Operational Strategy: A Case Study Of Ford Car Manufacturing Company In The United Kingdom

Question:

Discuss about the Analytic Operational Strategy Report for Ford Company.

Operational strategy is the procedures a business uses to achieve its purposes, goals and objectives (Ross, 2013). An organisation can investigate, and apply well-organised and effective methods of using personnel, the resources in the company and the work procedure by developing an operational strategy (Tang & Zhou, 2012). Companies that are service-oriented also use the functional approaches that they have developed to make critical decisions and also make a strong management team. Operational procedures can be grouped into five tactics that include corporate strategy, customer-driven strategy, developing core competencies, competitive priorities and product and service development (Cotter et al., 2013). Corporate strategy is looking at the organisation as a scheme of parts that are interrelated. Just as the body depends on the heart for the supply of blood, every section in firm depends on each on one way or the other so that the customers get the best services. A customer-driven strategy is where an organisation is prepared to respond to the changing preferences of its clients. The firm can understand the customers by evaluating the market trends of its consumers. Core competencies are the resources and the strengths that business has (Cotter et al., 2013). They include best financial and marketing experts, experienced and well-trained workers, favourable business location and the best management team (Schrank, Eisele & Lomax, 2012).  A firm can satisfy its consumers if it has identified the core competencies.

A company can develop its competing priorities by extending the market analysis of the firm, creating the corporate strategies, conducting a routine study on the needs of the organisation, and defining and identifying the company’s core processes (Gosling, 2013). The firm can also evaluate the cost of operation and analyses the quality of the goods and services it is providing. When developing the services and products, the organisation should put into consideration the innovation, design, and added values of the products (Schrank, Eisele & Lomax, 2012). A firm can either chose to be the first ones to introduce the commodity in the market or wait for other businesses to come up with the product then it makes modifications to the good or service. The firm should first study the preferences of its consumers before coming up with a product.  Like any other businesses, car manufacture should also understand their operations strategy if they want to prosper in the market. They must understand what the clients want, which mode does the client prefer (Cotter et al., 2013). This report, therefore, discusses the operations strategy of Ford car manufacture in the United Kingdom analytically by looking at the currents challenges the firm is facing and giving some recommendations to the firm.

Increased competition

As the carmakers in the United Kingdom are looking for the opportunities in the global market, they are facing competition from other carmakers around the world (Graffin et al., 2013). The Asian countries like Japan and China are posing a significant threat to the United Kingdom’s car products. There are other models of cars already on the market that are making the demand for the United Kingdom’s market reduce gradually. The slowdown of the in car sales in the United Kingdom is reported that it has been seen because the Japan and Chine models are coming into the market at a lower price. The transactions are estimated that they have reduced by 4.7% from 2014 (Maniak et al., 2014). Smith, (2014) believes that the increasing technological advancements in Japan and China will cause the United Kingdom’s market of care sales decrease to 2.3% by 2029. Most of the customer who used to buy the car models from the United Kingdom have deviated and now prefer automation from the Asian countries (Graffin et al., 2013).

Increased Competition

Apart from Japan and China, the United Kingdom car manufacturers are facing stiff competition from the United States of America and Canada (Graffin et al., 2013). The two countries have invested heavily in the production of new car models and selling them at an affordable price. Another issue that is increasing competition leading to lower United Kingdom’s manufactured cars is the demographic changes of the residence (Cong et al., 2015). Some populations in the United Kingdom adore social media hence losing appetite to own a car. The residents prefer to board a train to take them to work and as they interact in the social media.  Other changing market trends that affect the sales of the car include the technological innovations in the United Kingdom, environmental concern and persistent somberness economy. Another issue that led to the competition increase is the rate at which other car manufacturers bring the innovation of new car models. Jaidi and Thévenet, (2012) estimated that over 1544 car models where manufacture in 2013 and the number is still increasing due to the new technological changes.

Implications of the increased competition

Completion of not a new term in the world of business and every person entering the trade sector must be ready for opposition (Graffin et al., 2013).  Ford car manufacturing company should also be prepared for competition in the market. So that the firm gets a chance to grow in the car market, it should evaluate the operation strategy by studying the market trend and the demography of its customers. Understanding the customers is significant in business because it will help the organisation manufacture the cars that its consumers want. The trend in the market change every day and the environment of the customers also transform frequently. Therefore, the company should conduct the study of its market to learn new trends. The outcomes of the target market study can help the firm manufacture the best cars, and of high quality that meets the consumers’ needs, therefore, the company will stay in the market and compete healthily.

