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Global Trade Essay: Ford

Global Trade: Ford Essay

Company History and Profile

Ford is an American company operating in the automobile construction industry, and it is now one of the largest manufacturers in the world. The history of the company is directly related to Henry Ford, who constructed his first vehicle known as the Quadricycle in 1896 (Ford Motor Company, 2017). Moreover, he is known to have introduced the conveyor system into the manufacturing process, which significantly improved the efficiency of production. The founder of Ford made the first attempt to establish the company in 1899 by joining the investors who started the Detroit Automobile Company, although he abandoned this idea in a year (Ford Motor Company, 2017). The actual incorporation of the Ford Company occurred in 1903, and the first international plant was constructed the next year in Canada, while the logo of the automaker was introduced in 1907, and the first car the Model T was first manufactured in 1908 (Ford Motor Company, 2017).

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Starting from the incorporation at the beginning of the twentieth century, the Ford Company has developed substantially and even made a significant impact on the American culture and labor market. The introduction of the conveyor manufacturing system, higher pay, and a shorter working week contributed to the emergence of the middle class in the United States.

Now, the activities of the company include manufacturing, designing, servicing, and marketing cars, trucks, and SUVs (Reuters, 2017). Moreover, today, Ford owns such brands as Lincoln and Ford. The current performance of Ford is outstanding, although its stock prices are associated with fluctuation. Over the last ten years, they grew from $6.75 in 2007 to $8.03 in 2008, while they fell to $1.73 in 2008 due to the recession, and as of November 2017 are at $12.16 (Nasdaq, 2017).

Nevertheless, the company is ranked 10th on Fortune 500 list with $151,800 million in revenues in 2016 (Fortune, 2017b). Notwithstanding the apparent success, the Ford Motor Company faces some challenges in its operation.

The Problem that Needs to Be Solved and its Impact on the Company

In general, the operation of the Ford Motor Company is successful, which is evident from both the massive revenues and being ranked tenth on the Fortune 500 list.

Nevertheless, there are multiple issues that the corporation is facing, and they are similar to those faced by other large companies on the Fortune 500 list. According to Alan Murray (2016), the top three challenges that large corporations face are tighter governmental regulation, a fast rate of technological change, and cybersecurity, while the issue of the growing competition from China is ranked only as the sixth-worst problem.

In the case of the Ford Motor Company, the problem of the fast technological change is the most significant one because it affects multiple areas of its operation, including sales, revenues, technology, and HR. This challenge is the outcome of the general global trend of the development and introduction of new technologies, software, and hardware. However, since the existing products are regularly improved and the competition in the market is substantial, the advanced technologies quickly become available to the general audience, and large companies need to respond to the shifting demand to retain consumers. Ford is not an exception in this case, even despite its long history of operation and large experience in addressing various issues.

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The effect of the problem associated with the rapid change of technologies in the Ford Motor Company is that it affects the original specialization of the company as an automobile manufacturer. Now, as the technologies are widely available, consumers demand advanced software and hardware to be integrated into the vehicles, which requires Ford to alter its manufacturing process. In case the demand is not satisfied, the sales decrease because consumers are less interested in the technologies offered. At the same time, the expenditures on the development of new, modern technologies decrease revenues. Finally, HR is also facing a challenge due to this problem because the tastes of consumers are changing quickly and solutions need to be found. Nick Morrison (2017) suggests that the forms of this issue include the need to introduce automation, detect emerging technologies, and sustain the high level of cybersecurity.

The issue of rapid technological change impacts not only the Ford Motor Company. General Motors is another corporation in the automobile manufacturing industry that is affected by this problem. The company has a broader operation than Ford since it owns more car brands; thus, it is ranked 8th on the Fortune 500 list (Fortune, 2017a).

However, the larger size and market share are both an advantage and disadvantages in this case. On the one hand, due to the larger net sales and revenues, the company is more harmed by the rapid pace of technological change. On the other hand, the diversification of products mitigates the adverse effects of this problem. There are two major aspects of the problem of rapid technological change that General Motors faced in its operation. The company is experiencing the need to meet the demand of consumers for the introduction of technologies into the vehicles and the increased competition in the industry from the technology-based automobile manufacturers such as Tesla.

The increasing demand for the inclusion of technologies in automobiles that used to be simply means of transportation fueled by petrol is the reflection of the overall trend noticeable across all the industries. Mary Barra (2016) indicates that the process that is taking place in the world is the fourth industrial revolution, and the previous three did not occur smoothly but in leaps. Consumers have access to advanced technologies that became available to the general audience in more or less two decades. However, while this process is generally a positive social change due to the improved quality of living, General Motors had to absorb the impact of such leaps by altering the supply to the market. In the industry of automobile manufacturing, the effect of the rapid technological change is reflected through the growing demand for the introduction of electrification and connectivity (Barra, 2016). However, even though General Motors have identified the general trends, the CEO still acknowledges that the tastes of consumers are constantly changing (Barra, 2016). When the company first faced this problem in its operation, the response was a dramatic change in the vision of the entire car manufacturing concept. Now, when technologies are widely spread and change at a rapid pace, General Motors strives for the development of safer, cleaner, and more energy-efficient automobiles (Barra, 2016).

