Successful Innovations
Product is the only factor of business for which the entire decisions and strategies are taken. This product can be obtained in the form of either service of goods. The chief concern of producers is to sell their products in market for earning higher amount of profit. However, after globalisation, those producers have faced strong competitions within the market. Hence, to sustain within the market, it is essential for each firm to produce new products according to the changing requirements of their customers. In this context, innovation plays an important role (de Medeiros, Vidor and Ribeiro 2018). However, each innovation does not perform successfully and consequently the firm faces huge loss. Success or failure of a product completely depends on customers’ demand. Some innovations have remained unable to fulfil the desire of customers and consequently the demand has decreased significantly. This in turn has caused failure of this innovation. On the other side, some innovations have successfully fulfilled the demand of consumers and consequently have brought huge profit for the company.
This report has tried to focus on some innovations of a company which have either successfully operated in the market or have failed drastically. Hence, the chosen company of this report is the Ford Motor Company (Ford Corporate. 2018). This America based company has manufactured various commercial and automobiles vehicles within which, most of the products have earned huge success and consequently the company has become one of the leading companies within the automobile industry. However, some models have also failed to capture the market. Hence, this report is going to analyse those factors for which innovations have experienced opposite outcomes in the market.
The Ford has successfully applied the strategy of product development for which they have gained a prestigious position in the automobile industry, worldwide. Within their intensive growth strategy, the company has intended to offer new products for increasing their sales revenues. For doing this, the company has conducted various research and development (Forbes.com. 2018). This strategy has further helped the company to grow its business through obtaining competitive advantage. In this context, some models of the Ford, which have earned significant demand in the market, can be described. In this context, brands like the Ford F-Series, Ford Escort, Ford Model T, and Ford Fiesta can be mentioned (Su and Wagner 2017). The specified company has also launched other models like Ford Focus, Ford Mustang, Ford Transit and Ford Taurus, which have also gained significant market share for the last few decades.
Product details
Based on figure 1, it can be stated that the Ford has captured second market position in the U.S.A after the General Motors, in 2017 (Bloomfield 2017). The company has experienced strong competition with Toyota Motor Corporations.
In this context, F-Series of Ford can be taken under consideration to analyse the successful innovation of this company.
To focus on the successful innovation of a product, it is essential to describe the product and its associated features in details. Based on those features, it can be easier to analyse the successful factors of those products. The Ford has introduced its F-series trucks for the first time in 1948 and has remained the best-selling trucks for the last 3 decades in the U.S. The Ford has sold around 780000 F-series trucks in 2015 and this number has increased by 3.5% compare to the previous year (Gu et al. 2017). Within this F-series, F-150 has earned huge importance in the U.S.A market as this model has helped the company to remain at its leading position in this country. Presently Ford has brought some innovations within this model to provide an upgraded ratio between power-to-weight compare to the previous one.
The chief reason behind the success of F-series is technological innovations, and this in turn has helped F-150 to become the best-selling trucks in the U.S.A. in 2014, the company has launched its pickup truck with aluminium body along with steel ladder frame of high-strength (Shore et al. 2018). This innovation has reduced the weight of F-150 by approximately 318 kg compare to the previous generation (Friedman and Shaw 2018). According to the extensive durability testing of Ford, this change in body parts has increased the strength of F-150. This implies that to pull those trucks fewer amount of energy is required.
Ford has also introduced turbocharged consisting 3.5 liter V6 engine, which has provided best services for a full-sized pickup vehicles compare to the V8. Thus, F-150 has adopted new EcoBoost technology through adding a 2.7-liter V6 along with 375 pound-feet of torque and 325 horsepower. (Forbes.com. 2018).
The interior model of F-150 that Ford has introduced in 2015, has got new design including more space along with upgraded climate and touch screen controls. In addition to this, this specified F-series has also obtained better seating position with improved outward visibility. However, the chief innovation can be referred as the using of a productive screen, which is a digital MyView gauge cluster (Faber and Brodzik 2017). This helps the driver for configuring the gauges that show information, for instance, towing, economy related to fuel, tire pressure and off-roading and so on.
