How did Henry Ford change the world from horses to cars?

The story of the vision and start-up stage of Henry Ford - the father of the auto industry will bring back the classic lessons and business strategies of an innovative individual who changed the world but received little success. known during the first 40 years of his life.

'When I ask people how they want their transportation? They told me they wanted a faster horse ,' quote from a biography of Henry Ford.

Changing people's habits isn't easy, but Ford did.

Ford was alive when people used horses as a popular and popular means of transportation. So, when he surveyed people's tastes from his invention, he learned that there was never a market for new goods.

That is really a challenge. Changing people's habits is not easy, creating a revolution to change traditional ideas is even harder. But Ford made it. He changed the world now that millions of people are using the idea of ​​his invention as a routine. So how did Ford do it?

Have the courage to follow your vision

From an early age, Ford thought that somehow things could be made better. It was this thought that made him passionate about mechanics, and he was described by his mother as a born mechanic.

As a child, Ford had a small workshop with small metal samples used as tools. Back then, all of his toys were handmade, a far cry from the toys of today. The best moment of Ford's childhood was when he saw a railroad engine, a steam-powered car. It was the first car he saw that could run without a horse.

Or like disassembling and assembling things, when he was 15 years old, he could fix any watch and was expected to become a watch maker. But the idea of ​​'a chariot without a horse' was so magical, and with self-effort, Ford set out to build one from the workshop he built on the family farm.

Ford started building a car out of a workshop built on the family farm.

When he was 17 years old, he started his career as an apprentice mechanic, qualifying as a mechanic ahead of time and being promoted to higher ranks in the Drydock engine factory. In his spare time, he studies the workings of gasoline engines and dreams of building a 'global car' that can transport people inexpensively and reliably.

During a brief meeting with inventor Thomas Edison when he was twenty years old, Ford was inspired by an inexhaustible source of inspiration. Even though at the time, electricity was considered an important invention of Edison and everyone said that electricity was the future, but Edison still told Ford that he must continue to persevere in his own direction.

Then, Ford's boss at the Detroit Edison company recommended him to a high position on the condition that he gave up his personal passion to focus on more useful work.

'This left me faced with a choice between a job with wide advancement opportunities and my passion for cars. In the end, I chose the car and quit my job. In fact, I had no choice because I knew that it was the car that brought me success, even though many other people didn't think so ,' quote Henry Ford's biography My life and work.

Putting aside immediate fame just for a chance to change the world by pursuing a passion requires individual courage. He officially resigned on August 15, 1899 and has been in the automobile business ever since.

Starting a business

With no personal capital, Ford combined with a group of investors to form the Detroit Automobile Company. He quickly realized that these investors were more interested in short-term profits than in producing a better car, so after only a year of 20 cars being produced, Ford pulled out of the company. company.

Four years later, the slim, forty-year-old man founded the Ford Motor Company. The company raised $100,000, and this time Ford owns ¼ of the company's stock.

In its first year, the company produced more than 1,700 Model A vehicles, and they enjoyed early success because of their dependability. In the second year, due to pressure from associates, Ford launched three models and raised the price. The company sold fewer cars.

Ford realized it needed to have a large stake in order to have full control.

From there, Ford realized it needed to hold a large stake in order to have full control. So he used his monthly income to buy back the number of shares, from 50% and then 100%.

In 1908-1909, the company sold more than 10,000 vehicles and was under pressure to expand its product line. Ford, however, went in the exact opposite direction. One morning in 1909, he announced that the company would sell only one model, with prices steadily decreasing over time: the Model T. Plus, only one color.

'Every customer can get a car painted in the color he wants if it's black' is his famous quote.

While many people still think that the low selling price will make the company bankrupt, Ford believes this strategy will help the market expand strongly. Reality turned out exactly as he expected. He began building the world's largest assembly line factory, Highland Park, and capacity jumped from 6,000 to 35,000 units a year, while the number of employees less than doubled.

Just 10 years later, the company was making 4,000 cars a day and the next year 5 million cars a year. By the end of the decade, 15 million Model T cars had been produced, marking a magical milestone in mass production.

The reason the factory can expand to such a large scale stems from Ford's own business strategy. In the past, the first cars were seen as a toy for the rich, sold to people who wanted entertainment or status.

Ford changed this perception by advertising the usefulness of Ford cars. The car was also sold because of its ease of handling, ease of use and hence the saying : 'Anyone can drive a Ford'.

Ford hated the idea of ​​making cars expensive.

However, it is the price strategy that is the leading factor that makes the company successful beyond expectations. In the years 1909-1910, the car was worth $950. Ten years later, the price of the car is only $355.

Ford hated the idea of ​​making cars expensive. Instead, his strategy is to set prices based on production costs. Meaning, if his factories can become more and more efficient, consumers will benefit.

Like Sam Walton with the Wal-Mart supermarket chain, Ford discovered that he could make more profit by selling more products at lower prices, rather than selling small quantities at high prices.

If you can sell high-quality products at low prices, this will give your business an insurmountable competitive advantage, so 'you'll find demand so much higher that you can call it global ,' Ford writes. in his biography.

This strategy may sound 'familiar' to our times, but it's one of the classic secrets of Henry Ford's incredible business success.