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 "Global Strategies at Ford"

Topic: Corporate Social Responsibility; Globalization and Industry Structure; Business Level Strategy; Strategic Choice in the Global Environment; Designing Organizational Structure; and Matching Structure and Control to Strategy

Company: Ford

Length: 11:00

Chapters: 2, 3, 6, 8, 11, and 13

Cases: 22 "Ford of Europe: Fall from the Top" and 23 "Ford 2000"

Teaching Objectives:

  1. To show how Ford exercises its corporate social responsibility.
  2. To demonstrate how a company links its worldwide resources to develop new (and improve old) products for the world market it serves.
  3. To show how business level strategy can reduce costs and differentiate its products at the same time.
  4. To discuss the global strategic choices of an international strategy, a multidomestic strategy, a global strategy, and a transnational strategy.
  5. To discuss which global structure would be best for Ford today and in the future.

Key Concept Integration: 

Key Concept: Chapter

Corporate Social Responsibility 2

Globalization and Industry Structure 3

Choosing a Generic Business-Level Strategy

Global Strategic Choices

Designing Organizational Structure 11

Matching Structure and Control to Strategy

Content:

Pointing out that the world is changing at an accelerating pace, the video states that Ford is transforming its processes worldwide to meet ever-higher levels of competition in the global marketplace. Speaking of taking the "High Road of Global Cooperation," the video discusses the development of the car known in the U.S. as the "Contour" (a.k.a. the Mercury "Mystique").

The video also discusses Fordís accelerated pace of forming worldwide joint ventures and the fact that it is expanding its worldwide presence to expand its market share. The video explains that the majority of Fordís growth is expected to come from the emerging markets -- especially the Asia-Pacific region including China and Japan. The video further explains Fordís need for supercomputers and satellites to provide world-class communications. Moreover, the video stresses the need for efficient use of worldwide corporate resources including human resources (knowledge and talent), technology, and capital investments. It features Fordís desire to continually update its products. 

The video then shows how the worldwide new product development process was used to bring new life to the latest version of its legendary "Mustang." The video states that this version of Fordís Mustang was brought to market at substantial savings in just 35 months. The company spokesperson states that this is, ". . . the companyís best example of world-class timing."

The video explains that Ford faces many problems for developing products for the many countries around the world including, for instance, compliance with the many varied safety and environmental regulations. Regarding the latter, the video briefly shows Fordís efforts in recycling and environmental education.

Finally, the video shows that its new product development process is not only related to its cars . . . but to their financing -- and other profit centers -- as well. That the international financial services division continues to grow rapidly and show record profits speaks for itself.

Introductory Exercise:

One interesting way to begin the class would be to ask (prior to showing the video) how many students are familiar with the Ford "Contour." Then, ask them to name the other divisions of Ford that produce essentially the same car under a different brand name. Finally, ask them the name of the car sold by each division. (Mercuryís "Mystique" and Ford Internationalís "Mondeo")

Discussion Questions:

  1. What evidence do you see in this video that Ford is being a good corporate citizen?
  2. Why would Ford disperse parts of their production process to different locations around the globe?
  3. While Ford was doing the above, it was also implementing its coordinated worldwide new product development process to redesign the "Mustang." What benefits accrued to Ford when it did so?
  4. Why would Ford disperse parts of its responsibilities across the globe, while at the same time implement a coordinated worldwide process for other parts of its responsibilities?
  5. How is Ford implementing a business level strategy that is reducing costs and differentiating its products at the same time?
  6. Would you say that Ford is implementing the global strategic choice of an international strategy, a multidomestic strategy, a global strategy, or a transnational strategy? Explain your answer.
  7. Which organizational structures would you consider possibly appropriate for Ford as it moves toward the year 2000? What would be the advantages and disadvantages of each?

WWW Connection:

It may be interesting to link the use of the WWW with this video. One engaging exercise would be to ask students to research the questions posed in the "Introductory Exercise" above on the Web. You might also ask them to use the Web to find out more about the company and other issues related to the video. One good place to begin is Fordís Web page (http://www.ford.com/us/). Its branches, including its Global Home Page (http://www.ford.com/global/), have information about issues related to the video.

To meaningfully demonstrate to students that not everyone in the world uses English (something most know, but something that most havenít truly internalized), you might have them sign on to Fordís Web site in Germany (found as a sub-branch under its Global Home Page -- see address above).

Whether you provide students with these specific addresses is a matter of choice. A good compromise might be to suggest that they use a search engine (i.e., Yahoo, Excite, or Infoseek) within their Web browser to search for information about the company.

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