Reasons of Success
Ford has also added a camera, featuring birds-eye-view along with 360-degree camera technology in their F-150 model. This in turn has helped the drive easily. Moreover, this model has also obtained blind-spot detection, curve control, hill descent control, radar cruise control and lane-keeping assistance (Fridman, Jenik and Reimer 2017). In addition to this, ford has also introduced forward collision control and Active Park Assist system, which is a special feature of Ford. Active Park Assist implies that a truck can easily detect a street parking space that has enough space to park a large size truck.
After discussing about those features of F-150, it can be said that the Ford has introduced various innovations, which in turn has helped the company to increase demand for F-150 under the automobile industry, all over the world. A company upgrades new features through innovations to increase the level of utility of a product. In this context, Ford has included some new features including advance engine along with internal and external features that help drivers significantly (Deschamps, Martin, Dendievel and Van Landeghem 2017). After discussing those innovations within the F-series, it is essential to analyze various indicators that can support the view that innovation has earned huge success.
To measure the success of innovations, various indicators can be considered, for instance, profits, market share, time, consumer satisfaction and impacts on environment and so on.
Ford has earned huge amount of profit by selling F- series in North America and Europe. In the third quarter of 2017, the company has earned profit worth $1.6 billion, which is 63% more compare to the previous year, by selling F-150 (Liu 2017). The company is expecting to earn more profit from those region including Canada and Mexico, as well. In September 2017, the company has sold f-series trucks worth $45400 and this amount is $2,300 more compare to the previous year (Ford Corporate. 2018).
Market share is another indicator that helps to understand the success of a product within the market. Products, which have higher demand in the market, enjoy large share compare to other companies.
According to this diagram, it can be stated that Ford F-series has captured the maximum share among best selling trucks with lightweights in the American market of 2017. Ford F-series have strong competition with the General Motor’s Chevrolet Silverado in the truck market. However, during 2017, Ford has remained the best seller of truck as it has sold 896800 units while the General Motor has sold 585864 units (Davis, Williams, Boundy and Moore 2017).
Failed Innovations
The Ford Company has marketed its F-Series trucks since 1948. In the U.S.A, it has become the best-selling vehicle since 1981 while since 1977; it has remained the best-selling pickup. At present, the thirteenth generation of Ford Series has operated in the market, since 2015 (Collins 2017).
Increasing demand of F-series has indicated that consumers have received high level of satisfaction by using this light-weighted truck. Most of the people have provided positive feedbacks and for which it has successfully captured the market of General Motors (Talay, Akdeniz and Kirca 2017). For instance, the F-150 has won various awards like Automotive Excellence Award under the Workhorse Category, given by Popular Mechanics.
Through considering fuel economy, it can be said that the F-series, especially F-150 has reduced the consumption of fuel due to its lightweight (Collins 2017). Moreover, F-150 has less impact on environment while it has been manufactured and also those trucks have possess long lifetime for providing services.
Hence, from those indicators in can be stated that the Ford has successfully innovated their F-series and consequently, those trucks have provided positive outcomes in the real industry of automobiles. With large market share, higher amount of profit, long-term sustainability within the market along with higher level of consumer satisfactions, the success of F-series can be supported. Hence, product life-cycle for F-series is very long and the company has remained at its growth stage, where it can produce more products.
Despite of this huge success, Ford has also experienced failure regarding their product innovations. This can be described as follows:
In 1957, the company has launched Ford Edsel for the middle-class Americans. For making this car, the concerned company has invested $250 million. However, the company has incurred losses worth $ 350 million after the huge failure of Ford Edsel in market (Petroski 2017). Hence, it is essential to analyze some basic reasons for which this brand has sustained only for 24 months. This implies that the life-cycle of this product has remained low and it has stopped their marketing before reaching the stage of growth.