Marketing, branding and short-term sales volumes

Marketing is the process where a company promotes its products, distribute the commodity and the sell it to its clients (Lin & Ho, 2016). Marketing includes conduct research of the target market and advertising the product. Branding, on the other hand, is building the popularity of the product among the clients (Jia et al., 2016). Finding the balance between marketing and branding is hard. Most of the car manufactures in the United Kingdom find it hard to keep the balance between branding, marketing and selling their commodities in a short-term volume (Graffin et al., 2013). Marketing of products is significant to a company. Therefore, a firm should use its resources to market its products and make it known to clients (Azevedo et al., 2012). If marketing is done poorly, then the company will not get clients for its products.  When a product is branded well in the eyes of the public, it will sell the commodity. However, most of the carmakers in the United Kingdom have not found the connection between branding, marketing and short-term sales volume because most of the people who do the jobs do not understand their roles.

Implications of Increased Competition

Implications

Ford Company should develop core competencies by employing people who understand their roles in the firm. When a firm has professionals who know the best marketing and branding strategies, the company will have the upper hand in the market because people will already have a good picture of the firm. Knowing the marketing and branding strategies can help an organisation to have a thriving sale in the market. It is hard to sell cars on a short-term basis, but with good branding and marketing, the sales can improve. The firm should manufacture the vehicles of high quality so that the products can be rated the best.

Globalization

Globalization is the process where the world is becoming more interrelated, and communications are becoming easy (Azevedo et al., 2013). The increase in globalisation increases the risk of venturing into the car manufacture business also increases. The firm also grows more complicated.  There are the shifts of global sources of raw materials supply in the United Kingdom due to globalisation. Secure communications in the world have made many countries aware of car manufacturing, and most of the states are where the United Kingdom car manufacturing industries were getting their resources (Graffin et al., 2013). The countries are not supplying the raw materials for manufacturing the cars any. Instead, they are using the materials to produce their vehicles. Some of the countries were primitive before globalisation, but today they are educated because of the spread of technology and education through globalisation. Globalization further affects the global trade and the fulfilment of the worldwide finished cars logistics (Jia et al., 2016).

Implications of Globalisation

The Ford car manufacturing company that is based in the United Kingdom must use globalisation to their advantage. They should send some of their representatives who are good at public relations to go and meet with the countries that have the materials for manufacturing the cars and strike deals with that particular state. The firm should also search for alternatives when there are no raw materials. Through globalisation, the organisation should also look for the raw materials the produce high-quality cars.

New Regulations and New Powertrains

The car Manufacturing companies in the United Kingdom are facing challenges from the introduction of the new electric powertrains (Jia et al., 2016). The electric powertrains provide faster and cheaper transport of people from their homes hence, and persons nowadays prefer to travel by train instead of buying their cars. The electric powertrains also compete for the raw material with the carmakers. Another challenge is the new regulations passed by the government of the United Kingdom. The government wave heavy taxes on the manufactured cars and also wants the car to look for new ways of powering the engines (Cong et al., 2015). The powertrains use electricity to power its motor. Therefore, it does not pollute the environment.  Cars, on the other hand, use oil which emits toxic gases in the ecosystem and that is what the environmental department of United Kingdom is trying to fight.

Marketing, Branding and Short-term Sales Volumes

Implications for the Company

Ford Company in the United Kingdom should try to find the new ways cars can be powered apart from using the oil fuel so that it can solve the issue of regulations. The taxes cannot be avoided. Hence the firm should create high-quality cars to get more sales which can help in paying the taxes. The population in the United Kingdom is moving from the personal vehicles to public vehicles. Therefore, the firm should also proceed with masses and start manufacturing the public cars to match the market.

During the evaluation of the challenges the car manufactures encounter in the United Kingdom, the following lessons were identified which include lead operations and quality leadership.

Lean Thinking/ Operations

Lean thinking is the process of focusing on the business and removing the thing that is not important to the organisation and increasing the customer value in the firm (Aziz & Hafez, 2013). Lean operations can follow the following process first, identification of the events that create income, second, value streaming, removing the activities that do not add value to be business, allowing the consumers to interact with the products, and the last step is to improve the customer service (Vlachos & Bogdanovic, 2013). The two significant activities in lean thinking are the elimination of waste and generation of revenue for the company.

Elimination of waste

In the business field, a residue is identified as the actions or events that do not bring any value to the organization (Lyons et al., 2013). However, preventing waste is more important in a business that eliminates the waste.  Waste can come from the customer service or the activities in the office. Customer service waste includes when the customers get a delay when waiting to be serviced, for a response from the firm, for deliveries, waiting for long in the queues, and empty or delayed promises (Vlachos & Bogdanovic, 2013). Second, poor communications to the customers, duplication of services, and movements of customers that are unnecessary.  Third, errors during transaction services, damaged or lost goods during delivery time, lack of respect when treating customers, substituting products or services and poor customer care (Santos, Wysk & Torres, 2014).

