Entry strategy paper

Submitted By delaneyrosesmith
Words: 2606
Pages: 11
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Introduction:
The name Ford Motors Company has been synonymous with the automotive industry for decades. Ford Motor Company was founded in 1903 by Henry Ford and is headquartered in Dearborn, Michigan. Henry Ford Sr. was known for innovation, transforming cars into commodities for everyone. Ford came out with the Model T, which was the first affordable, efficient and reliable automobile. The company has been in business for over 100 years producing automobiles world-wide. Ford Motor Company is one of the first American automotive companies that even today successfully manufactures and sells automobiles, trucks, buses and automotive parts.
When it comes to globalization Ford has always been way ahead of their competitors. Unfortunately, in 2005 Ford faced difficult times as a result of raising health care costs, higher fuel costs and declining sales of SUV’s. During this time Ford did not see much profit on larger vehicles due to “incentives to offset declining demand. A short while after they came up with a plan to return the company back to profitability. This new plan was named “the way forward” it included resizing the company to match market realities, which in turn meant dropping unprofitable and inefficient models, consolidating production lines and closing 14 factories and getting rid of 30,000 jobs. Ford knew that in order to bounce back they needed to come up with vehicles that were more efficient for the average consumer. They came up with a wide variety of cars with new technology that would attract consumers. Ford introduced their Escape Electric Hybrid model which was the first SUV to have this type of technology. As of September 2014, they have sold over 344 thousand hybrids in the U.S. The top selling hybrids in the U.S market are the Fusion with 127,572 units, followed by Escape Hybrid with 117,997 units. Ford Motors currently manufactures and distributes automobiles in at least 120 markets, on five continents, with 176,000 employees in more than 80 plants worldwide. Former CEO Alan Mulally, came up with the “One Ford” plan and it was aimed to make attractive cars for Americans that will sell globally. Their ultimate goal was to deliver profitable growth for everyone (Miller, 2014). Ford Motors is the company it is today because they are aware of their consumer and their ever-changing needs of people world-wide.
When a company is classified as multinational, they must choose how they plan to enter each international market. There are many factors to take in to consideration when choosing how to enter, for example, decide whether they should export or build a manufacturing plant in the target country (Cullen, 2011). Companies can be guided by using participating strategies which show how to deal with entering foreign markets. Partisipation strategies include: exporting, licencing, strategic alliances, and foreign direct investment (FDI). Ford is a growing company operating in a rapidly expanding global automotive market. Ford has existing locations in, North America, Europe, Oceania, East and Southeast Asia, South America and Africa. Ford is part of the global automobile manufacturing industry and seeks to expand further and do business in India.
Exporting:
When it comes to the automotive business exporting is a widely used entry strategy. Exporting is one of the easiest way to sell a product in the global market. There are two different types of exporting, which are direct and indirect. Ford is entering into a new market in India, so they will benefit by using direct exporting as one of their entry strategies. Direct exporting is more intense strategy in which exporters take on responsibilities of the intermediaries. These responsibilities include, having direct contact with companies located in the foreign market. Direct exporters use, foreign sales representatives, foreign distributors and sometimes set up their own branch offices in foreign countries. By using direct exporting, Ford
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