The Way of Ford Motor Company * Introduction * Although to be the only one remaining member which have escaped bankruptcy of the Big Three among the automobile industry by June 2009, Ford suffers $14.7 million loss of revenue and elimination of stockholders’ equity due to the record-breaking fall in demand for 2008,US. However, to understand Ford’s position today requires understanding the American automotive industry. * General Industry analysis * From 1900-2008, US motor vehicle production has a rapid increase to9, 000,000 from 1900 to 1967, after not, there is a graduate decrease to 3,000,000 until 2008. At the mean time, the median age of passenger car in US was Spiral upwards. Combine the two phenomenon, we can get that the automobile industry market is quite saturated and the demand fell down. Regard to the automobile manufacturing technology, despite less differentiation between manufacturers due to the converge of technologies and design, the technological progress was incremental and lead to the various segmentations in each country. Follow the two situations, there are 3 big issues were emerged. One was the deep demand of auto cars result in excess capacity. Another one issues was the high cost among the technological development. Last one issue was the lacking differentiation. However, it also offers automakers new product segmentations and market. For an insightful analysis, we need to look at more information in details. * Porter’s Five Forces
First of all, we can get a comprehensive industry environment analysis through the Porter’s Five Forces. In terms of the threat of new entrants of the automobile industry, it requires high capital costs for potential entrants, as the manufacturers are all carry out the mass-production-scale. However, when a new entrant face with the current competitors’ scale economies, smaller manufacturers