“Lets Cap Up!” -Ford

Ford has increased their production capacity for the second year in a row in order to meet their production demand for their cars, trucks, and utilities. The Chicago assembly plant, one of the many plants included in the plan, will play a critical factor in the company’s production capacity who seeks to increase total production by 200,000 units. It seems like the company will for now only focus on their more popular automobiles which include the Ford Explorer, Ford Fusion, and the Ford F-Series. Ford plans on increasing the production capacity by only allowing one-week summer shutdowns which in turn will produce 40,000 new units. Currently Ford’s stock is listed at $14.49 per share, while General Motors is trading at $32.87.

General Motors is also planning on increasing their production capacity, however they are focusing on introducing 23 new cars and trucks to their automobile portfolio. Ford states that the company is planning to add 1,300 hourly jobs this year alone and it is planning to offer 12,000 hourly jobs by 2015. Ford’s revenues increased 10.5% to $35.8 billion.

The automobile industry has been considered America’s backbone for many years and we have heard of the struggles it went through especially during the recent recession with needed government aid. I understand that the industry as a whole is looking to increase capacity however Ford has not mentioned any new automobiles to be added as part of the plan. We have all heard of the phrase, “just because everyone’s jumping off a bridge does not mean you have to.” I believe that this is a risky move for Ford with what they plan on doing with their production right now and we all know the costs that run along with production and storage.

The company states that in plans to increase hourly jobs. However, adding these hourly jobs does not completely mean that hourly workers would be able to work full-time hours. The company has yet to declare whether or not these workers will be working full-time and the type of benefits they would receive. I believe Ford is eager to increase their production due to what other companies are doing and because of their recent growth. However, in the automobile industry, bad forecasting can be very costly for many reasons. For example, if revenue drops for the next year or two, then the company is stuck with a large number of vehicles in their storage centers. No company wants to report new hiring and then go downhill with reported job cuts and firings after.

In Ford’s case, is it too soon to increase this production capacity and plan on new hires? Does one good fiscal year call for changes in operational management for next year? And quite frankly, can Ford compete with the innovation that General Motors is adding to their portfolio?


Source: http://finance.yahoo.com/news/ford-enhances-production-capacity-141502358.html

The “King’s” Strategies-Burger King

Burger King, the popular fast food giant went public again in 2012 after being privately owned by a privately owned equity group called 3G Capital. After analyzing the numbers of Burger King’s quarterly reports from last year, it is apparent that the company is heading in the right direction after comparing the first quarter earnings this year from a year ago. Last year the company reported its first quarter earnings at $14.3 million compared to $35.8 million this year. So with these numbers on the rise, can the fast food giant compete with other companies such as McDonald’s and Chipotle while also being a valuable investment for its shareholders?

Well it looks like Burger King has a solid structured plan to make ends meet and come back to being a household name again. Last week the company sold its Canadian subsidiary, which owned 94 stores, to privately owned Redberry Investments. Now the company is planning on focusing on their operations in cutting costs in turn to making their sales more profitable. Another plan is to revamp 40% of their restaurants which will have a new 20/20 design and a change in lighting and seating arrangements. In order to increase the number of stores the company is promoting third-party financing opportunities as well as a 50% discount on the annual franchisee fee for their franchisees. Lastly, the company is focusing more on aggressive advertising techniques in order to promote their new valued items. These new strategies are from the article cited below and I should mention that Burger King has seen little changes to their menu from 1989 and 2012. Other restaurants have introduced healthier food choices for their customers such as smoothies, specialty salads, wraps, yogurts, etc.

It is obvious that the success factor of any restaurant is the quality of food it serves. Many sales at Chipotle are single burritos, burrito bowls, and tacos which can range from $7.50 to $9.50, depending on whether you want to upgrade your food with their delicious homemade guacamole. Keep in mind, Chipotle is a new restaurant that has come out in the last decade. It is also very appealing because of being considered a healthier option than most fast food restaurants. This is one of the reasons that Chipotle stock is currently being traded at $360 per share! Most of us have witnessed the long lines at the Chipotle across from the DePaul Center in the loop. So why do most of us insist on  waiting sometimes up to 15 minutes  for a burrito that costs on average around $8 rather than going to Subway or McDonald’s across the street and buying a meal that would surely cost more? Clearly, Chipotle’s plan is successful, so how does a fast food giant like Burger King raise its value and compete with all the other fast food giants?

The secret ingredient to that recipe is innovation! But what must they innovate to attract YOU personally?

Source: http://beta.fool.com/tinade/2013/04/28/burger-king-is-just-one-step-behind/32871/?source=eogyholnk0000001

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