Case Study: Ford Motor Company's Business Problem and Solutions

This case study examines the Ford Motor Company's business problems in 2019, focusing on the financial perspective and challenges in the international market. The analysis identifies a decline in sales and earnings, attributing it to restructuring costs and troubled overseas markets. The study proposes solutions such as focusing on the most profitable models, improving dealer profitability, reducing manufacturing costs, and identifying loss-making segments. It discusses data requirements, sources, and potential issues in data acquisition, emphasizing the need for accurate and timely data to support decision-making. The paper concludes that solving Ford's business problems hinges on acquiring and analyzing correct data, though the process is complex and time-consuming. The study references various sources, including CNBC and ET Prime articles, to support its findings and recommendations.

A case study on the Ford Motor Company
2019

1
By student name
Professor
Date: 15th September,2019
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Executive Summary
The aim of this paper is to identify and solve a major business problem of the Ford Motor
Company written from the financial perspective. Our paper intends to identify the business
problem and providing the solution for the same for which the problem has been taken from the
news published in ET Prime and the CNBC.
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Contents
Executive Summary……………………………………………………………………………………………………………………2
Main Body………………………………………………………………………………………………………………………………………………..
Conclusion...................................................................................................................................................5
References...................................................................................................................................................5
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Main Body
It consists of the identification of the current business problem faced by the Ford Motor company
for which we are seeking the solution,requisites for achieving the solution of the identified
problem, identifying the various sources of data required for the defined solution, nature of the
data acquisition like fresh or historical, major issues faced in such data acquisition,an analysis of
amount of data required and finally the mode of such acquisition.
The problem we are going to solve has been taken from one of the articles published in the
CNBC.com dated January 24,2019, written by Robert Ferris. The problem identified is to
turnaround its sales in he international market. This fall in sales was further substantiated by the
downfall in its earning in the fourth quarter for which its top level management is blaming its
lacklustre performance in terms of restructuring costs and troubled overseas market(Gridneff,
2019).
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The major requirements as identified by its top level management to solve the aforementioned
problem is focus on selling of only most profitable models in the overseas market. Second
important thing is to keep its dealers all over the world in a much profitable state and it should
keep on growing in future so as to retain them in future. Third important requirement to maintain
the high profitability is to reduce the manufacturing cost of its vehicle by focusing on the local
production or restructuring its supply chain. And final solution is the proper identification of the
loss making segments so as to cut down the amount of loss(Coate & Mitschow, 2017).
As there are four major solutions that have been suggested ,hence for each and every solution we
need to identify the source of data. In order to identify the most profitable model, the data to be
sent or obtained from its overseas branch or unit .second the data from the dealers about their
profit portion is to be obtained. Third it needs to have a robust system of internal control to have
the most accurate data for its manufacturing cost so as compare them with the cost proposed to
be incurred locally. Again the accurate amount of loss to be computed for determination of the
losses incurred by the loss making segment(Delone & Mclean, 2004).
The major issue in obtaining the data required is that if it is to be obtained internally from the
internal records of the Ford, then it needs to assure about the fact that there is strong system of
internal control so that the most accurate data should come out before the decision makers.
Second when the data is coming from the external sources like it is in the case of dealers
profitability, then in such a case it is quite difficult to rely on the same as there is no direct
control of Ford on its dealers. In that case there is huge chance that the data obtained is highly
misleading. The overall earnings of the company have been stated below through the four
quarters.
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As we have suggested the four different solutions for the identified problem in such a case the
amount of data for each of such solution is to be known. For the first solution we need to have
the data of all of the overseas markets wherein the most profitable models of Ford are being sold.
Second it needs to have the list of all of its dealers whether located in its own country or in the
overseas market and then ask for the amount of their profitability individually from each of its
dealer(Boghossian, 2017). For the third solution it needs to have the data from each of its unit
located in its home country or overseas in relation to its cost of manufacturing a particular model
or in other words model wise and unit wise cost of manufacturing. The last or the fourth solution
requires to have the similar data as that of the third one in relation to the amount of losses
incurred by the Ford on its each end every loss making model along with the unit wise loss
making details of each of its unit whether located in the home country or in the overseas
market(Cayon, Thorp, & Wu, 2017).
In most of the above cases it would be better to ask for the most fresh data as it shall better assist
the decision making process. It is because the Historical data though can assist the decision
making process, but the decisions based on them can not be said to be much rational. At the
same time it can be understood that obtaining the real time data is bit difficult, but not at all
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impossible as it shall clearly depict the current financial condition of the Ford(Abdullah & Said,
2017).
For the data in relation to the overseas market profitable model sales, we shall held the in charge
of every such unit responsible for the accuracy of the data sent to the Head office of the Ford. In
relation to the data to be obtained from the dealers it is important to note that there should be the
appropriate authority of Ford who needs to cross verify the same and then it should be finally
presented before the management. For obtaining the manufacturing cost, the Company can rely
on its internal control system and the Accounting system of the Ford. Finally the data of loss
making segment need to be obtained in the same way as the data of profitable model is going to
be obtained(Hellmann, Perera, & Patel, 2019).
Conclusion
From the above it is quite clear that the solution of the business problem of the Ford Motor
company is based on the acquisition of the correct data by the company executives. But at the
same time, the process of acquisition of such data is difficult and time taking too.
References
Abdullah, W., & Said, R. (2017). Religious, Educational Background and Corporate Crime Tolerance by
Accounting Professionals. State-of-the-Art Theories and Empirical Evidence, 129-149.
Boghossian, P. (2017). The Socratic method, defeasibility, and doxastic responsibility. Educational
Philosophy and Theory, 50(3), 244-253.
Cayon, E., Thorp, S., & Wu, E. (2017). Immunity and infection: Emerging and developed market sovereign
spreads over the Global Financial Crisis. Emerging Markets Review.
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Coate, C., & Mitschow, M. (2017). Luca Pacioli and the Role of Accounting and Business: Early Lessons in
Social Responsibility.
Delone, W., & Mclean, E. (2004). Measuring e-Commerce Success: Applying the DeLone & McLean
Information Systems Success Model. International Journal of Electronic Commerce, 9(1).
Gridneff, M. (2019, September 10). E.U.’s New Digital Czar: ‘Most Powerful Regulator of Big Tech on the
Planet. The Newyork Times, pp. 21-22.
Hellmann, A., Perera, H., & Patel, C. (2019). Contextual issues of the convergence of International
Financial Reporting Standards:. Advances in Accounting, incorporating Advances in International
Accounting, 2(26), 108-116.
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