Business Plan on "Pinto Ford"
Business Plan 4 pages (1097 words) Sources: 2
[EXCERPT] . . . .
Pinto/FordThe Ford Pinto: Case study
Analyze and evaluate alternatives:
The Ford Pinto was a budget vehicle designed to compete with small, European models in the American car market. Lee Iacocca, working as a manger for Ford Motors, set a benchmark that the Pinto could not cost more than $2,000 and could not weigh more than 2,000 pounds. While the final model did fulfill these specifications, it also had a fuel tank that often ruptured during relatively minor forms of rear-end impact. Ford had the option of either spending extra money to change the car, which would be of great cost to the organization and perhaps reduce its profitability for the company because of increased costs, or allow the dangerous car to go to market. Ford had expended a great deal of money on the development of the Pinto so it released the car, rationalizing that it would cost less money to pay potential lawsuits generated by deaths on the nation's highway, than to pay money to change the vehicle
Formulate a solid evaluation of the case
The case of the Ford Pinto illustrates the dangers of merely looking at financial metrics without socially contextualizing them: Ford's faulty analysis from a business point-of-view was to look only at the immediate costs of accident-related lawsuits, rather than the bad publicity car accidents would generate for the company. Distrust of corporations in America of the 1970s was high. Ford's cold calculation of the costs of lawsuits was not simply bad publicity for Ford as a cruel organization, but seemed to embody the notion of American companies as organizations devoted to making profits, rather tha
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Analyze and evaluate various alternatives
Ford could have installed a safety mechanism on the fuel tank and paid the extra money, possibly accepting lower sales. Given the rising costs of fuel during the 1970s, it is quite likely that the Pinto would have succeeded as a vehicle, despite the slight additional cost to the consumer. Ford could also have acknowledged the defect, and let consumers buy the product with awareness about the risk, but this would also put people driving on the highway, who did not accept the risk, in danger of losing their lives. The worst alternative, which Ford pursued, was to release the product to the unsuspecting public and to say nothing, and hope whatever accidents that transpired were minimal.
Weigh the pros and cons of alternatives
The 'cons' of correcting the 'explosive' fuel tank fault were the additional costs it would incur for Ford, costs that would have to be passed onto the consumers who bought the model. In retrospect, given the relatively minimal additional expenditure this would have cost Ford, the concern seems absurd. Iacocca was obsessed with 'beating' Ford's competition in the small car market. His ego as well as Ford's reputation was at stake, given that he had waged an internal political war to have control over the Pinto's development.
Iacocca wanted the Pinto in showrooms faster than the typical prototype-to-showroom turnover at ford. He was inflexible about the Pinto's cost and the size, even after the fact that the car's fuel tank ruptured at relatively slow speeds of 31 miles per hour, unless it was equipped with a plastic baffle placed between the axle housing and… READ MORE
Quoted Instructions for "Pinto Ford" Assignment:
“Analyze and evaluate alternatives:
*****¢ Formulate a solid evaluation of the case
*****¢ Analyze and evaluate various alternatives
*****¢ Weigh the pros and cons of alternatives
*****¢ Feasibility of alternatives
*****¢ Decide on the valid alternative and make recommendations, agenda of corrective actions
*****¢ What specific functions and activities must be performed to solve the problems?
Are recommendations workable and affordable?
Please lay out paper in this order to address each point. *****
How to Reference "Pinto Ford" Business Plan in a Bibliography
“Pinto Ford.” A1-TermPaper.com, 2011, https://www.a1-termpaper.com/topics/essay/pinto-ford-case/14141. Accessed 5 Oct 2024.
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