Wednesday, July 6, 2011

Ch 13 Corporate Governance in the Twenty-First Century

Corporate Governance is the system by which organizations, particularly businees corporations, are directed and controlled by their owners. Ford has all types of regulations in regards to business practices, safety inspections, and general laws that need to be followed. Ford has a CCO named Nicholas Singh who makes sure that everything is the way it should be in reguards to the laws that Ford has to follow. Not just some of the laws, but all of the laws! Not only does he have to make sure the laws are followed, but he also has to come up with how to overcome the agency problem. Which means the separation of the ownership of the capital necessary to fund a business enterprise from the day to day operational management of the business.

One of the ways that companies make sure that the executives do what is right for the company as a whole instead of what is best for them is to make the executives own the company's shares. Many of the incentive compensations and bonus plans require a variety of things that executives get. Some of these things are restricted stock, stock options, bonuses, and the traditional salary. Typically the restricted stock is high, but the stock options take the cake. Most companies offer the executives a large chunk of stock options that are a major portion of their compensation. Bonuses are typically large as well but usually are still close to half of what they stock options are. Now these are in general terms. Ford has a pretty evenly spaced compensation package for thier executives. They are given many stock options however. Ford doesnt do anything too crazy. They stay within the legal limits and do what needs to be done to bring the best vehicles to all sorts of customers.

Chapters 11 and 12

Organizational Structure, Systems, and Processes along with Considering New Ventures

Ford Motor has a good multidivisional structure. As with most major companies they have divisions of R&D, Advertising, Manufacturing, International Relations, and Corporate Responsibility.

Ford uses mostly a Multidivisional Structure to keep their company growning.
The reward system that Ford uses is the high pay high commitment.
Ford also uses the three C's of strategy communication:

Contacts-Ford's contacts are all over the world since they are one of the largest companies in the entire world.

Cultural Understanding- Ford's ability to cross the cultural divisions that most companies run into. Because Ford has been all over the world for decades they have a solid understanding of the cultures that they deal with.

Credibility- Because Ford does what they say they are going to do, their credibility is top notch. They are considered a hardworking honorable company who builds reliable and sustainable products.

The new ventures of chapter 12 is interesting to look at because Ford Motor Company is one of the most successful and longest lasting venture in modern history. Every aspect that the book talks about is interesting because Ford has essentially been there and done that. Ford has had to contract and expand with the changing market over time. Almost all of the companies that started when Ford started are no longer in business. It is interesting to see how Ford has made changed over time.

Sunday, July 3, 2011

Chapter 10 Mergers and Acquisitions.

Ford is constantly merging and acquiring plants, companies, and ideas every day. They are a mover and a shaker when it comes to merging and acquiring. Some of the most recent changes in Ford Motor Company are listed here..... http://investing.businessweek.com/research/stocks/transactions/transactions.asp?ticker=F:US

These changes are made constantly so that Ford will continue to grow and develop as a major power in the car industry. Without strategic placement of people, parts, and knowledge Ford wouldn't be worth what it is today! Ford has stood the test of time when it comes to the demands of the ever changing marketplace of cars and other vehicles. After doing such research into Ford and how they handle things... I am a Ford guy all the way! You could even say they have acquired me.... ha ha... ok that's lame.... but seriously Ford is a great company with great things still to come.

Chapter 9

Understanding Alliances and Cooperative Strategies...

Ford Motor over the years has done a good job of knowing when to hold em and when to fold em. Their alliances and strategies with those alliances have helped shaped them into what they are today. For example, most of the parts on the vehicles such as the door latches are third party produced. They found that  it is in their best interest to allocate these responsibilities out to other parties so that they can focus on the whole of the product.. the car...

They have strategically placed their emphasis on what is most important and that is the end result of a safe reliable American made vehicle. Some of their strategies include obtaining various car manufacturers on many different continents around the world, buying rights to vehicles that others have produced, and maintaining good relationships with companies that help them produce the vehicles. One of the big things that recently happened was their decision to not take government handouts along with most of the other major car manufacturers. This has played a key role in people determining what car they will buy. I will buy a Ford over other manufacturers for that simple fact! I don't think that handouts are what this country needs.... that's not what we were built upon and for us to continue that is not what we as a nation need to suggest that people do.. it leads to laziness and entitlement.

