BUsiness and management (HL)WORD COUNT: 1,843

Lyla Van Es
HL Business Management IA

Research proposal
Research question:
Should Ford expand the factory to be able to produce 3 extra models of cars in order to
increase profit and market share?
Rationale:
Right now Ford is producing 3 models of cars: Eco sport, fiesta and focus. Ford has extra
land around the factory in Rayong which can be used to build a factory to produce 3 extra
car models, this means that Ford may able to increase their profits as in Thailand there is a
high demand for cars, and in addition they may be able to supply the demand for the
different car models in different countries. Furthermore, by producing new car models Ford
may able to increase its market share, as right now companies such as Toyota are
dominating the market.
Theoretical framework:
*PEST/STEEPLE will be used (to analyse the external environment, to help Ford make a
decision, the PEST/STEEPLE can help the force field analysis)
*Force Field analysis (to analyse whether or not Ford should expand their plant, and weigh
the driving forces against the restraining forces)

Areas of syllabus covered:

growth and evolution (To discuss whether or not Ford should expand there factory)
Organizational planning tools (to be able to produce a force field analysis)
The external environment (to be able to produce a STEEPLE analysis)
Methodology:
primary

interview
plant/production
manager

problems

solutions

may not be able to answer

some questions
(confidentiality)

try to ask specific questions

interview employees
such as on the factory
floor

speak in Thai

language barriers

observations

will only be seeing

production

ask other peoples

observations to make sure my
observations are reliable

Lyla Van Es
HL Business Management IA

secondary

news articles

Information may be
limited

existing market
research

could be wrong

See multiple market research and compare

against each other.

Action Plan:
TASKS

Go to ford

study growth

start IA

finalize research proposal

hand in IA

September

WORD COUNT: 311

October

November

Lyla Van Es
HL Business Management IA

Acknowledgements
I would like to acknowledge the Ford Plant and all the staff for being welcoming and
allowing me to have a further insight of factory in order to help me with my
business IA. I would also like to thank Noppawan Uttha and Patrick ONeil, that I
was able to interview them and be able to get further information for my IA..
Furthermore, I would like to give my thanks to Ms. Faye Wheeler in helping me and
giving me guidance in order to complete my IA.

Lyla Van Es
HL Business Management IA

Contents
Research proposal...................................................................................................... 1
Acknowledgements.................................................................................................... 3
Abstract...................................................................................................................... 5
Introduction................................................................................................................ 6
Methodology............................................................................................................... 7
Analysis and evaluation.............................................................................................. 8
Force Field Analysis................................................................................................. 8
Steeple Evaluation:................................................................................................. 9
Conclusions and recommendations..........................................................................11
Bibliography............................................................................................................. 12
Appendices............................................................................................................... 13

Lyla Van Es
HL Business Management IA

Abstract
In this there will be an evaluation on whether or not Ford should build a new factory
to be able to produce 3 new models of cars. In the evaluation and analysis section,
there is a Force Field Analysis and the restraining forces and driving forces both
measure up to 13; a restraining force would be that Fords current factory is already
capable of producing 6 cars, and a driving force would be, if Ford builds a new
factory they would be able to put a section for cutting the metal themselves rather
than having the supplier do it. Also, there is a STEEPLE analysis on the opportunities
and threats that might affect Ford in building a new factory. In the conclusion and
final recommendations, it is stated that Ford should build a new factory in order to
produce 3 new models and be able to increase profit and market share.

Lyla Van Es
HL Business Management IA

Introduction
The Ford plant in Rayong is manufacturing 3 models of cars which are: Eco
sport, Fiesta and Focus. There is extra land around the factory which can
potentially be used to build another factory and produce 3 extra models of cars.
By building another factory Ford may be able to increase its profits as the plant
in Rayong is on of Fords biggest plants, this means that they may be able to
increase profits as they will have more cars to sell; in addition the new models
that may be produced could be sold in Thailand and neighboring countries as
there are limited models that are cold currently. In addition, by producing more
models in Thailand Ford may be able to increase market share as currently Ford
is not dominating the automotive industry compared to Toyota

Research question: Should Ford expand the factory to be able to

produce 3 extra models of cars in order to increase profit and market
share?

Lyla Van Es
HL Business Management IA

Methodology
Primary research was gathered by going to the Ford plant in Rayong and
interviewing the managers and employees within the plant. Information was
gathered by listening to a presentation by the HR manager, going around the Ford
plant and getting information by what was being said on the tour, observing the
factory firsthand, interviewing some of the employees on the factory floor, and
lastly by interviewing Fords marketing director and plant manager. The problems
that occurred while gathering the primary information was that the factory floor
could be loud at times, and some information that was told could not be heard; in
addition, while interviewing the employees there was sometimes a language barrier
and there was limited amount of time. Furthermore, while interviewing marketing
director and plant manager there was a time constraint which meant not all
questions could be answered. The solutions were with the employees, got someone
else too ask the questions; and finally extra information was collected from other
people taking notes in the plant just in case there was anything left out.

