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From the starting of the automobile industry, the USA became the hub of different automobile manufacturer companies like General Motors, Chrysler. And during the 1900s, General Motors & Chrysler became the market giant of the automobile industry of the USA with their cars despite the fact that these two companies only wanted to make cars for the rich persons of the then USA.
On the verge of these two companies’ success & long journey, there is another automobile manufacturer brand in the then USA which is very well-known now but didn’t get the spotlight during their starting. Nowadays, each & everyone knows about one of the best automobile company Ford Motors. Today, Ford Motors have business around billions & they are always keen to bring new models to market. But it was not the same at the starting.
Ford is a top-selling automaker in America as being the second-largest US automaker, Ford is also the fourth-largest globally. Ford is gradually becoming a global leader in the automobile industry, setting itself apart from competitors. Success does not come to Ford suddenly, like other successes. This enormous success is due to their strategy, planning, and manufacturing strategy, etc.
Let’s talk more about the history of Ford. The major achievement of Ford is an example of a case analysis that may assist entrepreneurs in identifying the best plan for their company by incorporating some new inventions and changes in strategy. This blog is about how Ford became the automotive behemoth despite being founded as an automobile business with just $28,000 in the capital.
Related: How Toyota Set Themselves Apart in Automobile Industry
About Ford
Over the course of more than a century, Ford Motor Company established itself as a pioneering force inside the aerospace and automobile industries. Innovating was always first and primary at Ford, from its modest origins in the garden shed of Henry Ford Sr. house’s back in the 1890s towards the revolutionary all-electric Mustang that debuted earlier this year. Ford’s history spans more than 116 years, during which a great deal of blood, sweat, and tears have been shed in the cause of invention on several occasions.
On June 16, 1903, Henry Ford and eleven investors signed the articles of the organization formed Ford Motor Company at Dearborn, Michigan. On October 1st, 1908, Henry Ford debuts the Model T, which quickly becomes among the most popular automobiles globally. Ford started producing particular jeeps for the United States military in 1941, and the company dedicated itself entirely to military manufacturing beginning in February 1942.
October 7th, 1913, marks the 100th anniversary of Henry Ford’s introduction of the world’s oldest process moves assembly line at his Highland Park assembly facility beyond Detroit, Michigan. During the 1964 World Fair, Ford debuted their Mustang sports car, and dealerships throughout the country saw an unprecedented transaction of nearly 22,000 Ford Mustangs in a single day. Ford On March 15th, 1990, Ford introduced among the first SUVs being produced, the Ford Explorer, which went on to become the best-selling SUV just on the market for 15 years.
On the 21st of August in 1997, Ford delivered the first natural gas-powered taxicabs to New York City. The Mercury Mariner, a new gas-electric hybrid SUV, went on sale on July 11th, 2005, marking the introduction of Ford’s latest product. In comparison to the gas-only version, it is $4,000 more expensive, but the Sierra Club endorses it.
Ford will begin selling vehicles equipped with the turbocharged EcoBoost engines in 2009, according to the company. Ford commemorated two important 50th anniversaries in 2014 and 2016: the first commemorated the 50th anniversary of the introduction of the original Ford Mustang. The second commemorated the 50th anniversary of Ford’s resounding victory inside the 24 Hours of La Mans racing race. Ford re-entered the tournament in 2016 with their most recent version of the Ford GT, and they were victorious once again, earning first place overall.
Related: Volvo- A Brand Loyalty Any Entrepreneur Wants
The Business Strategy of Ford
From the start, Ford always tried to compete with other companies with their innovations & worker’s efficiency. Today Ford crosses 120 billion dollars as their revenue just because of these two reasons. From the 1900s, the innovations of Ford not only changed the luck of Ford Motors but also helped to change the track of the global automobile industry.
Today, we’re learning about some of Ford’s creative business strategies. A thorough examination of Ford’s business plan may assist future entrepreneurs in developing or refining a strategy that is original, different, and, above all, practical for their company.
