Case Study – Ford Motor Company

Introduction Ford ride troupe was founded in 1903 by Henry Ford and eleven business associates. The connection was responsible for(p) for the innovation of the moving collection line where employees would remain in the uniform place era performing the same task on from each one automobile that move along the assembly line. Ford drive attach to has been a prominent car nonplusr for everyplace 100-years an icon of U. S. manufacturing. However, the bon ton has reached a pivotal impasse where timely externalizening has become crucial. Hence, to reconstruct the brand and Henry Fords original vision to bring cars that were affordable to the lower classes (What Would You Do?Ford Motor go with, n. d. p. 1). This case bailiwick leave examine four plectrons the first election is whether to close discomfit older plants in an effort to realine production and sales. The second option is to re-engineer the friendship to produce smaller cars eliminating or crisply step- go through the SUV and motor transport lines. The third option is to accommodate the unprecedented step of dramatically reducing North Ameri pot front man and focus the company efforts on supranational securities industrys where the company has been very successful. The fourth option is to sell the entire prime(a) elevator carmotive Group (PAG).To take in what the criterion for the Ford Motor Company four options argon, Fords management team should collectively go for the clear-sighted-decision making model that is define as a systematic make for in which managers define problems, evaluate alternatives, and choose optimal solutions that provide the supreme benefits to their organizations (Williams, 2010, p. 85). In addition, management should utilize the SWOT (acronym for Strengths, Weaknesses, Opportunities, and Threats) analysis, to identify their internal strengths and weaknesses and their surface-of-door opportunities and threats.Ford can manipulation the SWOT anal ysis for assessing their strategic military strength in its internal and external environments. Rational decision-making and the SWOT analysis entrust throw in the towel Ford to obtain and ascertain key issues to determine what strategic plans to run through. The case outlines four strategic options Ford is pursuing to increase its profitability. spot each of the four options. For each option list two criteria, you would wasting disease to evaluate the option. cream number one cheers closing older plants to realign production and sales. Closing the older plants managers would have to evaluate how these closures go away shanghai their internal environment, employees will lose their jobs the company will be stimulate to buy out each employee. In addition, the company has to evaluate their external challenges how will the closure of these plants run into the community. The plants argon currently producing more cars (supply) than the consumers are purchasing (demand).Therefo re, Ford Motor Companys has to create and implement a tactical plan that de nones how the internal threat of buying out the employees will occur, hence buying out the employees will take down Ford Motor Companys operation spending and increase their internal opportunity because there will be more resources (cash) to put in other areas of the business. In addition, the company could sell their supply to employees at a subtractioned price and offer the consumers in the community this same discount at a point lower to secure goodwill in the community, thus minimizing their external challenges.Option number two is eliminating or sharply reducing the SUV and truck lines and concentrating on the production of smaller cars. The company managers should determine the strength of this option, the company would need to evaluate the following can force out economy be realized in these break officular vehicle lines without fundamental cost being passed on to the consumer will there be a continuing grocery for SUVs and how will reducing or eliminating truck lines affect general sales.Therefore, to evaluate these challenges I propose managers review their effort forces that solicit the question how should Ford Motor Company compete in the SUV and truck line industry. According to Harvard professor Michal Porter (as cited in Williams, 2010), five industry forces determine and industrys overall attractiveness and potential for long-term profitability (p. 107). The company can determine if this is a feasible food market for the company to continue disassociateicipating in by assessing their positioning strategies.Option number three requires reducing Fords North American presence and focus the companys efforts on international markets where the company has been very successful, particularly in Europe, South America, and China. A work, it is imperative that managers utilize the rational decision-making process to determine what is the sustainability of the Ford b rand in the international market, how will reducing or removing North American presence affect the overall brand, and which plants in North America should be closed for short periods to allow the demand to catch up with the supply.In addition, Ford should implement an high-pressure marketing dodge in Europe, South American and China to gain a sustainable competitive edge in a market that is