Mgt 521 Final Analysis Paper
Final Analysis of Ford Motor Company
Angyla B. Bell
MGT/521
September 17, 2012
Steve Barnes, Sr.
Final Analysis of Ford Motor Company The final part of the business analysis will cover the strategic initiatives of Ford Motor Company (Ford), their reaction to the economic trends, company strategies for adapting to changing markets, and tactics to achieve strategic goals. It will also review the operations of their human resources department in helping to achieve business goals as well as give rationale whether or not to invest in Ford. Some of the best practices of Ford are centered on their manufacturing techniques, technology, and environmental awareness. Ford manufactures cost effective, fuel efficient, and environmental …show more content…
friendly cars.
Strategic initiatives The strategic initiatives of Ford put in place to activate the vision of its company are to lead the industry, maintain sustainability and growth in the market, produce environmental friendly products, and include modern appropriate technology in its vehicles. Ford’s vision is “To become the worlds leading consumer company for automotive products and services” (Ford, 2012) and their mission statement affirms “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world (Ford, 2012). They have one goal listed as becoming “An exciting viable Ford delivering profitable growth for all (Ford, 2012). This one goal describes their directional positioning. It tells who they want to be, what they plan to do, and who will benefit from it. Sue Cischke, group vice-president of sustainability, environment & safety engineering explains “we need a strategic plan that everyone can understand, and that addresses all three critical areas [of financial, social, and environmental], but if the plan is not profitable, it is not sustainable” (Business Excellence, 2012). Cischke further states that “Ford continues to search for new ways to reduce energy usage and CO2 emissions in its manufacturing operations in all parts of the world” (Business Excellence, 2012). One of Cischke’s many priorities is projecting what Ford does to make its products more energy efficient and environmentally responsible. The manufacturing of some of Ford’s automobile parts is outsourced to reduce costs, and operations are under the leadership of one global management team (Ford, 2012). They practice “offer[ing] vehicles that could deliver on four critical pillars of the Ford brand: quality, green, safe, and smart” (Ford, 2012).
Economic Trends and Ford Sheryl Connelly, Global Trends and Futuring manager of Ford, monitors global trends and works with other Ford managers to see how those trends may impact future products and company direction. She monitors what is going on in external areas of the economy, technology development and its affects, and the social environment that are not a direct part of the automobile industry to watch for shifts (Ford, 2012). An example she provided was the fact that people are more conscientious about their selections of products, looking for product longevity and they are buying in increments. For the car industry, this means buyers want a good and lasting product with all the current key technological features. Since the economy has been showing favorable recovery results according to Forbes, the economic boost will transfer to the automobile industry to help increase profitability (Forbes, 2012). Forbes also informs investors that moving forward the development of a new plant in Thailand will help Ford’s efforts to strengthen visibility in low penetrated areas like India, China, and other Asian markets (Business Excellence, 2012). Although Ford has experienced a higher volume of competition from foreign countries increasing exports to the United States (US), Ford still maintains a competitive edge with a favorable market share of 16.5% and holding at number two as one of the United States’ top automobile manufacturing industries (Forbes, 2012).
Strategies
Ford maintains various strategies for successful competition in the industry. The prime objectives are to create smaller more fuel efficient cars and cars that use alternative fuel sources. Focusing on smaller vehicle production, Ford will be able to show a more balanced global selection to assist with maintaining a competitive position with the shift in consumer demands. Ford’s flexible manufacturing technology helps make this possible. The company has incorporated three areas of flexibility that improves production and is cost effective. These areas are the Flexible Body Shop, the Flexible Paint Shop, and Flexible Manufacturing (Ford, 2012). The flexible technology is used in all of Ford’s plants globally.
Tactics
To achieve the goals noted in Fords strategic initiatives, their plans of action include downsizing gasoline engines to increase fuel economy, develop automobile applicable technology, increase development of fuel alternative vehicles like the plug-in or hydrogen fuel cell hybrids, improve car aerodynamics, and create affordable transportation solutions for urban life in developing countries (Business Excellence, 2012). The plug-in and hydrogen fuel cell hybrids were developed to reduce fuel utilization and carbon dioxide emissions by 3.5 percent. The EcoBoost engine is the Ford alternative fuel efficient engine found in the Ford Explorer and Ford Edge. The EcoBoost is a four-cylinder 2.0-liter engine that combines fuel economy with decreased emissions and ideal ‘go-power’. The Edge and the Explorer offer the customer the option of having a roomier vehicle inside without the oversized engine and excessive fuel use. These vehicles fall between the sizes of the larger SUV and the mid-size car. The EcoBoost engine within the Explorer, for example, has gained a 30 percent highway fuel efficiency over the previous 2010 model. Ford’s Driver Assist Technology gives the company a slight edge over the competition by introducing technology that improves driving safely and improve comfort.
