Analysis of Ford Shifts Global, Europe Executives - Essay Example

Part Summary of Wall Street Journal Article Nov 7, In an article d Ford Shifts Global, Europe Executives that appeared in the Nov, 7th issue of the Wall Street Journal, Mike Ramsey points out that Ford Motor Co. implemented some change that saw it swap its global marketing leader, Jim Farley for its European chief, Stephen Odell. According to the article, over the last nine months, the company’s European operations have lost an estimated $619 million and it is predicted that the operations will largely remain unprofitable in 2015 as Mr. Farley steps into the role. On the other hand, Mr. Odell will be tasked with the responsibility of having to boost Ford’s lagging U.S. market share as well as attempt to keep the sales in China rolling if the company is to be able to attain its goal of selling eight million units. Both the two company executives will continue to the company’s Chief Executive Mark Fields (Ramsey, 2014). Since his appointment to operations in 2010, Mr. Odell has been instrumental in crafting a restricting effort that has resulted in an 18% reduction the company’s operating capacity as well as the closure of three plants in a region where the closure of plants is acknowledged to be rather difficult. Although Ford’s European sales and market share are noted to be up this year, of concern is that the decline of the Russian economy has largely prevented the company from earning any revenue in that country. Mr. Farley who is considered as Mr. Mulally’s first major hire was brought into the company in 2006 and has since been crucial in effecting Ford’s turnaround. He is reputed as having helped in pushing the move by Ford to sell some of the relatively pricier vehicle versions such as the Titanium time line. He is also recognized as having played a major role in improving the company’s involvement in social media and a range of other nontraditional marketing avenues before this became commonplace across the entire industry. The swap is expected to help both company executives to significantly broaden their experience (Ramsey, 2014). Ramsey (2014) also points out that according to analysts, it is thought that there was a push by Mr. Farley try and do something else. This is because the issue in Europe has been identified as being not so much as bout marketing as Ford has a relatively strong market presence in that region. It is primarily about the market. This does not mean that Mr. Farley will not be able to succeed, however Europe has been an extremely difficult place. Although the European restructuring designed by Mr. Odell is almost finished, the company’s European market remains weak. On the other hand, Mr. Odell is entering a strong U.S. market where he is expected to lead one of the company’s biggest product launches ever. The company is planning on launching its new F-150 vehicle model that is made of aluminum that will go on sale next month. Under Mr. Mulally, a number of executives were rotated into different regions to help them gain the necessary experience as well as build the bench. The company has also announced that its Chief Information Officer, Mr. Nick Smither has decided to retire after having served the company for over 34 years. In his place, Mr. Smither will be succeeded by Ms. Marcy Kelvorn who will be reporting directly to Mr. Fields. The vice president of Ford’s sustainability, environment and safety engineering Mr. Robert Brown is also retiring after 35 years of service and will be succeeded by Ms. Kim Pittel who will also be reporting directly to Mr. Fields (Ramsey, 2014). Part II Summary of Assigned Chapter 14 According to chapter 14 of Terpstra et al (434-449), it is imperative for global marketing strategy to form a part of and be consistent with an organization’s overall global strategy. As such, the establishment of a firm’s international marketing strategy is noted to be directly linked with the formation of a firm’s overall global strategy. The development of a successful global strategy should begin with a foundation analysis that targets three key area; a situational analysis (external analysis), an organizational analysis (internal analysis), as well as a region or country specific analysis (to help in the development of strategies that are goal specific to the a given region of country). An organizational analysis aids in the identification of the overall weaknesses and strengths of a given firm in relation to its international expansion goals. This analysis forms an integral part of a firm’s overall readiness to export its products. Some of the aspects examined in this analysis include personnel issues, internal financial policy, and product or service development. On the other hand, the situational analysis is largely an analysis of the external environment in which a firm must operate. The main goal of this analysis is to try and identify some of the issues that might potentially affect the firm. These issues generally include its competitive advantage, an analysis of the industry, the competition within it, as well as the firm’s value chain. As part of the situational analysis, a firm is required to address the question as to whether it should be engaged in the development of separate product strategies, or employ the use of one global strategy for all its products. The region/country specific analysis is employed in the development of goal specific strategies to be employed in each foreign market. Some of the aspects examined in this strategy include which market to enter, how the market should be entered as well as the specific policies that should be established by the firm in each market (Tepestra et al. 434-444). The successful implementation of a strategy primarily depends on both the firm’s personnel and its organizational structure. It is essential for a firm to constantly assess the shifting nature of comparative advantages across countries as well as its own competitive advantage as compared to that of its various competitors. For a firm to emerge as a global competitor, it must ensure that it diversifies itself out of the national markets that it dominates, in addition it must also diversify into new products, extend its current product lines into new product segments as integrate its suppliers backward or forward. A key part of a global marketing strategy is that it is vital that a decision be made between the adaptation and standardization of marketing strategies to local markets. It is usually necessary for some local adaptations to be made so as to accommodate some of the differences in government regulations, consumer tastes, income levels, the structure of competition, as well the inherent differences in distribution channels (Tepestra et al. 439-440). The successful coordination of the global marketing system is a rather complex task. Some of the methods that are usually employed to attain this objective include the transferring of marketing experience and know-how, the use o similar marketing approaches across different countries, integrating various approaches to multinational clients as well as sequencing marketing programs across different countries. Part III Relationship / Application of Concepts to Article Industry Analysis: An industry analysis is a starting point for the situational analysis and works to identify the starting point of the situational analysis. Its main goal is to try and identify the industry specific forces and issues that will impact a firm’s international growth. Ford’s operations in Europe are expected to continue to be rather challenging. According to the article, the declining Russian economy has prevented the company from obtaining significant amounts of revenue in the country. Mr. Efraim Levy, who is an equity analyst with S&P Capital IQ, is also highlights the tough conditions in the European market by pointing out that Europe has been an extremely difficult place. Competing with differentiated Products/Services: To attract customers, some firms tend to try on a strategy of offering products that their competitors do not offer; in this respect, Mr. Odell is expected to lead Ford’s biggest product launch ever when the company launches its new F-150 vehicle model. The F-150 is made entirely out o aluminum. Country/Region Specific Analysis: After conducting a situational and an organizational analysis, it is imperative for a firm to consider the individual markets in which it operates. In some markets, a firm must seek increased market share, while in others, it may simply want to reduce its market presence and wait for the market to eventually become more attractive. By closing three of its plants in Europe, Ford’s region specific strategy for the European market seems to be an attempt to reduce its European market presence. Transferring marketing experience and know-how from one country to another: This is a strategy that is commonly used by firms in coordinating the global marketing system. The use of this strategy is especially useful when transferring the information gained by a firm in its lead markets to some of its other markets. In the journal article, Mr. Mulally has employed a strategy that has seen executives rotated into different regions so as for them to gain the necessary experience and build the bench mark. Works Cited Terpstra Vern, Ravi Sarathy, and James Foley. International Marketing. Naperville, Ill.: Naper Publishing Group, 2012. Print. Ramsey, Mike. Ford Shifts Global, Europe Executives. Accessed November 2014, from at Read More