Ford, Its History and Current Market Standing - Article Example

TOPIC: FORD; ITS HISTORY AND CURRENT MARKET STANDING (your Name) (Institution's Name) Ford motor company was started in 1896 by Henry Ford .He started by building a crude form of a vehicle called the Buggy frame. The buggy frame had 4 wheels the size of the bicycle. Ford did not rest at that but progressed each time improving on the original vehicle. In 1903 ,1708 cars were produced of the type ``ford mobile``. This was model A and in 1906 ford emerged as the top selling car company in the United states where 8,729 cars manufactured were sold. A new model (I) was introduced in the market in 1908 with approximately 15 million produced. Ford not only eyed the market in the United states but opened his eyes outside America. In 1911 ford started a factory in Manchester England. In 1926 he opened new markets in Australia with ford Australia introduced in Victoria and Geelong. (www.adl.org).In 1927 model (I) was brought to an end and model A reintroduced in Rouge complex. Two ford brands competed heavily in 1931 with ford model and Chevy model alternating in the level of demands in the US markets. This was the period when great depression occurred in the United states. Apart from production of various brands of vehicles ,the management of the company had various changes . Ford the founder, was succeeded by Edsel Ford in 1919 as the president of the company. In the 1943,Edsel Ford died of cancer and Henry Ford resumed the presidency .In 1945, Henry Ford 11 became the president of the company.In 1960 Robert Mcnomara was made the president by Henry Ford II. Until recently leadership changed hands severally. During this period more Ford brands were made till this day. For example Ford Mustang II (1974), Ford Tempo (1984) to mention a few. Sales also improved from 1.5 million cars by 1929 to 2.35 million vehicles by 1973.Currently we have several changes that have taken place in the Ford Company. The company has faced a lot of competition from General Motors,Toyota,Nissan and other makers of vehicles. This has resulted into low sales of the brands with the 2006 income statement showing that Ford company had negative Net income of 112,613,000,000 so big that the company had to do away with a large number of its workers to the tune of 18,000. This was aimed at reducing the operational costs of the company.The on going problems which have hit the Ford company, especially the perception the consumers have of its brands have also contributed a lot in the loses the company has incurred. Though it produces new brands, buyers are not quite interested in some of this brands due to the low quality as compared to other brands from its competitors. By July 2007, Ford sales went down by 19 percent and in August it was down by 14 percent. Ford has therefore faced a stiff competition from other vehicle makers, for example, Nissan, Toyota, Chevrolet and Honda. Fuel prices also have affected the Ford Motor co. sales because as fuel rose in price people preferred the vehicles which were efficient in fuel usage. Hence by 2006 the crossover utility vehicles sales rose 2.4 million units. Exceeding the SUV by 300,000. Units. Currently still the CUV dominate the market with prospects showing that it might rise by 8% in the current year. The Ford company has gone down in the retail market in the American market. Figures have shown that due to stiff competition from its close competitors its sales are 9.7% down meaning that the Americans or the consumers have lost taste and preference for the ford vehicles. The capacity has also been reflected in this figure. This means that the number of vehicles being produced by the Ford company are less as compared to those of its close competitors, due to the increasing problems Ford is facing and the downing sales figures the company has started selling away itself. In 2003, the company experienced a slow growth rate and this has persisted until now. In 2006, the Ford free star and mercuy Monterey minirawl were taken out of the market without being improved on replaced. Few people had hardly heard of this brands. This was because they did not march high quality brands that were made by Ford rivals. In 2008 it is focused that the factories producing the ford rangers will be shut down. The ranger brand may be stopped completely without being improved on or replaced. All this have caused a loss of 12.7 billion dollars the whole year. Through its restructuring program for ford products development in 2009, the ford company in 2006 mortgaged its assets in order to raise around 23.4 billion to achieve the above objective.In the current year 2007 new brands have been introduced for instance ford edge and Lincoln MKX and the AWD ford fusion. The ford fusion was rated first in quality than its competitors. (www.adl.org) Still in 2007, Ford has also sold its share away to David Richards who is the chairman of prodrive i.e. the Adston Martin. The land Rover brands and the jaguar brands are also expected to be sold and the only premium brands that ford will remain with will be the Volvo models . As stated earlier ford company has and is still facing stiff competition from its rivals. With its brands which are outdated it has become increasingly difficult to march the new brands originating from General motors,Toyota ,Honda and Nissan. This comes while the company is trying everything to ensure that its rivals i.e. General motors and Toyota companies do not outdo its F-series brand pick ups which it perceives to be one of the best selling brands in the market today ,when they bring into the market more redesigned and high quality models next year. To achieve its objectives the Ford company needs to maintain its leadership in the next years F-series model. Ford company therefore needs to make it more special and of good quality to maintain its leadership and increase the sales volumes. Geelong. (www.adl.org) For 104 years, ford motor company has had changes in leadership as stated earlier. In 2006 bill Ford stepped down as the chief executive officer and Alan Mulally was elected CEO and the president . Although this was done it was not announced to the public. This shows that the restructuring pro grammes that Ford undertook, to some extent were done behind the obscenest ford company has designed models and brands which are suitable for different parts of the wold. This is because we have areas or parts of the world with well developed infrastructures, for example, good roads where different Ford brands can move without getting spoilt easily. Ford company designs vehicles suitable for smooth or refined roads, and for areas where infrastructure is rough or not well developed. Ford has designed vehicles suitable for this areas for example, the heavy commercial vehicles, multi utility vehicles and the sports utility vehicles. This different models cost the company a lot of money to design because not all models can fit different climates and roads therefore the ford company has adversely invested in this area in order to outdo its competitors who have also gone into this areas with an aim of giving its consumers brands of high quality suited for their environment. For example the Toyota hilux has and is still being used in arid areas because of its strength and size above the ground.