Ford has talking car technology, easy access technology, and a robot named RUTH that delivers customer comfort technology. All of these areas are a part of their drive smart technology that increases accessibility, entertainment, and communication options (Ford, 2012). Car aerodynamics of Ford models are being altered to aid in boosting fuel efficiency. Ford has changed the body styles of some of their 2011 to 2013 automobiles to reduce drag with the Active Grille Shutter which reduces CO2 emissions by 2 percent. Through the use of computer simulations and wind tunnels it was proven that five percent better fuel economy was gained. To further study the accuracy of their alterations, Ford is in the process of creating a simulator that tests there aerodynamic changes to real-world conditions. As part of Ford’s Mobility network, they seek to reach more urban markets in developing countries. Ford plans to find transportation methods that assist in transportation and mobility. These countries are mainly populated with citizens who may not be able to afford to purchase a
car.
Human Resources The role of Human Resources (HR) has changed significantly in their responsibilities to organizations in helping them to achieve their goals. The HR team of Ford is responsible for increasing efficiency and performance by developing the skills and abilities of employees (Ford, 2012). In the case of Ford, HR is also responsible for producing global managers for Ford’s globalization strategy. Fords Human Resources (HR) team aligns the vision of Ford with the vision of the HR department. As a part of the Ford One Team, One Plan, One Goal strategy, HR also supports the same as it applies to human resources management. The One Team component is to support those who build and sell automobiles; One Plan is to be a change agent by focusing on the individual, the team, and the effectiveness of the organization; One Goal builds a strong team of people who are diverse, innovative, performance driven, and effective in competing in a global market (Ford, 2012). As noted by Nickels, et al., one o the challenges of any HR management team is decreased employee loyalty. One of the ways Ford counters this challenge is by cafeteria style benefit selection. Employees are able to select benefits specific to their needs instead of being forced to buy into a benefits package that does not totally suit their needs. The employees particularly like this process because it allows personal input, gives freedom to choose, and removes limitations of benefits offerings as packaged plans (Nickels, et al., 2010). Ford’s Effective Training Program ensures employees are trained in the respective area of work. Effective training contributes to long-term employee retention, and the profitability of Ford. Employees receiving specialized training reduce risk, increase production, and are genuinely happy contributors to their employers. As a multinational organization, diverse recruitment is key for many reasons. To name a few, one would be because of cultural differences and another is collaboration of an employee with a specific manger’s leadership style in key functioning areas (p. 292). Ethnic backgrounds must also be considered for sales and profit potential. A consumer of a certain ethnicity is more inclined to do business with someone of a similar background if given the choice (Nickels, et al., 2010).
