案例4  Ford’s European Organization Changes Strategy
Ford Motor Company has a long history of operating in Europe. Starting with exports to the United Kingdom in 1903, the company established sales branches in France and England in 1908 and 1909. Later, assembly plants were set up there. A plant was established in Germany in 1926. For several decades, the European operations were separate subsidiaries each being accountable to the headquarters in the United States with little coordination among them. The rationale for the organization structure was that each country’s customers had different needs, tastes, and preferences. In addition, each country had its own tariff regulations.
As the European countries grew closer together, Ford viewed its European operations as serving a common market with a regional organization, named Ford Europe, and two large manufacturing facilities in Germany and England. When the European companies were not considered separate and independent anymore, Ford used a coordination strategy. The aim was to achieve economies of scale and to reduce the cost of engineering. Therefore, Ford
designed cars that were considered suitable for most European countries. Models such as Fiesta, Capri, and Escort were largely designed in Britain and Germany and manufactured there as well as in Belgium and Spain.
In 1994, a new strategy emerged that was named Ford 2000. Ford merged its Automotive Operation unit in North America with that of Europe in 1995. Again, an important reason was to be more competitive and to achieve cost reduction through the elimination of unnecessary car platforms and the duplication of engine models. This meant fewer basic vehicle platforms as well as engines and transmissions. Moreover, the regional profit center concept was replaced by product-line concentration. Specifically, the Ford Automotive Operation consisted of five vehicle centers with worldwide development for cars and trucks. While four of the centers were in North America, the European center was responsible for developing small and midsize automobiles. Moreover, the North American centers worked together with the Europeans to develop the Mondeo, Which was produced in the United States and Mexico as the Mercury Mystique and the Ford Contour. These models were sold in some 78 countries.
北京新能源汽车目录But the Ford 2000 strategy and organization did not work well, as shown by the 1998 performance report: in Europe, Ford was losing market share to competitors such as General Motors and Volkswagen. Consequently, the newly elected chief Jacques Nasser reviewed the centralized Ford 2000 strategy and reintroduced the market focus orientation, which gives more autonomy to the regions, especially Europe where many of its competitors introduced brands that addressed the specific needs of customers. Moreover, Nasser created the Premier Automotive Group for luxury cars, which were more profitable than the low-and mid-priced cars. This division consisted of luxury cars such as Lincoln, Volvo, Jaguar, and Aston Martin.
The 21st century brought new challenges for Ford. While in the past European car makers were protected by quotas on Japanese cars, those restrictions are being reduced or eliminated. This means that Japanese and Korean car manufacturers will compete more fiercely in the European market. Also, the introduction of the European currency enables customers to compare prices across borders for the best deal. Finally, the global car industry is plagued by overcapacity, resulting in fierce competition. William C. Ford, Jr.
, the successor of Jacques Nasser, may have to review the company’s strategy and organization to adjust to the changing situation.
Questions
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1. What are the advantages and disadvantages of centralization and decentralization?
2. What was the rationale for the Ford 2000 program?
3. Why did Ford change from decentralization to centralization to recentralization?
4. Why did Ford establish a luxury car division?
5. Do you think Ford will be in the competitive global market in the future? Why or why not?
1.  There are great advantages in commonality as distinct from centralization or de-centralization in the automotive business. Modern technology has enabled designers and
engineers to collaborate across borders as designs are discussed and approved in joint international conferences, and overnight transmissions of data and details to working groups at Ford. However, local tastes prevail both the United States and in other areas of the world. The cars that sell well in the Midwest may not be the cars of choice in Southern California and the peculiarities of the London market are distinct from those in Hamburg. The significant cost of an automobile assembly line mandates some centralization of production facilities, but the dealer networks and service centers argue for regional de-centralized territories. 北京车辆限行
君越2.0t2.  The rationale was to reduce costs, but the execution didn’t work.
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3.  The vision was to rely on technology to bring about a new way of making and selling cars, but the infrastructure was not in place to sustain that vision. Ford allowed its costs to get out of control by focusing on the Internet instead of building good cars and trucks. Ford is re-centralizing to improve quality and reduce the costs of new products.
4.  The Premier Automotive Group was founded in part to help save Ford Motor by focusing on the cars with the highest margins.  However, relocation costs to Irvine, California, and product problems contributed to significant losses and in 2008, Mulally reached definitive agreement with Tata Motors of India to sell the Jaguar Land Rover segments for $2.3 billion, substantially less than Ford had paid for the brands under Nasser.
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