Case Study – Ford Motor Company

groundwork crosswalk labor Company was founded in 1903 by Henry Ford and eleven job associates. The connection was responsible for the innovation of the moving conclave caudex where employees would remain in the same place composition performing the same task on each automobile that move a bulky the assembly line. Ford force back Company has been a prominent car producer for over 100-years an icon of U. S. manufacturing. However, the fraternity has reached a pivotal impasse where timely planning has become crucial. Hence, to reestablish the brand and Henry Fords original vision to produce cars that were affordable to the masses (What Would You Do?Ford labour Company, n. d. p. 1). This case ponder depart examine cardinal options the first option is whether to close down senior plants in an social movement to re line up return and sales. The second option is to re-engineer the company to produce midgeter cars eliminating or sapiently decrease the SUV and truck line s. The third option is to take the unprecedented step of dramatically diminution northeast American front line and focus the company efforts on world(prenominal) commercializes where the company has been very successful. The 4th option is to trade the entire Premier railroad carmotive Group (PAG).To jibe what the criterion for the Ford ram Company four options are, Fords management group should collectively utilize the rational-decision making model that is define as a systematic process in which managers define problems, evaluate alternatives, and choose optimal solutions that provide the level dress hat benefits to their organizations (Williams, 2010, p. 85). In addition, management should utilize the SWOT (acronym for Strengths, Weaknesses, Opportunities, and Threats) epitome, to identify their internal strengths and weaknesses and their extraneous opportunities and threats.Ford can use the SWOT analysis for assessing their strategic position in its internal and ex ternal environments. Rational decision-making and the SWOT analysis allow allow Ford to obtain and ascertain key issues to determine what strategic plans to implement. The case outlines four strategic options Ford is pursuing to increase its profitability. Describe each of the four options. For each option hark two criteria, you would use to evaluate the option.Option enactment one commends closing older plants to realign production and sales. Closing the older plants managers would have to evaluate how these closures will affect their internal environment, employees will lose their jobs the company will be obligated to buy out each employee. In addition, the company has to evaluate their external challenges how will the closure of these plants affect the community. The plants are currently producing to a greater extent cars (supply) than the consumers are purchasing ( call for).Therefore, Ford ride Companys has to create and implement a tactical plan that denotes how the inter nal threat of get out the employees will occur, hence buying out the employees will reduce Ford Motor Companys operation expense and maximize their internal opportunity because there will be more than resources (cash) to invest in other areas of the business. In addition, the company could sell their supply to employees at a discounted price and offer the consumers in the community this same discount at a point demoralise to achieve 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 necessitate to evaluate the following can fuel economy be realized in these particular vehicle lines without significant cost being passed on to the consumer will there be a continuing trade for SUVs and how will reducing or eliminating truck lines affect general sales .Therefore, to evaluate these challenges I propose managers look back their industry forces that address 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 foodstuff for the company to continue participating in by assessing their positioning strategies.Option number tierce requires reducing Fords North American presence and focus the companys efforts on international markets where the company has been very successful, particularly in Europe, southerly America, and China. Again, it is imperative that managers utilize the rational decision-making process to determine what is the sustainability of the Ford brand in the international market, how will reducing or removing North American presence affect the ove rall 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 aggressive marketing strategy 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 proceeds and relative market parcel out, helping them decide how to invest corporate 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, discuss at least three examples of how the company should course-in flexibility to back-up it decision-making process. Ford Motor Company should implement flexible back-up plans and one plan or method is the option based planning that is the goal to keep all options open and acquiring small investments in alternative plans (Williams, 2010, p. 81).Therefore, when one or several 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, money or production. Hence, the partial closing of the North American plant, slack resources would enable Ford to adjust, when demand incr eases there will be resources available to gruntle these changes.In addition, for any plan to work well, management has to keep communication open with all members of the team to develop and encourage allegiance. List at least three steps that make-up a executable 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 prepare a workable plan is setting specific goals, using the S.M. A. R. T. guidelines that are specific, measurable, attainable, natura arguingic and timely. This is important because it directs behavior and increase efforts when the plan stipulates specific goals. Step number two is developing commitment. finishing commitment is the determination to achieve a goal (Williams, 2010, p. 80). Therefore, both managers and employees should collectively set goals to encourage commitment setting g oals collectively encourages employees to intensify their efforts.The third step is developing an effective action plan that list the specific steps, how the options will be carry out, which employees will perform each task, and what resources are going to be needed and how long it will take to accomplish the goal. The fourth step is tracking 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 getting 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 combination of options. I recommend Ford Motor Company put into operation, option number three, to take the u nprecedented 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 befogged a substantial 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 due to unionization.The United Auto Workers (UAW) represents most of the companys production employees and the contract terms over the years have been intentional to provide significant long-term support to those employees (What Would You Do? Ford Motor Company, n. d. , p. 1), and these generous bene fits are weigh down the company operations and liquidity therefore, Ford Motor Company should pay out the gaolbreak 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 decrease their available 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.