Ford Motor Company & Sustainability
Over the last decade Ford has lost most of its impact and market share on the car industry to competitors such as Toyota, who had been ahead of the curve providing fuel efficient cars. The new Ford Fusion which can run on alternative energy other than fuel is long past due. I am conflicted about Ford Motor Company. On the one hand, the firm had completely failed to notice significant changes in the market demand of cars and continued its operations of building big fuel inefficient SUVs, but on the other hand, it has finally realized its mistakes changing its design of cars and more importantly the way it produces its automobiles. However, I have to say, this was a rather late reaction to a market trend, not actually based on the purpose of sustainability. Ford has changed for the wrong reason but with the right consequence. The adaptation of a sustainable production line and the “caring” about the environment seem too much like a poor cover up for a bad profit performance in the last years. The interesting question would have been: If Ford would have outperformed the market with its original business model and its depressing 10K revenue statements would have not impacted its strategic decisions, would it have still changed to a more sustainable way? The answer seems quite frankly no. Companies such as Ford provide value to shareholders, not tree huggers. The correction in the market seemed to have occurred due to value and cost inefficiencies. As most firms are realizing this trend and trying desperately to get ahead of the curve, we shall see a significant change in business models and strategic decision making. Sustainability is in! It is innovative, sexy and marketable to consumers. Often times it even leads to cost reduction strategies, which can increase shareholder value. Although the reasons for firms to become more sustainable seem to be profit oriented, at least they are motivated to change. The underlying motivation of action becomes less important, if the consequence is the right step into the future.
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