Analysis Recap Ford meets the needs of both internal and external stakeholders. This can be concluded by the documented profits of Ford; therefore providing job stability, investment returns, and increased market activity through the development of new Ford models. The company has made an impressive comeback with optimistic financial standing after experiencing the devastation of a fallen economy. Ford is currently able to provide dividends and maintain its standing within the top three automobile manufacturers alongside Toyota and General Motors (GM). Ford’s projected growth is on an incline with no direct threats obstacles in its path. Ford has shown a significant financial comeback from a less than appealing bailed out image and proven to be a strong entity in the automobile industry. Their earnings per share have risen from a -.26 to an impressive .35 as measured from 2011 to the first quarter of 2012 (Forbes, 2012). Ford has also shown a 14.8% growth on their return on investments and rank 14 in sales profit in comparison to Toyota being 112 and General Motors at 45 (Forbes, 2012) . Currently, Ford ranks as number nine of the Fortune 500 companies in America moving up from number 10 in 2011 (CNN Money, 2012). The brand name of Ford is a symbol of American Pride. In current years, there have been noticeable changes in the view of the company’s image. When the changes in the economy affected much of the United States, Ford was also equally vulnerable to its ripple effect. They were hit equally as hard as other companies were and ultimately forced into a financial rescue by the United States (US) government. Ford had to use their brand name and symbol, the blue oval, as collateral. A plan of sustainability kept the company afloat. “After enduring several of the most difficult years in our Company 's history, Ford turned a corner in 2009. Ford achieved $2.7 billion of net income, its first full year of positive net income since 2005, and a $17.5 billion improvement over 2008 (Ford, 2012). Some of the best practices of Ford are centered on their manufacturing techniques, technology, and environmental awareness. Ford manufactures cost effective, fuel efficient, and environmental friendly cars. Their in-plant technology allows the quick production of cars. The manufacturing of some of Ford’s automobile parts is outsourced to reduce costs, and operations are under the leadership of one global management team (Ford, 2012). They practice “offer[ing] vehicles that could deliver on four critical pillars of the Ford brand: quality, green, safe, and smart” (Ford, 2012). With Toyota’s TQC they can monitor their cost by only utilizing materials as needed that helps reduce their cost (Toyota, 2012). Ford has implemented the ONE Ford plan with the purpose of accentuating teamwork, creating better products, and building a stronger business model while participating in environmental protection (Ford, 2012). Weekly business plan meetings are conducted to discuss the business units and skill team operations. Through these meetings the global management team can assess the success or failures of various worldwide operations. Ford delivers affordable products to its consumers and is consistently including new technological features to its models. They remain competitive in offering similar technology in their models to keep up with Toyota and General Motors. Ford has talking car technology, easy access technology, and a robot named RUTH that delivers customer comfort technology. All of these areas are a part of their drive smart technology that increases accessibility, entertainment, and communication options (Ford, 2012). Ford has received recognition awards for technology ingenuity and advancement and have been commended for offering realistic and insightful technological features at an affordable price. These features will soon be standard in models like the Ford Focus and the newly redesigned 2010 Ford Taurus (Ford, 2012). Ford is visible worldwide on 6 continents and maintains 65 active plants (Ford, 2012). By being a multi-national organization, the effects of globalization can easily intrude in the company’s production and profits if they do not make a conscious effort to maintain positive relationships across the globe. Understanding the culture and ethics of each country they operate in helps to protect them from being viewed indifferently by a locations residents and businesses (Nickels, et al., 2010, p. 73 ). Most important is their attention to the economic, financial, physical, environmental, and socioculture forces of each foreign location (Nickels, et al., 2010, p.72).
Globalization
Through globalization, Ford has the opportunity to increase profits through its product offerings. The already advantage is in the products produced. Automobiles are used in almost every country and by staying current in technology, environmental awareness, and being a part of the global infrastructure, Ford can trade across the world with peace of mind that they are producing a desired commodity. In comparison to Toyota and General Motors, Ford is holding tight to its spot in the top three. Ford had not been able to pay dividends to its investors since 2006, but in the first quarter of the current year its earnings per share increased from -.26 to .35 and an over 14% growth on their return on investments. General Motors has 150,276.0 million in revenues and is ranked as number five of the top 500 businesses in the United States (Forbes, 2012). Ford has 136,264.0 million in revenue and ranked number 9 on the list; however, Ford is still in a better financial standing than GM because of the reduction in debt due to their loan payoff and ability to pay dividends (CNN Money, 2012). When completing a financial comparison of Ford, Toyota and GM, Ford is maintaining its fair part of the market share in showing significant growth since their financial decline in 2005. A look at the current ratio of Ford versus the ratios of GM and Toyota show Ford’s ratio at 1.76, GM at 1.23 and Toyota at 1.43. Ford has increased production and sales of their smaller model cars in 2011 by 25% and was able to invest $16 billion dollars into their US operations (Ford, 2012).
Investment Decision As stated in the initial part of the business analysis, the investment opportunity with Ford should be pursued based on the noted company restructuring, operational goals set to increase customer based satisfaction, and their plan of sustainability as a top runner in the automobile industry. Brokerage firms who have evaluated the overall performance of Ford foresee that new product origination, low-cost constructing, strong financial sheets, and the ONE Ford plan all work in favor for the expansion of the company in coming years (Forbes, 2012). Financial data proves the company is on a directional incline to increase market share through technology additions to their vehicles and manufacturing plants, their adaptation to economic change, and operational team focus.
