Ford Motor Company Analysis

An Insight into the Ford Company and Its Environment

Global economics depend on the political environment that exists especially in the world’s super powers, their interests and the sense of global responsibility. This broad perspective systematically narrows down to specific economic and social aspects that ranges from the sales of motors arising from the orders by governments, consortia and individuals to the fiscal and monetary policies formulated in different parts of the world. Morrison (2013), the trade between China and the U.S.A grew steadily from a total trade of $5 billion in 1980 to about $536 billion; this is almost a hundred fold. This comes at a time when china has sustained its gross domestic product growth at a mean annual rate of 10%. China is an economic heavyweight in the Asia Pacific, whose trade volume on the Ford motors grew to about 15% in 2010, a figure that the company projects to reach about 32% by 2016. The analyses by Vienna University of Economics and business indicate that 59% of the Ford Suppliers take the products to the Asian market (Wayland, 2013).

This means that a positive or a negative shift in the demand of the Ford Motors would create a corresponding impact. Ford Company has established a formidable market across the five continents since its establishment in 1903. The market base ensures the company weather some of the technical and dynamic economic trends. For example the global financial crisis created a spill-over effect that rent Europe as late as 2013 with Spain, Portugal, Italy and the uncertainties within the E.U. leading to austerity measures. In retrospect, the market for Chinese products within the E.U slumped, leading to China’s adoption of stronger domestic consumerism. Therefore, most of the products were domestic. How does Ford manoeuvre in such economic turn of events? In fact, wall street Journal showed that Ford F-series PU sold 71,115 units in August 2013 with its closer competitor sales at 44,713 over the same period. Other models of Ford Fusion (24,653), Ford Focus (20372), Ford Escape (26,714), and Ford Explorer (14,148) featured among the best on sales (Wayland, 2013).

Ford adopted a strategic investment model that sustains its edge on the market. The model consists of five vehicle architectures referred to as the platforms; B, C, CD, pick up and Van. The company projects a 75 percent sales worldwide with B platform (fiesta, B-max, Eco-sport, etc.)of sales above 2 million units, C (Focus, C-Max, Escape, etc.) platform of the sales about 2 million units, CD platform with 1million units, 470,000 unit sales on Van platform and 275,000 unit sales on pick up platforms. Plant building focuses are located in various regions of the world. Notable are Russia and Chongqing, China representing regions that are politically and ideologically divergent to the U.S.A. However the plants have significant manufacturing in Europe, America and South America (Ford Company, Annual Report, 2011). The report does not feature the platforms in Africa. The company is strategic in potential markets that associate with the brand for decades. The platforms are reinforcement of the Company’s five business segments; Ford North America, Ford South America, Ford Europe, Premier Automotive Group and Ford Asia pacific (W.U, Vienna, 2013).

Ford Motor ranked 4rd after Toyota, Daimler AG and GM in 2008 in the heat of the global economic crisis (W.U, 2013). Rising from the global crisis, the Fukushima earth quake disaster slowed Toyota, but two years down the line, the company revamped with massive sales in the a same market that Ford thrives. This is a potential danger with the austerity measures in Europe and slow economic recovery in U.S.A and significant unemployment rates, the market has inclined towards Japanese models. The market may find it easy to acquire relatively cheap motors compared to Ford motors. The supplies into the African market by the Asian motors in military, police Security, and commercial may not have significant impact on the ford Company. Initially, most of the security motors supplies were from Europe before the strong trade ties (Morrison, 2013). However, the Asia- South America trade ties should worry Ford Company especially on supplies of state motor for security. This paper categorically notes that shift of Africa and South America to the East is not on principle of the nature of product and service but political and ideological change. Most of the state projects and operations now rely on models from the east due to bilateral agreements. Companies, and state projects set their budgets in line with their major trade partners. This is challenging for Ford since the budgetary allocations may favour their market competitors.

Ford Company does not just focus on market share strategies based on structural approach, but it has a clear technical and technological endeavour. It incorporates technologies on hardware and software. The configuration ensures that its efficiency reflects in the comfort of the end user and machine utility. It keeps the models abreast modern technological advancements in interface and nanotechnologies (Mehrabi, Ulsoy & Koren 2000).

The managerial structure and strategies must be apt and established on the best practices. They are responsible in refining the Ford Company and brand (W.U, Vienna, 2013). They are in charge of Ford models that cope with dangers posed by the highly speculative financial markets impacting on their industry, political and economic environments defined by the U.S fiscal and monetary policies on taxation and ever looming budget cuts. Practical challenges are still eminent, ranging from Ford itself to its surroundings such as the fall of Detroit into Bankruptcy (Litcherman, 2013)

 

 

 

 

 

References

Ford motor Company Annual Report. (2011). Profitable Growth For all.

Litcherman, J. (2013). Anguish in court as Detroit residents object to bankruptcy filing. Reuters. retrieved September 22, 2013, from http://www.reuters.com/article/2013/09/20/us-usa-detroit-bankruptcy-idUSBRE98J00420130920

Mehrabi, G.M., Ulsoy, A. G.,and Koren, Y. (2000). Reconfigurable manufacturing systems: Key to future manufacturing. Journal of Intelligent Manufacturing. 11, 403- 419

Morrison, M.W. (2013). China’s Economic Rise: history, Trends, challenges, and Implications for the United states. Congressional Research Service. RL 33534

Wayland, M. (2013). F – series sales top 70,000 in August, leadFord to 12% increase. Retrieved September 22, 2013, from

http://www.mlive.com/auto/index.ssf/2013/09/f-series_sales_top_70000_in_au.html

W.U Vienna. (2013). Ford Motor Company. Learning from the Automotive Industry. Hampshire: Palgrave Macmillan.

 

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