...Abstract Ford Motors used to be a prominent automobile company in the past. The company is on the verge of bankruptcy because of unexpected/unusual expenses incurred in the form of changes in investment and extinguishment of debt liabilities. The company should devise a policy that curtails the cost of sales, particularly, structural cost. Ford needs vast managerial and structural changes. The company needs to revise its price patterns, designs and make new and attractive products for the ultimate user, mainly, middle-class groups. Ford also needs expansion in Europe and Mexico. Keywords: Ford motors, cost analysis, microeconomics, demand, recommendation Introduction Purpose Microeconomics is that the branch of economic science that analyzes the behavior of individual shoppers and corporations to do and perceive the decision-making method of each business and households. Economics is concerned with the interaction between individual consumers and sellers also because the factors that influence the alternatives created by both consumers and retailers. Especially, economics focuses on patterns of providing and demand and, therefore, the determination of worth and output in individual markets. The aim of this paper is to clarify however economics influences the Ford Motor Company. History Henry Ford was born on June 30th, 1863. Ford saw his first car when he was 12 years old. Henry and his father were riding into Detroit during that time span. At...
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...Business Analysis Part I MGT 521 Business Analysis Part I Ford Motor Company was founded in Dearborn, Michigan in 1903 by a gentleman named Henry Ford. Henry Ford started Ford Motor Company with $28,000 and a big dream. He had a dream of creating a horseless carriage. His dream eventually turned into the Ford model T which he sold more than 15 million between the years 1908 and 1927. Ford is most known for developing assembly line production which revolutionized the automobile industry. This technique is not only still used today, and has only grown with modern advancements in technology. Ford would be amazed at the production in one of his plants today. 109 years later Ford Motor Company has over 166,000 employees working in 70 plants across the world. Ford has operations on six different continents and is still headquartered in Dearborn, Michigan where it was founded. Ford is one of the global leaders in the automobile industry and produces millions of cars each year. Built on the foundation of hard work and a big dream Ford Motor Company has sustained through the years to get where it is today. Ford Motor Company SWOT Analysis Ford has a lot of internal strengths which include strong brand recognition, strong engineering and development departments, a global network of distributors and dealers and multiple lines of makes and models. Ford also has some internal weaknesses that include a decline in market share, greater competition, more educated customers and...
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...A Leadership Analysis of Henry Ford Brief Historical Sketch Who knew that a young farm boy that loved tinkering with pocket watches and simple farm equipment would lead a manufacturing revolution. Henry Ford did. Even from an early age Ford understood that he wanted to change the world. His dream was to design and build a “horseless carriage,” a dream that he accomplish in 1908 (Ford, 2008). However, not even Ford could have predicted the magnitude at which both his invention and his business strategies would have on the world. Henry Ford was born in the small town of Dearborn, Michigan on July 30, 1863. The town was better known as the Greenfield Township. Ford’s parents were both European immigrants. His father, William Ford, emigrated from Ireland and his mother, Mary Ford, though born in the United States had strong ties to Belgium. (Henry Ford, 2012) The Fords were a successful farming family and never had to worry about money. While Henry Ford knew at an early age that taking over the family farm would have been a safe and advantageous decision, his ambition kept him focused on other possibilities. (Ford, H 2008) Ford’s teenage years were instrumental in helping him develop is dream and his career. There were two important memories that Ford could recall that sparked his interest in motor vehicles and engineering. Around the age of twelve, the Ford’s were traveling to Detroit with family when they passed a “road engine” delivering farm machinery (Ford, H 2008). This...
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...“Everything that is created begins in the mind” (Fishel, n.p.). This quote by Ruth Fishel caries wait because most everything in today’s society came to be off of nothing more than thought. For example, Henry Ford was no one special, just a man from Michigan with a vision of creating affordable automobiles for Americans ("Who Made America | Innovators | Henry Ford" n.p.). Despite what some people thought at this time, he succeeded in his dream and Ford is now one of the most well known automobile companies in the united states, he made is thought into reality. However, is envisioning and critical thinking considered to be the same thing? To answer this question one first needs to define what critical thinking really is; one needs to recognize how it can be used, and understand why is it important for people to obtain critical thinking skills?...
