Case Study #9 Ford PDF

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A weekly case study that counts towards the final grade in BUS493. ...

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xxxxxx BUS493 International Business Professor Mabul (07/08/2019) 1. How would you characterize the strategy for competing internationally that Ford was pursuing prior to the arrival of Alan Mulally in 2006? What were the benefits of this strategy? What were the costs? Why was Ford pursuing this strategy? The strategy that Ford was using prior to 20016 was very expensive and inefficient. Due to this production strategy, Ford was unable to but common parts for the vehicles, could not share development costs, and could not use its European Focus plants to make cars for the United States, or vice versa. This strategy was based upon the assumption, which required considerable local customization. Americans, it was argued, loved their trucks and SUVs, while Europeans preferred smaller, fuel-efficient cars. However, until 2006 Ford was pursuing this strategy since it worked for them and they were able to get revenues. Prior to 2006, Ford was focusing only on the Western Markets but later globalization and recession in the western markets had a big impact on the sales and revenues of the company and hence they were forced to move out of this strategy. 2. What strategy is Mulally trying to get Ford to pursue with his One Ford initiative? What are the benefits of this strategy? Can you see any drawbacks? Mulally is trying to use assemble to order/configure to order products and take the benefit of mass customization. The One Ford initiative aims to create a handful of car platforms that Ford can use everywhere in the world. Under this strategy, new models, such as the 2013 Fiesta, Focus, and Escape share a common design, are built on a common platform, use the same parts, and will be built in identical factories around the world. There are many benefits of this strategy. Ford can now specialize and benefit from the economies of scale for the component for the entire range of products and at the same time, they can cater to the needs and demands for different regions even if they have different specifications because they share common components and sub-assemblies. I can only see one major drawback with this strategy. There may be some increased inventory of the components

and subassemblies across the supply chain but this can be compensated by having fewer components and sub-assemblies across the organization instead of maintaining a wide range of components and sub-assemblies. 3. Does the One Ford initiative imply that Ford will now ignore national and regional differences in demand? No, I would not say that Ford will now ignore national and regional differences in demand. In our current globalized world, companies have to make products that meet the specific customer needs and Assemble to Order/Configure to Order is the best strategy that can lower cost as well as help in making a wide range of products....