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Case study: Ford and Honda


Read and memorize the following words, words combinations and word-groups:



1. Rising costs and the worldwide spread of shared tastes in car styling have prompted the indus­try's giants to exploit global economies of scale. But rivals such as Ford and Honda have approached the task very differ­ently.

2. Ford is one of the world's earliest multinationals. Its first foreign production unit was set up in Canada in 1904 - just a year after the creation of the US parent. For years Ford operated on a regional basis. Individual countries or areas had a large degree of auton­omy from the US headquarters. That meant products differed sharply, depending on local executives' views of regional require­ments. In Europe the company built different cars in the UK and Germany until the late 1960s.

3. Honda, by contrast, is a much younger company, which grew rapidly from making motorcycles in the 1950s. In contrast to Ford, Honda was run very firmly out of Japan. Until well into the 1980s, its vehicles were designed, engi­neered and built in Japan for sale around the world.

4. Significantly, however, Honda tended to be more flexible than Ford in developing new products. Rather than having a structure based on independent functional departments, such as bodywork or engines, all Japan's car makers preferred multi-disciplinary teams. That allowed development work to take place simultaneously, rather than being passed between departments. It also allowed much greater responsiveness to change.

5. In the 1990s both companies started to amend their organisa­tional structures to exploit the re­ceived strengths of the other. At Ford, Alex Trotman, the newly appointed chairman, tore up the company's rulebook in 1993 to create a new organisation. The Ford 2000 restructuring programme threw out the old func­tional departments and replaced them with multi-disciplinary prod­uct teams.

6. The teams were based on five (now three) vehicle centres, responsible for different types of vehicles. Small and medium-sized cars, for example, are handled by a European team split between the UK and Germany. The develop­ment teams comprise staff from many backgrounds. Each takes charge of one area of the process, whether technical, financial or marketing-based.

7. Honda, by contrast, has decen­tralised in recent years. While its cars have much the same names around the world, they are becoming less, rather than more, stan­dardised. “Glocalisation” - a global strategy with local management - is the watchword. Eventually the group expects its structure will so comprise four regions - Japan, the US, Europe and Asia-Pacific -which will become increasingly self-sufficient.

8. Two reasons explain Honda's new approach. Shifting to produc­tion overseas in the past decade has made the company more attuned to regional tastes. About lm of Honda's 2.1m worldwide car sales last year were produced in the US. A further 104,000 were made in the UK. No other manu­facturer has such a high propor­tion of foreign output.

9. Honda engineers also reckon they can now devise basic engi­neering structures which are com­mon enough to allow significant economies of scale, but sufficiently flexible to be altered to suit regional variations. The US Accord, for example, is longer and wider than the Japanese version. The European one may have the 105 same dimensions as the Japanese model, but has different styling and suspension settings.

10. Both Ford and Honda argue their new structures represent a correct response to the demands of the global market. Much of what they have done is similar, but intriguingly, a lot remains differ­ent.


From the Financial Times




Exercise 1. Find where in the text it is said about the points given below. Put down the number of the paragraph:


1. the concept of the Ford 2000 restructuring programme

2. the first emergence of Honda at the world market

3. Ford's original strategy

4. Honda’s new watchword

5. reasons for exploiting global economies of scale in car production


Exercise 2. Match the companies (Honda and Ford) in A with the statements which best apply to them in B and find them in the text:


1. Honda 2. Ford   a. one of the world’s earliest multinationalists b. making motorcycles c. building of vehicles in Japan d. operation on a regional basis at first e. making different cars in Europe f. flexible in developing new products g. creation a new restructuring programme h. preference of multi-disciplinary teams i. using of a global strategy with local management j. production of small and medium sized cars in Europe k. coverage of four regions l. having a high proportion of foreign output  


Exercise 3. Say if the following statements are true or false:

1. Ford and Honda exploit global economies of scale equally.

2. Honda was run very firmly out of Japan.

3. At Ford multi-disciplinary prod­uct teams were based on four vehicle centres, responsible for different types of vehicles.

4. Cars at Honda are becoming more stan­dardised.

5. Honda built different cars in the UK and Germany until the late 1960s.

6. Ford tended to be less flexible than Honda in developing new products.

7. Honda has decentralised in recent years.


Exercise 4. Answer the following questions:

1. Why did Ford operate on a regional basis?

2. What reasons explain Honda’s new approach?

3. Why did Ford and Honda start to amend their organizational structure in the 1990s?

4. Why did Japan’s car makers prefer multi-disciplinary teams?

5. What is “Glocalisation”?

6. Why has Honda a high proportion of foreign output?

7. What does the Ford 2000 restructuring programme include?

8. What regions will be comprised by Honda according to “Glocalisation”?


Exercise 5. Explain why car companies now need to have a global strategy.

Exercise 6. Characterize the main points of Ford and Honda original strategy.

Exercise 7. Prove that Honda produces more cars abroad than in its home country.

Exercise 8. State the changes in Ford and Honda new strategies.

Exercise 9. Make up a plan covering the main ideas. Discuss the text according to the plan.



Keys to the exercises:

Unit IV

Ex. 2. 1. b,c,f,h,I,k,l

2. a,d,e,g,j


Ex. 3. 1. false (differently)

2. true

3. false (five (now three))

4. false (less standardized)

5. false (Ford)

6. true

7. true



Unit V

Date: 2015-01-12; view: 7663

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