The wastes in the office are the most irritating wastes of all the scraps types in an organization (Santos, Wysk & Torres, 2014). They include first, searching for file or computer document that is out of place. Second, overloading workers with other assignments and they are already attending to other clients. Third, workers in an office having the habit of concentrating on less-important tasks and not working on most essential work. Fourth, the office staffs’ inability to make quick decisions and also workers failing to perform their duties when not supervised.  Lastly, attending events and meeting that is not productive to the firm (Vlachos & Bogdanovic, 2013).

Generation of Revenue

Generation of revenue is possible when an organisation’s management continuously stream the company’s improvements from time to time (Aziz & Hafez, 2013). The lean operations’ main purpose is to develop a new culture and behaviour which can motivate the employees of a given company to continue bringing ideas from time to time.  The ideas further help the firm grow. The company should also improve the firm’s revenue by reducing unnecessary transport cost, sacking those employees who do not take their work seriously and improving customer care (Lyons et al., 2013).

Quality leadership

When business is making profits, and manufacturing quality products to the consumers then the company is under quality leadership.  Bryant, Walker and Lee,  (2013) reported that quality leadership comprises of the following characteristics they include acting strategically, managing complexities, demonstrating integrity in business and inspiring engagement. The workers in the industry today want transparency, the company values and goals motivate them, and they are searching for integrity among their leaders.

When a leader wants to act strategically, he/she must question his or her ideas, and they should also look for data that challenges his or her views. A leader should not just sit in offices rather he or she should get out of the office to seek and gain new experiences that can help the firm thrive. Lastly, acting strategically in a firm includes allowing the employees who have new ideas to implement them (Kosicek et al., 2012). Demonstrating integrity is where a leader makes his or her own decisions and then takes responsibility for his or her actions and that of his workers. Showing integrity also means being selfless and setting an excellent example for the employees.  Managing complexities is a leader does an intense study of the market and learns the new trends in the marketplace that can change the business sales (Sandbothe & Slack, 2012). The leader looks for ways to improve their goods and services to match the patterns in the market. Inspiring engagement is linking the values and goals of the firm to match those of the workers in an organisation (Kosicek,  Sandbothe & Slack, 2013, July). The leader should also know and understand his or her workforce personally then try to connect the employees’ motives with that of the company.

There are some characteristics of a business leader they include one the capacity to decide quickly and fast, the ability to understand and know his or weaknesses and strengths, being fair in the workplace, integrity, and knowledge (Sandbothe & Slack, 2012). A good business leader should also know how to controlling situations if they are out of control, be creative, and have excellent communication skills. Carmakers in the same way even need good business leaders who can help market the products and bring profits to the company. When a company has a weak business leader, who is a poor decision maker, unfair and cannot communicate his or her ideas when then the firm cannot survive in the world of business.

Effects of Japanese Car Manufactures on Ford Company in the United Kingdom

Japan is a country in Asia that has changed the market for cars that are made from the United Kingdom.  In the 1950s it was hard to predict the future of Japanese car manufacturing in the international market (Young Hood & Hamill, 2017). The second world war negatively affected automotive production in Japan due to the mass destruction Japan’ s infrastructure and low demand their cars. Toyota company in Japan was about to suffer bankruptcy.  Toyota company limited its production of vehicles to producing all of 300 carriers only due lack of capital to manufacture more cars (Dunnett, 2013). The rise of the Japanese cars in the global market was due to following key factors consistency, focus and detail-oriented engineering of the automotive.  The car manufacture affects car making in the United Kingdom (Slack, 2012). The effects include high competition in the global market, the low prices of the vehicles and its detail engineering.

Competition

The Japan car makers are competing with the United Kingdom cars because its cars are somehow cheap compared to the cars made in the United Kingdom (Young Hood & Hamill, 2017).  The consumers of the United Kingdom cars turned to Japanese cars because they were relatively affordable. In the market, customers will choose commodities that are relatively cheap and are of high quality. The United Kingdom car manufacturers made cars that expensive and only the rich could afford the prices of the vehicles but Japan came up with Hondas, Toyota and Datsun cars which were affordable and cars of good quality. United Kingdom cars at first were the only ones in the world market, but Japan came and competed with them intensively (Dunnett, 2013).

Competition for Raw Materials

When industrialisation first came into play, the United Kingdom car manufactures enjoyed the raw materials around the world by themselves. The United Kingdom had colonised a lot of countries in the world where they used to get the raw materials including steel and silver to manufacture their cars. However, Japan came into play after the Second World War and started to compete with the vehicle produces in the United Kingdom for raw materials (Dunnett, 2013). The competition made the raw material expensive and hard to get hence, affecting the quality and quantity of the manufacture of the car in the United Kingdom. The opposition for raw materials also made it expensive for the citizen in the United Kingdom. Therefore, the production of vehicles in the United Kingdom decreased.

