The aim of this article is to create awareness in the automobile manufacturing enterprise. People within the globe objective at some point is to own a car and thus this industry can help one generate a lot of revenues as there is an available market to sell. Ford Company, a company that has major interest on the automobiles industry is discussed in this outline.
Ford motors are the largest automobile-generating corporation in England with its registered workplace positioned in Brentwood. Both diesel and petrol engine manufacturing is carried out in Dagenham and Bridgend while Halewood focuses on transmissions. In 2000, Ford had introduced its aim of making an investment of 500 million US dollars in the growth of a diesel engine manufacturing unit positioned in Dagenham making it the biggest diesel engine unit internationally and which has made it feasible to create approximately 500 new jobs for British kids. Technology introduced in the production unit has empowered Ford in developing designs that could assist the drivers with higher experience. They have advanced and introduced many new capabilities to their vehicles making them extra desired by the clients everywhere in the globe. Due to the fact that it is an international corporation and has set up its branches in different parts of the globe, this document explains Ford's operations within the United Kingdom. There is a range of things that have an effect on the enterprise. Specific evaluation has been given in the document to offer a higher understanding. Some of the competitors of Ford are Nissan and BMW among others, in Britain. They even produce vehicles in comparable stages too.
Discussion and Evaluation
Although there are a few robust competitors of Ford, it still obtained the biggest percentage in the car industry in 2015. It has 12.9% of the company share, accompanied by Vauxhall having 11.57% of the market percentage and Volkswagen having 8% of the market proportion (Statista, 2016). There are extensive kinds of vehicles which might be provided by Ford in Britain, some are personal vehicles while a few are business cars. Example of the vehicles provided is Ford Fiesta and Ford Transit Courier. Ford is dealing with a variety of opposition from the agencies in Japan. Ford has made funding of £169 million in 2004 in its Dagenham plant so that the organization can expand its manufacturing of diesel engines (Forbes, 2015). Since 2011, Ford has been continuing its emphasis within the main region which has made it feasible for the organization to keep high profitability considering the opposition into the region trying to capture an extra share of the marketplace. Ford is expected to continue to preserve excessive profitability as achieved in 2012. The product base of the organization may be very extensive starting with vehicles, the corporation is involved in the manufacturing of vans, tractors, numerous parts of cars, buses, and so forth. but, the other non-conventional products are leasing of automobiles in particular to its clients and monetary services as a subsidiary of the main enterprise. This offers a choice to the clients and permits the company to serve a wide base of clients with a robust market. Ford has been constantly operating to bolster their competitiveness in the changing environment; these actions include completely leveraging by using beginning the second segment of the plan, together with the advent of an all-new lineup of worldwide products in destiny years yet to come. Given the challenges experienced in Europe, the management of the organization is reviewing their actions to reinforce and improve their business in Europe. Ford is related to a number of manufacturers like, Jaguar and Volvo among others, which lets in the corporation to cater a big consumer base. Ford is engaged in monetary services and leasing of automobiles which assist people in the middle social class to experience a car of their restricted budget. Ford believe in introducing new technology to attain a massive market share. Despite the fact that Ford is a market leader, it isn't capable of playing with its rate. The organization’s pricing method relies upon the market conditions and consequently, Ford fixes its rating. For its costly line of products, they comply with a top rate pricing approach since most people of the automobile proprietors fall inside the magnificence of middle social class; eventually, the elastic market forces the organization to comply with twin charge approach.
Production Cost and Scale
Unfold of Ford’s commercial enterprise permits the enterprise to obtain primary materials from massive providers positioned throughout the globe. The primary materials include a base and valuable metals, resins, and fuel as the source of power. As indicated in their yearly report, they gather substances depending on the necessities, an excellent way to limit wastage. The control keeps in mind the number of threats and uncertainty associated with the complete supply of primary requirements. It has an effect on the entire production whereby the agency orders primary requirements in bulk with the intention to maintain the highest quality of resources to offer the required quantity of vehicles.