Conclusion
The conclusive finding of all three parts of the business analysis of Ford prompts the funds manager to take the opportunity to aggressively invest in this company. Financial data of Ford reflects positively as an industry giant holding strong in its position after a hard-hitting recession that left many companies in long-lasting recovery, bankruptcy or closed. The financial health of Ford has improved and is on target to increase revenue, profits, and stakeholder interests. Management must continue to accelerate the ONE Ford plan successfully. Short and long-term financial planning with monitoring cash flow, budget development and establishment of financial controls to examine company goal achievement (Nickels, et al., p. 489). Ford development in areas of fuel efficient cars, global recognition, modern technology and the unified ONE Ford Plan increases their opportunity for sustainability. The ONE Ford plan solidifies recognition of Ford as a global organization that continuously produces quality products, internal and external stakeholder cohesion and better brand recognition (Ford, 2012) Ford owns 16.5% of the market share world-wide and their longevity holds in the market area on 6 continents. Ford Motor Company, like its products, is built to last. Their product offerings are inclusive of and directed by consumer demand. The ONE Ford strategy represents the company’s sustainability endeavor and works to properly serve their customers through the goods and services they supply.
References
Business Excellence (2012, September). Ford Motor Co.. Retrieved from http://www.bus-ex.com/article/ford-motor-co.
CNN Money (2012, September). Ford Motor. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/160.html
CNN (2012, September). Ford Motor. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/160.html
Ford (2012, September). Ford Bolsters EcoBoost commitment for 2012 with Fuel-Efficient Edge, Explorer Utilities. Retrieved from http://corporate.ford.com/news-center/press-releases-detail/pr-ford-bolsters-ecoboost-commitment-35107
Ford (2012, September). Our Company. Retrieved from http://corporate.ford.com/
Ford (2012, September). Sustainability 2011/12. Retrieved from http://corporate.ford.com/microsites/sustainability-report-2011-12/blueprint-strategy.
Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). Understanding business (9th ed.). New York, NY: McGraw-Hill/Irwin.
Forbes (2012, September). Ford Motor. Retrieved from http://www.forbes.com/companies/ford-motor/
Ford (2012, September). Financial Health. Retrieved from http://corporate.ford.com/microsites/sustainability-report-2011-12/financial
Angyla B. Bell
MGT/521
September 17, 2012
Steve Barnes, Sr.
Final Analysis of Ford Motor Company The final part of the business analysis will cover the strategic initiatives of Ford Motor Company (Ford), their reaction to the economic trends, company strategies for adapting to changing markets, and tactics to achieve strategic goals. It will also review the operations of their human resources department in helping to achieve business goals as well as give rationale whether or not to invest in Ford. Some of the best practices of Ford are centered on their manufacturing techniques, technology, and environmental awareness. Ford manufactures cost effective, fuel efficient, and environmental …show more content…
friendly cars.
Strategic initiatives The strategic initiatives of Ford put in place to activate the vision of its company are to lead the industry, maintain sustainability and growth in the market, produce environmental friendly products, and include modern appropriate technology in its vehicles. Ford’s vision is “To become the worlds leading consumer company for automotive products and services” (Ford, 2012) and their mission statement affirms “We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world (Ford, 2012). They have one goal listed as becoming “An exciting viable Ford delivering profitable growth for all (Ford, 2012). This one goal describes their directional positioning. It tells who they want to be, what they plan to do, and who will benefit from it. Sue Cischke, group vice-president of sustainability, environment & safety engineering explains “we need a strategic plan that everyone can understand, and that addresses all three critical areas [of financial, social, and environmental], but if the plan is not profitable, it is not sustainable” (Business Excellence, 2012). Cischke further states that “Ford continues to search for new ways to reduce energy usage and CO2 emissions in its manufacturing operations in all parts of the world” (Business Excellence, 2012). One of Cischke’s many priorities is projecting what Ford does to make its products more energy efficient and environmentally responsible. The manufacturing of some of Ford’s automobile parts is outsourced to reduce costs, and operations are under the leadership of one global management team (Ford, 2012). They practice “offer[ing] vehicles that could deliver on four critical pillars of the Ford brand: quality, green, safe, and smart” (Ford, 2012).
