Ford Motor Company Case Study

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BUSM1227 International Business Individual Assignment Done by: Wong Ming Hui RMIT Student ID: S3475260 ABSTRACT Ford Motor Company’s entry to the Indian automotive market. 1. Introduction Founded in 1903 by Henry Ford, the Ford Motor Company is an automobile manufacturer based in the United States (home country) in Dearborn, Michigan. With a decorated and distinct history in the automobile industry, Ford is best known for Its famous “Model T” as well as the innovation of interchangeable parts in moving assembly lines that makes it possible to assemble cars at low cost and high reliability (Fordism). Ford has not been a stranger to doing business on a global scale. According the corporate official website (2014), Ford…show more content…
2. Ford’s Entry into the Indian Automotive Market via joint venture with Mahindra and Mahindra. In alignment of the strategic direction of Ford Motors Company in the 1990s (Johnson, Surganum 2011), the priority was to maximize profits through the investment in foreign markets. India was the ideal market for Ford to venture in due to the recent relaxed economic policies and the abundance of low cost labor force in the market (Kulkarni, Jenamani, 2008). As the above mentioned, Ford Motor Co entered the Indian market via a 50-50 joint venture with Mahindra and Mahindra back in 1995. The external environment at the point of time was in line with Ford’s strategic direction by practicing the limited edition strategy (Johnson, Surganum 2011). Mahindra Ford Ltd subsequently launched the Ford Escort model (John, Sidhva 1995) into the Indian market. According to the country report in the Economic Intelligence Unit (EIU, 2004), India was facing a high demand in passenger vehicle in the 1990s. Ford was able to penetrate the automotive industry with the infrastructure that Mahindra and Mahindra possesses back in…show more content…
According to the Economist Intelligence Unit (EIU) Indian automotive industry report (2004), the liberalization of the automotive industry has seen India become one of the top destinations for multinational companies to set up business in. While during the 1990s, Cars was still considered a luxury item to most Indians, the automotive industry only contributes 2.2% to the country’s GDP (EIU, 2004). Though, that does not seems to be tempting enough for a FDI to set up in India, it was expected to create direct and indirect employment to more than 10.2 million people in the automotive industry. Since Ford’s ultimate goal is to create more value with the vehicles they produce, this could spell a huge opportunity for them to diversify their manufacturing establishments as well as penetrating the Indian market in the

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