(Larry,2003) The ford company has adopted various marketing strategies in order to remain top in the sales of its brands. Firstly the ford company has fully adopted and incorporated the use of information technology both in marketing of its brands and production of its vehicles. This involves the use of Internet where customers can order their vehicles electronically. This has reduced the time taken for negotiations until the car is delivered to the consumer.This measures have also helped Ford company to have any critical information at its fingertips which has enabled it to venture into the market to increase its sales especially in areas where it would have been otherwise difficult to venture in. Secondly the ford company has invested heavily in the area of research to know its consumers preferences, complains and any other feedback that they may use in order to improve on their models to increase their sales. Thirdly the ford company is also continually marketing itself through the participation in the car races. This enables the consumers to view the ford vehicles practical on the road, compare it with other models and therefore make a choice as to its quality.(Larry,2003) Fourthly, ford company has used market segmentation in its advertisements to reach a targeted consumer group instead of the whole market.For example, ford company wants its messages aimed at marketing in front of professional golfers. Fifthly, the ford company has adopted new strategies of acquiring war rooms specifically for ford models. This ensures that no other models from its rival groups are viewed by consumers hence increasing the chances of its models being bought. This is in line with the fords objective of selling 900,000 F-series pickups in 2007. It has also adopted the policies of hiring experts in the marketing field in order to boost its marketing team and hence increase its sales especially for the F-series pickups that has led compared to the rival groups,Toyota, Nissan and Honda. The company marketing strategies have gone a long way into helping the company advance with its production and sales despite its hard economic problems. For example, reduced costs of advertising due to market segmentation has boosted its sales figures . The use of information technology has also been one of the most instrumental facility in boosting the sales of the company .This has helped the company reach geographical areas beyond its physical boundaries,for example the use of Internet advertising has opened up more markets all over the world. Models designed for different geographical areas have also helped the company maintain its sales figures by meeting consumer needs and demands . A good example is the Land Rover which is widely used in rough terrains. In spite of the above strategies various issues have hindered its performance. First, stiff competition from rival motor companies has resulted to a shift in consumer preference and taste from ford brands to those of Toyota, Nissan and others. Second,the hike in fuel prices has contributed to poor sales and this has adversely affected the ford brands which are not fuel-efficient as compared to other company models such as the Nissan and Toyota. Third, the existence of out-dated models in the market has also been a major drawback to the company sales. This models can not match the current models developed by the rival groups. Toyota company has the same model of corolla all over the world but it continues to experience increase in sales volumes because the model is continuously upgraded to meet changing consumer needs. Ford company on the other hand has different designs for different parts of the world but it has not been performing well since it does not review its consumer needs oftenly. Forth, some marketing strategies adopted by ford on its official website are detrimental to its sales.For example comparing ford mustang with Nissan 350Z, the Hyundai Tiburon GS and the Mitsubishi Eclipse are not worth adopting because the ford mustang is a muscle car which needs to be compared with cars like vipers and corvettes. The above comparison makes consumers lose meaning of the ford mustang hence reducing its sales . Therefore a lot need to be done in the marketing strategies to ensure they do not collide with the companies objectives. (Larry,2003) Fifth, the redesigning of the old and outdated vehicles takes years to be done .this continues to cause a decline in sales. The old and outdated vehicles need to be improved on and therefore give them a new face that can be admired by consumers within a reasonable duration of time. Sixth,comprehensive advertising strategies in the streets, media channels, magazines and other advertising channels have not been properly utilized and this has given room to the rival groups to utilize this channels. The result has been increased sales volumes by other rival groups and decreased sales volumes by the ford company. Adequate and continuous advertisement in the above mentioned channels reminds consumers of the new brands in the market, their quality as compared to other brands and the result being increased sales volumes.(www.ford.com) Seventh, inadequate marketing especially in the countries with high economic growth rate, for example,India, Kenya and other Caribbean countries has also been a set back in increasing the sales volume of the Ford car brands. Lastly high prices of the ford vehicles and its spare parts are other causes for low sales in ford vehicles. High priced car models which can not be afforded by many people of middle-class and lower class has been a major hindrance in the fords sales volumes. Targeting only high class people narrows down the consumer base and this has adequately reduced the sales volume. References Ford motor company available from www.adl.org (Retrieved December 9,2007) Ford motor company available from www.ford.com (Retrieved December 9,2007) Larry E,(2003), Ford Racing Century,New York: Prentice Hall publishers Read More