Reasons and Methods of Growth of Ford Motor Company - Case Study Example

?Marketing Analysis of Ford Table of Contents Introduction 3 Background 3 Reasons & Methods of Growth of Ford 4 PESTLE Analysis 5 Present Situation &Forecast Analysis of Ford 8 Conclusion 8 Reference List 10 Introduction Ford Motor Company is one of the most popular American multinational automakers headquartered in Michigan, Detroit. The company was formed in the year 1903 by the automaker Henry Ford and the company started selling cars and small vehicles under the brands Ford and Lincoln. The company had introduced several methods for large scale operations of domestic and industrial vehicles. Presently, the company operates worldwide in more than 80 countries and is listed on the New York Stock Exchange. The company owns a minor stake in companies Mazda and Aston Martin. Ford is regarded as the second largest automaker in the world based on the net sales of the year 2010. It is the eight ranked company American company in the list of Fortune 500, based on the global revenue earned in the year 2009 and 2010. This study will lay an emphasis on the background of the Ford Company and its worldwide operations. The study will also give an insight into the present scenario of the vehicle industry of UK and its impact on the Ford Company. The study will conduct a macro environmental analysis of the UK domestic and industrial vehicle industry. The study will highlight the present financial and strategic position of the company and the factors affecting the growth of the company. Finally, the study will conclude with a forecast of the company and suggestions that can improve its current financial and strategic position of the company. Background Presently, the company operates worldwide with an employee base of 166000 which helps in delivering vehicles that are of high quality and exceptional value to the customers across the globe (Ford, 2013h). The first car designed and manufactured by Henry Ford was Cadillac in the year 1901 and the company was known as Cadillac Motor Company. In the year 1908 the company introduced a car known as Model A, the first car with safety glass and a windshield. The company gained popularity and kept on manufacturing cars with innovative structure. By the end of 2005 the company was claimed as one of the world’s largest automaker in USA because of its introduction of a series of unique cars based on innovative technologies. The company had introduced cars based on hybrid electric powertrain technologies and plug in hybrid technologies which has increased its customer base of industrial and individual clients. The company had created a transportation revolution by manufacturing vehicles which were classy, sturdy and uniquely designed. Reasons & Methods of Growth of Ford The cars manufactured by Ford are known for their sturdiness, elegant design and high vehicle standards. The company is highly committed in the design and production of vehicles that have the ability to deliver superior performance, offer innovative safety and offer innovative safety and driver assist technologies (Ford, 2013c). This has earned the company several awards in its field like “Top Safety Pick Awards” from the Insurance Institute for Highway Safety (IIHS) and has also received good ratings from the same. The automotive supply chain of Ford is one of the biggest strength and the company relies on thousands of its suppliers for the timely supply of car raw materials, parts and other necessary services for successful automotive making (Ford, 2013j).The suppliers have acted as catalyst for the company in achieving lower costs, improvement of quality of car making and improving the sustainable development situation (Ford, 2013i). The management of Ford ensures that a pleasant relationship is maintained with the suppliers and there is enough support for the human rights in the supply chain (Ford, 2013b). The company believes in performing business activities by ensuring proper sustainable development practices like reduction of water usage by 8.5 percent, energy reduction and by customer engagement (Ford, 2013d). Ford is one of the few American companies which have been attaining net sales of 2 million since 2007. Due to its financial achievement the company achieved the Ford Blue Oval Award which is one of the most recognized brand symbols in the world and is source of great pride for the company. Quality is the topmost priority for the management of Ford and they are focused on developing unique patent technologies (Ford, 2013g) which allows lower cost production and