- Outline four strategic options Ford is pursuing to increase its profitability. Describe each of the four options. For each option list two criteria, you would use to evaluate the option.
The first strategic option that Ford is pursuing to increase its profitability is to close down older plants in order realign production and sales. This would help to reduce the number of vehicles that are produced per year since the company is currently producing more than the demand for the vehicles is available, leading to reduced prices. The older plants are not as efficient as the new plants, and require a massive input of labour to create the finished products. Closing them down has the advantage in that it helps cut down the number of workers who are costing the company a lot of money in terms of salaries and other employee benefits, as well as reduce the production cost since the newer plants are more efficient. Cutting down the number of cars produced will have no negative effect on the revenue, since the company is already producing more than the market can absorb. In fact, this can help to stimulate demand and increase prices as the supply goes down (Graham, 2008).
