Ford Motor Company Development

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FORD MOTOR COMPANY

Ford’s go back to the year 1896 and was built by a gentleman names, Henry Ford. His first product was a Quadricycle which is a vehicle with 4 wheels and it only had a four horsepower engine. The first company was not until 1902. This company started off with $28,000 cash and with only twelve investors. Two of those twelve investors happen to be Horace and John Dodge, who eventually ventured off and started up their own company which is where the Dodge vehicles came from. By 1903, just a year after Ford opened as a business, they made $37,000 by October just off their first car which sold in July.

By 1931, Ford sold over 5 million Model A’s automobile which was designed in 1927, even despite the great depression. Ford Motor Company is the fifth largest vehicle brand sold in the United States. Ford Motor Company is the manufacture of several different vehicles like Ford trucks; of course, Volvo is also a Ford brand, Land Rover and even the Jaguar. Mercury was once a ford product until 2015 when they discontinued them as a ford motor. The most popular ford and well known ford product is the F-150 pickup. The last several years Fords have been growing in sales. The market for ford went up 7.6% which is 1/10th % from last year’s market for fords. Ford planned on launching sixteen products and ended up launching only twelve. They do plan on launching the next four but it is taking some time. Ford has also had the best company profit quarterly since year 2000.

The pre-taxed profit went up to $2.9 billion which is up ten percent from last year. The net income for Ford Motor is also up 44% from last year too. How the Ford Motor Company operates is by using a divisional by geographic region organizational structure. Ford Motor Company does have a stated mission statement but does not have a published vision statement. The mission statement is based on four key components and paraphrased as follows: One Ford: Align employee efforts toward a common definition of success and optimize their collective strengths worldwide.

One Team

Work together as one team to achieve automotive leadership, which is measured by the satisfaction of our customers, employees, and essential business partners, such as our dealers, investors, suppliers, unions/councils, and communities.

One Plan

Aggressively restructure to operate profitably at the current demand and changing model mix.3 One Goal: Create an exciting and viable company delivering profitable growth for all. 4The warrant for Ford’s has declined by 66 percent in the first three months and the average cost for a warrant has dropped 54%. The new F-150 is better for the buck! When you purchase a F-150 that has a 2.7 liter V6 Eco Boost engine you will get the same power as a V8 but with much better gas mileage. Ford’s game plan is to have a higher engine output but with smaller displacements. 2014 was a good year for Ford because they launched more vehicles that ever in just a single year.

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Ford is currently engaged in the largest manufacturing expansion in over 50 years! It is increasing capacity in six U.S. plants and Ford plans on opening at least two new plants in Asia. It also has plans to open one in Europe and at least one in South America, if all goes well. Ford plans to improve its inventory turnover by 150% in the year 2018. Alone in 2013 they sold over 85,000 hybrid vehicles and then turned around in 2014 and sold 23 new vehicles. I have no doubt that 2018 will be a great year for Ford Motor Companies. I personally would prefer Chevrolet but after doing some Ford research it seems that Fords are actually a pretty great make!

Marketing for the company is keeping these new models of vehicles that provide the best performance for the best price coming. They are planning on making at least twelve new go fast models by the year 2020, which included the new high performance “Raptor” version of the new F-150 truck. Ford is also planning to launch its new sport car. The way that Ford is keeping all these new vehicles coming is making it easy to know that Ford has no problem surviving. Ford currently derives approximately 60% of its revenues from Mexico, Canada, and United States. Ford has announced that it is in a $400 million restructuring program in Europe. The revenue Ford reports is by five regions and processed (1) by the sales, (2) the financial amount of the services. Ford reported in 2014, $136 billion from the sales of the vehicles and $8.2 billion from the financial services. Below is Exhibit 2 from the book which is the Segment Data for Ford (in millions)

Checking out the finances for the Ford company from the year 2013 to 2014 it shows that there was a decline in sales according to the income statement and balance sheet. The sales alone went from $7182 to $3187, keep in mind this is millions. Even though the income statement shows a decrease they had an increase in the liabilities and equity from 2013 to 2014. In 2013 the total liabilities and equity went from 202,179 to 208,527. Those numbers are the combination of the liabilities which went from 175736 to 183,380 and then the equity went from 26112 to 24805.

There are several different brands of vehicles to choose from and everyone, like myself, likes a certain brand and once that brand is found people will usually stick to it. The competitors that Ford has to keep in mind to name a few are Toyota, Chevy, GM, BMW, Hones, Hyundai/Kia, Nissan, and several others. What makes Toyota stand out over Ford is not the price, because Toyota vehicles seem to be the most expensive, is the reliability of the vehicle. If they could make the Ford vehicle with Toyotas reliability then everyone would have that one vehicle they want! Toyota also happens to be the number one vehicle out of the top five that was based in 2014. What is boils down to when building a vehicle is the reliability of course, the price, if it is a utility vehicle, and even if it is fuel efficient or not. Currently the industry is experiencing an increased globalization. Many firms like Ford are now offering new products in the current markets and all while trying to expand in the new market.

Other than the pickup trucks, one of the most popular vehicles in the U.S. is the compact cars. You wouldn’t think that a compact car would be even close to the top of the most popular cars because the majority people that I know all go for bigger is better! I feel that compact cars are too small and not safe. One bad accident you can get smashed like a soda pop can. I do feel that midsize vehicles are worth the money. Most midsize vehicles are good for those parents that are at the ball fields and have more than one child that is active, like myself. The midsize vehicles are all great on gas and inexpensive as well. Now for most men a truck would be ideal.

Ford designing all these vehicles, I believe that if they can make one with all four important traits; reliability, affordable, fuel efficient, and utility then they market for a Ford vehicle would rise. One positive thing for the American manufactures is that the gas prices have been doable. The price for gas in November 2014 was on $2.92 and in some places you could even find it cheaper! The future of Ford Motor Company is growing! Ford Motor company is currently worth $140 billion dollars and if they keep the vehicles and surprises coming they can easily make over that within the next several years.

Works Cited:

  1. Strategic Management by Fred David and Forest David. Page 5232.
  2. Strategic Management by Fred David and Forest David. Page 5233.
  3. Strategic Management by Fred David and Forest David. Page 5234.
  4. Strategic Management by Fred David and Forest David. Page 5235
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