Time has played a negative role behind this huge failure of Ford Edsel. The U.S economy has experienced recession after the launching of this model. During this period, the car has faced strong competition with some other brands under the label of some wel-known companies, for instance, Pontiac, Buick, Oldmobile and Dodge and so on (Dyrud 2016). This phenomenon has occurred due to the shifting of consumer preferences towards economy cars. They have started to buy fuel-efficient cars while Edsel has consumed huge amount of fuel due to its powerful engines and quick acceleration. Moreover, Edsel has also faced huge competition with Mercury, which is also a brand of Ford (Carmeli and Dothan 2017). Consequently, Ford Edsel has remained unsuccessful to establish its brand loyalty with their customers.
Product details
The makers have delivered this model to their dealers at the day of announcement. Before that, various advertisements have published only the teaser of this car through reviling only a part. For Edsel, no test marketing has been conducted for convincing their real customers about the chief features of this model (Fine 2017). Hence, after launching the car, consumers have started to face various difficulties due to lack of information.
The pricing strategy of Ford Edsel has also remained confusing among customers. The company has set the price of this concerned model within the price segment of Mercury. Ford has tried to charge a price between its two other brands, namely, Ford and Mercury. However, the price gap between the most expensive model of Ford and the cheapest model of Mercury has remained only $136 (Feldman 2015). Therefore, prices of Edsel have remained closer to those models. Moreover, prices of Pacer and Corsair have remained higher compare to some other models of mercury. Hence, Edsel has faced close competition with Ford and Mercury for their close price strategy, which in turn has led consumers to face difficulties for choosing the best one with proper price.
Consequently, after launching in the market, Edsel has become unsuccessful to fulfil its consumers’ demand though the company has tried to offer many features, for instance, automatic lubrication and self-adjusted rear brakes. Consumers have intended to pay fewer prices for those reasons while dealers have remained unable sell those cars in comparatively lower prices. As a result, the demand for Edsel has decreased in the market.
Initially, Edsel retain organisation has obtained 1187 exclusive dealers to sell those cars. The company has tried to match with Chrysler, which have 10000 dealers in the market while the General Motors have 1600 retail stores (Feldman 2015). While products of Edsel have faced difficulties to sell their products in market, those dealers have started to sell cars of Ford and Mercury for sustaining in the market. Hence, due to insufficient promotion, those products have failed to capture the market of automobiles.
Quality is the chief factor that attracts customers to consume a product and this in turn has helped to increase the demand for this product significantly. Edsel has also experienced some difficulties regarding their quality, for instance, leaky trunks and faulty welds. The company has tried to maintain the same quality level like their other products. However, most of the model of Edsel of 1958, has faced quality issues. The chief reason behind this drawback can be referred as lack of factories, exclusively made for Edsel (Fine 2017). Consequently, those cars have been manufactured with other models of Ford and Mercury. Hence, workers have faced difficulties to manufacture different models of Ford Company due as tools and parts bins of different models have different features.
Reasons for Failure
The trademark of Edsel’s external design is its “horsecollar” grille, which has distinct feature than other cars, during the same period. However, engineers have extended this grille for passing sufficient air to the radiator. Moreover, Edsel station wagons have also received complains because of its boomerang-shaped lenses (Koku 2014). As, the arrow of light has pointed towards the opposite direction, it has created huge confusions, for instance, when the right turn signal flashes, its arrow shape points toward left.
Hence, from those discussions, it can be stated that various internal and external factors have influenced the Ford Edsel to fail in the market. The company has expected to capture huge market share by selling those cars to the middle-income people of the America. However, due to wrong marketing and pricing strategy, this innovation of Ford Company has remained unsuccessful to capture the minimum market share, for which the company has started to operate below their shut-down point.
Conclusion:
After discussing the entire concept, a conclusion can be drawn, based on the success and failures of the Ford’s innovations. Ford has captured significant position in the automobile industry of various countries, especially in America. The company has produced large number of vehicles and motor parts and most of them have earned huge success. Through their research and development along with modern technologies, Ford has successfully launched its F-series trucks in the market. Each model under this series, especially F-150, has successfully fulfilled the desire of their consumers. Consequently, the company is producing their trucks of 13th generation. On the other side, Ford Edsel has faced huge failure in the market during its wrong timing along with lack of market research and product design. Hence, from those two distinct outcomes, it can be said that innovation is completely depended on factors for which it can earn either huge success or failure.
References:
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