Lyla Van Es
HL Business Management IA

Analysis and evaluation

Force Field Analysis
If Ford plans of coming up with
a new model of car in the
future, it means that Ford would
be able to facilitate and
produce the new lines of cars.

If Thailand floods again, it could

cause production to stop, which
means that Ford would not be
able to supply deliveries.

D
R
3
Economic growth in Thailand is
I
pretty low at the moment so Ford V
Ford already has land around the might not be able to get good
I
current factory, which means that supplier contacts.
N
they would not have to buy new
G
3
land to build the factory, this
means that costs are reduced as Fords current plant in rayong is F
they do not have to buy land
capable of producing 6 models of O
which can be very expensive.
cars, which means that it might
R
4
be a waste of money building an C
extra factory.
Ford is able to hire more
E
educated workers, this means
S
5
that Fords efficiency will
increase.
They import their metal from
Japan, Korea and Germany
2
,furthermore, their supplier also
Ford plans to cut the metal by
cuts their metal for the car parts.
themselves, which means they
This means that if there is a
can use the new factory to cut
problem with the supplier such as
the metal and also produce 3
they have problem with delivery,
extra car models. This means
this means that the whole
Ford will eliminate costs such as production line of Ford will be
transportation and the cost of
disrupted.
having the supplier cut the metal.
3
4
2

Should
Ford
expand
the
factory
to be
able to
produce
3 extra
models
of cars in
order to
increase
profit
and
market
share?

RESTRAINING FORCES: 13
DRIVING FORCES: 13

R
E
S
T
R
A
I
N
I
N
G
F
O
R
C
E
S

Lyla Van Es
HL Business Management IA

Steeple Evaluation:
SOCIAL:
Opportunities: Ford is able to hire more educated workers 1, which means that
efficiency increases as there are more capable workers, this means that there is
higher output. IN addition by having more educated workers it means that running
the new factory would be easier.
Threats: Resources that are used to produce cars have to be Just in Time therefore
traffic could cause them to missed out on some of the times manufacturing the car
since they have no spare resources.
TECHNOLOGICAL:
Opportunities: The internet in Thailand has 10gbit/s high speed fibre-optic lines. Eg.
THAICOM, a communication satellite that allows people in Thailand to access
information more conveniently and at a faster rate. Which means that the
departments within the plant such as admin, will be able to communicate
effectively, for example with suppliers.
Threats: Thai web users have a 20.8 per cent risk of being attacked or becoming
infected with some sort of malware.2This means that if the new technology put in for
the new factory is infected with a virus, it will cost Ford a lot of money to hire
specialists to fix the virus.
ENVIRONMENAL:
Threats: In 2011, Thailand was hit with a major flood, which left Fords plant in
rayong to close for a few weeks, this means that if a flood does happen again then
Ford would have more vehicles that would not be produced and delivered; which
means they might gain a bad brand image.
ETHICAL:
Opportunities: The minimum wage is 300 baht in Thailand 3-In comparison to other
countries it is very cheap, this means that the employees needed to be hired for
the new factory would not cost as much compared to if another factory would be
opened in a country such as Australia.

1 Appendix 2
2 http://www.bangkokpost.com/news/local/326028/thailand-ranked-third-in-cyber-threats

3 http://thailand.prd.go.th/view_news.php?id=6223&a=2

Lyla Van Es
HL Business Management IA
Threats: Labour may be smuggled refugees from Myanmar, Burma etc. 4., even
though this would be cheap for costs, this is illegal and may cause problems with
the law, which means that it may cost Ford more in legal fees than it is to open a
new factory or hire employees that have not been smuggled

POLITICAL:
Opportunities:Gen. Prayuth Chan-ocha, has moved swiftly to try to restore business
confidence and stimulate the economy, including the automobile sector that
accounts for about 11% of the country's annual output, which means that Ford may
have government help.
Threats: There is political unrest in Thailand, for example a few months ago there
was a coup, which means that investors might not want to invest in Ford Thailand as
the political instability might affect the plant.
LEGAL:
Opportunities: workers in Thailand get fewer holidays than every other country in
the world.5, this mean that there will be more workers on the production line to
make the cars, which means output can be at its highest.
Threats: Limited working hours, they employees must not exceed 8 hours per day
and must not exceed 48 hours per each week, which means Ford might have
trouble finding employees to work in the new factory.
Economical:
Threats: Economic growth in Thailand is pretty low at the moment so Ford might not
be able to get good supplier contracts. 6 Which means that if Ford do not get good
supplier contacts it might be harder to find the materials to make the new line of
cars in the factory.