To the employees: Ford offers sufficient opportunity for them to have career developments, independent treatment, and relatively high salary. They form the second most crucial stakeholders after clients. Ford gives a secure operating surrounding and additionally invests in their education.
Factories: Ford invests plenty in growing the performance of the units in the UK. It commenced its production in the 18th century by Henry Ford. The organization provided the lands which the factories were built. For instance, Henry made funding of £20 million in the factories located in the UK. This funding will assist in lowering wastage of power and in step with the estimates, the total saved power will store a whole of 800-gigawatt hours. The business enterprise is located in the Thames Gateway vicinity which gives high future prospects due to the development of big housing obligations sponsored through the authorities. Entrepreneurship: Ford believes in developing leaders from within the business enterprise and they comply with coverage of appointing humans with proper potentials to places where they could broaden their talents.
Capital funding: The capital is arranged by the organization from the income out of the entire sale of cars and automobiles. The enterprise offers more than one way of making an investment in the company. Another form of funding is through trust share enterprise that facilitates investors in the acquisition of Ford’s stocks. This agency facilitates stock purchase for both existing and first-time consumers. Most of the elements of funding employees and to a point capital investment are variable factors due to the fact that all of them may be changed to a positive quantity in a quick span of time. For instance, the company can boom its employment by hiring new workers and also can apply the method of downsizing on the way to increase their share of earnings. It will be tough for the company to make choices related to the established order of recent factories or extending the capacity of Ford’s current infrastructure to acquire its objective inside a quick span of time. The capacity of producing unit is difficult to calculate because, over time, the employer has multiplied its enterprise by way of producing new products and getting into new markets so one can increase and grow to be an international logo. The entrepreneurship of Henry Ford confirmed the value of vision and determination. The stableness of the government of UK after the choice to leave the union has led to many questions related to growth in uncertainty which could have an effect on the future prospect of the enterprise. Ford appears to have been the primary enterprise to reply to the turmoil faced with the aid of all of the enterprise ventures positioned inside the UK. The organization has stated that they can decide on downsizing and rethink their future funding decisions. Different carmakers also are dubious whether or not they may be dealing with a fall in demand as an immediate outcome of “Brexit”. Analysts all over the world have already anticipated that in the coming years, the United Kingdom will experience a fall in demand for brand new vehicles through one-fifth. But, reduction in demand relies upon the strength of the recessionary forces.
If organizations like Ford withdraw their assets and cuts down employment in order to keep their competitive benefit, there are probabilities that others may comply leading to a complete loss. In line with the management of Ford, the selection of “Brexit” may bring about losses for the company of approximately one billion dollars in a span of 2 years. The political instability has affected the value of the pound in global market falling by 11%. The organization is of the opinion that it'd be smart to raise the costs of the cars (The Guardian, 2016)
Brexit is a political choice that has impacted the economy of the United Kingdom and has for that reason made agencies to question their future prospect in the United States. United Kingdom’s vote to exit EU, has led to the fall of the stock market in that sector. The value of pound fell by 10 % which means that the costs of imports will be more expensive. The inflation rate of the United States will rise even though the price of export fell that could raise the demand for British products and services in different places.
The Treasury had expected that due to Brexit, the interest is going to be raised for the British financial system by about 1%. It’s going to stall the development of the economy as agencies will find it highly-priced to make the funding. As Ford and plenty of different organizations are making plans on closing their production units in the UK, the unemployment rate is going to rise. It'll make reasonably-priced exertions available for the businesses staying within the economic system. Salary rates are to be lower than what was previous to the selection of Brexit. There may be a reduction in overall investment for agencies like Ford due to the fact that investors are warding off because of the financial and political turmoil in the worried financial system Though the sellers of cars within the UK believes that the rise in interest will not reduce promoting of vehicles as the majority of the car manufacturing corporations are global. They will be able to offset their losses through favorable forex costs. Ford ranks as the biggest automobile logo in the United Kingdom and in line with the chief financial officer of the enterprise; if Ford is required to maintain profit in this kind of financially risky market, then the enterprise is required to raise its prices in the coming months. The organizations are estimating a discount on their income might result in a loss of hundreds of millions in 2016. All of their alternate deals are required to be renegotiated as they might not be able to produce their agreed amount if they are no longer capable of raising the rate. The pressure is on the organization to recall all of its options inclusive of the closure of the units in Britain.
