ford Motor Company Analysis
Ford's History, Development and Growth
As Ford Motor Company itself proudly declares, "The dream became a business." The inception of Ford is one of the critical steps in the industrialization of America and the West in general. According to Ford's public relations department, "Ford Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company's articles of incorporation. With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of the world's largest corporations. Few companies are as closely identified with the history and development of industry and society throughout the 20th century as Ford Motor Company." (www.ford.com)
As with most huge multinational corporations, Ford Motor Company's beginnings were humble. In fact, the car manufacturer suffered through many nervous moments in its infancy. The earliest record of a shipment is July 20, 1903, approximately one month after the company's actual incorporation, to a Detroit doctor. With the company's first sale came hope -- and indeed, a young Ford Motor Company had taken its first baby steps.
But assembly line mass production was Ford's greatest contribution to industrialization. First used at the Highland Park plant (in Michigan) in 1913, the new assembly line technique of manufacturing permitted individual workers to remain in one location and execute the same job over and over again on multiple vehicles that passed by them. The line proved tremendously efficient, helping the company far surpass the production levels of its competitors -- while at the same time rendering the automobiles more affordable. (www.ford.com)
According to Ford's public relations department, "Henry Ford insisted that the company's future lay in the production of affordable cars for a mass market. Beginning in 1903, the company began using the first 19 letters of the alphabet to name new cars. In 1908, the Model T. was born. 19 years and 15 million Model T's later, Ford Motor Company was a giant industrial complex that spanned the globe. In 1925, Ford Motor Company acquired the Lincoln Motor Company, thus branching out into luxury cars, and in the 1930's, the Mercury division was created to establish a division centered on mid-priced cars. Ford Motor Company was growing." (www.ford.com)
The 1950s presented the arrival of the heralded Thunderbird and the chance to own a part of the famed Ford Motor Company. The company went public and, on Feb. 24, 1956, had about 350,000 new stockholders. Henry Ford II's keen perception of political and economic trends in the 50's led to the global expansion of Ford in the 60's, and the establishment of Ford of Europe in 1967, 20 years ahead of the European Economic Community's arrival. The company established its North American Automotive Operations in 1971, consolidating U.S., Canadian, and Mexican operations more than two decades ahead of the North American Free Trade Agreement. (www.ford.com)
Indeed, Ford Motor Company began the 19th century with a single man -- Henry Ford -- envisioning goods that would meet the needs of people in a world on the verge of high-gear industrialization. Today, Ford Motor Company is a family of automotive brands consisting of: Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin, and Volvo. According to Ford's public relations department, "The company is beginning its second century of existence with a worldwide organization that retains and expands Henry Ford's heritage by developing products that serve the varying and ever-changing needs of people in the global community." (www.ford.com)
Ford's Internal Strengths and Weaknesses
Ford's primary strength today is a reliable set of purchasers in an era where American automobile manufacturers are struggling. Ford's Crown Victoria Interceptor, for instance, holds about 85% of the police car market. (The Center for Auto Safety, 2005). As a result, Ford has a direct and reliable stream of accounts receivable on such contracts -- also, Ford does very well in the taxi cab and rental car purchasers' markets as well. Consequently, even when personal car purchasing rates decline with economic downturns, Ford is able to ride through those rough times with the much more stable police car, taxi cab and rental car industrial purchasers.
However, a strong weakness for ford has been recent revelations of compromises in safety. For instance, in the aforementioned police car market, recalls have been the norm recently: "Ford, which has about 85% of the police car market, came under fire last year after several cities and law enforcement agencies across the country filed lawsuits and voiced concerns about the risks of the Interceptor catching fire after high-speed, rear-end wrecks. In October 2002, Ford announced plans to begin installing rubber and plastic shields around the gas tanks of the nearly 350,000 Ford Crown Victoria police Interceptors. Ford estimated it would cost them about $50 million to furnish the shields aimed at preventing items from penetrating the fuel tank. At the same time, the automaker announced plans to offer an optional $250 trunk pack cabinet to safely store sharp-edged, heavy equipment used by police officers." (The Center for Auto Safety, 2005)
These safety issues were compounded, of course, by the Ford Explorer / Firestone tires partnership that inexorably damaged Ford's reputation in the late 1990s and early 2000s. The average consumer today believes Japanese competitors' cars to be both safer and more reliable than Ford's offerings, and this presents...
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Ford faces many threats. In terms of operational/strategic threats, the company faces intense competition in all of its markets. There is no product or geography where Ford does not face intense competition. This drives down margins and exposes Ford to the possibility of declining sales. The competitors in the industry are innovating at a rate faster than Ford generally is. This creates new and unique competitive threats. Ford is under
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