Business Analysis of the Ford Motor Company

Last Updated: 15 Oct 2020
Essay type: Analysis
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Since sound business decisions rely on timely access to the right information. Ford Financial Europe has a large data and needed a scheme that could help it create, design and manage critical information regarding the sale of automotive finance contracts to support planned decisions. As a result, the company decided to put into practice Microsoft SQL Server 2000 Analysis Services beside Business Objects Web Intelligence business intelligence tool. This mixture enables the company to give an account on critical management data drawn from varied geographical locations effectively and quickly. Introduction

This is a report that is going to look at the Company of Ford Motor. It will look into details of industrial and company background through analysis of the automobile industry, and the corporate values of the company. It is going to look at the company’s mission statement through evaluation and giving possible recommendation of corporation mission statement. Its corporate philosophy is going to be discussed including the analysis of the internal environment which includes employees, directors and cultural diversity. It is also going to look at the organizational goals including SWOT analysis and the organizations goals and objectives.

Mission statement This is a written statement that incorporates an institutions philosophy, responsibility and scope. For GM, its mission is to identify forward looking statement that defines the current judgment about future events and these are ability of GM to realize production efficiencies, to achieve reductions in costs a result of the turnaround restrictions, to implement capital expenditure and to reduce health care cost Company History This company was started on June 16, 1903 by Henry Ford. He was the pioneer who started what is now one of the world's largest business corporations.

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Ford Company is one of the oldest automobile manufacturers and thus they have to create and develop many new views and ideas in order to adopt in the changing word. It was the first company that introduced the fastest moving assembly line in the year 1913 this is the Model T which significantly reduced assembly time contributing to the fact that the company was producing 50% of all cars at the end of 1913 in U. S. The assembly line produced was put to use during the World War 2 and was put on the bomber planes which produced one bomber every hour contributing to giving the allies an advantage (Sorensen, 1978).

Ford in 1922 purchased the Lincoln Motor Company so as to appeal to the luxury market. They later on formed Mercury in the year 1939 for producing middle class cars but in 1945 it was combined with Lincoln. Corporate Philosophy The company’s corporate philosophy is put to build not just better products, but better communities it is also to serve society with superior quality that are best today and still will be better tomorrow. This company also offers a wealth of variety to the automotive consumer.

It was also developed in workshops that were specially organized for the purpose when the joint venture was set up (Simon ; Schuster, 1953). Drawing on this philosophy vision and values have been set up that will define their corporate identity, guide, their actions and pointing a way to the future. This philosophy will look at the company’s success that they believe is based on the people’s attractive working environment, willingness to change and balance of freedom and responsibility to create the basis to allow individuals to reach their full potential in work and private life (Donald, 2003).

The innovative product side will help in advancing manufacturing technologies and assuming that they are the leading provider for power train systems and services. The philosophy stresses on values in everything so as to create an entrepreneurial and socially responsible company culture basing its skills on being fair, having the will to take any responsibility, being respectful, honest, consistent, passion and trustworthy (Simon ; Schuster, 1953). They take pride in the products, their services and processes that will continually improve standards of quality and excellence.

Fair and reliable relations with business partners is another that will lead to mutual success and sustainable growth and lastly they believe that the company’s success is the energy that drives to achieve an excellent image, profitability to the supplier and employer of choice. Analysis of internal environment The paper starts by looking at the firms activities which is divided into a series of value creating steps which includes both individual activities as well as the interrelationships among activities within the firm, customers and alliance partners.

The environment consist of inbound logistics which is associated with receiving, storing and distributing of its input products which includes material handling, inventory control, warehousing, return to suppliers and vehicle scheduling. This will be reached at if the employees are given important training on their field or outside their field this will lead to the employees working closely with customers. The activities here are divided into tangible resources which include established manufacturing facilities globally, highly trained managers and R;D facilities.

The intangible one is a well known brand name associated with Industrial Revolution and American Dream. Its capability is to manufacture sufficient number of cars to meet demands globally and being capable of providing innovative products with Safety and Convenience features. Ford Core Competencies like Strong Engineering Capabilities and a competitive Advantage of strong brand portfolio of strategic alliances formed with auto manufacturers in different countries and a large network of dealers and suppliers globally.

The company’s value chain should consist of Inbound Logistics like Receiving, warehousing and input control of materials or parts; Operations like transforms inputs of raw material and parts to finished automobile and lastly the outbound Logistics which holds activities involved in delivering the automobile to customers and order fulfillment. Board of directors William Ford Jr is the Executive Chairman, Chief Operating Officer, Chairman of Finance Committee, Chairman of Operating Committee, Member of Environmental ; Public Policy Committee and Member of Long-Term Incentive Compensation Award Committee.

His compensation data is not available since he is the major shareholder. Alan Mulally is the Chief Executive Officer, President, Executive Director, Member of Long-Term Incentive Compensation Award Committee and Member of Finance Committee. He has an annual compensation of $6,006,154 with a restricted stock award of $3,178,581 and a total number of stock options of $5,680,672 (FMC, 2007). Lewis Booth is the Chairman of Ford of Europe, Executive Vice President of Ford - Europe Operations, Member of Operating Committee, Non-Executive Chairman of Volvo Cars Division, Executive Vice President of Volvo and Director of Land Volvo Brand.

