1 BACKGROUND Essay example -- Business and Management Studies

1 BACKGROUND1.1 cover Motor play alongFord was the pi starer of the motor vehicle, full over 100 years ago.Today, Ford Motor Company is a family of automotive brands consistingof Ford, Lincoln, Mercury, Mazda, Jaguar, Land Rover, Aston Martin,and Volvo, employing 350,321 (Yahoo Finance) workers in more than 200countries.1.2 Motor IndustryThe American oligopoly in the motor industry, consisting of Ford,General Motors and Chrysler, has suffered from poor financial resultsrecently. As reported by www.guardian.co.uk (16/06/03), the big threeUS car-makers are wrestling with the combined cause ofover-capacity, growing competition from Europe and Japan, huge pensionand health care costs, and a damaging increase in incentives to getcustomers into the showrooms.A real shrink that the car industry is in the midst of major change camewhen www.reuters.com (25/01/04) reported that Toyota had overtakenFord as the worlds second-biggest automobile manufacturer. TheJapanese firms strategy of foc using on quality, efficientmanufacturing and targeting new grocerys paid off with their marketcapitalisation, at $120bn, totalling more than the big threecombined.The main value device driver for the motor industry is platforms, orproduction lines. The Japanese and European firms invested heavily inmulti-car platforms and can now base a number of cars on one platform,rather than the traditional method of one car per platform. This hasreduced their fixed costs dramatically and allowed these firms to selltheir cars at much cheaper rates and gain market share. Developing newplatforms requires serious investment not just in financial terms, butalso in time. The big three are some(prenominal) years behind the newcompetition and because of this, American automotive research firmIceology estimate the market share of the big three could fall from60.2% in 2003 to 56.5% by 2006 (Business Week, 3867, 76).2 CURRENT POSITION2.1 Competitive PositionThe intense publicity generated by Fords recen t centenarycelebrations diverted solicitude from the fact the company wassuffering from slowing sales and dire financial results, such aslosing $5.5bn in 2001 (Strategic Direction, 19(1), 9). CEO JacquesNasser led Ford away from their nerve centre business and despite replacinghim in 2001, the combined effects of his reign and the e... ...Can Ford Fix This Flat?, Business Week, 2003, 3860, 50Detroit Tries It the Japanese room, Business Week, 2004, 3867, 76Ford Feels the Pressure, Strategic Direction, 2003, 19(1), 9-12Big Three Car Bosses Fight for Pole Position, Strategic Direction,2003, 19(11), 10-13Restructuring Ford Europe, European Business Review, 2003, 15(2),77 - 86Pedal to the Medal - Enough is enough, Business Week, 2004, 3865,30Financial ResourcesDataStream (Aston University Library) network Resourceswww.guardian.co.uk, Ford goes in for refit after 100 yearswww.reuters.com, Toyota overtakes Ford as No.2 car makerhttp//finance.yahoo.com/, Yahoo Financehttp//www.autointel l-news.com/News-2002/January-2002/January-2002-3/January-16-02-p4.htm- Ford Motor Company Announces Revitalisation Planshttp//www.forbes.com/reuters/newswire/2004/03/02/rtr1282302.html -Fords Scheele sees deflationary price environmentTruby (2002) -http//www.detnews.com/2002/autosinsider/0209/25/a01-596413.htmSusanto (2003) - http//www.susanto.id.au/papers/JITFORD.aspLienhert (2004) - http//www.forbes.com/2003/12/15/cx_dl_1215feat.html