Henry Ford and A Legendary Business Model

Henry Ford was a car maker who decided to build cars for the “common man” because he thought that the workers who made the cars should be able to be able to have them too. Although his backers at Ford Motor Co. told him to build a car for the rich, Ford followed his own mind and made an affordable car.

The Model T was Henry Ford’s mass produced car. He produced many cars in less time and money than ever before. It became so popular because it was suitable for all men. As a result, Ford created something called the "dealer-franchise" system. The dealer-franchise system is the system that companies use to sell their product in many locations. By expanding and creating more dealers across the country, Henry Ford’s car became known and popular all over.

Ford not only changed the way cars were made, but his cars help improved conditions for the automobile. Ford pushed for better roads and more gas stations to help his company and to help all car owners. If a large business such as Ford’s was to develop, the infrastructure had to expand as well.

While Ford was a visionary, he solicited help from others when necessary. One of those forefathers of the automobile who helped Ford was Thomas Edison. Thomas Edison was a great inspiration to Henry Ford. Ford asked Edison for his assistance in building a battery for the car. He gave him $1.5 million to develop an electric storage battery. Although Edison never made a perfect battery, the battery that was built was used and modeled after for successive models.

Ford's cars were built on an assembly line strategy. The assembly line is a production strategy that has each person do the same specific piece of work to build the final product. Ford’s cronies, or skilled tool makers, organized teams to add each of the parts to the Model T. In 1914, Ford’s assembly line could produce a car in 93 minutes. Wondering what these workers got paid? Ford had a $5 minimum wage which was very high for 1914. With his assembly line and great production time, he had plenty of money to give to his workers. He set a standard for other companies as well.

Today, we term Ford's advancements as a form of vertical integration. Vertical integration is the ownership of the companies that produce the things you need for your business. Ford was vertically integrated because he controlled rubber plantations in Brazil, a fleet of ships, a railroad, 16 coal mines, and thousands of acres of timberland and iron-ore mines. Ford and the Ford motor company were truly great early models of business.