OMM 692: Organizational Management Strategy
January 14, 2013
Ford Motor Company (Ford) has been a leader in the auto industry, however, over the past few decades has continued to lose market share to foreign competition. The current weak United States economy combined with rising fuel prices and increased political pressures regarding global warming, presents several challenges to Ford and the entire auto industry. These current challenges provide exciting opportunities for the auto company who must reduce cost, get fresh capital, and quickly develop and produce, new efficient, economic autos, and alternative fuelled vehicles. The global auto industry will continue to grow with 80% of the global auto industry’s growth from now until 2014 is expected to come from emerging markets. However, for Ford to succeed they will need to address several internal issues regarding legacy costs, unions in the United States, and the development of a wide range of new vehicles that consumers consider the new “must have” vehicles instead of the large trucks and SUVs (Scribd.com). Looking to the future Ford will have a global presence in these critical emerging markets like China and India, and have the knowledge and expertise in efficient and alternative vehicle technologies required to move the company forward. For Ford to achieve the vision of being synonymous with alternative vehicles (low fuel consumption, fuel celled hybrid, ethanol, and electric / battery). When consumers think of the innovative technology in the auto industry they will think of Ford for this to happen Ford can no longer be a quick follower, but must be an industry leader in technological advances in the auto industry. Ford must offer a variety of alternative vehicles that meet consumer demands and government regulations. Ford has significant fixed costs and large capital investments are needed. Cash flow is the lifeblood of any business and should be considered in every decision which could impact the company expenses. The reduction will be invested in new plants in growing markets; fund the research required, development, and production of alternative vehicles. The global auto industry market is growing, and the opportunity for Ford to recapture market share lost in the past few decades is there for the taking. Ford can win, and to do so needs to expedite change to meet the challenges and seize opportunities. Ford needs a sense of urgency regarding revising a strategic plan that incorporates the next generation of vehicles, reduces cost, and expands in the world growing markets. In today’s global economy and highly competitive auto industry Ford has no time to procrastinate. Ford has just too much at risk in not planning a new strategy and become an industry leader in alternative fuel technology. Its present strategies can be summarized as; more resource driven than market driven, managed control, more global than local. Centralized strategic leadership and decentralized policy implementation (Scribd.com). External analysis-
• Timely acquisition of capital makes Ford more financially sound than the other big three carmakers. • Product line is respected by industry experts and is qualitatively seen to be a step above many of its competitors. Recent surveys place Ford in a tie with Toyota for greatest customer satisfaction, a significant improvement from five years ago. • Have a global market presence, with worldwide brand recognition and a particularly strong presence in Europe. • Is perceived to be a thoroughly “American” brand, which helps Ford among certain groups of consumers. • U.S. market share, after years of decline, has stabilized in recent years. • The Ford F-series pickup remains the most respected commercial truck available; despite demand shifts, profitability on this line should remain high. •...