high quality car making (Ford, 2013a). PESTLE Analysis According to the Cambridge organization PESTLE analysis is a management method that examines the effect that influences the performance of the company (Cambridge Dictionary, 2013). PESTLE Analysis will help us in understanding the effects of political, economic, social, environmental, legal, technological factors on a particular industry. PESTLE Analysis of Ford A pestle analysis will be conducted to understand the external factors that affect the UK domestic and industrial vehicle industry (Turner, 2007). Political Ministry of Transportation Test As per the British laws and regulations the Ministry of Transport Test (MOT) is a test which helps in testing the vehicle safety features, roadworthiness and the exhaust emissions required for cars more than three years old on the public roads of United Kingdom (UK). The British government has introduced changes in the MOT test with effect from 20 March 2013 which will ensure that the car manufacturers comply with certain road and vehicle safety regulations (British Government, 2013). The management of Ford considers the MOT test of paramount importance and offers customers basic information regarding the same through the official website. The management of Ford are laying emphasis on the development of the cars which comply with road safety regulations and measures developed by the British government (Ford, 2013m). Economical The UK automotive sector has improved considerably after recession. The nest sales of this sector increased from ?41 billion in the year 2009 to ?49 billion in the year 2010(SMMT, 2013). The value of car exports increased to ?29 billion in the year 2010 and almost 4 out of 5 vehicles manufactured in UK have been exported mostly to USA and China markets (SMMT, 2013). Since, the economy is recovering the management of Ford has decided to penetrate further into USA and China markets by manufacturing convenient domestic cars and vehicles. This strategy would help the company to yield surplus profits and increase its customer base. Social This is because the priorities of the customers in UK to purchase a vehicle are put on hold due to current slow economy. The net sales of the domestic car and industrial vehicles have decreased considerably and thus the management of Ford has decided to manufacture domestic vehicle instead of elegant and expensive cars. Technological Technological innovations play an important role in manufacturing fuel efficient cars and vehicles which serve the purposeful needs of the customers (Ford, 2013k). Intense competition has compelled the car makers to develop technologies which improve the quality of car making. The management of Ford is highly focused on developing patent technologies which would help in lowering the cost and facilitate mass production of cars. The time period of manufacturing such cars have been kept three months (Ford, 2013k). Environmental The UK car makers are equally focused on manufacturing cars which have the potential of lowering the damage caused to environment, society and climate. The UK government has requested the car makers to manufacture vehicles based on technological process that have the potentiality of reducing the environmental impact. Production of vehicles as per the climate change requirements is essential for the convenience of the government and society. Ford is engaged in developing science based strategy to reduce the green house and carbon emissions from the product development and operations process (Ford, 2013e). Legal As per the British Vehicle Rental Association (BVRA) it is prohibited to rent cars and vehicles based on ages (Autorental, 2012). This would lead to the breaking of rules and regulations involved in Age Discrimination and Equality Act. Moreover, the European Commission has become developed certain rules and regulations regarding the light and heavy commercial vehicles which are supposed to be adhered by the vehicle manufacturers. As per the contract hire services offered by Ford it was observed that the company offered car rental services on a contractual basis for 3 months only after thorough research of the customer background and other details (Ford, 2013n). Thus, we can observe that the presently the UK vehicle industry is booming and is very lucrative for the car manufacturing companies. However, the vehicle manufacturing companies including Ford are more focused on developing cars based on innovative technologies and have the potentiality of reducing the adverse impact of their activities on the environment and society Present