how/why is ford motor company a vertical integration?

Answer 1

Vertical Integration is a form of doing business where one company controls the entire production cycle of a product from it's creation through its distribution. The same company would design the product, acquire the necessary components and machinery to produce the product, assemble the product, test the product, store the product, and finally sell the product. The Ford Motor company was a perfect example of vertical integration.
During the 1910's and 1920's when Henry Ford was still in charge of the Ford Motor company, he believe that the cost of manufacturing his automobiles began from the moment the raw materials were obtained up until the time that the finished product was sold to the customer. As a result of this thinking, he wanted to control every aspect of it. So he built a new manufacturing complex near Dearborn Michigan called the Rouge and where he consolidated his entire business there in 1928. This complex controlled the production, assembly and transportation of his product. He next purchased a railroad, coal mines, timberland, freighter ships, and a glassworks plant. He also built his own sawmill. At the peak of his success, Henry Ford owned businesses in 33 different countries that all contributed to his automobile product. During this whole time, Ford Motor company was producing the Model T automobile. It was a utilitarian type of vehicle that came in one color with few design changes over the years. So he never had to retool any of his manufacturing machinery. It took no longer than 93 minutes to assemble. The Model T was a huge success. Over 15 million were manufactured. At one time, 90% of all cars in the WORLD were Model T's. In fact, with all of the purchases that Henry Ford made to convert to vertical integration, he never had to borrow any money. He used cash from his profits from selling the Model T automobile.

Answer 2

Another corporate test question?If one doesn't know the answer to this, better start looking for a menial job, like dishwashing.Ford Motor Company is a fully integrated company , vertically, because it is involved from basic manufacturing operations like steel , glass and papermaking through machining and manufacturing many parts for its end product, through distribution to dealers in addition to warehousing spare parts, where much of its profit is generated.

Answer 3

It is much less vertically integrated today than early in it's life due to government intervention. Now the cost of doing business is higher ( And other reasons) than foreign real vertically intergrated companies.