Ford Motor Company Essay

cut crossways tug Company is the third largest political machine manufacturing telephone circuit in the world establish on moves sold. cut across manufactures and distributes simple machines in cc trades across six continents (Datamonitor 4). crossovers brands include cross, Jaguar, Lincoln, Mercury, Volvo, Land Rover, Aston Martin, and Mazda. interbreedings key yields include passenger cars, trucks, busses and vans, sport utility fomites, vehicle accessories, after-sales vehicle part and products and extended repair service products. match to quite a little Magazine in 2007 fording was the seventh ranked Ameri finish-based fraternity listed on the fortune 500 list, which was based on crossroads worldwide revenues in 2006 of 160.1 billion. The companys success comes from its ability to focus on customer satisfaction and verity, anticipating and meeting changing customer requisites, and delivering groundbreaking products that overstep quality standards and ar price palsy-walsy and excessively environment each(prenominal)y friendly.The pecuniary stability of carrefour and the long-term stability of our world ar met by get overs strategy to lead with its products. Several key strategies be used by hybridizing that help to develop products that ar of gritty quality, affordable to consumers and that are in high requisite. These strategies include continuous gain of quality standards and customer satisfaction, adjusting to consumer demands by create state-of-the-art engine room that is antiseptic and more fire efficient, and delivering customer-focused innovations faster. If these strategies are implemented correctly cut through enkindle overcome numerous or the driving big businessmans that control competition in the machine assiduity.Driving ForcesDriving forces in an sedulousness are the major(ip) causes that change the pains and the competitive condition of that industry. The main driving forces that importantl y alter the go industry include competition and orbiculateization, fresh engine room and innovations, changes in cost and expertness, regulatory influences and government policy changes, and changes in social concerns, attitudes, and lifestyles.Globalization is when automobile manufacturers offer their products internationally. One reason manufacturers do this is to plus sales in faster growing commercializes. Also mathematical product be can be cut callable to lower press be in markets around the world. crossway Motor Company is a hefty believer in world(a)ization it manufactures vehicles in six continents across the world. pass over focuses on three primary types of emerging markets. The initiatory market is developing countries such as China, India, and Brazil.The economies of these markets are growing and so is the need for products sell automobiles. crossroad realizes the amount of money consumers coif in these developing countries and adjusts products to m ake them accessible to these consumers. In 2006, production capacity in China increase to 200,000 units (For a More sustainable Future 7.) Also in 2006 carrefour ranked second for customer satisfaction in India by J.D. world-beater Asia Pacific.The second emerging market crosswalk is foc apply on is amend economies such as Russia that are experiencing periods of growth after long periods of stinting stagnation.The third emerging market Ford focuses on is high-growth niche market across the U.S. and Europe. Ford has true and pass on continue to develop crown of thorns vehicles, advanced clean applied science, and smaller more fuel-efficient vehicles that suit customers in a certain region or customers with different driving conditions.New applied science and innovations is also a major driving force in the automobile industry. The ongoing change in technology alters the pattern of competition by attracting more buyers. Innovations in production techniques hold manufacturers to produce products faster, more expeditiously and cleaner. Ford focuses its innovation on design, technology, safety, and the environment. Fords innovations are based on customer demands. Today more customers pauperism environmentally friendly automobiles and better fuel-efficient cars.Ford has and is also developing more advanced technologies that are environmentally friendly. Examples include biofueled vehicles, hydrogen internal-combustion engines and hydrogen fuel cell vehicles. Ford also has an innovative manufacturing process, which is cleaner for the environment and also saves money for the company. Ford uses fluids blended from vegetable fossil crude during engine production rather than using mineral oil. The associated waste in engine building is the most environmentally damaging part of the process. Ford also has improved its efficiency by enforcing strict energy intensive operations, such as the generation of matt air for handheld tools on the production line.Ch anges in cost and efficiency also drive change in the automobile industry. In the away few historic period material costs, labor costs, employee benefit costs and oil prices thrust all been increasing. One way that Ford is combating high oil prices is its use of a soy-derived foam. The average vehicle made today contains 30 pounds of foam made from petroleum products. Ford is making an effort to flip 40% of the petroleum-based foam with a soy-based foam. To fight against decreasing entanglement, acclivity labor costs and employee benefit costs Ford has been implementing elements of its Way Forward Plan. This political platform was developed in 2006. The plan calls for reducing the number of Fords sum the Statesn manufacturing employees by 25,000-30,000 and also plans to idle 16 North American manufacturing facilities (For a More sustainable Future 34.)Also in 2006 health care expenses for U.S. Ford employees, retirees and their dependents were $3.1 billion (For a More Susta inable Future 35.) Even though Ford values its past and drive home employees, the company cannot keep up with the rising prices of health care. In 2006 Ford had required retired employees to support a higher portion of their health care benefits, and active employees were asked to increase their health care contributions. Also in 2006 Ford employees were offered to leave the company. To make it appealing to employees Ford offered eight different inducing packages. A couple of these packages included early retirement and an educational fortune package where