MEMO
From:
To:
Subject:
Date:
Recommended Action
The recommended action is to develop a strategy that will build on the use of bio-based materials and the success of the soy foam technology. This will form the foundational basis of the implementation of the plan of replacing the polyurethane-based car seat foam with soy based foam in an attempt to produce cars which are not only eco-friendly, but also cars which are safe, smart, green and of high quality in alignment with Henry Ford’s philosophy of assimilation of industry with agriculture, which forms part of the overarching issue of bio-based materials for car interiors.
Since the first step has proved to be a success, the question that is been canvassed and which is lingering on everybody’s mind is “what next?”. My recommendations in answering the question beforehand is three-fold; first, Ford should endeavor to set a price index for soy; second, Ford should exploit every opportunity available in order to market soy foam and lastly, Ford should implement the soy-foam initiative outside of America.
Issues
On the first recommended action, Ford should consider setting an index price for soy, this action is taken since it is a good way of insulating the company from the fluctuation of soy in the market, this model of setting a price index for soy is similar to that taken by other commodities which are in the market. In buttressing this point, the objectives of setting the price index should be in line with their corporate environment policy which comes in handy in ensuring that the cost of the soy-based material would be offset by achieving economies of scale, once this is achieved, the price index of the soybeans in the market will be set and controlled and it will mitigate the adversaries of the market such as fluctuation of soy in the market, this has proved to be a success previously.
The second action that I have recommended is for Ford to exploit every available opportunity and aggressively market soy foam. This recommendation will help in garnering approval from customers and stakeholders’ legitimateness. Once there is an aggressive form of marketing, the various consumers become aware of the availability of a certain commodity in existence in the market and the potential of the innovation, the benefit that accrue from aggressive marketing is that several companies will approach Ford with a proposal to develop foam for vehicle interiors from soy extracts as did the United Soybean Board (USB), and once these companies are attracted with the idea, they will find different opportunities to commercialize the use of soybeans which is a means to an end the end being profits and large economies of scale.
The last crust of recommendation goes to the core of commercialization and implementation of the Soy-foam initiative outside of North America. Since there was a general customer acceptance which was facilitated by a very positive media in North America, the Ford company should try to commercialize and implement the soy-foam initiative in other regions outside of North America, the end results of this recommendation will form a similitude with the end result of other recommendations such as improving, and in huge figures, the economies of scale, this is the rationale for this recommendation since Ford is a Global company, and this will also go hand in hand with Ford’s “One Ford” plan through its four-point strategy where the company aims to be a lean, global, automotive leader by restructuring aggressively to operate profitably at the current demand.
Options
In order to tap fully the market potential of the soy-foam, as an alternative, I would recommend that Ford should engage in a scientific research and experiments to ensure that the soy-foam that they are already manufacturing for car’s exterior meets the test of time. How long the innovation lasts will determine the resultant acceptance by people hence integrating itself as a viable commercial commodity which can be trusted by the various market players and participants, once the Ford Company fully coalesce itself in the market, the better for the company, as it will enjoy the fruits of profitability, economies of scale as well as prestige.
The other option available as an alternate is that they should come up with a way of reducing the amount of chemical reagents used in extracting the soy foam from the soybeans, this is in line with their vision of achieving goals towards environmental sustainability which is a crux of a viable business strategy in line with Henry Ford’s philosophy.
Implementation
Since the company’s first and obvious objective was to increase the percentage of soy foam that was being used, the major task being to ensure that the innovation remains a viable business in the long run, I believe that the company should take both short and long term steps which would be necessary in keeping the initial objective afloat. The company should engage in a marketing strategy such as advertising their commodity, manufacturing of high quality products which would be unmatched, this will enable the company sustain and have a rooting in North America and ensure little or no competition, not on the basis of unfair practices, but on the quality of their products. The company must ensure that at no point in time will the percentage of the raw materials which they use will go down and diminish. They should also collaborate with other like-minded companies and groups in order to come up with other eco-friendly soy foam innovations.
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