Preview

External Factors Affecting Ford Motor Company

Powerful Essays
Open Document
Open Document
1701 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
External Factors Affecting Ford Motor Company
Introduction
The purpose of this report is to examine the external factors affecting Ford Motor Company within the last four years. Dr. John L. Waltman has authorized this report. It is based on secondary sources, mainly gathered through the First Search Periodical Index. Authorized Publication includes Wall Street Journal, Financial Times, New York Times, and sources from the Internet. This report examines and analyzes these three external factors: v Consumer Demand v Increased Fuel Costs v Visteon 's Spin Off

Consumer Demand
Ford Motor Company 's profits had been low in 1996. The company 's consumers were demanding increased quality and option at low prices. Ford was forced to cut costs. Ford also planned to reduce their product development time. The consumers demand for higher quality and more options had a major impact on Ford.

Consumer Demand Brings Low Profits
In 1996 consumers were demanding better vehicles for lower prices and Ford Motor Company 's Profits were low. Fords was not meeting these consumer demands. A Rubber and Plastic News article stated that this puts the company under a lot of pressure to cut costs (9,24). Ford Motor Company 's vehicles were not in demand and sales were low. Ford Motor Company 's profits were affected by this consumer demand.

Suppliers were a part of the plan
Ford Motor Company 's customers were demanding a better product for a cheaper price. A Rubber and Plastics News article stated that Ford 's suppliers play a major role in the plan to cut costs (9,24). Ford was forced to cut cost to be able to bring back the profit. Ford Motor Company and its suppliers were working together to cut costs. Not only did this consumer demand affect Ford, it also affected Ford 's suppliers.

Decreased Development Time
The need to cut cost had affected the company in many ways. Ford 's need to cut cost impacted their decision-making. A Rubber and Plastics News article stated the company was going to reduce cost by cutting


Bibliography: 1. Burt, Tim, "Visteon Tries to Achieve Independence from Ford," Financial Times London Edison Financial Times, April 17, 2000, p.28. 2. Editorial Staff, "Ford Offers Investors a Bonus," Investor Relation Business, May 1, 2000, v5, n9, p.9. 4. "Ford is Conceding S.U.V Drawbacks," New York Times, May 12, 2000, vCXLIX, n51, p.A1. 5. "Ford to Give Holders Stock, Visteon Unit," Wall Street Journal, April 17, 2000, n76, p.A3. 6. "Ford Plans Electric SUV in '03," Plain Dealer, April 7, 2000, p.1-C. Automotive News Europe, February 28, 2000, v5, n5, p.26. 9. Miller, Joe, "Automakers get Ready for 21st Century," Rubber and Plastic News, September 9, 1996, vXXVI, n3, p.24-28. 10. "Procurement of Fuels Remains Dilemmatic Imports Except to Increase," Indonesian Commercial Newsletter, April 11, 2000, vXXVII, n289, p.7-8. 11. Sherefkin, Robert, "Visteon, Set Free, Seeks Running Start," Automotive News, April 17, 2000, v74, p.1+. 12. Stoffer, Harry, "Ford Goal is to Meet Standards, End Fines," Automotive News, April 17, 2000, v74, p.51. 13. "Straight From the Top," Automotive Industries, November, 1997, v177, n11, p.47-51.
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Business Btec Level 3 Unit 1 D2
    • 392 Words
    • 2 Pages

    Business Btec Level 3 Unit 1 D2

    During the economic growth, the automobile industry was also growing, and Ford’s business expanded rapidly, and the demand for their products increased as people could afford luxury goods. During these times, customers could afford more so Ford was bringing out newer more expensive models. During the recession, Ford sold off its subsidiaries to cut its losses. As the customers had less money, they will buy less, so Ford reduced the numbers of cars it was produced.…

    • 392 Words
    • 2 Pages
    Good Essays
    Read More
  • Good Essays

    The Company's Dilemmas Facing Ford Motor Company
    • 1512 Words
    • 7 Pages

    The Company's Dilemmas Facing Ford Motor Company

    Like many business Ford Motor company has its dilemmas as well. Facing Ford Motor’s was a shut down their exiting ling of the Mercury vehicle. The Mercury line tried to be revamped into a model of vehicles people wanted. In May 2010 Ford reported double digit sales (Hirsch, 2010). This was not strong enough to save the Mercury line which accounts for five percent of the total company sales. By shutting down this line, Ford would be able to focus on other lines that were becoming more popular. The major characters are Ford Motor Company, General Motors, and the Government.…

    • 1512 Words
    • 7 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    BUSN 412 Wk2 In the News
    • 405 Words
    • 1 Page

