America's Car Company Looks to the East

With the American, European, and Japanese car markets fully saturated, there is not much room for market growth. That is why Ford Motors is partnering with companies all over the globe to allow better access into developing markets. India, China, and Argentina are among some of the best countries for market growth potential and Ford is using this towards its advantage.

Thanks in large part to its Changan Ford Mazda joint venture in china, Ford has seen an 84 percent increase in this year’s sales in china. Ford has also been trending more towards a pooled effort of collaborative innovation and improvements through its Ford partnership program. This program is allowing all of the global partners to become actively involved in pooling their resources towards a better overall product. This initiative is starting to pay off especially in the small car market where Ford has been historically behind its competitors. Ford is pushing smaller fuel efficient cars globally; and this strategy looks to be paying dividends.

Ford financial continues Henry Ford’s vision of his automobiles to more people

Since 1908 Henry Ford has been known as the first automaker to offer his products to the masses. The Model T was not the first car produced in America it was not even the first car made by Ford. The Ford Model T was however the first automobile to be produced via assembly line. Henry Ford realized the economies of scale would more than make a profit and allowed more Americans to be able to own automobiles.
What was once a revelation is now commonplace. Now Henry Ford’s vision of the assembly line can be seen in most any corporate automakers plant. Ford kept to Henry Ford’s vision even after his passing. In 1959 Ford introduced Ford Financial. Ford financial added a competitive advantage to Ford that would soon be followed by competitors. Since Ford sold auto mobiles that were often more than a middle class family could afford to purchase outright, it made sense for Ford to create its own financing company to place its cars in more hands. Since its creation Ford Financial has helped Ford sell over 50,000,000 vehicles.

Ford and Microsoft announce extending their strategic alliance with the Hofm

The announcement of a new collaboration between Ford and Microsoft at the 2010 New York Auto show may have been big news but it was not necessarily a surprise. In the reinvention of Ford’s competitive strategy, strategic alliances have been a staple of the new direction.
While collaboration is nothing new for Ford, it has defiantly begun to align itself with differentiating partners. Eddie Bauer, Harley, and Shelby are some of the more well past collaborations by Ford; however, these alliances did not necessarily add much in the way of product innovations. They were merely not much more than brand name luxury models.
More recently Ford has been using its collaborative efforts for feature and product improvement. Thanks in part to the alliance with Microsoft Ford recently received the award for the most innovative auto maker in mobile technology at this year’s CES awards show. It looks like Ford and Microsoft are looking to extend their relationship further with announcement of the Hofm program.
The Hofm program is an aggressive plan to make electric vehicles and hybrids an affordable reality to general consumers. The program will work with electric companies and vehicle owners to better manage their energy consumption practices. This may seem like misplaced effort at first glance, but the shift of energy consumption from fossil fuels to the electrical grid is a growing concern. There are estimations that purely electric vehicles could double household energy consumption. Better management of the electrical consumption will be critical to states like California and New York.
Microsoft is not the only technological giant teamed up with Ford. De Walt, Serious, and Microlise are just a few of the collaborative partners. In 2011-2012 Ford is poised to be one of leading automakers in technological innovations and solutions.

Is a More Competitive Market Good for Ford?

While many will argue that foreign entry into US domestic markets is the downfall of the American auto industry it may well be the key to Ford’s newfound success. Shortly after WWII the big three were pretty much the only major players in the auto industry. The competitive nature at the time between said companies were at the least lax and the most bordering on collusion. Fast forward twenty five years and the threat of new foreign entrants was laughable compared to the US auto makers. So what has changed in the last forty years?
The American auto makers took their foot off of the gas and neglected to look in the rearview. By the time Japanese automakers flew past, the US automakers would fall further behind wondering how to catch up.
So how has this superior level of competition been good for Ford and bad for GM and Chrysler? Since the conglomeration of American automakers the companies to form General Motors Ford has been has been forced into a niche. Please don’t misunderstand when I write that Ford’s product selection has been relatively limited compared to other auto makers. For better or worse from that Ford has since been dependent on the synonymies of its models to its brand recognition. So in some way although Ford’s domestic level of competition was lacking, its corporate structure was much more capable of adapting to the entrants of new foreign competitors. As discussed in former blogs I relate Ford to Honda, because they both depend largely on the success of only a limited product line. Toyota, GM, and Hyundai share similar traits in that their success is based more on the large product mix.
In conclusion I believe Ford’s recent success compared to Chrysler and GM can be somewhat attributed to the fact that it was already competing against a lot of options. If Ford continues its recent trend of consolidation of resources and effort to a superior product they will America’s Honda.