Economic Trends and Ford Sheryl Connelly, Global Trends and Futuring manager of Ford, monitors global trends and works with other Ford managers to see how those trends may impact future products and company direction. She monitors what is going on in external areas of the economy, technology development and its affects, and the social environment that are not a direct part of the automobile industry to watch for shifts (Ford, 2012). An example she provided was the fact that people are more conscientious about their selections of products, looking for product longevity and they are buying in increments. For the car industry, this means buyers want a good and lasting product with all the current key technological features. Since the economy has been showing favorable recovery results according to Forbes, the economic boost will transfer to the automobile industry to help increase profitability (Forbes, 2012). Forbes also informs investors that moving forward the development of a new plant in Thailand will help Ford’s efforts to strengthen visibility in low penetrated areas like India, China, and other Asian markets (Business Excellence, 2012). Although Ford has experienced a higher volume of competition from foreign countries increasing exports to the United States (US), Ford still maintains a competitive edge with a favorable market share of 16.5% and holding at number two as one of the United States’ top automobile manufacturing industries (Forbes, 2012).
Strategies
Ford maintains various strategies for successful competition in the industry. The prime objectives are to create smaller more fuel efficient cars and cars that use alternative fuel sources. Focusing on smaller vehicle production, Ford will be able to show a more balanced global selection to assist with maintaining a competitive position with the shift in consumer demands. Ford’s flexible manufacturing technology helps make this possible. The company has incorporated three areas of flexibility that improves production and is cost effective. These areas are the Flexible Body Shop, the Flexible Paint Shop, and Flexible Manufacturing (Ford, 2012). The flexible technology is used in all of Ford’s plants globally.
Tactics
To achieve the goals noted in Fords strategic initiatives, their plans of action include downsizing gasoline engines to increase fuel economy, develop automobile applicable technology, increase development of fuel alternative vehicles like the plug-in or hydrogen fuel cell hybrids, improve car aerodynamics, and create affordable transportation solutions for urban life in developing countries (Business Excellence, 2012). The plug-in and hydrogen fuel cell hybrids were developed to reduce fuel utilization and carbon dioxide emissions by 3.5 percent. The EcoBoost engine is the Ford alternative fuel efficient engine found in the Ford Explorer and Ford Edge. The EcoBoost is a four-cylinder 2.0-liter engine that combines fuel economy with decreased emissions and ideal ‘go-power’. The Edge and the Explorer offer the customer the option of having a roomier vehicle inside without the oversized engine and excessive fuel use. These vehicles fall between the sizes of the larger SUV and the mid-size car. The EcoBoost engine within the Explorer, for example, has gained a 30 percent highway fuel efficiency over the previous 2010 model. Ford’s Driver Assist Technology gives the company a slight edge over the competition by introducing technology that improves driving safely and improve comfort.
Ford has talking car technology, easy access technology, and a robot named RUTH that delivers customer comfort technology. All of these areas are a part of their drive smart technology that increases accessibility, entertainment, and communication options (Ford, 2012). Car aerodynamics of Ford models are being altered to aid in boosting fuel efficiency. Ford has changed the body styles of some of their 2011 to 2013 automobiles to reduce drag with the Active Grille Shutter which reduces CO2 emissions by 2 percent. Through the use of computer simulations and wind tunnels it was proven that five percent better fuel economy was gained. To further study the accuracy of their alterations, Ford is in the process of creating a simulator that tests there aerodynamic changes to real-world conditions. As part of Ford’s Mobility network, they seek to reach more urban markets in developing countries. Ford plans to find transportation methods that assist in transportation and mobility. These countries are mainly populated with citizens who may not be able to afford to purchase a
car.
Human Resources The role of Human Resources (HR) has changed significantly in their responsibilities to organizations in helping them to achieve their goals. The HR team of Ford is responsible for increasing efficiency and performance by developing the skills and abilities of employees (Ford, 2012). In the case of Ford, HR is also responsible for producing global managers for Ford’s globalization strategy. Fords Human Resources (HR) team aligns the vision of Ford with the vision of the HR department. As a part of the Ford One Team, One Plan, One Goal strategy, HR also supports the same as it applies to human resources management. The One Team component is to support those who build and sell automobiles; One Plan is to be a change agent by focusing on the individual, the team, and the effectiveness of the organization; One Goal builds a strong team of people who are diverse, innovative, performance driven, and effective in competing in a global market (Ford, 2012). As noted by Nickels, et al., one o the challenges of any HR management team is decreased employee loyalty. One of the ways Ford counters this challenge is by cafeteria style benefit selection. Employees are able to select benefits specific to their needs instead of being forced to buy into a benefits package that does not totally suit their needs. The employees particularly like this process because it allows personal input, gives freedom to choose, and removes limitations of benefits offerings as packaged plans (Nickels, et al., 2010). Ford’s Effective Training Program ensures employees are trained in the respective area of work. Effective training contributes to long-term employee retention, and the profitability of Ford. Employees receiving specialized training reduce risk, increase production, and are genuinely happy contributors to their employers. As a multinational organization, diverse recruitment is key for many reasons. To name a few, one would be because of cultural differences and another is collaboration of an employee with a specific manger’s leadership style in key functioning areas (p. 292). Ethnic backgrounds must also be considered for sales and profit potential. A consumer of a certain ethnicity is more inclined to do business with someone of a similar background if given the choice (Nickels, et al., 2010).