Ok now that I am off of my soapbox... Ford has done a marvelous job of building and maintaining alliances and cooperative strategies.

Sunday, June 26, 2011

Ch 8 International Strategies

Over the years Ford has owned many manufacturers like Volvo, Land Rover, Mazda, Mercury, Lincoln, and Aston Martin. With the downturn in the economy over the last few years Ford chose to sell most of them. Mercury is no longer as of early 2011. Ford today owns only Ford Motor Company, and Lincoln. All of the other have been sold. From the early 1960's Ford has been all over the world. Some of their most common places are those of Europe and Asia. Most of the cars here are smaller commuter cars, not the large SUV's we have here in America. Close to 50% of sales of Ford Motor Company came from outside of the US. A very impressive number for anyone. One of their comparative advantages is that people know Ford makes a solid vehicle that will last. Anything American made over the last few decades has a solid report with consumers outside of our borders. Ford has major manufacturing plants all over Europe and Asia. In fact there are even a few in Australia.

The multipoint competition is a part of Ford's international strategy. They do a great job of overcoming various local vehicle manufacturers in various places around the globe. The use of the CAGE framework really comes into play with Ford Motor. Culture of where they are is important because some countries are use to smaller more fuel efficient vehicles while others like the US and Dubai are more luxury based. Administration is well placed with specific manufacturing plants and managing facilities around the world. Geographic comes into play because they are almost everywhere in the world. Economic is important because in order to provide a good product you must show how the product is worth the money spent. And in times of economic tightness, value is a major factor.

I know this is wikipedia, but it has a ton of good info!!
http://en.wikipedia.org/wiki/Ford_Motor_Company

Ch 7 Corporate Strategy

Over the last few years Ford has introduced new products that have revolutionized the marketplace. The way they introduce the products and market them is no secret.They unveil the new products on a large stage like the Detroit Automotive Show and the Green Festival. As most of the automakers have been doing in recent years Ford has unveiled its own "Green" line of vehicles. One thing that Ford did recently was provide grants to smaller developing companies to help them develop less emissions and alternative fuel vehicles.

In chapter 7 one of the main points of the chapter is diversification. As I have mentioned earlier in this blog, Ford has done an amazing job to make a vehicle that is suitable for everyone. From the hardworking rancher to the quick fuel efficient commuter in a foreign country. Most of their diversification is related diversification where they use very similar platforms (if not the same ones) to build their vehicles.

Some of their stable contexts include that of the F-Series Trucks. They have been the best selling truck for more than 50 years, and they don't plan on giving that spot up. They know that they can rely on that main staple to keep them going. The dynamic contexts that are involved with Ford's corporate strategies are the constant need for better fuel economy and consumption. They are constantly trying to overcome any obstacles that stand in their way in order to make a better, more fuel efficient vehicle.


http://corporate.ford.com/news-center/news/press-releases/press-releases-detail/pr-ford-and-green-festival-give-34543

Friday, June 24, 2011

Ch 6 Dynamic Contexts

   Ford is a leader in one of the most competitive markets in recent history. The competitive interaction that they face day to day is constantly changing. The different phases of competitive interaction are; phase 1 discovery and competitive new action.  2. Customer reaction.  3. Competitor reaction.  4. Evaluation of action and reaction effectiveness.
     Before Ford introduces a new product or design they must first take a competitive action. In the case of the Ford sync they were the first ones to fully integrate a hard drive into a car that can recall music and contacts by the sound of your voice as well as enter directions to the gps. The customer reaction was great. The competitor reactions were basically, they have to do this as well. The evaluation is still taking place because we don’t see every car made with this new technology. Then again with a good company like Microsoft behind them not too many other car manufacturers have the expertise in providing such a service.
    The speed of change over the last few years has dramatically increased. It wasn't too long ago that the SUV market was flourishing. Then came the demand for more economically conscious vehicles so the crossover vehicles showed up. Now it seems to be changing again into 50+ mpg vehicles. (Though Ford is doing well in these markets with its research and development, it is still the leader in Trucks. That market has been trimmed back a bit with the emphasis on fuel economy as well.)
    With the economy being the way it has been the last few years, Ford has had to downsize a bit. They had to do quite a bit of it in 2009 since they didn’t take any government handouts. Here is quick video about it....  http://www.cbsnews.com/video/watch/?id=4134028n  Check It Out!!