    BUSN 412 Wk2 In the News

    The company as a whole understand its strengths and also what to focus on, as auto sales jumped in the last year for the S.U.V.s and Pickups brands. The company understand its weakness as well against other competitors as the past 5 years before 2014 Ford reports low income, due to lack of sales as the economy fight to rebuild and high gas prices. Ford also understand treats toward bad manufacturing, if you remember the malfunction within one of their releases when the car would suddenly accelerate on its own losing control over steering. Forcing Ford to recalls nearly six hundred thousand of their motor vehicles.…

    • 405 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    BIOL 1209 WA 1
    • 799 Words
    • 3 Pages

    BIOL 1209 WA 1

    Animals fight for survival daily, and sometimes their lives depend on their ability to adapt with their surrounding environments. Natural Selection is the process in which individuals have certain traits that allow them to survive and produce more efficiently (Reece et al.456). The animals that inherit these important traits have a higher fitness; therefore, those without the traits have a lower fitness (Reece et al.456). One example of natural selection is the differences between American Alligator and Albino alligator. The American Alligator acquired dark, thick skin due to the swampy, wet marshlands they live in ("American Alligator." Aquatic Community. AC Tropical Fish and Aquarium. Web. 21 Feb 2013.). It has a higher fitness than the Albino Alligator because their pigment not only hides them from predators, but also gives them an upper hand when sneaking up on prey while hunting ("American Alligator." Aquatic Community. AC Tropical Fish and Aquarium. Web. 21 Feb. 2013.). On the other hand, the Albino Alligator has a much lower fitness and is very rare because it does not have the allele that produces the pigment that has dark skin. The white color stands out like a sore thumb in its dark environment ("White alligator is one of the rarest in the world." Telegraph Media Group. 16 Feb 2009: n. page. Web. 21 Feb. 2013.).…

    • 799 Words
    • 3 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Issue Analysis Paper
    • 587 Words
    • 3 Pages

    Issue Analysis Paper

    Ford Motors is currently facing unfavorable business conditions and in order to survive, it is remodeling itself as a smaller, more flexible and competitive firm. For this the company is slashing 10,000 jobs and closing 2 plants. The company is at present not making a profit and it is hoped that, by taking these actions, the company will once again become profitable by 2009. It is hoping that there will be huge cost savings after layoffs and plant closings. For instance, by offering buyout packages, it aims to reduce $5 billion in operating costs. The company is also looking to make its production more strategic by concentrating on core products and expected best setters.…

    • 587 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    mkt Case study
    • 1714 Words
    • 5 Pages

    mkt Case study

    During the year 2006, Ford Motor Company suffered its biggest operating loss to date at the cost of $12.6 billion. A year later in 2007, things didn’t improve much as Ford posted a $2.7 billion loss. This corresponded with increasing deterioration in market share, with the majority of these losses being captured by other competitors. Ford had seemingly fallen down a slippery slope, and found itself in a hole it was struggling to surface from. This was all gearing up to the three-year recession that hit the U.S. and Global economies extremely hard. Ford’s competitors, General Motors and Chrysler, found themselves also struggling to get a foothold suffering such losses that both companies had to ask the government for massive bailouts while also filing for bankruptcy. Ford was apparently heading for the same disastrous bailout, but then Alan Mullaly stepped in as the new CEO and implemented a series of crucial strategic maneuvers. These strategic maneuvers that he coined as “One Ford,” aided them in getting a foothold out of the hole in which they dug for themselves by losses in market share. One such important strategic maneuver utilized by Ford was the reorganizing of its product line. It did so by standardizing components and making a stable of products that is more clearly defined for each market segment (Senna, 2013).…

    • 1714 Words
    • 5 Pages
    Better Essays
    Read More
  • Better Essays

    Ford Pinto Fires Case Study and Executive Summary
    • 1210 Words
    • 5 Pages

    Ford Pinto Fires Case Study and Executive Summary

    During the Late 1960’s the Ford Motor Company was one of the leading auto manufactures in the United States. Ford was credited with revolutionizing the muscle car era of the 1950’s and 1960’s. During the mid 1960’s Lee Iacocca helped Ford establish itself in the late 1960’s with the introduction of the Ford Mustang. During this time foreign auto manufactures were gaining market share in the mid to compact car markets. This was largely due to customers seeking more fuel efficient cars because of soaring fuel prices. Ford saw an opportunity to regain a portion of this market with the introduction of the Ford Pinto. This would bring them into direct competition with the foreign manufactures. The idea was to produce a small car that was affordable for the customer, and had a relatively high profit margin. With the introduction of the Ford Pinto, 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.…

