Business strategy report on Ford Company Essay Example | Topics and Well Written Essays - 3500 words

Business strategy report on Ford Company - Essay Example Ford Motor Company is a reliable name in the industry since the year 1903. It has now become a global name and has significant shares in different parts of the world. As per Healey (2012), it has 172000 employees globally and 65 plants across the world. It serves 50 markets and employees 65000 employees in Europe. The firm has two main brands Lincoln and Ford and is divided into two departments namely the auto sector and the financial services sector. Under the former it manufactures service cars, trucks, SUVs and vehicle parts. However, as per Naughton and Webb (2012),over 28% of its sales come from the European market, which is suffering for the past five years due to economic downturns. This in turn has affected the firm and it has broken off from the European industry by announcing the shut down of 3 prominent plants in the European region. According to Ramsey (2012), the firm claims that it will be running an annual loss of $ 1.5 billion in Europe. According to Castonguay (2012) , though the closer of these plants will cause the elimination of 5700 jobs directly, it will save the firm $ 500 million. It will decrease the production capacity by 18% and thus cut costs also (European Commission 2012). As per Ford, the market is predicted to fall even more and it was the only feasible solution that they could come up with to curtail their costs and answer their investors. This is a bold step that the firm is planning to take as no other firm in the industry has done so as yet.... This is a bold step that the firm is planning to take as no other firm in the industry has done so as yet. However, Ford is sure that this will work for the firm as an identical model of reducing cost by cutting labour in an attempt to reduce the production capacities has worked in North America (European Commission 2012). The firm needs to take this step as a large part of its revenue depends on the European market. However, there is fierce opposition by the labour union as the firm had earlier committed to build a facility in Genk but instead is going to build one in Spain. The workers need to be compensated and the firm has to face the union before it can take this measure (Ford, 2012). 1.2.1 Purpose of Ford The mission statement of the firm is: People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction. (Ford Motor Company Mission Statement 2012) The firm also aims to restructure itself in an aggressive disposition with the aim to operate with profitability at the on going demand altering the product mix as per the needs of the market, at the same time, work as a single team with the focus on improving the balance sheet. However, currently the firm is not in line with its mission as it is operating below profit and has not been able to alter its product mix with the changing demand (4-traders, 2012). The firm’s focus is not profitability in Europe and has been pressed down by the socio political environment (Thorpe, Slade and Bender, 2009). 1.3 Pestle analysis 1.3.1 Political / legal environment The political and legal environment governing the auto industry in Europe is quite