He has a total annual compensation of $1,395,056 and a total number of stock options of $1,304,865. Michael Bannister is the Executive Vice President, Executive Chairman of Ford Motor Credit Co and Chief Executive Officer of Ford Motor Credit Company. He has an annual compensation of $1,147,931 and a total number of stock options of $2,858,700 (FMC, 2007). Mei-Wei Cheng is the Group Vice President and Executive Chairman of Ford Motor China.

Robert Graziano is the Head of Quality, Head of Research ; Development, Head of Sales ; Marketing, Vice President, Chief Executive Officer of Southern Africa Operations, Chief Executive of Ford Motor China, President of Southern Africa Operations, President of Ford Motor China, Executive Vice President of Mazda Motor Corporation, Group Managing Director of Southern Africa and Director of Mazda Motor Corporation (FMC, 2007). Edsel Ford II is the Consultant, Director, Member of Environmental ; Public Policy Committee and Member of Finance Committee.

Has a total calculated compensation of $619,668 John Bond is the Consultant, Director and Member of Finance Committee (Langworth, 1987). Other members include: Homer Neal of Ford Motor Company who earns a total compensation of $131,866, Ellen Marram of KBL Healthcare Acquisition Corporation, Richard Manoogian of Masco Corp whose salary is $1,500,000 and has a stock option of $6,312,228, Stephen Butler of Cooper Industries Ltd whose total annual compensation is $280,856, Jorma Ollila M. Sc. (Eng. ), M. Sc. (Pol. Sci. ), M. Sc. (Econ. ), Ph of Sustainable Performance Group AG. John Thornton of Laura Ashley Holdings plc.

Irvine Hockaday Jr of Sprint Nextel Corp. Kimberly Casiano of Casiano Communications, Inc. Gerald Shaheen of U. S. Chamber of Commerce and William Ford Jr. of Ford Motor Company of New Zealand Limited whose financial details are omitted (FMC, 2007). Corporate culture The management has been in the works for two years and Ford Motors' Business Leadership Initiative program is still in process, from the top down under each level of Ford's 55,000 managers, have been put to train those with level below them, in business matters and how to have them put into 100day action items or projects with expected outcomes.

The program point is to make a large company more receptive to customers and in turn make a difference to the bottom line (Donald, 2003). The Motors Company is determined to upgrade or close facilities in order to be more profitable. It is working diligently with the UAW in these efforts. Part of the plan is to get sub-assemblies from suppliers for the ford motors to assemble less of each vehicle, thus minimizing the need for as many machines or people. The company’s hope is to make more income on new full-size pickups and SUVs but predictions have to ride out reality (Simon ; Schuster, 1953).

The Ford Company is believed to be considering finding other suppliers for its vehicle parts that are normally supplied by two striking Flint, Michigan plants. Experts and parts suppliers consider Ford to have major problems in an attempt to restart operations at its Flint vehicle plants. Rumors had existed that the car maker was in preparation to reopen up to 10 vehicle-assembly plants (Langworth, 1987). SWOT analysis SWOT Analysis of a Company Profile is an essential source for top-level company data and information.

The report tries to look into the company’s key business arrangement and operations, history and products, and provides summary analysis of its key revenue lines and strategy. This is a tool of strategic and marketing analysis which was invented years ago. These are facts that can be used to gauge the degree of “fit” between the organisation’s strategies and its environment, and to suggest ways in which the organisation can profit from strengths and opportunities and shield itself against weaknesses and threats (Adams, 2005). Strengths

It is used to determine an organisation’s strong points which should be from both internal and external customers. As strength it is a resource advantage relative to competitors and the needs of the markets a firm serves or expectations to serve. It has a characteristic competence when it provides to the firm a comparative advantage in the marketplace. Strengths come up from the possessions and competencies available to the firm (Simon ; Schuster, 1953). Weaknesses It is used to determine an organisation’s weaknesses, not only from the company’s point of view, but also more importantly, from customers.

Although it may be difficult for an organisation to accept its weaknesses, it is best to handle the bitter reality without procrastination since a weakness is a limitation or deficiency in one or more resources or competencies relative to competitors that impedes a firm’s effective performance (Donald, 2003). Opportunities The other major factor is to look into how organisations can proceed to grow within the marketplace. After all, opportunities are everywhere to include all the changes in technology, government policy and social patterns. An opportunity is a major fact in a firm’s environment.

Key trends are some of the opportunities in identification of a previously overlooked market segment, changes in competitive or regulatory circumstances, technological changes, and improved buyer or supplier relationships which could help represent opportunities from the firm. Threats No company would like to think about threats, but they still have to face them, despite the fact that they are external factors that are out of our control, for example, the recent economic threat in U. S, is very important to be equipped and face threats even during unstable times.