Fords core competency is in its value chain and brand recognition

Ford is well renowned for being the originator of the mass production system; but it has been over a century since. Since any large auto maker now uses the mass production system, what “is” the Ford’s core competency then? To start, it’s Ford brand recognition on a global scale. Let’s play a word association game. If you had to name of a car model for each product type what would be your answer? SUV (Explorer, Suburban), family sedan (Camry, Taurus), muscle car (Mustang, Camaro), truck (F150, Tacoma), family van (Odyssey, Wind Star), coup or compact (Civic, Accord)? While Ford does not have a model in every category it does in most.
A more strategic core competency of Ford’s is its global supply chain network. Ford’s strategic alliances and supplier base is quite possibly one of the most advantageous in the world. Thanks to Ford’s global supply chain network it is competing and leading on a global level.

Ford’s New Business Level Strategy

Until recently if you were to discus Ford’s business level strategy it would have been hard to do without a straight face. Ford’s previous business strategy was to find something with high sales potential and high profit margin and make the hell out of it. Basically milk the cash cow till it runs dry, afterwards slaughter it and use the meat. Anyone who knows the business strategy of Detroit over the last century knows that it has drastically changed in order to survive the new entry of leaner global competitors. Some critics may argue that the “Big Three” have not changed enough to meet the market conditions, without the being bailed out by the Federal Government. Ford has taken its knocks over the recent years, but the fact that it did not take the “bailout” funds in 2009 shows that it is starting to stabilize. Based on Ford’s over exploited then short-lived successes in the past how do we know that this is not more of the same. In all honesty we don’t, however, it looks like Ford is using its resources to gain and maintain a market advantage by minimizing its scope.
For the last decade Ford, GM, and Chrysler, have all been criticized by buyers and investors that their prices were too high, the quality was too low to compete with the high quality European automakers and the economical Eastern automakers. The initial response from Detroit was none at all. After the Big Three began losing market share the response was more audible. By the time the Big Three decided to effectively mount a counter initiative it was too late.
Ford during that time of bleeding market share Ford and GM were notoriously trying to find a new golden goose instead of putting their resources into to their existing product line. The SUV (Suburban, Explorer) era in America is a microcosm of the Ford’s overexploitation of a cash cow. The Taurus, which at one time was the cash cow had been put out to slaughter.
Rather than trying to find the next golden goose, Ford seems to be adopting a much more sustainable strategy. The One Ford strategy looks less like a traditional American strategy and looks more like Honda’s. Honda’s corporate level strategy has always been to put all resources into a current product line until it is the market leader, only when that market lead can be sustained, will Honda look to enter into new markets. This form of strategy has sometimes been argued to be too slow; no one can argue its upward trending stability.
The One Ford strategy is a business strategy that consolidates the product design and development into one product to make it the best possible. Many of the new models will use the same chassis, a practice that has been use by the Japanese to have more responsive product releases and cycles.

2 best in show awards at the North American International Auto Show 2010 show Fords resurgence is no accident

At this year’s North American International Auto Show, Ford took home top honors for best Car (2012 Fusion) and Truck (2012 Cross Transit). While Ford’s recent spike in popularity and sales is welcome change, it did not happen by accident. As many may be aware, the amount of time for most American automakers to change strategic course is 4-5 years. The 2012 Ford Fusion is the flagship for the company’s change in strategy. It is the first model to use the “One Ford” concept. Instead of creating multiple model types for specific regions which is common among many automakers, Ford is now developing one model for multiple markets. The downside to this strategy is the inability to satisfy the specific needs and requirements of different regional markets. The upside that Ford is banking on is that all developmental resources can be put into one superior model design. With the amount of time, resources, and money required to develop each model Ford’s streamlined strategy seems to show some payoff. How this strategy will fare in the global market, time will tell.