Ford Motor Company: The Product Warranty Program

1759 words - 8 pages

Introduction:
Ford Motor Company is America's one of the largest car manufacturer and seller. In year 1987 it faces an external business environment change in the form of new warranty policy announcement by its major competitors General Motor, which changes the current philosophy of warranty in U.S car market. This policy change may have implications not only on Ford’s sales and market share but also on various departments within organization (such as manufacturing, quality assurance, parts and service, and extended service plans) and their dealer network. In answer, Ford executives have to respond through a best suitable course of action by carefully analyzing the current market variables. ...view middle of the document...

So these forces had both positive and negative effects.

Rivalry amongst existing competitors: Increased competition from cars produced in countries new to U.S. market e.g. Korea and Yugoslavia. However, fast growth rate of industry have positive effect as during growth, competition is minimized. The increased production and substantial overcapacity both had negative effect.
Threats of substitutes: In U.S., an automobile was considered as necessity so for every adult there was car on roads. Even for inter-city travel more than 70% time cars were used. Buses, trains and other means didn’t have much impact. The growing array of higher priced imported models had negative effect.
Threat of new entrants: Intensified price competition as new entrants sought their share of mature market had negative effect. However, high capital requirements positively affect Ford Motor Company. High capital was allocated for research and development which was and advantage against new entrants.
Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.
Bargaining power of buyer: 46% percent brand loyalty means product is important to customer and he can pay more for the product – had positive effect. Also a large number of customers minimize bargaining leverage.
Market Research:
Ford makes good use of market research on new car buyers shopping habits, buying processes, and ownership experiences. A new car ownership cycle has been increased from 3.7 to 5.4 years. 72% of buyers financed their cars, the vast majority 80% bought on four to five year loan period. The percentage of loyal customers was 46% and it is around highest in 10 years, percentage of the customers who switched from other manufacturers had increased and ratio gain/loss had increased.
The market research has helped Ford to anticipate customers buying criteria like Core Benefits and Augmented product that included quality, reliability and warranty for different type of cars. This data also helped to know owner’s Buying Behavior and loyalty influencers like quality, drivability, engine and transmission etc. It helped in understanding that the introducing of successful new car models had become a key to the success in industry. Ford changes it product policy from focus on standardization and narrow product line to proliferate and upgrade its models with quality as corporate philosophy and released multiple modifications in different models in one year. 1986 cars quality measured by TGW and was 50% better than of its 1980 models. Nationwide independent surveys were conducted to collect quality ratings data during years 1981-1986.

Warranty and Service Plans:
Warranty: Till 1960, basic warranty of 3 months/4000 miles was offered as a limited liability which increased to 1 year/12000 miles...

Other Papers Like Ford Motor Company: the Product Warranty Program

Ford Motor Company Essay

644 words - 3 pages Ford Motor Company Petris Irina Group 310 Contents General Presentation 3 Ford in Romania 4 Competitors 4 SWOT Analysis 5 Bibliography 6 General Presentation Ford Motor Company is an American multinational corporation which is ranked 3rd in the world in automobile production. Ford has always been in the top ten largest companies in the world by revenue and in 1999 was among the most profitable companies

Ford Motor Company Essay

3427 words - 14 pages sponsor the MMSDC Ford Diversity Internship program which will provide internships for 20 minority students (Corporate Ford, 2010, para.8) Furthermore, the Ford Motor Company has been recognized for several awards in diversity. , Ford ranked number five from Diversity Inc. Supplier Diversity” (Corporate Ford, 2010, para. 9). Ford also ranked in the top 50 organizations in the United States for multicultural business opportunities

Ford Motor Company

1098 words - 5 pages Case Study for Ford Motor Company Supply Chain Strategy Prepared by Student: Prepared for Instructor: This report is submitted in partial fulfillment of the requirements of the course Table of Content Subject Page Executive Summary ............................................................................... 2 Issue Identification

Ford Motor Company - 725 words

725 words - 3 pages Ford Motor Company Ford 1 Alan Mulally, CEO, Ford Motor Company Clinardus Parks Ronald Deming Leadership and Organizational Behavior-BUS 520 May 13, 2011 Strayer University-Lithonia Campus Ford Motor Company Ford 2 Abstract In this paper I will discuss the role of leadership and how it can impact organizational performance. I will also discuss Alan Mulally’s leadership style at Ford Motor Company and provide