    • 1210 Words
    • 5 Pages
    Better Essays
    Read More
  • Better Essays

    Porters 5 Analysis Auto Industry in 2009
    • 1239 Words
    • 5 Pages

    Porters 5 Analysis Auto Industry in 2009

    The case on the global automobile industry demonstrated by lowering cost through innovative production without sacrificing quality is the defining characteristic in a successful company. I found this case interesting because it characterized a successful automobile producer as one that will cut cost in an innovative approach to deal with a market that is constantly changing. The innovation in producing automobiles started with Ford through mass production and continued all the way to today with companies promoting major suppliers to move closer to assembly plants to cut cost. Since the beginning of the automobile industry the company that was able to lower their cost was the company that would lead the way. However, giving up quality is not a viable option. Lower quality automobiles lead to the down turn in the American automobile market share. In my Porter’s 5 Forces analysis I will identify key competitive forces in the automobile industry.…

    • 1239 Words
    • 5 Pages
    Better Essays
    Read More
  • Satisfactory Essays

    What Role Does Henry Ford Play In History And America's Economy
    • 333 Words
    • 2 Pages

    What Role Does Henry Ford Play In History And America's Economy

    Ford has strived to meet the demands of the world for the perfect vehicle to fit their needs. Ford has proven that they are truly innovative leaders. Ford Motor Company has fought their way up through the automobile industry from the great depression to the almost collapse of the automobile industry. Henry Ford and Ford Motor Company have played a vital role in history and America’s economy. They have managed to build a company based on value, customers, and tradition that is still going strong. Ford has made their supply chain a critical aspect of their company by promoting long-term relationships with their suppliers and seek alignment with them on sustainability-related issues such as human rights, working conditions and environmental responsibility.…

    • 333 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Karl Benz and the Benz Patent Motorwagen
    • 939 Words
    • 4 Pages

    Karl Benz and the Benz Patent Motorwagen

    William, Jeanes, Celebrating Americas 125-year love affair with automobiles (Canada: Saturday evening post, Jun 2011) P.p30-35 Vol.283…

    • 939 Words
    • 4 Pages
    Powerful Essays
    Read More
  • Good Essays

    Ford: Strengths, Weaknesses, Opportunities, Threats
    • 782 Words
    • 4 Pages

    Ford: Strengths, Weaknesses, Opportunities, Threats

    Stability and Predictability: The Ford Motor Company was founded in 1903 and has been serving the world’s consumers with quality automobiles for decades, and will not be going away any time soon…

    • 782 Words
    • 4 Pages
    Good Essays
    Read More
  • Good Essays

    1920s Cars
    • 359 Words
    • 2 Pages

    1920s Cars

    Between used car sales to lower income families, and attractive financing options on new cars for the middle class, Ford began to see a decline in sales. After resisting change for several months, Ford finally chose to shut down production from May to November 1927 to design a new car and re-tool his factories.…

    • 359 Words
    • 2 Pages
    Good Essays
    Read More
  • Better Essays

    Ford Pinto Paper
    • 1358 Words
    • 6 Pages

    Ford Pinto Paper

    In the late 1960’s the American auto industry was facing the large challenge of selling American made cars in direct competition with the dominating Japanese auto industry. The Japanese were beginning to outperform the United States auto makers, due to their smaller, fuel efficient and low-cost cars. In response to the Japanese, Ford Motor Company decided to create a smaller and more affordable vehicle that would capture the interest of the American people. Pressured by competition during the early 1970’s, Ford Motor Company began their production of the Ford Pinto (Business Ethics). Ford Motor Company saw this moment as an opportunity to create jobs, sell a large amount of cars at a very low price, and at the same time make a substantial profit for their company.…

    • 1358 Words
    • 6 Pages
    Better Essays
    Read More
  • Good Essays

    Ford Mondeo
    • 881 Words
    • 4 Pages

    Ford Mondeo

    Ford decided to expand internationally to increase sales, spread production sites, and to increase their research and development. The company believed that economies of scale and supplier flexibility would improve cost efficiency and supplier efficiency. Ford felt that these factors would help its global image and improve its position within the auto industry.…

    • 881 Words
    • 4 Pages
    Good Essays
    Read More
  • Powerful Essays

    Management and Labor Unions
    • 8329 Words
    • 34 Pages

    Management and Labor Unions

    Davis, M., (2003, June). A History of the Ford Motor Co. Ward’s Auto World, Retrieved from…

    • 8329 Words
    • 34 Pages
    Powerful Essays
    Read More

Related Topics