In just a comparison of cars and trucks, which company seems to have the vehicles the American public wants?
luxury cars price comparison
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Heathen
If you were to take off the emblem and just compare vehicles on styling, mileage, power, price, etc. (you know, like a real consumer), which company would win the "blind taste test"?
Answer
Ford
The Fusion/Milan/Focus are getting great reviews. The Lincoln brand is best in luxury. The full sized trucks are tops.
Ford
The Fusion/Milan/Focus are getting great reviews. The Lincoln brand is best in luxury. The full sized trucks are tops.
Why do we need to continuously increase productivity?
june
Why do we need to continuously increase productivity? & what is the relationship between "quality" and "productivity"?
Answer
After World War II, Japan needed to rebuild. One smart thing that they did was gear their factories for export. The economy would provide the basics of life for the Japanese people but to prosper they needed outside money, beyond what the occupation forces needed for their bases and their troops spending for their leisure moments. Many prosperous economies realized that, Sweden and Switzerland are excellent examples. But, unlike those two european countries, initially Japan was in for quantity. Make a lot of stuff cheaply and those in well-off countries would surely buy some. Folks like Peter Drucker began to galvanize the corporate thinking in Japan, much as has happened in the recent decades in China--the extra steps of extra value produce extra value and consumers who can afford and appreciate that extra value will pay higher prices for it. Japan increasingly became known not as the mass-producers of junk but mass-producers of quality merchandise.
Figure it this way. Factory A assembles 100 cheap automobiles that sell for $12,000 with a profit margin of $2,000 each. For that production period, factory A contributes $1.2 million in sales and stockholders count $200k in gross profits. Factory B assembles 50 luxury automobiles along the same lines and they sell for $25,000 with a profit margin of close to $8,000 each. Factory B contributes $1.25 million in sales and stockholders count $400k in gross profits. Factory A's product is in for maintenance and repairs between 2-5 times as often as factory B's product.
What I have just described, drawn from looking at it about 15 years ago, was a comparison between Chevrolet's GEO Prism and a BMW 3-series sedans. Chevrolet could make and sell more (often in a factory that it shared with Toyota who was making its comparable product, Corolla) than BMW did, but even with BMW's "introductory model", the German car maker could grow and profit while, if you notice, Chevrolet no longer makes Prisms.
Without sufficient quality, production is no longer needed. If you make junk that no one buys, what have you made? If you improve the quality so that you can charge a premium price, then you will have sufficient profits to fuel the production of the next level of quality.
As for increasing productivity, when a technology becomes standard, the quality price premium shrinks. That means profit margins narrow. That means in order to get the kinds of profit percentages that you had before or aspire to have now, you will have to simply do better faster. Chevrolet had higher unit productivity rates than BMW, but a much, much lower marginal profitability rate than BMW. Parent company General Motors is suffering today, BMW is not. That is the relationship.
After World War II, Japan needed to rebuild. One smart thing that they did was gear their factories for export. The economy would provide the basics of life for the Japanese people but to prosper they needed outside money, beyond what the occupation forces needed for their bases and their troops spending for their leisure moments. Many prosperous economies realized that, Sweden and Switzerland are excellent examples. But, unlike those two european countries, initially Japan was in for quantity. Make a lot of stuff cheaply and those in well-off countries would surely buy some. Folks like Peter Drucker began to galvanize the corporate thinking in Japan, much as has happened in the recent decades in China--the extra steps of extra value produce extra value and consumers who can afford and appreciate that extra value will pay higher prices for it. Japan increasingly became known not as the mass-producers of junk but mass-producers of quality merchandise.
Figure it this way. Factory A assembles 100 cheap automobiles that sell for $12,000 with a profit margin of $2,000 each. For that production period, factory A contributes $1.2 million in sales and stockholders count $200k in gross profits. Factory B assembles 50 luxury automobiles along the same lines and they sell for $25,000 with a profit margin of close to $8,000 each. Factory B contributes $1.25 million in sales and stockholders count $400k in gross profits. Factory A's product is in for maintenance and repairs between 2-5 times as often as factory B's product.
What I have just described, drawn from looking at it about 15 years ago, was a comparison between Chevrolet's GEO Prism and a BMW 3-series sedans. Chevrolet could make and sell more (often in a factory that it shared with Toyota who was making its comparable product, Corolla) than BMW did, but even with BMW's "introductory model", the German car maker could grow and profit while, if you notice, Chevrolet no longer makes Prisms.
Without sufficient quality, production is no longer needed. If you make junk that no one buys, what have you made? If you improve the quality so that you can charge a premium price, then you will have sufficient profits to fuel the production of the next level of quality.
As for increasing productivity, when a technology becomes standard, the quality price premium shrinks. That means profit margins narrow. That means in order to get the kinds of profit percentages that you had before or aspire to have now, you will have to simply do better faster. Chevrolet had higher unit productivity rates than BMW, but a much, much lower marginal profitability rate than BMW. Parent company General Motors is suffering today, BMW is not. That is the relationship.
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