Strategic Planning: Ford Motor Company
Planning is an essential process in today’s organizations. Based on the three types of managers: top-level (strategic managers), middle-level (tactical managers), and frontline (operational managers), exist three corresponding levels of planning: strategic, tactical, and operational. The purpose of this essay is to focus on the strategic level of planning for the Ford Motor Company; a leader in the global automobile industry. Strategic planning, according to Bateman and Snell (2009), “involves making decisions about the organization’s long-term goals and strategies” (p. 137). This paper will elaborate on six key influential factors: economic, ...view middle of the document...
Between 1927 and 1928, Ford set in motion their “1928 Plan” of establishing worldwide operations. Unfortunately, the strategic plan didn’t account for economic factors in Europe driving the demand for smaller vehicles. Henry Ford established plants in Europe for the larger North American model A. Their market share in 1929 was 5.7% in England and 7.2% in France (Dassbach, 1988). Economic changes can wreak havoc on a corporation’s bottom line and profitability as well as their brand.
Environment is another significant factor that affects the strategic plan. When a major environmental disaster occurs, such as a hurricane, it can affect a company’s production facilities, their sales facilities and the community that the company serves. How well the company is able to recover can often depend on how the company responds to the disaster. When Hurricane Ike wreaked havoc across Texas, Ford responded immediately with the following press release; as customers rebuild from hurricane Ike, Ford Motor credit offers financial relief (Ford Motor Credit, 2008). According to this release, Ford Motor Company offered Texas residents affected by Ike, the ability to miss an undisclosed number of payments so that they could focus on damage control and get back on their feet before resuming a regular payment schedule. These actions set an excellent example for community involvement and compassion toward its customer and strengthen the brand of the company. Corporate citizenship in response to environmental disasters should be part of the overall strategy.
The automobile industry is among the largest industries in the world and this competition directly influences the company’s strategic planning. A few of the competitive advantages that these companies work to gain include; vehicle pricing, gas mileage efficiency and vehicle stability. With the constant rise in gas prices the Ford Motor Company must develop a plan to overcome the threat to their products value. “Ford has not always been a leader in fuel economy, particularly in North America, but we believe that the steps we have laid out will bring our product plans in line with our commitment to leadership in addressing the climate change issue and our goal to provide customers with vehicles that are fully competitive in every way, including fuel economy.” (Mulally, 2008) Continuous customer satisfaction is vital because society is being impacted not only by rising gas prices but also an increase in population causing congestion which in return may result in alternate means of transportation. “There are currently 900 million vehicles in the world, and that number is increasing rapidly as individuals in developing markets reach new levels of prosperity. It could reach two billion vehicles by the middle of this century.” (Mullally, 2008) Ford’s strategic plan must take these factors into consideration and ensure future growth and product development address...