Ford car manufacturing company should come up with new ways to counter the rising competition from Japan car producers. The Ford should make vehicles that all its customers will get and be satisfied. The Ford Company should analyse its operational strategy to find out the loose ends of the firm and correct them. Understanding the choice and preferences of your consumers is significant because it will help the firm manufacture precisely what the customers want. Operation analysis is vital in Ford Company because they will put down strategies for marketing, advertising, and branding to their customers.

A green business of sustainable trade is innovativeness that has less adverse effects on the local or global environment, society, community, or economy (Vom Brocke,  Seidel & Recker, 2012). A green company is a trade that strives to achieve the triple bottom line. The industry has human right regulations and policies and open-minded environmental guidelines. The following factors qualify a company as green (Nair & Paulose, 2014). First, green business commits itself to follow the ecological directions that have been put in place by a country during its operations. Second, it produces and supply goods and services that do not pollute the environment for example products producing toxic gases to the atmosphere.  Third, the green business incorporates guidelines, principles and sustainable regulations in its everyday activities and decisions. A green corporation is a firm that produces products that are not harmful to the environment and follow the stipulated environmental laws, and at the same time, it makes profits.  A green business can also be said to be an organisation that produces good and services that achieve the needs of its consumers in the current world (Karagülle, 2012). However, the industry does not interfere with the future generations and how will attaining their needs in the years to come. It is also a way a business evaluates how it can use renewable resources to produce its goods and services.

Houy el at., (2012) reported that green industry is like a stool that have three legs that is the planet, the people and profit. A business should consider all these issues when performing its everyday activities. The most primary purpose of the green company is to eradicate all the events that cause environmental pollution during manufacturing of the products. The organisations usually consider the green business by, for example, avoiding using papers in the communication and instead use electronic communication process (Vom Brocke, 2012). The car manufacturing companies make good use of green industry by reusing car metals to manufacture new cars.

Ford Company benefits a lot from green business because they reduce the cost of buying new raw materials to manufacture cars but instead reuse metals from old cars to make new vehicles. The company usually considers the life cycle cots for the products it produces. The customers have had faith in the firm because it tries not to pollute the environment. Ford Industries has been working on the innovation of cars that use renewable energy that will help in keeping the ecosystem healthy.

A business that involves a lean environment will make more profit because it will remove the waste in the firm and try to improve its services to the customers (Ghose el al., 2010). A firm that strives to improve customer services for its clients has good sales usually.  The facilities include delivering the products on time, not keeping the customers waiting for a long time and communicating clearly to clients (Karagülle, 2012). Similarly, green business helps the companies to improve the quality of services for their customers. When a firm puts the health of its clients into consideration shows that they care about the customers. A green business also helps coming up with innovations hence improving creativity.

Conclusion

Operation strategy is a significant exercise in any business. Ford Company should seriously conduct operation strategy of its activities so that they can learn where to improve the daily business activities (Ross, 2013). Operation strategy helps the management to discover workers who are lazy and an employee who hardworking and contribute positively to the firm. The exercise also helps the organisation to know and understand the choices and preferences of its customers, and therefore they can manufacture goods and services that fulfil the consumers’ needs (Tang & Zhou, 2012). Ford Company has faced some challenges due to a global financial crisis, product quality, and environmental regulations. Therefore, conducting operational strategies can help the firm identify the obstacles and also solve them. Competition is everywhere, and companies must be ready to encounter the challenge. Ford Company can use marketing, advertising strategies to help them overcome the other businesses in the global market. Ford should also make good use of the new technological inventions to their advantages. They can use technology to follow their target market and learn the demographic changes and trend in the marketplace (Jaidi & Thévenet,  2012).  Technology can also be used to improve the quality of products. Lean operations and green business are also part of the operational strategies. Lean thinking can help Ford Company identify and eradicate the daily activities in its business that are not profit-oriented and improve the customer services from the learned wastes. Green industry, on the other hand, has grown the creativity of Ford Company in that it has been working on a car engine that uses renewable energy instead of toxic oil gas. Ford has also been avoiding the confrontations with the human rights by ensuring that they follow the policies put in place to improve the environment for future generations.

1. Ford manufacturing company should use their resources towards studying their target mark and understand the trends in the markets. The market research can help Ford organisation to manufacture products that customers prefer.
2. Competition is a daily challenge in business therefore, Ford company should develop excellent marketing mad advertising strategies.
3. Ford organisation should implement the lean operations in the business to help them track activities that are irrelevant and develop methods of satisfying the consumers.
4. Being green is vital to the environment hence Ford should develop new ways which do not pollute the environment of supplying power to the cars.
5. Ford should also consider developing cars that are relatively cheap to compete effectively with Japan market.

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