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...Businesses Family businesses make up an incredible 34% of the S&P 500 Index, meaning over 170 of our nation's 500 largest companies are family owned (Caspar, Christian). To some, this figure is extremely surprising, as it shatters the commonly held misconception that family firms are simply "mom and pop shops." Although it is clear that family businesses are capable of incredible widespread success, exactly why this is the case is far less obvious. One way to gain some valuable insight into how and why so many effective family businesses exist is to closely examine the three in our nation that have had the most success: Cargill, Ford Motors, and Wal-Mart. In many ways, these businesses could not be more different; for instance, they operate in separate industries, and the levels and types of family involvement in the firms vary. Extensive analysis of these three corporations did, however, reveal that while no family, business, or family business is perfect, each company's achievements are directly attributable to its commitment to the common vision and identity instilled in the firm by the family. Cargill Cargill is a private corporation that works with "farmers, customers, governments and communities" to provide "food, agriculture, financial and industrial products and services to the world ("Cargill: Provider of Food…"). Believe it or not, Cargill is as broad of a company as it makes itself sound. Founded in 1865 as a grain storage facility, the company no longer specializes...
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...1. Introduction 2. External Analysis Porter’s Five Forces Analysis – Ford The competitive structure of an industry is an important element of identifying factors that are a menace of decreasing profitability. One of the most adequate forms of assessing competitive issues is Michael Porter’s five-force analysis. According to Michael Porter understanding the external environment in which a firm operates in, is essential for a successful business. Porter (2008) displayed five such factors: 1) threat of new entrants, 2) the power of suppliers, 3) the power of buyers, 4) the threat of substitutes, and 5) rivalry among existing competitors. The evaluation of these five forces provides managers with the ability to form an optimal strategy, due to external opportunities and threats being taken into consideration. The existence of new entrants in the automobile industry may force prices down and put pressure on profits. However, there are barriers to entry that favor established firms; economies of scale is mildly attractive, despite the expectation of significant economies of scale, due to indications that large size may not be as significant as one would assume. Nonetheless, entry into the automobile industry requires a large capital investment from any new entrant, indicating economies of scale is a substantial barrier to entry. Opportunity factors connected to product differentiation predict product differentiation will go from mildly attractive to highly attractive;...
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...Mark Atia 7/25/2012 Extra Credit Assignment THE PRACTICE OF MANAGEMENT BY PETER DRUCKER The introduction is titled “The Nature of Management” and features three chapters. The first chapter is titled “The Role of Management”. The first two sentences in this chapter might be the best definition of a manager anyone has ever written. Drucker states that “the manager is the dynamic, life-giving element in every business. Without his leadership the “resources of production” remain resources and never become production”. To me this sums up what being a manager is all about. Later in the chapter he says “from the peak there is only one easy way to go: downwards. It always requires twice as much effort and skill to stay up as it did to climb up”. A powerful statement, that many do not realize. The second chapter, titled “The Jobs of Management”, Drucker talks about how the jobs of management are usually not known by people within the company. People know who the managers are but aren’t quite sure what they do. He breaks down what a managers’ job involves into a couple of key areas. The first of which is “economic performance”. With this Drucker say that management must always put economic performance first in every decision and action they make because this will justify their existence. Other areas of this chapter focus on management functions which include: their first job is managing a business, managing managers and managing both worker and work. The third chapter is called...
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...On 5th January 1914 the Ford Motor company announced that it would more than double the wages of its workers. Briefly describe the history of this decision and relate to the theory of incentives and efficiency wages. When Henry Ford introduced the five-dollar day on the 12th of January 1914, many of his competitors might have questioned the success of this policy. Today, it is well established that Ford’s strategy was a key reason for the company’s early success and is often documented as an exemplary application of the efficiency-wage theory. This essay will briefly outline the history and implications that have led to the five-dollar day and relate it to the theory of incentives and efficiency wages. Henry Ford founded the Ford Motor Company in 1903. During the first few years the company remained relatively small and it was only with the introduction of the T-Model in 1908 and the transformation to assembly line production that Ford could expand his market share and increase the company’s profitability. However, as Raff and Summers noted, assembly line production resulted in a high degree of specialisation of the different production steps. Work at Ford’s became more and more menial, leading to dissatisfaction among the workforce, which reflected in a significant annual turnover of 370% in 1913. Although there was no evidence that Ford had problems filling his vacancies, the absenteeism and high turnover undoubtedly resulted in costs that Ford had aimed to reduce. It...
