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Ford Business Case Anlysis

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Ford and the World Automobile Industry

Ford and the World Automobile Industry In 2008, the Ford Motor Company and the world automobile industry as a whole, was struggling financially. The slumping economy had a significant effect on US automobile sales, with a 50% reduction year over year, negatively impacting company earnings. (Grant, 2010, p. 46) Reduced sales, emerging markets and increased competition created a changing landscape and financial sustainability issues amongst the market. These forces and Ford’s growth created excess capacity beyond consumer demand resulting in inefficient use of resources.
Synopsis of the Case
Ford and the collective automobile industry were faced with challenging times due to a US recession, resulting in reduced demand. This decline caused a focus shift from existing markets to new growth markets, such as Asia, Europe and Latin America. (Grant 2010, p. 48) Companies partnered with outsourced providers and adjusted operational methods in an effort to reduce costs. This growth partnered with a decrease in consumer demand resulted in high carrying costs across the industry.
Relevant Factual Information about the Problem or Decision the Organization Faced
The US automobile industry experienced a boom in the early-mid 1900’s, resulting in Ford and the industry growing rapidly. (Grant, 2010, p. 48) In order to meet the demand, capital investment in manufacturing capabilities was occurring. In the late 1900’s the industry began to see a decrease in US sales, culminating in the most unprecedented fall in demand in the industry’s history. (Grant, 2010, p. 46)

Explanation of Relevant Concepts, Theories and Applications Derived from Course Materials
The world automotive industry pursued cost cutting activities, such as plant closures, seeking outsourcing solutions, workforce reductions and selling off subsidiaries. Ford

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