Latiza, Mark Jasper J.

BSCE IV-GA

REACTION PAPER

“FORD EXPANDS PARTNERSHIP TALKS WITH VW AND MAHINDRA TO

CUT COSTS”

As much as it depend its size from revenue amounts, profits will never
occur in breaking-even production cost levels. Unsurprisingly, there are
actually numerous ways to defray operational business costs. Ford, in its
goal to attain lower cost of production, did this through establishing
partnerships. As stated in the article, Ford sought to rent out its available
production facilities to other auto-manufacturing firms in able to earn
additional income. It also practiced price benchmarking to monitor its
operating expense parity with others in the industry, whether they have
been incurring higher cost levels compared with its peers or not.

For me, this is a good practice of company self-assessment. First, Ford is

trying to maintain the goal of firms of satisfying its shareholders’
interest through “low costs, high profits” business performance. Second,
Ford is maximizing its efficiency through putting into work otherwise
idle company assets. This move is an all-win scenario, limiting the
company asset wastage and earning otherwise absent income. Lastly, it
is establishing healthy partnerships with its peers within the industry.
The saying “no man is an island” is being put into practice by Ford
through seeking help and opinion with same-industry players which in
turn assesses, improves and alleviates its current performance level. This
in turn inures to the benefit of its shareholders and possibly to
stakeholders of the firm.