Henry Ford - an Entrepreneurial Biography

Henry Ford

An Entrepreneurial Biography

Throughout the birth of the automotive industry there were many attempts by assorted firms to create the first everyday automobile. However, this resulted in a vehicle that could only meet the expense of by the upper class. Due to the structure and strategy used by these firms the costs of mass producing their vehicles were too expensive for the average American to afford. It was not until an American named Henry Ford, revolutionized the automobile industry in the early 1900’s with his invention of the assembly line and his desires to produce a simple yet affordable automobile for the everyday American citizen. This biography will outline and examine the current industry, competitors and market trend at the time of the Henry Ford’s venture. As well by exploring Ford’s biography, we will be able to identify relevant concepts such as the Elevator Pitch, the 10x rule, the need for pain, competitive advantage, and the “3 C’s of leadership” used throughout Henry Ford’s prosperous career as an entrepreneur.

During the early stages of the automobile industry, the number of firms that entered the market industry grew steadily from 1895 to 1907, peaking at 82 in 1907. (Klepper, 2001) It was apparent that this was a highly competitive market as the U.S was in the midst of the industrial revolution and to become successful a company would have to establish a competitive edge over the competition. Though the amount of increasing firms seemed high, the industry rounded out to be one dominated by three major players: Ford, Chrysler and General Motors. By 1911, Ford’s and GM’s productivity accounted for 38% of the industries output. (Klepper, 2001) The direction of the market at the time was facing the issue of high of economies of scale, which meant that the firm’s costs to manufacture were directly affecting their product price resulting in extremely high prices. Thus the average citizen could simply not afford an automobile. Henry Ford was able to identify this problem and perceive it as an opportunity which he then integrated in to his overall business model which was to produce an automobile with the lowest costs possible. However Fords largest competition did not come from GM or Chrysler, but the Association of Licensed Automobile Manufacturers. The issue that arose was that the ALAM owned the rights to the Selden patent, which was the patent for gas combustion engines. This meant that Ford would have to pay royalties for every vehicle sold. (Wicks, 2003)Unfortunately, this would have a major impact on the overall price of the model T, as well defeat Fords vision of supplying America with an affordable automobile. After numerous lawsuits between the companies with Ford losing the first time, Ford was awarded a victory and he would