4 http://www.vice.com/read/noi-thailand-human-trafficking-rohingya

5 Appendix 3
6 Appendix 4
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Lyla Van Es
HL Business Management IA

Conclusions and recommendations

In conclusion, with the information that was analyzed Ford should build a new
factory with the land they already have around it; this is because by building a new
factory they will be able to produce 3 new models of cars and be able to cut their
own metal. By being able to cut their own metal Ford will eliminate transportation
costs and costs to cut the metal from the supplier, which may in the long term help
Ford reduce its production costs. Furthermore, if Ford were to build a new factory, it
could help in the future, as if Ford ever come up with new lines of cars, the plant in
Rayong will be able to produce those car; in addition, if Ford were to just increase
their production line and produce 3 extra cars in the current factory, this would
mean that the factory would have to be rearranged to accommodate the new cars,
which means that time might be wasted in trying to sort out a new layout, which
means that they may lose money. BY building a new factory and being able to
produce more models of cars, this means that Ford will be able to sell more models
of cars to neighboring countries which means they might be able to increase profit
as there is extra models for people to choose form, in addition If there is more to
choose from Ford might be able to compete with other brands such as Toyota and
Nissan and increase market share. However though, if Ford do decide to build a
new factory, in short term Ford would lose a lot of money as building a new factory
and getting the machinery can be expensive; furthermore by building a new factory
it might disrupt the current factory and production line.

FINAL RECCOMENDATIONS:

If Ford does not have enough capital to build a new factory, they should not
get a loan from the bank, they should just wait to build the factory.
If there is no demand for the models, Ford should build a factory but only for
cutting the metal.
If there is demand for the models, Ford should build a new factory to be able
to produce 3 extra models of cars, and also be able to cut the metal
themselves.

11

Lyla Van Es
HL Business Management IA

Bibliography
Lamina, L. & Muchena, M. & Pierce, R. A. (2014) Business Management. 2014
Edition. Great Britain: Oxford University Press.
Index Mundi. (2014) Thailand Demographics Profile 2014. [WEBSITE]. Available
from: http://www.indexmundi.com/thailand/demographics_profile.html [accessed: 08
November 2014]
Steve Mac. (2011). Ariel footage of Thailand flooding. [Online Video]. 23 October. Available
from: https://www.youtube.com/watch?v=rFESGOor3rc. [Accessed: 08 November 2014].
Bangkok Post. (2014). Thailand Ranked Third in Cyber Threats. [Website] Available from:
http://www.bangkokpost.com/news/local/326028/thailand-ranked-third-in-cyber-threats
[accessed: 08 November 2014]
The government public relations Department. (2012). 300 baht daily minimum wage.
[Website] available from: http://thailand.prd.go.th/view_news.php?id=6223&a=2[accessed:
08 November 2014]
Johnny Miller. (2013). Corruption, Torture, and "Ethics" in Thailand's Human Trafficking Industry.
[ONLINE]
Available from: http://www.vice.com/read/noi-thailand-human-trafficking-rohingya[accessed:
08 November 2014]

12

Lyla Van Es
HL Business Management IA

Appendices
Appendix 1
QUESTION
Where do you get the metal you use to
produce the cars from?

(question asked to employee on the

factory floor) Do you enjoy working
here?
HOW WILL TECHNOLOGY IMPROVE?

WILL YOU BE PRODUCING THE 2015

MODELS?

FACTORS THAT COULD CAUSE

DISRUPTIONS:

ANSWER
We import our metal from Japan,
Germany and Korea. Our supplier also
cuts the metal for us as well, such as
cutting the metal for the car door that
is then stamped. However, we plan to
start to cut the metal ourselves soon,
as sometimes the supplier has
problems and then it affects the
production directly.
Yes I do, I get to play football outside
and use the leisure facilities on my
break.
continue innovation factory floor =
such as computers - to help the
workers so they dont have to strain
themselves physically as much so that
they are healthier
They will always try to advance
and innovate they technology they use
to make sure the car production is
efficient
going to become an exporter
now producing 2014 models soon
they will produce the 2015 ones there are
slight changes to make them better scrap
the 2014 models = however depends on
the demand and orders at the dealerships

Import parts so there could be a

delay they are trying to localize
Natural disasters worried as well
When suppliers are affected it affects
them such as TSUNAMI in japan
factory that produced black pigment for the
cars color was wiped out, this caused most
car manufacturers to have problems
difficulty producing black cars

13

Lyla Van Es
HL Business Management IA

DID YOU WORK WITH THE THAI

GOVERNMENT?

DO YOU PLAN TO INCREASE THE CARS

THEY MANUFACTURE ANNUALLY

Worked with Thai government when

the plant was set up they worked very
closely

It depends on demand, and they dont want

to produce too much or too little.

APPENDIX 2

APPENDIX 3
(Days off employees get

in Thailand)

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Lyla Van Es
HL Business Management IA

APPENDIX 4

15

Lyla Van Es
HL Business Management IA

16