Ford Motor Company

Question 1

Outline 4 strategic options Ford is pursuing to increase its profitability

Ford automobile company has been in existence for a very long time, the company has been on the verge of experiencing some losses, and therefore, its management directors developed strategies, which were enacted to ensure that the profitability margin remains high. The strategies adopted include the maximum utilization of their global companies. In this view, Ford aims to maximize profits by effectively checking the long run reduced economies of scale, which will result in reduced investment but increased earnings, this idea can be easily verified by the look into the books of accounts, which will reflect increased long run profits (Sons, 2009).

As a participant in the automobile industry, Ford company faces serious competition from other automobile manufactures and this has a negative effect on its profit margin hence there is need to counter the effect of competition. The management of ford came up with the strategy to develop rival cars that are better than their competitors. They therefore developed hybrid cars that are more efficient in fuel consumption and are environmentally friendly (Werbach, 2009)

The third strategy adopted by the company was the idea of reducing the operation costs, which reduces the profit margin. In this view, the company aims at lowering the worker’s salary or retrenching some workers so that the operation costs which reduces the profit are minimized to manageable levels. In addition, the company aims at reducing the material costs of operation.

In any business enterprise, the customer is the king. Ford Company therefore took advantage of this fact and sought to satisfy the customer’s need by improving the quality of the products and by ensuring that the selling process runs smooth and efficient. When the customer is effectively satisfied, there will be reduced costs, corresponding increased capacity, and subsequently increased profit (Werbach, 2009)

Question 2

In light of the possibility that market conditions can and do change, discuss at
least three examples of how the company should build-in flexibility to back-up its
decision-making process.
Market conditions are subject to different forces hence the tendency to change from time to time. When undertaking a business venture, it is very advisable to include the varying market changes into consideration so that profits can be maximized at all times. It therefore in this view that the Ford manufactures through the managers laid down plans to counter the market fluctuations which includes sourcing funds through government loans to fund their operations during periods of poor economic performances.

In the case where the changes in the market are brought about by the increased level of competition in the industry, Ford has a backup plan of manufacturing hybrid cars that are better than the competitors are as far as efficiency and environmental effects are concerned. This is achieved by increasing investment in small cars while striving to maintain larger market share in the production and sale of trucks (Werbach, 2009)

Some factors that may be responsible for causing the changes in the market conditions are the increments in the operation costs. When the operation costs increases, the profit gained fluctuates and there is a resulting decrease in the quantity and quality of output. In order to control this, the Ford Company is aiming to reduce the operation costs by closing the non-performing branches in North America (Daly, 2002).

Question 3

Discuss how an effective action plan can be created and how progress can be
monitored.

Individuals and businesses have goals they hope to achieve within a given period of time and in order to ensure that their goals are realized, they develop an action plan to help them. An action plan is a document that comprehensively lists the order of events, which must be followed to ensure that goals and visions are achieved. When drawing an effective action plan, one should realize where he/she is and where he/she hopes to be after some time. The action should specifically spell out the goals that should be achievable. When setting up goals, one should consider realistic goal and identify the factors that may hinder the realization of the goal. The tasks that must be performed before achieving the goal are listed down and assigned weights based on their importance. In order to have an effective action plan, the tasks ahead are broken down into manageable and handled separately. It is also important to observe the time allocated and if the time is so short then an increase in time allotted is necessary. Effective execution of the plan requires creation of visual impression of the work to be done and working tirelessly till the work is done to perfection (Rothwell, 2010)
When executing the action plan, it is advisable the progress of the plan be constantly monitored. The progress of an action plan can be monitored by constantly evaluating the activities done within the stipulated time. If at the end of the given time, the work set to be done is still pending then a new time span is set. In general, the progress of an action plan is monitored simply by checking if the goals of the plan are achieved (Rothwell, 2010).

Question 4

List at least three steps that make-up a workable plan and explain why each is
important.

The making of a workable plan can be divided into three major potions that must be keenly observed in order to achieve the set goals. The basic step in making a workable plan is to list down all the accomplishments. It is then important to share out the accomplishments with the team that will help in realizing the accomplishments. Since the plan involves team work, each party is a player and therefore, each party identifies his/her role and works on it. The team comprises of individuals each with accomplishments, when each team member accomplishes his/her accomplishments then an effective plan is being achieved.

Project follow up is also a major point to consider when ensuring the success of the plan. Since each member is assigned duties, the project coordinator must therefore watch closely and ensure that everything works as per the plan. This is a very important part since any form of neglect may cause the whole project to fail and miss the mark for the goal. Without follow up, the junior members may overlook minor details building up the project and cause the entire project to shutter (Rothwell, 2010).

Sometimes the completion of a project may be hindered by unforeseen circumstances and events that prevent the realization of goals and objectives. However, when such happens, the project coordinator should not lose hope instead he should set a new time span and continue working. In order to achieve the objective and goals of the project, the team must work tirelessly together and encourage one another not to lose hope despite the factors that may discourage them from striving to achieve the goals. Many people give up too soon and miss the proceeds that could be generated by the project (Greg Conderman, 2008)

Question 5

Discuss the option or combination of options you selected as the best course of
action for Ford Motor Company and detail your reasons for selecting that option
or combination of options.
Ford automobile has to consider various options and implement them accordingly in order to remain profitable. The major option that the company should consider is to enhance innovation and produce sophisticated environmentally friendly cars that have very limited harmful effects to the environment. To this effect, the production of very efficient hybrid electric cars serves as breakthrough because these cars have virtually no environmental effects and are made using the state of the art technology.

The main reason of the company’s existence is to make profits and therefore, during periods of poor economic performance, it is advisable that the company secures loans from the government to enable it source its operations and continue with production. This action by Ford is considered the best course of action because it is not advisable for the company to close down during the times of poor economic performance (Daly, 2002)

The sustainability of an enterprise in business depends with the level of profits that the venture yields. The strategy by the Ford Motor Company to ensure maximum profits are achieved by minimizing the operation costs is the best course of action. This is because even though, the company may be performing well and making profits, the profit level is adequately reduced when the level of working costs rises therefore, the reduction of operation cost through lowering of salary or retrenching of workers is the best remedy for ensuring maximum profits.

The plan to closer the idle 14 North American manufacturing facilities and 7 vehicle assembly plants is another best course of action to be considered by the Ford Manufacturing Company because this will considerately reduce maintenance costs and reduce the plant assembly capacity by a considerable margin. This in effect will help the Company in increase its assembly capacity utilization rate by a considerable margin. This action will help the company lower its working costs by retrenching workers from closed plants. Due to this, the company will increase its market share and profitability and subsequently achieves the goals and objectives in the action plan (Werbach, 2009).