Ford and the World Automobile Industry in 2009 Essay

hybridizing and the World Automobile Industry in 2009 - Essay ExampleOverview of the family Ford Motor Company founded in 1903 by Henry Ford, an self-propelling and industrial pioneer remains today as one of the oldest unfluctuatings within the industry. The automotive trustworthy in Dearborn, Michigan and has so furthermost uprisen into other nations. Ford established itself as a major player in the automotive industry in 1908 commanding close to 50% of the market share after sales of 15 million vehicles of Model T (Grant, 2010, p. 46). In 1950, Ford became a public company making it to grow significantly. Fords main products include cars, trucks, and SUVs with different types of brands such as Jaguar, Volvo, Ford, Mercury, Lincoln, Aston-Martin, and Land Rover amongst others. Ford also has finance division, parts and service department, and they own Hertz Corporation, being the largest car rental firm in the world. In 2003, Ford was second after a pre-tax profit of about $ 1.3 billion disdain a $ 1.1 billion loss in North the States. Nevertheless, the company experienced significant losses amongst 2000 and 2008 attributed to rising costs of commodities, ongoing and rising healthcare expenses, lagging behind of sales of vehicles, and bailing out of major parts supplier from bankruptcy such as Visteon. Ford recorded huge losses in the fiscal years 2000 to 2008 as shown in fig. 1. The following is a Porters Five Forces analytic thinking explaining this trend. Figure 1 Table showing return on Equity of various Automotive Firms address of Grant (2010) Porters Five Forces Analysis Various models used in industry and firm analysis to develop the right managerial strategy. Strategic counseling is a complex due to dynamism and turbulence in business environment. Nonetheless, through Porters five forces model, organizations are able to describe areas requiring overhauling for effective and efficient performance (Blake, Cucuzza, Rishi, 2003, p. 11). Like many other firms, Fords strategic management can be enhanced through a deeper insight into five forces that has been reducing their competitive profit from 2006 to date hence recording such huge losses. Porter described competitive advantage as significantly influenced by five forces bargaining power of buyers, bargaining power of suppliers, intensity of competition rivalry, threats of fresh entrants, and threats of substitutes. These same forces led to Fords current economical situation (Windecker, 2004). In each of the down the stairs forces, a conclusion regarding rating in a scale of 1 to 5, 1 being very weak and 5 very strong is provided. The full scale is as follows Bargaining Power of Buyers in that respect is high intensity of competition coupled with increasing demand for automotive products in major markets. Hence, consumers film a variety of firms to choose from unlike during the classical time when there were limited reachrs. United States of America and European U nion consumers have a high bargaining power necessitated by availability of cultivation regarding various products (Grant, 2010, p. 49). The buyers in automotive industry are powerful due to unavailability of grand proliferation of companies that manufacture automotives. In addition, the largest automotive manufacturers within US have approximately 90% value shipped hence special value to the product. Another important feature of automotive industry in US is the fair normalization of parts used in assembling of products (Waraniak,