BBA 4951 Unit IV Case Study: Ford Motor Company

BBA 4951 Unit IV Case Study

Columbia Southern University

Ford Motor Company

Ford Motor Company, more commonly simply referred to as Ford, traces its roots all the way back to 1896 as this is when company founder Henry Ford built his first motor vehicle, which was a four wheeled, four horsepower contraption that he called a Quadricycle. A few years later in 1901, Ford founded the Henry Ford Company and in 1902 the organization became officially known as Ford Motor Company. Ford began with just 12 investors; two of which were John and Horace Dodge, who later went on to found the Dodge automotive brand, and $28,000 cash. Ford had spent nearly the entire initial invest before selling the first Ford vehicle in July 1903, and just a few months later by October of 1903, Ford had already turned a profit of $37,000, a clear sign of what was to come for the very popular brand. Ford became very famous for the invention and use of the assembly line, and the brand grew in popularity due to their drive to make vehicles affordable for the everyday man. Over the years Ford has grown into one of the largest automakers in the world acquiring and selling off multiple other brands throughout their existence (David & David, 2017). Today Ford offers a full line of cars, trucks, and SUV’s across the entire globe and is rapidly expanding into the realm of electric vehicles (EVs) and hybrids and Ford offers some of the most popular and top selling vehicles in the U.S..

Strategy, Mission, and Organizational Structure

Ford’s strategy places a strong emphasis on the areas of producing quality vehicles, reducing energy use and waste, improved safety, and expanding on its model line-up introducing new vehicles and making new models available globally. Ford has done well compared to some of their competitors at producing quality vehicles with less warranty repair costs. In fact, since 2005, Ford has reduced its average costs of warranty repairs by 54% and warranty repairs have declined by over 66% in the first three months of ownership of its new vehicles. Additionally, the company has greatly reduced energy use and waste in both its factories and its vehicles by reducing emissions and improving fuel economy with more technologically advanced engines. Fords initiative to produce higher outputs with smaller displacement engines to improve fuel economy has been very successful with the introduction of the EcoBoost engine line up. Fords aims to improve the safety and security of their vehicles as nearly all of the company’s products include features such as blind spot monitoring and information systems, lane departure alert systems, and rear parking assistance. Finally, in 2014 Ford launched its largest line up of vehicles ever including an all new Mustang; which was offered globally for the first time ever, and an all new F-150 which included a newly designed aluminum body, a first for the truck industry (David & David, 2017). The strategy of Ford says that the company is committed to the global market and meeting the wants and needs of their customers while also considering future impacts on the environment. The company has implemented a strategy that allows them to reduce not only costs, but waste and emissions as well, by using smaller, yet more powerful and fuel-efficient engines, which are all very positive aspects.

While Ford is unique in that it does not have a published vision statement, the company does operate using a stated mission statement that incorporates four key components, One Ford, One Team, One Plan, and One Goal. One Ford aims to align the efforts of employees towards a common goal of success and to optimize global strengths. One Team allows Ford to work together as one large team to sustain their reputation as a automotive leader. One Plan enables Ford to aggressively and continuously restructure in order to operate profitably meeting current demands and the changing model mix. Finally, One Goal creates excitement and viability within Ford as an organization that delivers profitable growth for all stakeholders within the company (David & David, 2017). The mission of Ford reiterates the organizations commitment to both its customers and to its employees and stakeholders. Ford looks to share a common definition of success among all employees in an effort to meet the needs and wants of customers by remaining a leader within the automotive industry. Ford says they measure their success “by the satisfaction of our customers, employees, and essential business partners, such as dealers, investors, suppliers, unions/councils, and communities” (David & David, 2017, p. 523).

According to David and David (2017), within organization structure, Ford operates under a divisional-by-geographic region organization structure. This type of structure “is appropriate for organizations whose strategies need to be tailored to fit the particular needs and characteristics of customers in different geographic areas” (David & David, 2017, p. 216). Positive aspects of this organization structure include clear accountability, it allows for local control of local issues, it creates career development and advancement opportunities, promotes delegation of authority, and allows for improved control and attention to be placed on products, customers, and regions. Ford has a very clear chain of command with top Ford executives from each respective branch reporting to CEO Mark Fields under Executive Chairman and Chairman of the Board William Clay Ford, Jr. (David & David, 2017). Fords organizational structure once again displays the company’s commitment to understanding and meeting the needs of customers. This structure allows the organization to focus on the products and services relevant to particular regions and allows the company to provide the right products to the right people. It shows that the company understands that each region is unique and products must be tailored as such.

Goals

Ford has many short-term and long-term goals inducing continuing to expand into the global market by offering new vehicle line-ups across the globe. Currently, 60% of Fords revenue comes from the United States, Canada, and Mexico, which accounts for nearly all of Fords profits and the company is looking to grow its international sales and revenue. The only other profitable region for Ford in 2014 was the Asian market. Another goal of Ford is to expand its performance line up offerings. Ford plans to introduce 12 new high performance models into their line up by the year 2020, which includes new performance models of the Focus and an upgraded version of the Ford Raptor, as well as other performance models of the Mustang. Long-term goals include the company’s initiative to improve fuel economy in its vehicles and to reduce waste, emissions, and energy use across its entire vehicle line up as well as within its factories with plans to spend nearly $6 billion on improvements to U.S. plants alone (David & David, 2017).

References:

David, F. R., & David, F. R. (2017). Strategic management: A competitive advantage approach, concepts and cases (16th ed.) [VitalSource Bookshelf version]. Retrieved from https://online.vitalsource.com/#/books/9780134167947