Ford Case Study

Ford is one of the largest car manufacturers in the US. Nevertheless, the recent economic recession has had a significant, negative impact on the development of the company. The company has deteriorated its marketing performance consistently. In this respect, it is possible to refer to the balance sheet and income statement of the company (See App. Table 1 and Table 2), which show the consistent deterioration in the organizational performance and marketing position of the company since the beginning of the economic recession. In actuality, the company undergoes a considerable downturn in its business development. In such a situation, the company needs to undertake immediate actions, which can improve the position of the company consistently and prevent the ongoing deterioration of its marketing position and decrease of its market share in the US and in international markets.

In actuality, it is possible to distinguish several threats to the future of the company and to its current position in the market. First of all, the economic recession has decreased consistently the buying power of consumers, especially in the US. As a result, the sale rates of Ford have dropped substantially because customer cannot afford buying as much cars as they used to do before the recession. Secondly, the competition in the industry grows stronger. At this point, it is important to place emphasis on the fact that, on the one hand, American rivals of Ford, including GM and Chrysler have deteriorated their marketing position and organizational performance since the beginning of the economic recession. On the other hand, overseas rivals of Ford, such as Toyota, have demonstrated a better marketing performance compared to Ford and other American companies. In such a way, Ford has undergone the consistent deterioration of its market position but the company has survived the recession. Thirdly, the company needs to meet environmental and economic concerns of the public, because consumers are dissatisfied with the high fuel consumption of cars sold by Ford.

Key strategic actions and decision elements facing the company

On analyzing the current situation and position of Ford in both domestic and international markets, it is important to focus on three strategic directions in the development of the company. First, the company has to overcome negative effects of the economic recession. Second, the company needs to improve its competitive position and regain its market share. In addition, the improvement of the marketing position of the company should be accompanied by the financial stabilization of the company. Furthermore, the company needs to change its mission and vision to meet needs and wants of customers. To put it more precisely, the company needs to take into consideration environmental concerns of the public.

Main findings from the analysis

The analysis of the current position of Ford reveals several problems the company has to tackle with. In this regard, it is worth mentioning the problem of the growing competition. Furthermore, the company has to deal with negative effects of the economic recession because the drop of the buying power leads to the drop of sale rates of the company. In addition, the deterioration of the marketing position of the company leads to increasing share of Ford’s rivals, mainly overseas car manufacturers. Moreover, the company loses its position not only in the domestic but also in the international market. Ford still faces the problem of the negative public image as car manufacturer responsible for the pollution of the environment because Ford’s cars use gasoline, which causes greenhouse gas emissions, which, in their turn, lead to the climate change.

Possible solutions

In such a situation, it is possible to suggest several solutions to current problems of Ford. First of all, the company should optimize internal business processes. In this regard, the company should focus on the quality of its product and services as well as on the quality of relationships between professionals working within the company. Secondly, the company has to save costs. At this point, the company can reduce its expenses through selling its overseas subsidiaries, which need substantial investments. In this regard, the decision of Ford to sell out Volvo, as one of its subsidiaries, is logical and rational but the company has to carry on the policy of optimization of its expenses and saving costs. Furthermore, the company should develop and manufacture more fuel-efficient cars. In this regard, Ford could even refuse from manufacturing of its famous pick-ups and other vehicles, which are not fuel efficient. In addition, the company can seek for merger with another large car manufacturer to improve its marketing position and to expand its market share. Moreover, the company should develop hybrid vehicles and vehicles using alternative sources of energy but fossil fuels. In such a way, the company can improve its public image. Finally, the company should elaborate the new strategy of the market development to expand its market internationally.

Key recommendations, responsibilities and timing factors

Taking into consideration all above mentioned, it is possible to recommend introducing new strategy focusing on manufacturing of fuel-efficient vehicles and the improvement of the public image of the company. Ford should attract new customers and expand its market share internationally. In addition, it is possible to recommend introducing innovations, especially in regard to the expansion of manufacturing of hybrid vehicles by Ford. At the same time, at the moment the company should cut costs substantially. In this regard, the company should take responsibility and sell out its unprofitable subsidiaries and, if necessary, to cut jobs. The company can attempt to obtain more tax credits from the government. Finally, the company needs to focus on the quality of its products and services.

Ford should accomplish the aforementioned changes in the course of the year. Otherwise, changes within the company and the deterioration of the position of the company in the market will be irrevocable.

 

 

 

 

 

Works Cited:

Daft, R. Understanding the Theory and Design of Organizations. New York: Random House, 2007.

Sanna, L. “Driving the Solution: the Plug-in Hybrid Vehicle”. EPRI Journal, Fall 2005, p.8-17.

Volti, R. Society and Technological Change. New York: Random House, 2005.