Analysis Recap Ford meets the needs of both internal and external stakeholders. This can be concluded by the documented profits of Ford; therefore providing job stability, investment returns, and increased market activity through the development of new Ford models. The company has made an impressive comeback with optimistic financial standing after experiencing the devastation of a fallen economy. Ford is currently able to provide dividends and maintain its standing within the top three automobile manufacturers alongside Toyota and General Motors (GM). Ford’s projected growth is on an incline with no direct threats obstacles in its path. Ford has shown a significant financial comeback from a less than appealing bailed out image and proven to be a strong entity in the automobile industry. Their earnings per share have risen from a -.26 to an impressive .35 as measured from 2011 to the first quarter of 2012 (Forbes, 2012). Ford has also shown a 14.8% growth on their return on investments and rank 14 in sales profit in comparison to Toyota being 112 and General Motors at 45 (Forbes, 2012) . Currently, Ford ranks as number nine of the Fortune 500 companies in America moving up from number 10 in 2011 (CNN Money, 2012). The brand name of Ford is a symbol of American Pride. In current years, there have been noticeable changes in the view of the company’s image. When the changes in the economy affected much of the United States, Ford was also equally vulnerable to its ripple effect. They were hit equally as hard as other companies were and ultimately forced into a financial rescue by the United States (US) government. Ford had to use their brand name and symbol, the blue oval, as collateral. A plan of sustainability kept the company afloat. “After enduring several of the most difficult years in our Company 's history, Ford turned a corner in 2009. Ford achieved $2.7 billion of net income, its first full year of positive net income since 2005, and a $17.5 billion improvement over 2008 (Ford, 2012). Some of the best practices of Ford are centered on their manufacturing techniques, technology, and environmental awareness. Ford manufactures cost effective, fuel efficient, and environmental friendly cars. Their in-plant technology allows the quick production of cars. The manufacturing of some of Ford’s automobile parts is outsourced to reduce costs, and operations are under the leadership of one global management team (Ford, 2012). They practice “offer[ing] vehicles that could deliver on four critical pillars of the Ford brand: quality, green, safe, and smart” (Ford, 2012). With Toyota’s TQC they can monitor their cost by only utilizing materials as needed that helps reduce their cost (Toyota, 2012). Ford has implemented the ONE Ford plan with the purpose of accentuating teamwork, creating better products, and building a stronger business model while participating in environmental protection (Ford, 2012). Weekly business plan meetings are conducted to discuss the business units and skill team operations. Through these meetings the global management team can assess the success or failures of various worldwide operations. Ford delivers affordable products to its consumers and is consistently including new technological features to its models. They remain competitive in offering similar technology in their models to keep up with Toyota and General Motors. Ford has talking car technology, easy access technology, and a robot named RUTH that delivers customer comfort technology. All of these areas are a part of their drive smart technology that increases accessibility, entertainment, and communication options (Ford, 2012). Ford has received recognition awards for technology ingenuity and advancement and have been commended for offering realistic and insightful technological features at an affordable price. These features will soon be standard in models like the Ford Focus and the newly redesigned 2010 Ford Taurus (Ford, 2012). Ford is visible worldwide on 6 continents and maintains 65 active plants (Ford, 2012). By being a multi-national organization, the effects of globalization can easily intrude in the company’s production and profits if they do not make a conscious effort to maintain positive relationships across the globe. Understanding the culture and ethics of each country they operate in helps to protect them from being viewed indifferently by a locations residents and businesses (Nickels, et al., 2010, p. 73 ). Most important is their attention to the economic, financial, physical, environmental, and socioculture forces of each foreign location (Nickels, et al., 2010, p.72).