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...“Ford Motor Company” Barbara Wilson Professor Andrea Dennis Business 302 February 7, 2011 Discuss at least three criteria the company should use to decide which of the four listed options is best and the reasons why each criterion should be used. “Steps to Rational Decision Making” Define the problems: Ford Motor has been losing money for years, particularly in its North American operations. Option one is to close down older plants in an effort to realign production and sales. The best criteria decision to use should be “Steps to Rational Decision Making”. The first step in decision making is to identify and define the problem. Identify Decision Criteria are the standards used to guide judgments and decisions. Weight the Criteria. After identifying decision criteria, the next step is deciding which criteria are more or less important. Some companies use mathematical models for weighting decision criteria, all require the decision maker to provide an initial ranking of the criteria. Some use absolute comparisons, in which each criterion is compared to a standard or ranked on its own merits. Another method uses relative comparisons, in which each criterion is compared directly to every other criterion. Some criteria weight that guided decision maker’s judgment to close or not close the company included the cost of present inventory sales. Also cost to buying out the workers, shuttering the plants, setting up a new business and selecting a new location for...
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...Conditions Competitive Analysis In 1903, American industrialist Henry Ford started a company that revolutionized how the world moved. With $28,000 in his pocket, Ford Motor Company was born. Today, it has grown to be the world’s third largest automaker, and the largest family-controlled company that has been in family control for over 110 years. Throughout the existence of Ford Motor Company, their success would not have been possible without knowing and understanding certain factors that affect not only the supply and demand, but also the equilibrium prices in the automobile industry. Every organization within the industry faces the same issues and opportunities that may affect competitiveness and long-term profitability, but Ford Motor Company continues to develop new and improved products to gain the advantage over their competitors. Ford Motor Corporation Henry Ford began the creation of Ford Motor Company by his fascination of gas-powered engines. In 1903 with the help of 11 investors Ford Motor Company was incorporated through the New York Stock Exchange and its home office originated in Dearborn, Michigan. This giant automotive manufacturer created the first Model T. in 1908 that became to be one of the largest selling vehicles in history. Ford Motor Company later began to build vehicles for the government to support in World War II. This made the automotive manufacturer a very vital business to the U.S. economy and now one of the largest in the world. Ford Motor Company...
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...Compensation Practice BUS 409 Cheryl Smith July 26, 2015 Professor Stacey Flood Briefly describe the company you researched, its compensation strategy, best practices they are applying and compensation-related challenges they are facing? For my paper I choose to use Ford Motor Company this is a Company that is based in Dearborn, Michigan. They are the second largest industrial corporation in the world, with revenues of more than 144 billion and about 370,000 employees. Ford Motor Company conducts Operations that are expanded to 200 countries. Although Ford obtains significant revenues and profits from its financial services subsidiaries, the company’s core business remains in the design and manufacture of automobiles for sale on the consumer market. Since Henry Ford, the founder of Ford Motor Company, incorporated in 1903, the company has produced over 260 million vehicles with very high customer satisfaction ratings some of with are the best in the market (www.ford.com). In the last couple of years some of the companies have been dealing with some of the most difficult economical climates as the world’s economy continues to change rapidly. This continues to demand increases in the charges of compensation benefits packages. This has pushed them into taking preventive measures to ensure their compensation policies and Business strategies flow together failure can result in losing valuable employees. If you look at the growing improvements in the economy and the Businesses the...
