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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