receptive. Option number four is to sell the entire PAG. The PAG group is part of Fords portfolio strategy that did not align with Fords vision. Therefore, retrenchment strategy should be applied for this option, sell the entire line because it is not part of Fords original vision production of cars that were affordable to the masses (What Would You Do, Ford Motor Company, n. . p. 1). According to the Boston Consulting Group, BGC matrix, is a portfolio strategy that managers use to categorize their corporations business growth and relative market share, helping them decide how to invest corpora te funds (Williams, 2010, p. 103). The PAG group can be defined as a dog a company that have a small share of a slow-growth market (Williams, 2010, p. 104). In addition, the hand-built PAG automobiles do not fit Fords innovation of the assembly line.In light of the possibility that market conditions can and do change, prove at least three examples of how the company should build-in flexibility to back-up it decision-making process. Ford Motor Company should implement flexible back-up plans and one plan or manner is the option based planning that is the goal to keep all options coarse and acquiring small investments in alternative plans (Williams, 2010, p. 81).Therefore, when one or several(prenominal) of the alternative plans flourish Ford would invest more in those plans, while reducing investments in other, for example, the North American plants. The second plan for the company to build in flexibility would be its slack resources that are people, property or production. Hence, the partial closing of the North American plant, slack resources would alter Ford to adjust, when demand increases there will be resources available to take on these changes.In addition, for any plan to work well, management has to keep discourse open with all members of the team to develop and encourage lading. List at least three step that make-up a workable plan and explain why each is important. To determine and execute strategies for the four options managers at For Ford Motor Company have to be aware of the essentials steps in preparing a workable plan. Therefore, step number one to unionise a workable plan is setting specific goals, using the S.M. A. R. T. guidelines that are specific, measurable, attainable, realistic and timely. This is important because it directs behavior and increase efforts when the plan stipulates specific goals. pervert number two is developing commitment. Goal commitment is the determination to achieve a goal (Williams, 2010, p. 80). Therefor e, both managers and employees should collectively set goals to encourage commitment setting goals collectively encourages employees to intensify their efforts.The third step is developing an good action plan that list the specific steps, how the options will be hold in out, which employees will perform each task, and what resources are going to be postulate and how long it will take to accomplish the goal. The fourth step is introduce progress this will allow you to track your short-term (proximal) and long-term (distal) goals. In addition, the company managers should use a Gantt chart that will aid them in tracking this progress and keeping projects on task.When you know where you are going, how you acquire there, who is assisting and how long it will take allows you to be flexible when conditions change. Discuss the option or combination of options you selected as the best course of actions for Ford Motor Company and detail your reasons for selecting that option or combinati on of options. I recommend Ford Motor Company put into operation, option number three, to take the unprecedented step to dramatically reduce their North American presence and focus their efforts on international markets where they have been successful.Ford Motor Company also should elect option number four, to sell the entire PAG group. To maximize Fords profits, it is clear that North American factories are not doing well and are the major sources of losses. Ford has lost a unquestionable amount of market share to its competitors. Ford does not want to produce more cars than they sell. Therefore, by reducing production in this market will provide them with slack resources to fund their European market. In addition, operation expense for their North American operations is expensive payable to unionization.The United Auto Workers (UAW) represents most of the companys production employees and the contract terms over the years have been designed to provide significant long-term make to those employees (What Would You Do? Ford Motor Company, n. d. , p. 1), and these generous benefits are weighing down the company operations and liquidity therefore, Ford Motor Company should ease up out the severance package to these employees and this will free up those monies to reinvest in the markets that are doing well or to repair older plants.In addition, due to the general environment changes the economy, the company should negotiate new compensation packages with UAW to slack their operational expenses. Additionally, Ford Motor Company should sell PAG because they are not in the luxury car business and refocus their attention to what they do best producing cars that are affordable to masses. ? References Williams, C. (2010). Management. Mason, OH Cengage Learning.