Introduction
Ford has been a renowned motor vehicle company since June 16, 1903. When undertaking a capital project, a company needs to evaluate its chances of success. Ford motor limited, in line with its environmental conservation policy, would like to invest in a solar charged motor vehicles plant. This paper discusses problems that the company is likely to get when evaluating the project.
Project definition
The project aims at manufacturing vehicles which can be electrically charged (using solar energy) and at the same time it is using fuel when there is no sunlight. It’s likely to be faced by the following challenges;
Risks
When making a new venture, there are chances that the venture will not be accepted by the market. In the case of solar charged motor vehicles, there are number of limitations which include its acceptability in areas which have minimal sunlight. This will limit the market for the product.
Cost v/s benefits
The project will consume a large capital outlay; for it to be viable, initial costs and operational costs should be covered by the incomes from the project. Markets are unpredictable and thus determining cash flow from the investment is a challenging task. This is further challenged by changes in international trade and foreign currency values fluctuations (Cooke-Davies, Crawford & Lechler, 2009).
Politics (internal and external)
When a proposal to make the plant is brought to the board, there are chances that it will cause heated debates. Those opposing the investment, pessimists, are likely to show how unviable the plant is likely to face. If this side has a strong backing or have people who knows how to convince others (opinion leaders), the project is likely to fail.
On the other hand national and international politics may face the project after it has been initiated. This is in cases where target countries have unpleasant trade relations with the producing countries.
Public relations
Though ford has a strong brand name, there are chances that the project will fail; it can suffer rejection by the target market. The target market may feel that products from the company do not meet its expectations and thus the company limits rejection. This will influence the cash out flow of the company.
Competition
The need for environmental conservation is on the rise and almost all motor companies are trying to develop projects aimed at producing automobiles which either have high fuel consumption or are electrically propelled. The project thus will suffer from competition; some international companies like Toyota and General motors’ are expected to be the major competitors.
Unpredictability and different social values
The company has a policy to ensure that it conserves the environment, this may not be shared by its target market and thus the market may not recognise the new products in the market. Some people are concerned about their welfare and not environmental issues and thus they will not be willing to spend an extra amount (the vehicles will be priced slightly high than normal ones) for the good of the environment (Bryde & Wright, 2007).
The project costs and benefits are estimated as follows;
Conclusion
Having a solar charged automobile plant for Ford limited is likely to face challenges. These challenges include unpredictability and different social values, competition, public relations, politics, cost v/s benefits and risks.
References
Bryde, D., & Wright, G. (2007). Project Management Priorities and the Link with Performance Management Systems. Project Management Journal, 38(4), 5-11. Web.
Cooke-Davies, T., Crawford, L., & Lechler, T. (2009). Project management systems: Moving project management from an operational to a strategic discipline. Project Management Journal, 40(1), 110-123. Web.