Ch 5 Creating Business Strategies

          Ford Motor Company's business strategies evolve with the ever changing market place of automobiles. Ford operates much like the Pacific Cycle company that is mentioned at the beginning of chapter 5. They have taken on or bought out many different types of car manufacturers over the years in order to reach a wide array of customers all across the world. One of Ford's strengths is that of their integrated position in terms of their low-cost leadership and differentiation. They do a good job of both at Ford Motor. Their scope of Arenas however would be classified as broad. As was mentioned earlier their footprint is broad and wide throughout the industry. Though there are some threats of integrated positioning like straddling, Ford does a good job of maintaining a balance throughout their production.

         One of the phrases that is highlighted in this chapter is economy of scale. With all the production going on at Ford, their economy of scale is important. With the more they produce the cheaper it is to produce. This sounds good at first, but it is a balancing act for Ford. They do not want to produce more cars just to make them cheaper because what if those cars don't sell? They are then stuck with cheap cars that are staying on their books. At Ford, they make sure that they produce just enough vehicles to keep the main costs low while ensuring the vehicles they produce have somewhere to go. This is called minimum efficient scale.

Sunday, June 19, 2011

Chapter 4... Exploring the External Environment.. Macro and Industry Dynamics

PESTEL analysis framework has six sections: Political, Economic, Sociocultural, Technological, Environmental, and Legal

Ford Motor Company has seen its fair share of industry dynamics since its early days. In most recent days the factors that play into each part of the "PESTEL" analysis are not much different from those of the past. However the emphasis that is placed on each one seems to be increasing exponentially.

Political Factors:
The political environment of the US today seems to be widening more and more with each election and campaign. There are so many specialty groups petitioning for this or that which makes life difficult for a large firm in which tries to attract people from all backgrounds. Ford has done a good job of maintaining its image as a workers truck. As was stated before in other posts, Ford also attracts the attention of other types of social-economic groups with its "high-class" expensive luxury lines of vehicles. The political factors seem to be a combination of the following categories in the PESTEL analysis.

Economic Factors:
Ford Motor Company has suffered just as the rest of the auto industry in the past years. As was mentioned previously their ability to maintain a level of business that enabled them to stay afloat when others were taking handouts was an example of their ability to adapt to changing economic circumstances. Not only was the auto industry hammered during the recession of 2008, but shortly following that was the collapse of the banking industry. Ford Motor Company's ability to stay above water with their financing capabilities was impressive as well.

Sociocultural Factors
Ford in recent months has increased their advertising to help consumers understand that Ford is an innovative and exciting company with new and pertinent vehicles that are sleek in design and capability. One of the things that they are focusing on is the environmental factors which we will talk about later. They are playing to all types of consumers also... one of the consumer classes that I would have never thought about for a new car is that of the new driver. Ford has increased their advertising to new drivers or parents of new drivers explaining why their new models are some of the best cars available for new drivers to use. Interesting isn’t it.

Technological Factors:
As it has been mentioned in other posts, Ford's major move in recent years is that of the technology that is in their cars. With Ford's venture with Microsoft to introduce a "smart car" that has an understanding of what types of music the driver prefers to read text messages aloud and voice commands; Ford has definitely taken the lead in terms of technology inside the car. With this leap however some bumps and bruises have come with the territory.

Environmental Factors
Ford has unleashed a new line of economic cars with the emphasis on the environmental safety of the cars. With going green being a major concern of a growing number of people, Ford has changed its focus from large gas guzzling SUV's to more fuel economic engines and technology. Ford is making changes in order to conform to new government regulations and market conditions.

Legal Factors
Ford has taken care of all the necessary precautions to make sure that their vehicles pass the inspections of the Federal Government of the United States. With all of the safety regulations, financial regulations, and any other regulations, Ford continues to maintain compliance with the ever-changing regulatory agencies that are continually being made.

The PESTEL analysis covers the aspects of a company that enable it to continue being a top producer in a macro environment. With this overview one can see that Ford Motor Company may have some flaws as most major corporations do, but is a cut above the rest with its capabilities and resources.