Ford Motor Company - 2473 words

2473 words - 10 pages Chapter 5 Case – “Ford Motor Company” Instructor: Professor Pamela McLaughlin Course: Management of Concepts – BUS 302 Date: July 17, 2011 * This case outlines 4 strategic options Ford is pursuing to increase its profitability. Describe each of the 4 options. For each option list 2 criteria you would use to evaluate the option. The four strategic option that Ford Motor Company might pursue to increase its profitability is to (1

Ford Motor Company - 1279 words

1279 words - 6 pages Ford Motor Company | Spring 2013 Final Project | By Drake Dukes, Sarah Miller, Josh McKeon, Mackenzie Sowers, and Danny Lee | 5/9/2013 | Introduction Ford Motor Company aka “Ford” is an American multinational automaker headquartered in a suburb of Detroit, Michigan founded by Henry Ford and incorporated in 1903, 109 years ago. Ford introduced methods for large-scale manufacturing of cars through the use of the world famous

Ford Motor Company - 1318 words

1318 words - 6 pages “Alan Mulally, CEO, Ford Motor Company” Chiquetta Silver BUS 520 Dr. Amine Ayad May 15, 2011 Discuss the role of leadership and how it can impact organizational performance. Leadership is the process of developing ideas and a vision, living by values that support those ideas and that vision, influencing others to embrace them in their own behaviors, and making hard decisions about human and other resources (Hellriegel & Slocum

Ford Motor Company Strategic Audit

1277 words - 6 pages Fields (Executive Vice President, President of The Americas),Donat Leclair (Executive Vice President and CFO), Mark A. Schulz (Executive Vice President, President of International Operations) and Michael E. Bannister (Group Vice President; Chairman & CEO Ford Motor Credit). Paul Mascarenas (Vice President of Engineering, The Americas Product Development)(Ford Motor Co., 2008). The Ford Motor Company board members and corporate officers realize the

Ford Motor Company Case Study

1176 words - 5 pages Ford Motor Company Vision Ford Company aspires to be the world’s principal Consumer Company for automotive products and services. Or To be the world’s leading Consumer Company for automotive products and services. Mission We are a worldwide leader in automotive and automotive-related products and services as well as in newer industries such as aerospace, communications and financial services. Our mission is to continually improve

Analysis Of Ford Motor Company

1111 words - 5 pages Analysis of Ford Motor Company External Factors and Economic Environment 1) Market and Customers Between 22% and 23% (average over past five years) of Ford’s customers are defined as fleet customers as described above. The residual 77%to 78% of customers are private individuals who purchase Ford vehicles through licensed dealers. Ford customers come from all demographic strata given the diverse brand lineup and product mix, and Ford’s

Ford Motor Company Case Study

1714 words - 7 pages ------------------------------------------------- ------------------------------------------------- Ford Motor Company Case Report ------------------------------------------------- Executive Summary Ford Motor Company has a long history, starting in Michigan in 1903. They have focused on designing and manufacturing and have been very successful, however with increasing competition, global markets and over-capacity the company needs to

Related Essays

The Ford Motor Company Essay

1713 words - 7 pages Ford Motor Company Strayer University BUS 302 Professor Doreen Rainey October 31, 2010 Ford Motor Company located in Dearborn, Michigan has an alarming problem. Ford Motor has lost money in its North American sector of operation in the past years, despite its increase of models. In an attempt to attain a larger portion of the car market Ford Motor acquired some luxury models. Ford Motor moved some what away from Mr. Ford’s vision to

Ford Motor Company Essay 1868 Words

1868 words - 8 pages they expanded operations worldwide. Ford manufactures and distributes automobiles in 200 markets on six continents and has 108 plants worldwide. This allows more free trade between the United States and Europe, Asia, Pacific, Central and South America, the Caribbean, Africa, and the Middle East (Ford Motor Company: International Operations, 2009). Ford Motor Company took the time to restructure the company. They also redesigned their product

Ford Motor Company Essay 3032 Words

3032 words - 13 pages Ford Motor Company Billie Warren OMM 692: Organizational Management Strategy Adrienne Osborne January 14, 2013 Executive Summary- Ford Motor Company (Ford) has been a leader in the auto industry, however, over the past few decades has continued to lose market share to foreign competition. The current weak United States economy combined with rising fuel prices and increased political pressures regarding global warming

Ford Motor Company Essay 3264 Words

3264 words - 14 pages . The auto industry represents one of the largest segments of the U.S. economy. The U.S. industry is dominated by the Big Three, General Motors, Ford Motor Company, and Chrysler. The auto industry employs nearly 6.6 million people nationwide which represents about 5% of private sector jobs. Surging oil prices have shifted demand away from SUV’s and light trucks to more fuel efficient options. This change in consumer preferences has caused