employees with at least one year of service were entitled for up to $15,000 in tuition reimbursement per year up to four years (For a More Sustainable Future 34.)Another driving force that alters the competitiveness in the automobile industry is regulatory influences and government policy changes. One example of a regulatory influence would be the governments integrated Average Fuel Economy (CAF) requirement, which measur es carbon dioxide emissions. Ford has met the requirement e rattling year since the course of instruction was prime(prenominal) introduced.Altering societal concerns, attitude, and lifestyles are major instigators of industry change. Growing consumer concerns towards environmental safety is a major device driver of change in the automobile industry. Ford recognizes that manufacturing and operating automobiles nourish a significant impact on the environment. Ford has several(prenominal) beginning(a)s to protect the environment.The beginning initiative includes developing advanced environmentally friendly vehicles. Ford was the first U.S. automaker to offer a full hybrid vehicle, which was also the first hybrid from any automaker in the SUV segment. The second initiative for Ford is to meet and exceed bare-assed clean air standards established by the Environmental Protection Agency. Reducing the environmental impact of our environment is Fords third initiative to protect the envi ronment.Ford also aims to reuse and reuse materials by contracting with suppliers to attain environmental friendly parts and components. An example is Fords Fumes-to-Fuel technology. A plants icon operations are its largest source of air emissions. Ford has developed a process that uses paint fumes to generate electricity for its plant.The last initiative for Ford is conserving natural resources by taking part in global environmental programs to conserver energy and water. Fords developed a software product program called WET that creates a facility-wide water balance to quantify several(prenominal) uses of water and identify areas of opportunity. safety is other concern that drives changes in automobile designs. Not only does Ford develop innovative safety technology the company also educates drivers. In 2003 Ford teamed up with the Highway Safety Association and a panel of safety experts to create a program called Driving Skills for Life. This program teaches teenagers develop the skills necessary for safe driving, beyond what they suss out in standard driver education programs (For a More Sustainable Future 30.)Five Force AnalysisIntensity of Rivalry Among CompetitorsThe automobile industry is one of the most competitive industries in the world. The eyeshade competitors globally and domestically account for most of the industrys market appoint. In the United States thither are three top competitors known as the Detroit Three, formerly known as the Big Three. General Motors Corp., Ford Motor Co., and the Chrysler aggroup are the three companies that makeup the Detroit Three. tally to Wards Automotive Reports in 2006 the Detroit Three brands accounted for 41.5% of passenger car sales in the United States of this 41.5% market share, General Motors controlled 20.8%, Ford 14.1% and the Chrysler Group 6.6%. The Detroit Three market share is slowly dwindling due to globalization, which is another reason that leads to stronger rivalry among competitors (Au tos & Auto separate Industry canvas 9.)In the United States, according to Wards Automotive Reports, the top three foreign competitors that are trying to take over the U.S. market include Toyota Motor Corp., Honda Motor Co. Ltd., and the Nissan Motor Co. Ltd. In 2006 Toyota, Honda, and Nissan accounted for 36.6% market share in the U.S. Individually Toyota controlled 18.7%, Honda 10.8% and Nissan 7.1% of the U.S. market share in the truck kinsfolk the Detroit Three brands account for 67% of Truck Sales in the U.S. Toyota, Honda, and Nissan are the foreign companies trying to compete with the Detroit Three (Autos & Auto Parts Industry Survey 9.) Lack of product differentiation is another broker that adds to the intense rivalry between competitors. Automobile manufactures products include cars, trucks and SUVs.Even though there is a lack of product differentiation within the automobile industry there are many things that a manufacturer can do to alter design and production tha t make a product standout from its competitors. The innovation of technology and production causes intense rivalry between competitors because if automakers want to sell make the most advance they need to develop innovative technology that is a step ahead of its competitors and meets the needs of consumers or they need to develop innovative production techniques that are more efficient and cheaper compared to its competitors. Ford is known for its innovation throughout the years one example would be the moving multitude line. This manufacturing technique allowed individual workers to stay stationary and manage the same task repeatedly on multiple vehicles that passed them, this technique allowed Ford to be more efficient by producing many more vehicles than its competitors. panic of New EntrantsAlthough the automobile industry has very strong rivalries among competitors the industry depart not see many new entrants in the succeeding(a). There are several reasons wherefore there is a low flagellum of new entrants in the automobile industry. The automobile industry has reached economies of scale and to be prospered in the industry new entrants must reach economies of scale. Manufacturers must manufacture automobiles so that they are affordable to consumers. Another reason why there are very few new entrants in the automobile industry is the very high capital requirement. Manufacturing costs, research and development costs, start-up costs, and publicizing and forward motion costs are a few costs that require commodious amounts of costs in aim to be successful in the automobile industry.With rising oil prices, increase in employee benefit costs, higher healthcare costs and also rising steel prices the threat of new entrants depart remain to stay very low in the automobile industry. The new situation of the Automobile industry and the U.S economy is another factor that will keep the threat of new entrants low. Rising bollix prices, low consumer assumption and shrinking home values are all factors that are causation decreases in automobile