Question

In: Operations Management

Compare and contrast Ford’s strategy to one of its competitors.

Compare and contrast Ford’s strategy to one of its competitors.

Solutions

Expert Solution

The comparison done is between Ford and its main competitor Toyota, both of them following different manufacturing agenda. Ford was founded by Henry Ford in 1903, whereas Toyota was established by Kiichiro Toyoda in 1937. There is an immense difference in the strategies that they employ in order to stay in the competition. Some of them are as follows:

  • Ford has a mass production strategy that utilizes the economies of scale, whereas Toyota adopts a lean manufacturing strategy which on its own is known as the Toyota Production System.
  • The product is given more preference in the case of Ford by producing a high volume of standardized products, whereas Toyota gives emphasis to the customers with more options for customization of the product. They have a low volume of production with high variety included.
  • In case of the production line strategy, they have long moving assembly lines with continuous flow. Toyota on the other hand has a cellular manufacturing set up with a short U shaped assembly line.
  • Ford adopts a push system where the products are pushed into the market and the customers are made to buy, whereas, Toyota has a pull system, which only makes to orders.
  • The organizational philosophy of Ford is hierarchical in which the management takes responsibility in all ways. Toyota being a company that shares the responsibility, aims to empower the employees and provide more room for their personal development and skill enhancement.
  • The business strategy of Ford is to make use of the economies of scale by employing maximum automation, whereas Toyota aims to be more flexible and adaptive to the needs of the customers.
  • In Ford, the improvement of the products and the employees is periodic in nature with an expert-driven process, whereas Toyota aims in continuous improvement which is workforce driven.
  • Ford adopts a premium pricing strategy for its products whereas Toyota has a value-based pricing strategy. Both of the companies also adopt a market-oriented pricing strategy, in which they set the price according to the market factors, customer demand, competitor position and other conditions.
  • The ultimate aim of Ford is to increase the efficiency of production and products are reduced cost. At the same time, Toyota focuses on value addition to their products with minimum waste by adopting their own Japanese manufacturing techniques.

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