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Ford Case Study

Ford Motor Company
Case # 38
Ford Motor Company, Established in 1903, built their first car the Model A. Founder, Henry Ford, realized that he could change society be making his automobile affordable to the general public and not just the wealthy. Henry Ford focused on efficiencies in manufacturing, marketing and mass producing cars that would be less costly to make and more affordable than his competition. Continuing with the idea of changing society for the better, Henry Ford created jobs that paid double the industry standard, thus allowing his own employees to afford the cars they were producing. In addition, he established employment opportunities for the physically and mentally handicapped, as well as, ex-convicts giving them a second start. Lastly, realizing the immigrant workers needed help with language skills, Henry Ford established schools within the factories. Henry Ford swiftly established a company built on the foundation of changing society for the better.
Over a Century later, the Ford empire faces new domestic, economic and global challenges. Typically the company did not hire top level executives outside of the family. In September 2006, Alan Mulally was named President and Chief Executive Officer. Mulally immediately identified the Ford Company needed to restructure the company to focus on manufacturing efficiencies, product design and economic focus. Mulally was stated as saying “Ford’s mentality of the bigger-is-better has to change to Less is More” (Strategic Management, fourth ed. Dess, Lumpkin & Eisner). Although this thinking is accurate and focused in today’s global and economic environment, the timing is going to prove to be the toughest challenge Mulally will face.
Ford Motor Company failed to effectively respond to environmental, both internal and external, changes. Competitive automotive companies, such as Honda and Toyota, began to gain market share because they were able to produce vehicles that were fuel...