A threat is the main unfavourable state in a firm’s environment and also they are key impediments to the firm’s current or desired position. The entrance of new competitors, increased bargaining power of key buyers or suppliers, slow market growth, new or revised regulations could represent threats to a firm’s success and technological changes (Donald, 2003). Since opportunities and threats normally arise from the environment and therefore SWOT analysis needs to take into account the results of a full environmental analysis.

It is however impossible to gauge what an organisation’s real strengths are until you have assessed its strategic resources that is since strategic resources and strength are the same thing. There is a tendency for companies to put down anything vaguely favourable that they can think of about a company as strength. This temptation needs to be resisted because strength is not strength unless it makes a genuine difference to an organisation’s competitiveness. The same is true of weaknesses.

The help of SWOT is comparing and matching of specific internal and external issues, which develops a strategic matrix and which makes sense. It is necessary to know that the inside factors are within the control of organisation, such as marketing, operations, finance, and other areas. On the other hand, the external factors are out of the organisation’s control, such as political and economic factors, technology, competition, and other areas (FMC ; GMC,2002). Organizational goals and objectives

It is said that the bigger you become, the more difficult the task of managing all the pieces of a global operation becomes and since Ford Motor Company is the second-largest company in the United States it's a race where every business decision and every dollar count. The objective is to trim down, by one-half, the duration it takes us to develop or enhance their software applications and to reduce their costs by 30 percent. It needs to be more nimble and responsive to the needs of a business environment where the pace is constantly increasing so as to step up the speed of delivering IT capabilities to the company (FMC & GMC,2002).

To create the organizational structure is also important in making make sure it has qualified professionals to do the work without putting undue strain on its own internal staff resources. Ford turned to an approach called managed sourcing to mean partnering with specialized IT vendors to provide the professional services required to manage the company's massive technology systems. These vendors practice straight with Ford employees, who define the business necessities of the systems and manage the process to make sure that the desired results are achieved.

The other is planning for the future which the AMCs represent a new approach to applications support at Ford. in place of being given only one application, the staff of IT professionals is part of a pool that will be assigned on an as-needed basis to support all Ford applications (FMC, 2007). The staff will actively manage the request portfolio by prioritizing requests for application changes in line with business goals. They also will look for ways to improve reply times and advocate the retirement or substitution of applications on a worldwide basis that may not be meeting current needs.

Ford expectation is to implement the AMCs by the end of the year 2000 and has established ambitious goals and specific targets for completion. Accomplishing events will be measured in several ways, including the function points. Function points will quantify the functionality which system provides to the user, based primarily on the logical design of the system rather than the technology with which the system was built. Ford plans to put into use function points and to assess the success of its new IT strategy across all of its business objectives, ranging from speed of delivery to continuous improvement.

They put their strategies through IT application that will deliver the hoped-for results, largely because of a successful pilot program that began in November 1997 and has been folded into the AMC structure. The pilot gives insights into the types of efficiencies that could be gained by applying a managed sourcing approach on a larger scale across the company, which was helpful in establishing goals for the AMCs. Financial Information Ford had their third consecutive year of profitability in the fourth quarter of 2005. They recorded a full year net income of $2 billion or $1. 04 per share.

The company has recorded net losses of $1. 2 billion or 64 cents per share, $123 million or 7 cents per share, and $5. 8 billion or $3. 08 per share respectively (FMC, 2007). The previous 3 years were much brighter for Ford. From 2003 to 2005 Ford actually recorded numbers in the black for earnings before interest and tax. They made $9,060,000,000 in 2003, $11,924,000,000 in 2004 and $963, 9,000,000 in 2005. Ford recorded profits of $921,000,000, $3,634,000,000 and $2,228,000,000 with earnings per share of $0. 27, $1. 91 and $1. 08 respectively from 2003 through to 2005 (McClellan ; Dom, 2006).

In comparison with the major import companies, there is a sharp contrast. Honda, Nissan, and Toyota all posted profits in the most recent quarter, while stealing market share from the North American automakers (FMC, 2007). The management report The board of directors bears the responsibility for the integrity of the official financial statement. The management committee uses facts collected by the independent audit firm. They will collect all financial information from all the sub firms of Ford Company and access the reality of the information presented before taking it to the board of directors (Jardim, 2006).


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Service Manual By Technical Support Operations. Detroit: Ford Motor Company Technical Publications. Ford Motor Company and General Motors Corporation (FMC ;GMC). (2002).

Motor Information Systems Auto Repair Manual: DaimlerChrysler Corporation. Detrit: Motor Information Systems. Jardim, A. (2006).

The First Henry Ford: A Study in Personality and Business Leadership. Michigan: MIT Press. Langworth, R. (1987). Complete History of Ford Motor Company. Detroit: Random House Value Pub. McClellan, J ; Dom, H. (2006).

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Ford at Fifty: 1903-1953. N. Y. : McGraw. Sorensen, L. (1978). The Ford Road: 75th Anniversary, Ford Motor Company, 1903-1978. New York: Silverado Pub. Co

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Business Analysis of the Ford Motor Company. (2018, Apr 01). Retrieved from

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