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...Qtr# 1) Y = 130.96 +43.88 (25) = 1227.96 Qtr #2) Y = 130.96 + 1.06 + 43.88(26) = 1272.90 Qtr #3) Y = 130.96 – 1.57 + 43.88(27) = 1314.15 Qtr #4) Y = 130.96 + 2.71 + 43.88(28) = 1362.31 Q#4a) RMSE= SQRT of ( sum of (A-F)2 / n.o of years) 3 MOV AVG = SQRT(2797.667/9) = 17.63 5 MOV AVG = SQRT(3785.4/7) = 23.25 SO 3 Moving Average has given the better answer. b) 3 Moving Average has given the better answer. c) RMSE= SQRT of ( sum of (A-F)2 / n.o of years) 0.4 Weightage= SQRT(3102.247/12) = 16.078 0.5 Weightage= SQRT(2728.635/12) = 15.079 So we will choose 0.5 weightage result. Case Study # 2 Pg # 259 1) Model T was the first affordable car produced by the Henry Ford’s Ford Motor Company since its commencement. It was the first car launched by the Henry Ford to target middle class people and it was the first car which was produced in a large quantity in contrast to previous models which were launched as prototype. And now Mr. Mullaly is thinking in the same manner to come up with a economical passenger car model rather than new expensive sports car or truck model. Which will be manufactured in mass production and made available globally with limited variation to cater the changes in taste in different countries. So in both situations...
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...Ford Pinto Case In the late 1960s Ford Motor Company developed the idea of the Ford Pinto. Foreign automobile such as Germans and Japanese manufactures dominated the small car market. Ford Motor Company did not want to stay behind in production. Chief Executive Officer, Henry Ford II and Lee Iococca’s rushed building new compact cars out in the market within two and half years which, was the Ford Pinto and the shortest production planning. Production and distribution of the 1970s Ford Pinto stirred controversy regarding safety concerns. Ford’s desire to compete with the foreign manufacturers led Ford to overlook known design flaws and their own ethics while in search of higher profits. Ford assigned a team of engineers to work on nothing but the Pinto. This team was required to stick to Iacocca’s goal of “the limits 2000”; this meant that the car could not weigh more than 2000 pounds. This became a challenge for the engineers and created concerns regarding the placement of the fuel tank. Because of the accelerated production the testing was not done thoroughly. Out of 11 Pintos subjected to rear end collisions, eight failed the test. Only the three with baffles between the tank and bumper and a special interior tank lining met safety standards. The project was almost complete, and it was not possible to make redesign revisions and meet the deadline for the release of the Pinto. The car met the requirements for the American public. It was not long before...
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...extended example critically examine whether the ‘sector matrix’ framework gives a better strategic understanding of product markets than the concepts of ‘product’ or ‘commodity’ chains. The product market is growing stadily, with new, advanced and more complex products being introduced into the competitive global market. However, “there´s no single company which has all the neccessary knowledge about either the product or required process to completely design and manufacture them in house”(www.hbs.edu). Thus, analysis such as commodity chains and sector matrix is essential to identify their comparitive advantages and use them to establish themselves in a long run. This essay will begin with a defination or an overview of both sector matix and commodity chains, followed by a detailed comparison, in order to know which gives a better strategic understanding of product markets, such as the automobile market. I will also discuss how sector matrix have been successful for Ford and how it hasn´t for other product markets. The sector matrix framework is an extension to Porter´s “value chain” and Gereffi´s ´product` or `commodity` chains. Poter defines value chains as “Every firm is a collection of activities that performed to design,produce, market, deliver and support its product. All these activities can be described using a value chain....”(porter,1985:pp.36) and provides a framework to understand the shifts in corporate strategy. Sector matrix is applied to complex products...
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...Ford Pinto Case Ford Pinto Case If we were involved in the Ford Pinto dilemma we would have used Deontological Ethical reasoning to decide whether or not to disclose the danger that the Pinto posed and/or use that reasoning to determine whether or not to install the part(s) that would make the Ford Pinto safer. Our decision would be to do what is morally right and avoid doing what is morally wrong, regardless of the consequences. True enough Ford was not obligated by government regulation or any law, to disclose the potential hazards of the Ford Pinto however; at the least they should have presented the option of purchasing the part to make the care safer - an option we would have made available to the customer. It is apparent Ford use the Utilitarian Ethical approach to come to their decision – choosing to do what produced the greatest amount of good for the greatest amount of people; a subcompact car that cost $2,000 and weighing no more than 2,000 pounds (Ford & Newton, 2008, p. 296), sold to 11 million customers as opposed to the only 180 people who lost their lives! Valuing a human life at $200,000 against a part that if individually purchased cost $11, Ford felt that it was less expensive to settle fatality claims at $200,000 per life – so they thought, until jury’s started awarding multi-million settlements – so much for their cost-benefit analysis. When a person comes to a conclusion on a decision, many times there are influences from outside sources that...
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