Ford and the Global Automobile Industry in 2012 Case Study

Ford and the Global Automobile Industry in 2012 Case Study

Park University

Ford and the Global Automobile Industry in 2012 Case Study

        The global automobile industry has developed under sturdy conditions. Since its inception, the industry has grappled with numerous challenges, among them competition between car companies, changes in consumer demands and economic crisis. Friedlaender, Winston and Wang (2011) argue that the automobile industry faced indecision over technology and design of cars in the early years. Besides, rapid technological growth overwhelmed the motor industry. The different automobile companies came up with distinct technological discoveries that led to the development of diverse vehicles. However, the desire to develop car models that are acceptable worldwide resulted in various companies agreeing to work together. In 2012, the major challenges that hampered the growth of automobile industry were technological revolution and changes in consumer demands.

Synopsis of the Case

         The present state of automobile industry can be attributed to increased demand for cars, government policies and development of efficient vehicles. The world financial crunch witnessed between 2007 and 2009 led to most industries restructuring their operations (Friedlaender et al., 2011). The automobile industry was not exceptional. Previously, the Ford Company did not have sufficient market to sell its cars. Moreover, the financial performance of the major car companies was awful. The emergence of novel markets and competitors compelled the car companies to change their strategies. Besides, environmental disquiets and technological revolution affected the growth trajectory of the industry. The auto companies had no alternative but to come up with standard models for their products. Additionally, the promotion of global models led to companies manufacturing standard vehicles across the different countries. Changes in technology resulted in the production costs going up (Winston & Mannering, 2012). Therefore, the automobile companies had to look for ways to minimize the costs. Most companies opted for lean production that guaranteed efficiency and reduction in production costs. However, the lean production was not sufficient. The companies had to look for alternative measures. A majority of automobile companies started to outsource services, components and materials to attain flexibility and lower costs. To date, the companies continue to contend with technological revolution and changes in consumer demands in their bid to exploit the global market.

Explanation of Relevant Concepts

        According to Patterson (2013), technological growth and the fight against global warming has led to tremendous changes in the auto industry. The demand for efficient and safe cars has resulted in the development of vehicles that mankind could not fathom in the past. Indeed, the major automobile companies like Ford, General Motors and Toyota have been forced to change their production strategies and invest in technology. Stiff competition due to emergence of infant companies has compelled the major auto corporations to diversify their operations. The companies have reduced the number of platforms used for vehicle manufacture to guarantee that they develop homogeneous and quality models (Patterson, 2013). Currently, automobile industries pay high attention to powertrains when assembling cars. Most companies are trying to enhance the general effectiveness of their engines. Moreover, companies are competing to develop the most efficient and cost-effective electric vehicles.