are measurable.

Indications from officials at ford and Ford’s published materials suggest that improvements at facilities have yielded real savings- the company has made an effort to develop initiatives that not only achieve environmental performance targets, but are also improvements over existing processes. It is clear that Ford is determined to seize its advantage and has made sometimes quite painful adjustments to restructure its corporate organization in order to ensure success.

” (Foss, Gonzalez, Noyen) In addition to fortifying their environmental efforts, Ford has studied Japanese companies and their implementation of new marketing strategies to further their business plan. “The implementation of market driven strategy will require skills in designing, developing, managing, and controlling strategic alliances with partners of all kinds, and keeping them all focused on the ever-changing customer in the global marketplace. ” (Webster, 1992). According to Marketwatch, the company’s strength lies in its strong engineering capability.

“the company engages in engineering, research, and development primarily to improve performance (including fuel efficiency), safety, customer satisfaction, and to develop new products. ” (Marketwatch, 2011). “The Ford Company recorded revenues of $128,954 million during the fiscal year ended December 2010 (FY2010), and increase of 10. 9% over FY 2009. The operating profit of the company was $7,149 million during FY 2010, as compared to an operating profit of $2,599 million in FY 2009.

The net profit was $6,561 million in FY 2010, and compared to a net profit of $2,717 million in FY 2009. ” (Datamonitor, 2011). Ford did not see such tremendous increases in their profit line without the recruiting, training and development of their employees. Ford Motor Company is a large company with thousands of employees, nationally and internationally. The human resource department is a tool that is used to provide each employee with the tools they need to be successful. Diversification in their workforce is a cornerstone of the success of the Ford Motor Company.

They established work teams to function as catalyst for change within the company. “What is clear now is that use of work teams can facilitate the pursuit of quality and the drive for innovation. For example, Ford Motor Company adopted its “Quality Is Job One” philosophy, it has engaged in a massive program of organizational change. To produce quality products, Ford believes that employees must be involved in and committed to their jobs and that team-based work engenders this commitment, so teams have proliferated throughout the organization. ” (Jackson, Alvarez, 1992).

“Organization-specific metrics tied to the organization’s overall business strategy represent another avenue for linking diversity initiatives with bottom-line results. At Ford Motor Company, for example, employee resource groups demonstrate their value to the bottom line by tracking the number of vehicles members sell through the company’s friends and Neighbors vehicle discount plan. An examination of the program, which enables Ford employees to provide extended family members and acquaintances with vehicle discount vouchers, revealed that resource group members were more likely than nonmembers to use the program.

” (Jayne, Dipboye, 2004). This diversification that is found throughout the company’s workforce allows the organization to continue to grow and reach new consumers. As Ford continues to expand into new markets, their focused strategic planning and use of a forward thinking workforce will allow them to continue their domination of the industry. Ford continues to be a good, solid investment opportunity and looks to have a long prosperous future dependent on their continued adaptation of the organization to the ever changing global environment. References Company spotlight: Ford Motor Company.

Marketwatch. Retrieved from www. datamonitor. com. March 2011. Datamonitor: Ford Motor Company. Retrieved from www. datamonitor. com , 2011. Foss, M. , Gonzalez, E. , Noyen, H. Ford Motor Company. Energy Institute, University of Houston- College of business administration. Jackson, S. , Alvarez, E. , Working through diversity as a strategic imperative. Diversity in the workplace: human resources initiatives. Guilford Press, New York, 1992. Jayne, M. , Dipboye, R. , Leveraging diversity to improve business performance: research findings and recommendations for organizations.

Human Resource Management, Winter 2004, McAdam, R. , McCormack, D. , Integrating business processes for global alignment and supply chain management. Business Process Management Journal, vol. 7, no. 2, 2001. Quinn, J. , Hilmer, F. , Strategic Outsourcing. Sloan Management Review, summer 1994. Sawhney, M. , Wolcott, R. , Arroniz, I. , The 12 different ways for companies to innovate. Massachusetts Institute of Technology, 2006. Webster, F. The changing role of marketing in the corporation. Journal of marketing. Vol. 56, 1992. Yip, G. , Global strategy…in a world of nations? Sloan Management Review. Fall 1989.