Managing For Finance Accountability - Ford Motors Company



Abstract

In the research we will focus on Ford Motors Company to see whether the concept learn in the course of Managing for Finance Accountability apply in this company or not. Furthermore, the research indicates the efficiency of the company to sustain in the competitive environment and how far Fort Motors adopt the financial techniques and concept in their decision making.

Table of Contents

Abstractii

Introduction1

Discussion2

Key Success Factors2

Cost Structure Benchmarks3

Purchases3

Wages4

Profit5

Basis of Competition Price and Cost5

Capital Intensity7

Revenue Volatility7

Budget Management9

The Future of Current Decisions9

Process9

Philosophy10

Structure10

Decision Making in Ford Motors10

Activity Based Management10

Cost Anlaysis12

Conclusion13

References14

Ford Motor Company

Introduction

Ford Motor Company is a joint stock company based in Dearborn, Michigan, USA, founded in Detroit in 1903 by Henry Ford. Toda, it is the largest company producing automotive cars, trucks, buses, vehicles and agricultural machinery, computer equipment and other products. The company employs approximately 246 thousand employees. The Ford automotive vehicle brands comprises of Ford, Lincoln, Mercury and Volvo.

Depending on the needs of the market, Ford Motor Company founded in different countries, their subsidiaries, which produce quite different, often not occurring elsewhere Ford models. The largest of these is the Ford-Werke AG which is located in Cologne Germany.

In 2006, Ford held a portfolio of eight brands: Ford, Lincoln, Mercury, Land Rover, Jaguar, Volvo, Aston Martin and Mazda. In 2010, this portfolio is reduced to two brands, the brand history of Ford brand cars and luxury Lincoln. All other brands were either arrested or surrendered.

In 2010, Ford posted a net profit of 6.56 billion dollars against 2.72 billion in 2009 and after having accumulated 30 billion dollars losses between 2006 and 2008. The turnover amounted in 2010 to 120,900,000,000 dollars (90 billion) and sales volume reached 5.31 million vehicles. Ford is profitable everywhere in North America, South America, Europe and Asia-Pacific-Africa (media.ford.com).

Discussion

Ford is the company who has a strong engineering potential which facilitates Ford to broaden their product portfolio and competitive in the automotive industry. Moreover, the severe price competitions have resulted in the financial health and condition of the ford which directly impact on their major operations. The main features of the Ford due to which they are successful in the automobile market.

They comprise of strong brand image which ultimately increase their sales and make their financial strong and enhance their share in market.

Their wide-spread operations across the world make their reputation strong in the market increasing their share price.

Ford has built strong research and development and engineering abilities which is due to the hiring skilled employees.

They have enhanced their operational performance which is due to their proper and suitable cost benefit analysis.

Key Success Factors

The most important for Ford Company to be successful in this industry are:

Access to the latest available and most efficient technology and techniques: Access to production technology is critical in reducing costs.

Effective cost controls: Continued pressure from the assemblers to reduce prices will require effective cost controls.

Undertaking technical research and development: Product innovation and expenditure on research and development are required to gain ...