FORD AND THE WORLD AUTOMOBILE INDUSTRY IN 2012 Essay

FORD AND THE WORLD AUTOMOBILE INDUSTRY IN 2012 - Essay Example GM took over Ford as a result. This resulted due to the vision of GM being much more decentralized organizational arrangement. Customers were also offered much more options and choices as the product portfolio of GM happened to be much broader in nature. The bulk production of cars in United States influenced the growth of the post-war period, but that was only till the 1970s, which saw intensive rivalry from countries like Japan. Toyota offered customers in the US and through Europe better deals, not only with respect to quality but also cost Another reason for intensive competition can be attributed to government actions in Europe and US. The government of these areas tend to provide bonuses for getting rid of old cars and subsidizing purchase of ones that are new. Bonuses are also offered for the regaining of demand in major markets. Due to new incentives in production as well as increasing demand, competition increased. The automobile industry can be explained diagrammatically in the following figure: Porter’s Five Forces Model ((Investopedia, 2009) The automotive industry is facing a strong and tough competition as most of the competitors are not only large with respect to size but also have market, resource and financial stability as well as a proven track record. Competitors are promoting new products that may compete with each other at a high level. Competition focuses on attracting recruiting and retaining marketing personnel. Due to the fast pace of changes in technology the position of automobile players would unfavourably be affected if future developments in new technology are not accessed as well as anticipated. The automotive industry has faced low profitability due to the following key challenges: Regionalization Overload and division of markets, Challenges that only a few makers have happened to manage positively as well as effectively. New skills are needed to deal with the ongoing competition and ensure that the company/organization op eration results in profits. Many countries have grasped the skills of manufacturing cars. The quality of cars produced are not only good in quality but are also low in cost as compared to cars produced in Europe and US. The figure below shows the key challenges suppliers face in the automobile industry: Other reasons for low profitability include the cost of health care, the rise of China to a persistent overcapacity, manufacturers relying heavily on static business models (as shown in the figure above), and unable to show some adaptability skills especially in a changing environment. History shows to what degree the position of companies have changed during the last century due to them being unable to adapt themselves according to the changing market. Henry Ford built his realm on the basis of its capability to produce vehicles in bulk at an unmatched cost. Ford’s market share was defied by Alfred at GM. Alfred sensed that customers required a broader range than Ford provide d especially in maturing markets. Alfred started offering vehicles that served every purpose as well as every class of the society. Hence, in 1927 Ford happen to lose its market share and never happen to regain its dominant market share as yet. Market share, in the mature automobile industry has not and will never be obvious only on the basis cost