Globalization
Through globalization, Ford has the opportunity to increase profits through its product offerings. The already advantage is in the products produced. Automobiles are used in almost every country and by staying current in technology, environmental awareness, and being a part of the global infrastructure, Ford can trade across the world with peace of mind that they are producing a desired commodity. In comparison to Toyota and General Motors, Ford is holding tight to its spot in the top three. Ford had not been able to pay dividends to its investors since 2006, but in the first quarter of the current year its earnings per share increased from -.26 to .35 and an over 14% growth on their return on investments. General Motors has 150,276.0 million in revenues and is ranked as number five of the top 500 businesses in the United States (Forbes, 2012). Ford has 136,264.0 million in revenue and ranked number 9 on the list; however, Ford is still in a better financial standing than GM because of the reduction in debt due to their loan payoff and ability to pay dividends (CNN Money, 2012). When completing a financial comparison of Ford, Toyota and GM, Ford is maintaining its fair part of the market share in showing significant growth since their financial decline in 2005. A look at the current ratio of Ford versus the ratios of GM and Toyota show Ford’s ratio at 1.76, GM at 1.23 and Toyota at 1.43. Ford has increased production and sales of their smaller model cars in 2011 by 25% and was able to invest $16 billion dollars into their US operations (Ford, 2012).
Investment Decision As stated in the initial part of the business analysis, the investment opportunity with Ford should be pursued based on the noted company restructuring, operational goals set to increase customer based satisfaction, and their plan of sustainability as a top runner in the automobile industry. Brokerage firms who have evaluated the overall performance of Ford foresee that new product origination, low-cost constructing, strong financial sheets, and the ONE Ford plan all work in favor for the expansion of the company in coming years (Forbes, 2012). Financial data proves the company is on a directional incline to increase market share through technology additions to their vehicles and manufacturing plants, their adaptation to economic change, and operational team focus.
Conclusion
The conclusive finding of all three parts of the business analysis of Ford prompts the funds manager to take the opportunity to aggressively invest in this company. Financial data of Ford reflects positively as an industry giant holding strong in its position after a hard-hitting recession that left many companies in long-lasting recovery, bankruptcy or closed. The financial health of Ford has improved and is on target to increase revenue, profits, and stakeholder interests. Management must continue to accelerate the ONE Ford plan successfully. Short and long-term financial planning with monitoring cash flow, budget development and establishment of financial controls to examine company goal achievement (Nickels, et al., p. 489). Ford development in areas of fuel efficient cars, global recognition, modern technology and the unified ONE Ford Plan increases their opportunity for sustainability. The ONE Ford plan solidifies recognition of Ford as a global organization that continuously produces quality products, internal and external stakeholder cohesion and better brand recognition (Ford, 2012) Ford owns 16.5% of the market share world-wide and their longevity holds in the market area on 6 continents. Ford Motor Company, like its products, is built to last. Their product offerings are inclusive of and directed by consumer demand. The ONE Ford strategy represents the company’s sustainability endeavor and works to properly serve their customers through the goods and services they supply.
References
Business Excellence (2012, September). Ford Motor Co.. Retrieved from http://www.bus-ex.com/article/ford-motor-co.
CNN Money (2012, September). Ford Motor. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/160.html
CNN (2012, September). Ford Motor. Retrieved from http://money.cnn.com/magazines/fortune/fortune500/2012/snapshots/160.html
Ford (2012, September). Ford Bolsters EcoBoost commitment for 2012 with Fuel-Efficient Edge, Explorer Utilities. Retrieved from http://corporate.ford.com/news-center/press-releases-detail/pr-ford-bolsters-ecoboost-commitment-35107
Ford (2012, September). Our Company. Retrieved from http://corporate.ford.com/
Ford (2012, September). Sustainability 2011/12. Retrieved from http://corporate.ford.com/microsites/sustainability-report-2011-12/blueprint-strategy.
Nickels, W. G., McHugh, J. M., & McHugh, S. M. (2010). Understanding business (9th ed.). New York, NY: McGraw-Hill/Irwin.
Forbes (2012, September). Ford Motor. Retrieved from http://www.forbes.com/companies/ford-motor/
Ford (2012, September). Financial Health. Retrieved from http://corporate.ford.com/microsites/sustainability-report-2011-12/financial