1. Introduction of Assembly Line
At the 1900s, the assembly line was so much common & popular system that was accepted drastically by the slaughterhouse of the USA. Henry Ford was the first one who started to think about using the assembly line concept in his manufacturing plant. His introduction of the assembly line in the automobile industry changed the direction of the automobile industry.
The first assembly line, developed by Henry Ford, went into operation in 1913. The floating assembly line seemed to the spectator to be an unending maze of chains and connections, allowing Ford Model T components to move throughout the sea of an assembly operation. According to the manufacturer, the construction of the vehicle may be subdivided into a total of 84 stages. The use of replaceable components, on the other hand, was essential to the process.
In a famous quote, Henry Ford said that the utilization of both the moving assembly line enabled the job to be brought to employees instead of workers having to go to and across the car. Construction of the vehicle started with its movement along the line and its construction in stages. At first, everything was dragged by a cable, and subsequently, it was replaced with a basic chain mechanism that moved back and forth. Because of the new technique, the Model T could now be constructed in just ninety minutes.
The use of this invention decreased the production time of magnetic flywheels from 20 minutes to just five minutes. Ford then extended the method to the construction of the chassis. Each chassis took 12 & 1/2 person-hours under the previous method, which required components to be transported to a fixed assembly site. With the use of a rope, Ford reduced the amount of time it took to move the chassis through stockpiles of components.
2. Division of Workers
The division of labor is an economic ideology that says that by separating the manufacturing process into separate phases, employees are able to devote their time and attention to certain activities. Increasing overall performance is increased by allowing employees to focus on a single minor element of production as long as a suitable volume and amount of product is generated.
Henry Ford’s assembly line included a division of labor having employees focusing on certain tasks. Also, with the division of labor, each person just has to know how to perform their particular job; neither large-scale expertise nor vision are required of the assembly-line worker. A worker has to know how to spin the bolt when the component was next to him. This enables each worker to concentrate on a particular set of abilities, which may improve quality.
There being less skill or knowledge overlap, everyone knew what they required to perform their job. A workforce of assembly-line employees could produce vehicles quicker than a team of experienced artisans, even if no one on the assembly-line understood how to construct a car. A worker in the wheel assembly department may never have seen a vehicle motor.
3. Workforce Centric Thoughts
Despite the ease of assembly, employees started leaving Ford to work for rivals. Employees found this assembly line job dull since they were now just performing one or two tasks rather than building a complete car. Workers also disliked the automated assembly line’s tight time requirements.
He created the $5 workday to keep employees at Ford. With the $5 workday, the worker’s daily income would be more than doubled. This action was generally expected to bankrupt the firm. Contrariwise, Nationwide mechanics flocked to Detroit for the high-paying jobs.
Besides raising his workers’ pay, Henry Ford also reduced the number of hours that they were required to put in on the clock each week. Henry Ford reduced the length of the hours by one hour and increased the pay of his workers. Ford was able to add another third shift and recruit additional employees due to the reduction in shift duration. Ford Motor Company was able becoming a twenty-four-hour business as a result of the assembly line.
On September 25, 1926, Henry Ford, creator of Ford Motor Company, changed his labor philosophy to a 40-hour workweek including five business days, and without any change in pay. He understood that for businesses to succeed, consumers have to purchase. Employees wanted to relax and have fun to desire to shop. They wanted more time apart. Ford’s decision to more than double employee pay surprised the other manufacturers but boosted productivity and boosted staff morale.
These three methods resulted in a price reduction for something like the Model T. The automobile went from $825 in 1908 to $260 in 1925, expanding access to everyone. Most importantly, it enabled Ford workers to improve their lives and finance the item they created.
Related: Electric Car: Bright Future or Ruined Future?
End Note
Did you know that one of the reasons Ford’s success is involving themselves in continuous innovation, which makes them very distinct in the automobile industry despite such a long life span of 116 years?
In this article, we explained why & how despite having a small investment of 28,000$, Ford has now become one of the most celebrated automobile brands in the world. Now, they are one of those companies who are initiating eco-friendly cars & bikes throughout their innovations.
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