Video Ford S Global Auto Strategy
Running time 5 minutes. Available from ABC News
A good film to use as part of lecture on Chapter 2: Global Enterprise [which lecture?]
This short film describes Ford’s big gamble in the auto industry to develop a global car on the same platform worldwide. The auto is the Contour in the U.S. or the Mercury Mystique; in Europe it has been very successful as the Mondeo.
The narrator explains the auto is to be sold in 60 countries yet remain responsive to local tastes with delayed differentiation. Delayed differentiation is a manufacturing strategy wherein differences between models that make them attractive to local markets are delayed as long as possible in the manufacturing process. In Ford’s case, suspension, body style, and shifting gears differ for local markets, but these alterations are not added until toward the end of manufacturing in each market.
Delayed differentiation and other innovations allow Ford to use a common platform for the auto and therefore be speedier and more efficient in their use of worldwide resources.
The film demonstrates satellite and computer links that cut design and engineering changes from days to hours. This demonstrates how borders and distance have become less meaningful in a global world. The narrator also describes how Ford has developed global links with suppliers so they can shift to least expensive supplier for parts anywhere in the world. Doing all this saves $2–3 billion per year.
The narrator concludes that there are risks to this strategy because of the trade off between national preferences and global integration.
There are different global strategies (worldwide integration which Ford has chosen and multilocal strategies like Nestlé and Unilever adopt). Which is “right” remains to be seen; both are efforts to balance efficiency and responsiveness to local custom.
Global enterprises cross boundaries and barriers such as time and distance as the example of