A case study: Ford Motor Company
Introduction
Ford Motor Company is a U.S. automaker with global vehicle sales ranking no. 6. Dearborn,
Michigan was the birthplace of Ford Motor Company, which was established in 1903. In a
Detroit suburb, Henry Ford established the company on June 16, 1903; it's still going strong
today. As at the time of this writing, it is still in operation. Because of its success throughout the
Great Depression, Ford Motor Company developed to be one of the world's biggest and most
lucrative corporations. Henry Ford founded the Ford Motor Company in 1903 in Dearborn,
Michigan with annual revenues of $155.45 billion and a market value of $35.49 billion, Ford
Motor Company is the world's most valuable company.
Q. 1. What went wrong with Ford Motors operation in India? Explain.
Ford has been in the Indian market since 1995, despite the fact that the firm began operations in
the country in 1926 before being forced to stop operations owing to import restrictions. MFIL, a
joint venture between Mahindra & Mahindra Limited and Mahindra Ford, has reappeared as a
Ford-owned company. Ford India Private Limited was the new name of the business. We
continued down the road and saw some of Ford's most famous models, including the Ikon and
the Mondeo Mk3. The firm decided to cease doing business in India for a variety of reasons. The
choice was daring and well-thought-out in order to secure the company's long-term viability and
profitability.
Consumers have long liked Ford, but the country's car sector is in decline as a whole. This has
more to do with the general state of the market than it does with the brand in question. As a
result of the wide range of alternatives available on the market, demand for the company's
products has declined steadily in the Indian market. The statistics show that the company's
market share has been stagnant for some time.
After Ford Motors pulled out of the Indian market on Friday, the country's automobile sector had
even fewer names to choose from. The automaker had stated on Thursday that it will shut all of
its local production plants. The bad news was made worse by the fact that it would have long-
term ramifications for auto dealers and business workers. The production facilities will remain
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open until 2022 only for the production of export cars. As a result, vehicles including the Figo,
Aspire, Freestyle, Eco Sport, and Endeavour that cater to the Indian market will no longer be
manufactured.
This shouldn't come as a surprise to anybody who follows the automotive industry. After Harley
Davidson, Chevrolet, and Fiat, Ford is the latest automaker to pull out of India's market. Were
these companies all forced to depart for the same reasons, or were there individual roadblocks in
their way? The reasons behind Ford's tough choice will be examined in more depth.
Q.2. As being international business head, what are the precautionary measures, you
would have initiated to avoid such situation?
It is necessary for a business organization to first define its mission and vision, as well as its
goals and policies, before it can expand its operations outside national borders. Apart from that,
as a result of the organization's expansion, it must be prepared to deal with the legal and ethical
issues that arise as a result of conducting international commercial transactions.
In order to achieve long-term development in a foreign environment, a business must confront
major moral and ethical problems, as well as make tough economic choices, if it is to succeed.
A few of the ethical problems that may emerge in an international company are child labor,
diversity in the workplace, equal opportunity, and supervisory supervision. There are a variety of
additional issues to examine as well. These include: human rights, religious freedom, political
arena, environment, bribery, and corruption. In the event that a corporation does business in
another nation, it is subject to federal and state safety and environmental laws, as well as fiscal
reporting requirements and civil rights legislation.
Consequently, there is an increasing need for skilled people who are familiar with foreign
markets, business techniques, cultural concerns, and ethical issues that arise in international
commerce as a consequence of the rapid growth of the global economy, all of which are
becoming increasingly common.
Q.3. Shall Ford retain their international business head or not?
Commercial vehicles, passenger cars, and imports will be separated into their own business
divisions in Europe so that Ford may better serve its consumers in Europe. The objectives and
responsibilities of each group are different. Companies will be better prepared to make fast
decisions based on consumer needs with the new operating model.
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A 6 percent EBIT margin and returns that surpass the cost of capital are long-term goals for Ford
Europe. Ford will produce a more focused line of European-built passenger vehicles, focusing on
the brand's quality, technology, and fun-to-drive DNA, while also aiming to establish emotional
connections with customers via sporty and creative designs.
Every Ford vehicle going forward will have an electric powertrain option, starting with the all-
new Ford Focus. There are also new models under existing nameplates, as well as new variations
of established models. From the Fiesta to the Transit, European customers will have access to an
electrified vehicle range that includes mild-, full-, or plug-in hybrid models, as well as fully
battery-electric models.
Located in Dearborn, Michigan, Ford Motor Company is a global corporation with operations all
over the world. There is a whole Ford vehicle range that includes premium cars like Lincoln, as
well as cars and trucks like F-150 and F-250 pickups, and even electric vehicles. Ford Motor
Credit Company provides financial services as well, and the company aims to be a leader in
electrification, autonomous driving, and transportation. Ford employs approximately 200,000
people worldwide. Ford Motors and Mahindra's collaboration has allowed the company to
produce new cars more rapidly and at a cheaper cost in the past because of this. Earlier this year,
in October, Mahindra and Ford announced the formation of a 50/50 joint venture, with Mahindra
owning 51% of the stock and Ford holding 49%.
When it comes to building a profitable business, one of Ford's goals is to charge certain
customers more on certain route plans. This is critical because Ford wants to go from selling cars
at a maximum profit of 10% to selling mobility services at a margin of 20% to 30%.
Conclusion
Even in light of the 4,000 employees who have been laid off, Ford's most recent move doesn't
seem to be a positive one. Whatever the case, the company has made up its decision and selected
a course of action that will benefit them in the long run. After that, Ford plans to bring more
foreign cars to the Indian market. We'll just have to wait and see how things work out in the end.
In the Indian automotive business, as well as among car enthusiasts, the brand will certainly be
much missed. The best we can do for the time being is keep an eye out for some great deals on
used cars and hope that Ford Motors continues to operate on Indian Territory in the future.
References
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[1] Todd Bailey, William Duncan, 2016. Ford Motors Case Analysis. Available at:
https://www.slideshare.net/WilliamDuncan13/ford-motors-case-analysis (Accessed: 20-
062020).
[2] Jasper Jolly, 2019. Ford to close Bridgend factory by September 2020. Available at:
https://www.theguardian.com/business/2019/jun/06/ford-to-close-bridgend-factory-
inseptember-2020 (Accessed: 20-06-2020).
[3] Anastasia Christodoulou, Kevin Cullinane, 2019. Identifying the Main Opportunities
and
[4] Ed Zielonka, Bill McCann,Matt Gaynor, Zach Metcalfe, and Garrett Hasanbasic, 2012.
Ford PP Available at: https://www.slideshare.net/Cowboyz209/ford-pp-11925017
(Accessed: 20-06-2020).
[5] Timothy J. Sturgeon, Johannes Van Biesebroeck, 2010. Effects of the Crisis om the
Automotive Industry in Developing Countries. Available at:
[6] https://elibrary.worldbank.org/doi/pdf/10.1596/1813-9450-5330 (Accessed: 21-06-
2020).