At the same time, the rapid rate of technological development contributed to the establishment of entirely new, technology-based automobile manufacturers. Such a shift in the car production market is related to the so-called network effect, which means that technology’s value increases as the number of its users grow (Surowiecki, 2017). As a result, the rising demand for significant innovations and the introduction of technologies into the automobile manufacturing industry led to the growth of supply, which is now associated with the Tesla Company. Over a short period, the firm managed to grow substantially, increasing the competition in the industry by producing electric vehicles and surpassing General Motors by the market capitalization metric (Ferris, 2017). Furthermore, investors and experts believe that the firm has a large potential for future growth due to the further change and demand for technologies. The response of General Motors was the introduction of electric models such as the Chevrolet Malibu Hybrid, Chevrolet Volt, and Chevrolet Bolt EV, although they have a small range (Barra, 2016). Therefore, the company is still threatened by the problem of rapid change in technologies and its indirect effects.

Rectification of the Problem as the CEO or a Strategist

The problem of the fast rate of technological change is inevitable because it is a global trend. However, the substantial broadness of the issue and its significant effects still may be addressed by developing and implementing an effective strategy. Further, there is a discussion of the measures I would take as the CEO or a Strategist for the Ford Motor Company to rectify the problem.

First of all, I believe that the issue of the fast rate of technological change is a progressive step toward social development because technologies have been evolving steadily throughout human history. Now, when computer-based technologies are being introduced rapidly and broadly, it becomes apparent that the role of cars as vehicles fueled by petrol is very much outdated. Instead, as the CEO of the company, I would promote the shift in the perception of automobiles so that they are seen as integral parts of the modern technological environment rather than simply means of transportation. Therefore, the first measure would be the review of the firm’s mission and vision statements so that they corresponded to the realities of the modern world.

Secondly, I consider that the effects of the rapid pace of technological change may be mitigated and addressed only by taking corresponding countermeasures. Since the tastes of consumers are changing and such alterations affect the volume of demand, the supply needs to be flexible and adjustable. As the CEO or a Strategist for Ford Motor Company, I would consider investing in two essential areas of the business operation, namely R&D and consumer analysis. By investing in research and design, the power of the rapid rate of technological change could be used to benefit the company because the current and emerging technologies could be implemented in the new models and promoted in the market to attract and retain consumers. Meanwhile, the investments in the consumer analysis are also important because the use of different types of research would give the possibility to identify what the tastes of consumers are and what technologies are expected to be implemented in automobiles. Therefore, I envision the increased investments in R&D and consumer analysis as the second principal measure that needs to be taken.

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Finally, the current technological achievements could be used to increase the margin profit of the company’s operation. The revenues of a firm comprise the difference between sales and expenses. However, this marginal difference could be increased by either increasing sales or decreasing expenditures. As the CEO of Ford, I would review the current achievements of technological development, especially those in robotics and materials production, to reduce the costs of manufacturing. The introduction of more advanced and, potentially, AI-based robots at the production facilities would make it possible to save on labor expenses, although such benefits are related to ethical issues. At the same time, the use of more advanced yet cheaper materials could also decrease the costs of production. As a result, the margin would increase, and it would be easier for Ford to stimulate demand and sales using monetary and non-monetary means. Thus, this third measure that I would take as the CEO or a Strategist is effective because it both takes advantage of the fast rate of technological development and considers the adjustment of the company to the fluctuating market.


Ford is an international car manufacturer that has been operating in the market for over a century. Founded by Henry Ford, the company has had a strong effect on the development of the American economy and society due to the introduction of the conveyor system and higher salaries for workers. However, despite the significant experience, Ford Motor Company experiences the effects of the issues that are also currently faced by other companies in the industry. Among others, the rapid pace of technological development has the most robust impact because it affects the firm’s sales, revenues, technology, and HR. The same issue is faced by General Motors which has to handle changing technologies and increased competition from technology-based manufacturers. Their response was the production of more efficient, cleaner, and safer vehicles and the development of electric automobiles to remain competitive. Although the problem of the fast rate of technological change is severe, it still may be addressed. As a CEO or a Strategist for the Ford Motor Company, I would take three measures to rectify the problem. First, the mission and vision statements of the company would be updated to perceive a car as an integral part of the technological environment. Secondly, the investments in R&D and consumer analysis would be increased. Thirdly, technology-based production equipment and materials would be used to increase margins between sales and costs. Thus, if I were a CEO or a Strategist, my reaction to the problem of the fast rate of technological change would be grounded on the attempt to follow the trend rather than hold the pressure because the impact of this qualitative change in the world is too strong to be stopped by a single company or industry.

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