Ford Motor Company Chapter 5 Case Study
This case outlines 4 strategic options Ford is pursuing to increase its profitability. Describe each of the four options. For each option list 2 criteria you would use to evaluate the option. The first option is to close down older plants in an effort to realign production and sales. The criterion to evaluate that option would be to make sure that the costs of that plant shutdown are offset by the increased profitability that is expected. In order for a shutdown to have any benefit to a company, it must lead to higher efficiencies, lower costs and increased profitability. The second criterion would be the timeframe in which those costs are recouped. It is imperative to make that money back in the least amount of time possible, in case the need arises for a new plant to be built to meet future increased sales. (Week 4 Assignment-Ford Motor Company Case Study) The second option would be to move the company to produce only smaller cars. The first criterion for option two is that the truck and SUV product lines are not meeting an acceptable profit level. The second criterion would be if the increased profitability of producing smaller cars exclusively offset the lost profits of the truck and SUV product lines? (Week 4 Assignment-Ford Motor Company Case Study) The third option dramatically reduces the North American presence and focuses on international markets where Ford has been very successful. The first criterion for this option would be to make sure the current sales in the international market is sustainable. The second would be to ensure that reduced presence in North America does not result in Ford becoming a second tier auto manufacturer. (Week 4 Assignment-Ford Motor Company Case Study) The fourth option is to sell the entire Premium Automotive Group (PAG) and let someone else figure out how to sell fewer vehicles and still make money. The first criterion would be that all reasonable efforts have been...
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