Situation & Forecast Analysis of Ford Ford Motor Company has achieved certain important milestones like restoring the investment grade status of Ford, reclamation of Ford Blue Oval and resuming the regular the regular payment option to the dividend and shareholders (Ford, 2013f). The company has sold more than 2.3 million vehicles in USA in the year 2012 (Ford, 2013l). It generates most of its revenue from the brands Focus and Fiesta, which were also claimed as top ten best sellers’ cars worldwide. The company also maintained its truck leadership since 36 years as the top truck producer in America. Additionally, the company has also transformed the brand Lincoln by manufacturing cars of excellent design and state of the art car facilities. The vehicle industry is expected to grow by 39 percent by the end of the year 2017 and it is expected that most of the sales of the company would be targeted to China and USA markets (Ford, 2013l). The research and development team of Ford is engaged in the development of elegant car designs along with sturdiness for the convenience of the customers. Conclusion Thus, it is observed that Ford has become one of the most renowned car makers which have the ability of manufacturing cars with unique and classy designs and the credit goes to the intellectual research and development team and the manpower planning ability of the management. Although, the company has made a strong footing in USA and China markets it would be advisable if the company develop strategies to penetrate further into Asian Markets. Reference List Autorental, 2012. UK Law Prohibits Car Rental Companies from Refusing to Rent Based on Age. [online] Available at: < http://www.autorentalnews.com/channel/fleet-insurance/news/story/2012/07/uk-law-prohibits-car-rental-companies-from-refusing-to-rent-based-on-age.aspx > [Accessed 12 July 2013]. British Government, 2013. Changes to the Mot Test Effective From 20 March 2013. [online] Available at: < http://www.dft.gov.uk/vosa/repository/CHANGES%20TO%20THE%20MOT%20TEST%20EFFECTIVE%20FROM%2020%20MARCH%202013.pdf > [Accessed 12 July 2013]. Cambridge Dictionary, 2013. PESTLE Analysis. [online] Available at: < http://dictionary.cambridge.org/dictionary/business-english/pestle-analysis > [Accessed 12 July 2013]. Ford, 2013a. Financial Health. [online] Available at: [Accessed 12 July 2013]. Ford, 2013b. Supply Chain. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2012-13/supply > [Accessed 12 July 2013]. Ford, 2013c. Vehicle Safety. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2012-13/vehicle > [Accessed 12 July 2013]. Ford, 2013d. Evolving Our Sustainability Vision. [online] Available at: < http://corporate.ford.com/our-company/sustainability > [Accessed 12 July 2013]. Ford, 2013e. Climate and Environment. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2012-13/environment > [Accessed 12 July 2013]. Ford, 2013f. Current Financial Health. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2012-13/environment > [Accessed 12 July 2013]. Ford, 2013g. Customer Satisfaction and Quality. [online] Available at: < http://corporate.ford.com/microsites/sustainability-report-2012-13/financial-satisfaction > [Accessed 12 July 2013]. Ford, 2013h. Operations Worldwide. [online] Available at: < http://corporate.ford.com/our-company/operations-worldwide > [Accessed 12 July 2013]. Ford, 2013i. Ford in the Community. [online] Available at: < http://corporate.ford.com/our-company/community > [Accessed 12 July 2013]. Ford, 2013j. News Center. [online] Available at: < http://corporate.ford.com/news-center/press-releases-detail/pr-good-things-happen-in-threes2658-37181 > [Accessed 12 July 2013]. Ford, 2013k. News Center. [online] Available at: < http://corporate.ford.com/news-center/press-releases-detail/pr-ford-develops-advanced-technology-38244 > [Accessed 12 July 2013]. Ford, 2013l. Annual Report. [online] Available at: < http://corporate.ford.com/doc/ar2012-2012%20Annual%20Report.pdf > [Accessed 12 July 2013]. Ford, 2013m. A Quick Guide to the MoT Test. [online] Available at: < http://www.ford.co.uk/OwnerServices/VehicleServiceandRepair/ServicingyourFord/VehicleServicing/MOT > [Accessed 12 July 2013]. Ford, 2013n. Ford Contract Hire. [online] Available at: < http://www.ford.co.uk/BuyingandprotectingyourFord/Ford-for-Business/Finance-for-Business/Ford-Contract-Hire > [Accessed 12 July 2013]. SMMT, 2013. Economy. [online] Available at: < https://www.smmt.co.uk/industry-topics/economy/ > [Accessed 12 July 2013]. Turner, J. R., 2007. Gower handbook of project management. Farnham: Gower Publishing. Read More