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Ford and the World Automobile Industry

Essay by   •  April 13, 2013  •  Case Study  •  757 Words (4 Pages)  •  1,463 Views

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Ford and the World Automobile Industry

This article will explore some of the issues that Ford and world automobile industry are facing today. The automobile industry is a constant changing environment. An automaker needs to keep up with the trend; otherwise it will lose its share of market. This will also examine the strategies company should take in order to survive and compete in today's market. We will be looking at acquisitions, mergers and alliances and some cost-reducing measures that occurred in this industry.

Synopsis of the Case

The automobile industry is an old industry it began in the 1900s. Henry Ford began his production in 1903. His vision to mass-produced cars came true. One example was the assembly of Model T. It reduced man-hours to produce one. It was the standard for the other automobile. Years later, it further improved when Toyota's lean production was incorporated to the manufacturing process. Following this, new entrants came and started competing, making the market constantly changing and improving.

In 2008, the recession has hit the automobile industry really hard. Thanks to government bail outs, automakers were able to keep their plants open. GM and Chrysler were among the two automakers that had to file Chapter 11 protection. Ford Motor Company was the only remaining automaker that did not file bankruptcy (Grant, 2010, pg. 40). However, it was not an easy journey for Ford. Ford Motor Company along with the others continues to struggle for survival.

Relevant Factual Information about the Problem or Decision the Organization Faced

Over the years, automakers were producing millions of cars across the industry. As a result, the industry exceeded the demand. Leading automakers have built new plants in many countries to expand their operations. Although sales grew annually, growth capacity outstripped the demand. Some companies would have to keep producing even if they won't sell their automobiles.

It was predicted that the strongest companies will remain and weak ones will no longer exist when recession hit the industry. That did not happen because the government was able to rescue these producers. Plants that should have been closed down were still kept open.

New product development is costly. Acquiring and partnering with other auto companies seemed to be a good choice so manufacturers can move forward to develop more products. Financial problems will always be an issue.

The world's cheapest Nano car added to the problems to the financially struggling companies. It is even more challenging and competitors must even look for solutions to reduce their operations cost.

Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials

This industry is internationalized, competition is

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