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Posted on February 4, 2008 by Murad Ali | Posted under Business
Ford and China Marry for Convenience
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A recent SWOT Analysis of Ford indicated the following (Ford Motor Company, 2007): Strengths: Strategic Alliances. Ford Motor Company has done a strong job with managing its supply chain and making strategic alliances around the world. These alliances are used to build a variety of different automotive parts, concepts and services. Weaknesses: Market Share. Ford Motor Company has declined in its market share slipping behind Toyota. Ford Motor Company is no longer one of the Big Three Automakers and executives are scrambling to slow down the decline. Opportunities: Growing Markets. Ford Motor Company would do well to consider the growing markets of India and China which are increasing their overall purchase amounts of automobiles. As these economies grow they will need more ways of shipping equipment, people and products. Threats: Pricing Pressures. The cost of labor in heavily unionized plants has damaged Ford Motor Company's ability to have high output, efficient operations, and cost effective labor. After analyzing the Strengths, Weaknesses, Opportunities and Threats of the above listed SWOT analysis it appears that China would be a strong place to focus Ford's energy. Their ability to make international partnerships would be a benefit in getting the company into China, the new markets with high levels of population would be a great place to sell automobiles, and labor costs could be reduced by building parts and cars within China. Currently Ford Motor Company distributes across 200 markets in six continents which means that it has the potential to reach both China as well as other international markets in its thrust to regain market share and reduce costs (Ford Motor Company). Each one of these locations represents additional sales for the Company and a possible new market outside of the United States. The underdeveloped automobile market in China is consolidating which makes it easier for larger American companies to find potential partners (Hardigree & Gawker, 2007). With consolidation the small Chinese manufacturers have moved themselves from small entrepreneurial operations with little ability to deal with large organizations to more sophisticated operations that can no produce high volumes of orders. Navistar who recently lost a contract with Ford plans on moving some of its operations to make new inroads to selling truck parts and potentially boat engines to locations like China, India, and Eastern Europe over the next 5 years (Tita, 2007). Ford would do well to increase their international positioning in these emerging markets as well creating new opportunities. Ford Motor Company has already begun to explore this opportunity on a limited selection basis. Ford Motor Company is developing a plan to produce Verve small cars out of a plant in Nanjing China and Thailand (Webb, 2007). The concept car has already been shown at the automobile show in Guangzhou China and has received a warm acceptance. This new car will be marketed in both China and be a predecessor to a U.S. version. Ford Motor Company has also made a larger commitment, as well as many other U.S. manufacturing operations, to outsource parts operations to China (Webb, 2007). The goal is to reduce labor costs, increase strategic partnership, increase inroads into China and decrease costs of part manufacturing. Decision Makers at Ford Motor Company feel that China will be the way in which their Company can regain lost market share and have begun to invest in additional research in China (Tran, 2007). Even though the progress towards China-Ford relations is just becoming there is some signs that the new concepts are working. Ford Motor Company reported that sales have increased in the U.K. 3% and in China 25% from a year prior. The hope is that Ford utilizes these new markets to put them self on a stronger economic playing field. Haldis, P. (2007). Ford Reports Improved China, U.K. Sales. World Refining & Fuels Today, 2 (10). Retrieved January 23, 2008, from EbscoHost Database. Hardigree, M. & Gawker, J. (2007). SAIC Motors and Nanjing Automobile Group Merge, We Look Forward to Dr. Maoyuan Commercials. Shanghai Automotive. Retrieved January 23, 2008, from EbscoHost Database. SWOT Analysis. (2007). Ford Motor Company, 5. Retrieved January 23, 2008, from EbscoHost Database. Tita, B. (2007). Navistar maps post-Ford plan. Crain's Chicago Business, 30 (45). Retrieved January 23, 2008, from EbscoHost Database. Tran, A. (2007). SSOE Grows Presence in China with New Ford Motor Co. Facility. Automotive Industries, 187, (8). Retrieved January 23, 2008, from EbscoHost Database. Webb, A. (2007). Ford will build Verve small car in Asia. Automotive News, 82 (6279). Retrieved January 23, 2008, from EbscoHost Database. Webb, A. (2007). Ford opens center to source more parts in China. Automotive News, 82 (6275). Retrieved January 23, 2008, from EbscoHost Database. About The Author: Murad Ali is a three time published author, a business professor, a human resource manager and helps companies get ahead by drawing more visitors. (Author Exposure and Website Customers) www.article-agent.org (Free author submission and website content) www.article-agent.net (Business articles) www.themodernbusinessworld.com (Dating articles) www.datingdesires.blogspot.com |
Tags: AMERICAN MANUFACTURING, BRUTAL BUSINESS, CHINA, FORD, SMALL CARS, VERVE
