Ford Motor Company

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Ford Motor Company

Ford Motor Company


The first step in the plan that can begin immediately is to reorganize the company that aligns with moving the company towards alternative vehicle mass production. The cost of this endeavor will be large, and therefore, all cost reduction opportunities must be realized. Senior leaders need to identify the new core competencies, and begin to outsource all functions that are not directly related to one of those core competencies. This will allow the company to focus on the large task at hand and should provide some significant cost savings through outsourcing of those functions. This new vision needs to be communicated as soon as possible, along with the plan and objectives for moving that auto company towards an industry leader in alternative vehicles.

Global energy price projections are alarming, and the impact could be significant to the US economy. Ford, along with the domestic auto companies need to take advantage of these calamitous predictions to promote the next auto industry revolution. Jeffrey Rubin, chief economist and strategist with Canadian Imperial Bank of Commerce, forecasts in a new report titled The Age of Scarcity that Canadians and Americans should brace for $2.25-a-litre gasoline or about $7.50 a gallon, by 2010. That's nearly double the current nationwide average price for regular unleaded gas of $1.23. (per liter and Canadian dollar) The price will top a record $1.40 this summer as it starts its climb, Mr. Rubin said. (Van Praet, 2008) This is an alarming forecast, and even more of a reason why a plan to shift focus to alternative vehicles, and the plan needs to begin now.

Invest in technologies and R&D that will eventually enable alternative vehicles to be produced and sold at or below current gas powered vehicles today. Start immediately to redirect funds and resources to the development, production, and marketing of alternative fueled vehicles. As funds are transitioned, begin to downsize current gas powered vehicle platforms (non selling vehicles and redundant products). This will need to be done gradually, as to not lose current market share, and to create a positive cash flow that will be used for R&D. This can begin immediately, with the goal to divert spending at a 20% rate each year. “Chrysler has used innovation to get out of trouble before, when it stumbled in the 1980s, 1990s and in the early years of this decade. In response, it produced the minivan in the 1980s, the luxury SUV in the early 1990s and in this decade reinvented the big American sedan in the form of the Chrysler 300C. (White, 2005). Using innovation to turn around a company is not a novel approach but being an innovator leader provides greater potential for accumulating more market share. Just as consumers now view Chrysler and the primary maker of minivans, Ford could obtain the same perception with alternative vehicles.

Begin lobbying local and federal governments to start planning the infrastructure required to the alternative vehicles. A timeframe of one or two years to convince ...
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