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    Pricing and production strategy of Ford

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    I need help with the attachment.

    I need to prepare a paper based on the Ford Motors Company overview. The paper should address the following refined topical areas: I need help with (d)&(e).

    a. Company/industry overview
    b. Current market condition analysis
    c. Future market condition analysis

    d. Group of final recommendations
    1) Price
    2) Production
    3) Composition of inputs

    e. In your paper, address the following questions:
    1) Should the firm continue, expand, or reduce current operations? Explain your reasoning.
    2) If your answer is to expand: Should the firm invest in new plants, equipment, or technologies? Should the firm consider a merger with another company? Explain your reasoning.
    3) If your answer is to reduce: Should the firm reduce production or shutdown their operations? Explain your reasoning.

    f. Introductionconclusion

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    Solution Preview

    I need to prepare a paper based on the Ford Motors Company overview. The paper should address the following refined topical areas: I need help with (d)&(e).

    d. Group of final recommendations
    1) Price
    There are as many types of pricing strategies that can be used for a certain product or service. As based on MarketingTeacher.com (2006), some of them can be stated as follows: First is 'premium pricing' that uses high price and uniqueness within a product or service. Second is 'penetration pricing' wherein prices are artificially low in order to gain market share. Third is 'economy pricing' wherein the cost of marketing and manufacturing are both kept low. Fourth is 'price skimming' wherein there is high price for a substantial competitive advantage. Fifth is 'optional product pricing' wherein the initial goal is to increase customer through optional extras. Sixth is 'captive product pricing' wherein companies charge premium prices where the consumer is captured (MarketingTeacher.com, 2006).
    Right now Ford is facing elastic demand and also facing pressure of lower profit margins. Hence Ford has to maintain penetration pricing in order to improve the capacity utilization and to withstand the competition. Our pricing objective will be Profit-oriented
    A sales-oriented approach focuses on unit sales, market share or sales figures rather than profit only. This approach shows differences among concepts of sales growth and market share. Companies that concentrate of sales growth often underestimate the impact of profits which can cause companies to grow without gaining profits. Organizations concerned with holding a large market share are more aware of profit maximization but often encounter the same problem of profitless growth. Short term growing with lower profits may benefit some companies in the long run due to maintaining the market share over a long period of time which allows profits to grow. Our goal is low prices and customer satisfaction.

    2) Production

    Although sales of trucks and SUVs are on a decrease do to the fuel crisis, Ford has produced some fuel efficient products. Although most of their product lines are not focused upon fuel efficiency like their competitors they still remain larger and consume more fuel. (Ford, 2007c) Due to the reengineering of the company, operations of several plants domestically and globally have been impacted. With the cuts in management positions there was also an increase in leaner manufacturing method to reduce operation expenses. Furthermore several product models are no longer manufactured and non profitable plants were closed. The increase savings from these cost cuts were re-invested towards innovative fuel efficient/alternative products and smaller vehicles that meet their competitor's product lines. (Wickell, n.d.)
    Thus our production's objective will be to maximize the capacity utilization. Also we will improve the production designs and will also focus more on hybrid cars.

    3) Composition of inputs

    Research and Development
    Ford has recognized the need for innovative fuel efficient and alternative automobiles to meet the consumers and environments needs. They have renamed their Ford Science Research Lab to Ford Research and Innovation Center. They concentrate on developing, engineering, and manufacturing vehicles that provide flexible fuel technology to include a wide assortment of hybrid and ethanol-fueled options. (Ford, 2005)
    Hence we will improve the efficiency and effectiveness. By focusing on quality as an integrated concept. They must improve the quality of every aspect of management whether it is labour, material or machine. Following are the foundational elements or principles of TQM

    1. People: Involvement of all in achieving customer focus is a key tenet of TQM. This is achieved through Teamwork, Voluntary Activities, Consensus Building, Training, Multi-skilling, Instilling a Sense of Pride, Employee Empowerment and Leadership ...

    Solution Summary

    This explains the pricing and production strategy of Ford