The principal issue associated with the producing of vehicles is the emission of gases which is hazardous to the health of individuals. The organization is operating constantly so they can reduce the emission from each car. Ford is also related to public and personal initiatives so that an answer can be generated to deal with the problems of whether adjustments throughout its working units. The organization has focused to lessen the emission of carbon dioxide by 30 % before 2025 for every vehicle produced by the organization. Ford has already accomplished a reduction of 18% CO2 emission by end of 2013, therefore, the organization is positive in achieving the set goal. The enterprise has also ventured in the manufacturing of vehicles run through power in preference to bio-fuels. Ford is producing mainly designed engines that can assist in minimizing the emission and are fuel efficient. They have got additionally began generating hybrid vehicles.
Presently, they provide the best 3 models however as the gasoline charges are increasing the employer is making plans to extend its share of hybrid car production. Ford has made extensive modifications in making their products environmentally conducive. The organization is making use of the following techniques in an effort to make their synthetic automobiles greener. First: The life cycle method carried out by the organization allows the enterprise to estimate the environmental harm and allows in developing vehicles that have a least harmful impact on the environment. Secondly: rising utility of technology in lowering the carbon dioxide emission. Thirdly: they may be using the principle of reuse and also are inclusive of sustainable substances in the production of each automobile in order that the proprietor can have better experience. They have already made tremendous modifications in the design of the products to enhance interior air quality. Their designs have minimized the inclusion of problematic materials.
Employment Trends
Regardless of the any actions on the fuel prices changes, employments are expected to drop in this industry and variations made by companies will too reduce employment.
Ford Swot Analysis
As the company aims at becoming the automotive industry leader, its success lies in its ability to work strongly on its SWOT analysis. This analysis tries to help the company put more focus on expansion and new revolutions that can support its growth and improve on its performance.
Strengths
A supply chain that is done globally.
Innovations that are effective.
A brand identity that is strong.
Weaknesses
The production of cars in different locations globally is limited.
Innovations processes are slow
Its prices are relatively higher compared to competitors.
Opportunities
Market penetration can help in its expansion globally
Increase in growth resulting from product development
Threats
Market rivalry
Inconsistent prices of oil.
Action plan
The company needs to work on its market exploration, investments expansions, advance on its speed of new innovations and increase its manufacture network.
Conclusion
Ford Motor is one of the biggest vehicle brands in Britain and has a reasonably profitable business hooked up in the states with some of its producing units in the United Kingdom. Even though 2015 has been distinctly better for the organization, the latest selection of Brexit has posed a tremendous risk to the operation of the organization. It is evident that the management of Ford can close their production units in the United Kingdom and increase expenses in their merchandise to maintain profits. As a part of their future in the EU market, they have made a choice to preserve all the options open. The organization is an international emblem and has the revel in and information to hold their achievement spree in the future.
References
Forbes. (2015). Ford Motor Company 2015 Annual Report. Retrieved from Ford Motor Company 2015 Annual Report: https://corporate.ford.com/content/dam/corporate/en/investors/reports-and-filings/Annual%20Reports/2015-Annual-Report.pdf
Statista. (2016). Comparison of leading car companies' market share in the United Kingdom (UK) from March 2014 to December 2017. Retrieved from Comparison of leading car companies' market share in the United Kingdom (UK) from March 2014 to December 2017: https://www.statista.com/statistics/300467/leading-car-companies-market-share-in-the-united-kingdom/