Thursday, June 16, 2011

Chapter 3 Internal Environment

The internal context of strategy for Ford Motor Company has changed over time with implementation of new technology and changes in the market. A few of the resources that Ford has in terms of management with Alan Mulally as the CEO, William Clay Ford Jr. as the Executive Chair, Lewis Booth as the CFO, and Michael Bannister as the Executive Vice President just to name a few make Ford one of the best managed Fortune 500 companies out there. These leaders capabilities help make strategic decisions that allow for the companies growth.

The dynamic capabilities of Ford have made them the company they are since Henry Ford. Throughout history Ford makes changes in order to be the best in the industry. From time to time they have not been number one, but have made changes so that they will be. Most recently is their ability to stay in business even though most of the industry has taken a government handout.

Some of the intangible resources that Ford Motor Company maintains is their trustworthiness, their knowledge, as well as their expertise.

Wednesday, June 15, 2011

Leading strategically through effective vision and mission

It is so important that the leaders of companies have a positive vision and effective mission that the company can stand by at all times. Ford Motor Company has just that with their CEO Alan Mulally. Just a few days ago Mulally was quoted in saying that industry leading quality will be Ford's pillar in the coming years. Ford has had a few glitches when it comes to reliability in the case of new technology like Ford's sync and MyFordTouch. Ford is the industry leader in implementing these uncharted territories, and with that territory comes some bumps and bruises along the way. Their focus is to become the highest quality car possible. They have implemented and installed laser-guided robots for precision placement of the parts in 17 of their top producing factories.
Ford has definitely taken the step to becoming the industry leader in quality, but only time will tell as their new technology becomes debugged and precise.

Here is a link that explains exactly what they are doing.
http://www.businessweek.com/news/2011-06-02/ford-missing-targets-pressures-mulally-to-fix-mishaps-cars.html

Strategic Management

       Throughout history there are moments and events that will never be forgotten. One of these such moments in relation to strategic management is that of Henry Ford and the Ford Motor Company. In 1908 Ford Motor Company implemented the assembly line that revolutionized the automotive industry, and made the automobile something that the common man could afford. Here is an awesome article about the beginning of the Ford Motor Company.
http://www.eyewitnesstohistory.com/ford.htm

When a company has a bloodline of strategic management that over arches all industries it is no wonder that Ford took head on the crisis which has plagued the American auto industry over the last few years. Ford Motor Company did not take a handout from the U.S. government. They strategically placed new people, assets, and products throughout the company in order to regain their rightly owned place in the American auto industry.

The strategic diamond consists of Economic Logic, Arenas, Staging, Vehicles, and Differentiators
Here is how Ford Motor Company is consistently improving upon their diamond.

The Economic Logic
We will build the best affordable car possible. This was Henry Ford's purpose, and it is still our purpose today. Our advantages come from our capabilities to deliver a vehicle that will support and help a nation and the world grow. We only deal with top quality suppliers and we do not cut corners when it comes to the makeup of our vehicles.

Arenas
The arenas that Ford has chosen to be in consists of a wide variety of products that attracts all types of people from different social-economic backgrounds. In the United States, their area of emphasis is to lower to middle class with their economy line of vehicles while yet passionately playing towards that of the upper class with some of their higher end lines like Lincoln, Jaguar, and Range Rover. They have all their bases covered. In other words, they are everywhere.

Staging
Their staging is that of constant motion. They are always improving and implementing the newest technology in all of their vehicles as well as how they go about building them. They currently have over 20 models to choose from in the U.S. with many many more around the world. There really is something for everybody. They are also planning on new models coming out next spring. (2012)

Vehicles
How they get where they are going is something that is very important to Ford. As was mentioned earlier they did not take a government handout. They took responsibility for their actions and corrected things on their own. They did not burden the taxpayer with their problems. Over the past few years Ford has had many acquisitions like that of Jaguar and Range Rover. They have broadened their horizons with their range of products. As we get more into this assignment I am sure we will see how in depth Ford Motor Company really is in life of America.

Differentiators
Ford is everywhere. They sponsor all types events from sporting ones to concerts and theater. They have made and image for themselves with their industry leading F-150 built Ford tough. It is pretty commonly known throughout the United States that Ford is the leader in trucks. They are also making headway in other lines of vehicles, but they will always work hard to keep their image as tough and reliable with their historical leader the F-150.

Sunday, June 12, 2011

Totally New At This!!

I have never had a blog before so this is new to me! I am going to be reporting on Ford Motor Company. Check back often to see what I have come up with!

JD