Introduction
Ford is among the oldest and most successful automobile companies globally. The company, which was founded in 1903, has had its fair share of ups and downs over the years. However, it has managed to weather all sorts of challenges through its innovative management strategies.
This article takes a closer look at Ford’s business strategy to analyze how it has managed to remain at the top of the automobile industry for over a century.
The Early Days of Ford
Ford’s business strategy has always been centered on innovation. From the very beginning, Ford implemented a series of inventive practices that kept them ahead of their competitors.
For instance, Ford is credited with revolutionizing the production process through the assembly-line technology. This approach made it possible for the company to mass-produce automobiles affordably, thereby reducing their prices to appeal to a broader market.
Ford’s Diversification Strategy
Ford’s diversification strategy came to the forefront in the 1970s, when it began to invest in other industries beyond making cars. The company began to acquire other businesses, including an aerospace company, which it later sold before acquiring a computer company, which it also sold.
However, the diversification strategy was not sustainable and caused Ford to lose focus on its core business of making cars. It was not until Alan Mulally was appointed CEO, that the company focused on shedding off its non-core businesses to concentrate on making cars.
The “One Ford” Strategy
Alan Mulally instituted the “One Ford” strategy when he took over as CEO in 2006. This approach aimed to reduce Ford’s costs while improving its efficiency by implementing a unified product design and manufacturing process globally.
The strategy saw Ford focus on making fewer models with a higher degree of standardization and using fewer platforms to reduce production costs.
Today, this strategy has helped Ford to remain competitive in the automobile industry while being able to explore new opportunities for growth.
The Future of Ford’s Business Strategy
Ford is currently in the process of shifting its focus to electric vehicles as the world moves away from traditional combustion engines. The company has already released its first all-electric vehicle, the Ford Mustang Mach-E. Ford intends to produce more electric vehicles to meet customer demand while significantly reducing its carbon footprint.
Conclusion
In conclusion, Ford’s business strategy has evolved significantly over the years. The company’s innovative management practices have enabled it to adapt to the ever-changing market dynamic and remain competitive in the face of fierce competition.
Ford’s diversification strategy was an essential lesson about the need for businesses to focus on their core competencies. The “One Ford” strategy helped the company to streamline its processes and improve efficiency, making it more profitable.
As Ford moves towards the future, its focus on electric vehicles is an exciting opportunity for the company to create new and innovative solutions to meet their customers’ evolving needs.
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