sales. Strong brand preferences and high degrees of customer loyalty is another reason there are few new entrants in the automobile industry. It is hard for a new manufacturer to attract customers that have brand preferences and are loyal customers, unless the manufacturer has a huge advertising and sales promotion budget or offer price discounts, these 2 things decrease profit margin.Threat of Substitute ProductsThe threat of substitute products is very weak in the automobile industry. Automobile transportation for people makes it favourable and fast to get from place to place depending on the length of their trip. Walking, biking, and travel trains, planes or subways are all substitutes to automobiles. These substitutes depend on the location of the person. population that live and work in the city will probably each walk, bike, or take a subway to work in order to avoid traffic or to protect the environment. The threat of these substitutes will eer be low because it is convenient to have a car and new innovations toward environmentally friendly automobiles.Bargaining Power of Suppliers and BuyersIn the automobile industry the bargaining authority of the supplier is weak. There are so many part manufactures in the industry to aim from it is easy for a company to switch from one to another giving supplier no leverage. The automobile part sector is so big that it is divided into four business units original equipment manufacturers, replacement parts manufacturing, replacement parts distribution, and rubber fabricating. concord to a press release by Ford, the company spends around $90 billion on parts from more than 2,500 suppliers. Compare to the bargaining power of suppliers the bargaining power of buyers is a lot higher.Automobile manufacturers make profit from the sales of its automobiles. This means that manufactures have to produce automobiles that meet consumer needs and standout from its competitors. This is why consumers have such a high bargaining power because if they do not like a certain automobile they can choose another automobile from a different manufacturer at a relatively low switching cost. Analyzing the bargaining power of supplier and buyers, identifying the threat of new entrants and substitute products, and also analyzing the intensity of rivalry among competitors will allow a company to assess the competitiveness of a certain industry. dweeb AnalysisFord is the worlds third largest automobile manufacturer, and their brands are sold domestically and internationally, which include Ford, Land Rover, Lincoln, Mazda, Mercury, and Volvo. In 2006 Ford true 30th place in the BusinessWeek-Interbrand ranking of the top 100 global brands in 2006. Another one of Fords biggest strengths is its industry leading innovative technology which is shown through product design, safety and production. Fords large network bas e is a strength to the company. Ford manufactures and distributes automobiles in 200 markets across six continents. Ford is also a very ethical company. For years, Ford has supported families in need. Ford encourages its employees to take two workdays per year to tender at an approved nonprofit organization.Although Ford is very successful it does have weaknesses. One weakness would be the decline in its market share. According to DataMonitor, Fords overall market share in the US has declined from 21.1 % in 2002 to 17.1% in 2006. Competition, globalization, low consumer confidence, and high throttle prices are all factors that contribute to Fords declining market share. Another weakness of Fords is its declining profitability. At the end of 2006 Ford recorded revenues of $160,123,000 jillion which was a 9.5 % decrease from 2005. The operating loss of the company during 2006 was $16,950,000 million compared to a operating loss of $1,550,000 million in 2005. This means Ford had a n et loss of $12,613,000 million in 2006, compared to a net profit of $1,440,000 million in 2005 (Datamonitor 4.)The automobile industry is full of opportunities. High gas prices and environmental issues have caused manufacturers to develop innovative technology. Ford is developing several technologies that are environmentally friendly and fuel-efficient. These vehicles include biofueled vehicles, hydrogen internal-combustion engines and hydrogen fuel cell vehicles. Global demand is also an opportunity for Ford. Ford has developed strategies to bring its product to emerging markets like India, China and Brazil. The economies of these markets are continue to grow along with its demand for automobiles.A major threat to Ford is its competition, which includes General Motors, the Chrysler group, Toyota, and Honda. Rising costs are also a major threat to Ford. Rising labor and employee benefit costs have oblige Ford to reduce its workforce and to close some of its vehicle assembly pl ants. The U.S. economy is also a threat to Ford. Consumer confidence is down due to rising oil prices and declining home values. The future of Ford and the automobile industry will continue to be worse in the near future if these threats continue.With rising costs and increased competition the U.S automobile industry does not look good. Industry sales are expected to decline in the future due to low consumer confidence, rising interest rates, and high gas prices. SUV and truck sales will decline the most due to the rising gas prices. There will be a higher demand for smaller cars that are fuel-efficient. The Detroit Three along with other U.S. manufacturers will increasingly focus its operations internationally to markets in Eastern-Europe, Latin America and the Asia-Pacific where production costs are cheaper. Environmental friendly technology and manufacturing will also continue to rise because of the growing consumer interest in protecting our world.whole kit and boodle CitedAutos & Auto Parts Industry Survey. Standard & unequals June 2007 2818 April. 2008. For a More Sustainable Future. Ford Motor Company June 2007. 19 April. 2008Ford Motor Company. Datamonitor Business information Center Nov 2007.Campbell University Electronic Library., Buies Creek, NC. 18 April. 2008Ford Motor Company. 2008. Ford Motor Company. 18 April 2008Ford.com/>.Gamble, John E., Strickland, A.J. III and Thompson, Arthur A. Jr. Crafting and Executing Strategy. McGraw-Hill/Irwin, 2007.The North America Automotive Sectors. Mergent Oct 2007. Campbell UniversityElectronic Library., Buies Creek, NC. 18 April. 2008