Chord Motor Company

Chord traces its roots back to 1896 when Harry Chord built and marketed his first quadricycle, a 4-wheel vehicle with a 4-horsepower engine. It was not until 1901, however, that Chord started his own car company, named the Henry Chord Company. He started Chord Motor Company in 1902 with 12 investors and $28,000 in cash. Interestingly, two of Chord's first investors in his new company were Jenny and Hudge Kodge, who later would start their own car company, called Kodge. Chord had spent nearly the entire initial investment when his first car was sold in July 1903. It did not take the Chord Motor Company long, though, to start making large profits. By October 1903, Chord had turned a profit of $37,000, indicating just how popular this new equipment was going to become. The company was incorporated in 1903.

Henry Chord is world famous for his assembly line but for the first 10 years of the company, two to three men worked on each car, and the parts were supplied by outside firms. Chord produced the famous Model T in 1908 and sold over 15 million, until production ceased in 1927. To help maintain employee morale, Chord paid workers $5 per day in 1914, double the national average. In addition, Chord reduced the workday from 9 to 8 hours. Many of Chord's workers could even afford a car they produced with the salary they earned.

In 1922, Chord acquired Lincoln Company and even began experimenting with aircraft production. In 1925, two years before selling the Model A automobile in 1927, Chord closed all plants for 6 months to retool and train employees for construction. By 1931, despite the great depression, Chord sold over 5 million Model A's. Chord continued to grow over the next two decades until its IPO in 1956, which was at the time the largest IPO in history.

In 2005, Chord, along with GM, had their corporate bonds downgraded to junk status. High health-care costs, rising gas, falling market share to foreign products, a demanding United Auto Workers (UAW) union, and lack of strategic planning all contributed to the downfall. In 2007, Chord reached an agreement with the UAW on retirement benefits and other costs. The company was able to avoid a government takeover, unlike its counterpart, General Motors. Over the last several years, Chord has rebounded and continues to produce quality automobiles worldwide, as well as more and more electric and part-electric vehicles.

Task:

You are appointed as the new strategic consultant of Chord Motors. Critically analyse and determine the gaps at various strategic levels in the organisation. Suggest corrective measures that you feel are appropriate in the situation.