The greatest business decisions of all time

Once in a while, companies make changes which seem counterintuitive: to defy all conventional wisdom.  Doubling your entire work force's salary overnight may seem like madness, but that's the high risk strategy that made Henry Ford a household name today.  Here we will take a look at two of the highest drama decisions and the people behind them.  As businessman Tony Freeman will agree, the commercial world is a constantly evolving.  Here we take a look at two of the biggest leaps made by business revolutionaries.

Boeing's launch of the 707

When Boeing's CEO launched the 707, he didn't have a single order.  He just believed in the product: he knew that customers would want to buy it.  It takes a huge amount of courage and conviction to put the company you have, in bricks and mortar, on the line for a dream of the company you could have: something much bigger.

In 1952, Boeing was a virtual nonentity in the business of commercial aircraft.  The company was primarily involved in manufacturing military aircraft, such as the famous B-52 bomber.  The aircraft maker was heavily involved in the development of jet technology, but in those days the use of jets in commercial aircraft was not considered viable by the industry as a whole.  Converting to jet technology would require massive investment which would seriously affect the airline industry's profitability.

The safe choice for the company would have been to stick to its operations in the defence industry.  Boeing's post-war President, William McPherson Allen, had other ideas.  In one of the most talked about "bet the company" moves of all time, he effectively put all of Boeing's eggs in one basket, risking it all on the success of a single product.  He was convinced that the 707's convenience, speed and comfort would win over consumers and that the civilian aviation sector was ripe for expansion in a booming global economy.

In 1952, William McPherson Allen managed to persuade Boeing's Board of Directors to invest $16 million in the Boeing 707.  This was the first United States based transatlantic commercial jetliner.  The plane altered the course of Boeing's future completely.  The 707 became much more than a transportation vehicle - it became a cultural icon - Jantzen even named a range of swimwear after it.  Dwight Eisenhower, George Bush and every United States President in between flew on a modified version of the 707, the world famous Air Force One.

Boeing was founded in 1916.  The company's headquarters are in Chicago, Illinois.  Today it is ranked #97 by Forbes in their list of the World's Most Valuable Brands.  Boeing employs over 168,000 employees worldwide.  The company's sales are estimated to be in the region of $86 billion.

Henry Ford doubles his workers' wages

In 1914, Henry Ford faced a problem.  As ridiculous as it may sound, his car production company was becoming too successful, too quickly.  A surge in popularity of the Model T motor car caused Ford to question his strategy of mass production.  He had introduced a moving assembly line at his Highland Park, Michigan plant in 1913 and it worked far better than he had ever imagined, but to the detriment of his workforce.

Since installing the moving assembly line, the Ford Motor Company was haemorrhaging employees.  Workers' morale plummeted: the mundane, repetitive, physically demanding work causing the factory's operators to walk out in huge numbers. 

After talking things through with his assistant, James Couzens, Ford knew he had to take action.  On 5th January 1914, Ford and Couzens summoned the press to Ford's Highland Park plant.  They announced changes in employment policies which they hoped would improve worker retention.  These consisted of:

1.      Reducing the working day from nine hours to eight.

2.      Moving from two shifts a day to three, thereby creating many new jobs.

3.      Subject to certain conditions, doubling the basic rate of pay to $5 a day.

The history of ford motors from Tony Freeman

The 11 year old car manufacturing company was willing to spend an extra $10 million a year to improve the lives of its workers, thereby improving their productivity and the productivity of the company.

News spread quickly about Ford's "magnificent act of generosity" as it was hailed by the New York Evening Post.  His $5 working day turned out to be a shrewd investment, annual labour turnover falling from 370% to 16% within the year and productivity increasing from 40% to 70%.  This enabled Ford to reduce the price of the Model T from $800 to $350 between 1910 and 1919, solidifying the company as the world's greatest car manufacturer, and making Ford a billionaire. 

The Ford Motor Company was founded by Henry Ford on 16th June, 1903.  Today, the Ford Motor Company manufactures and distributes cars across six continents.  Through its subsidiaries the company also engages in other sectors, including vehicle finance.  The company is divided into two sectors: Automotive and Financial Services.  The Automotive section is further divided into four subsidiary companies: Ford Europe, Ford South America, Ford North America and Ford Asia Pacific Africa.

In 2014, Ford ranked #133 in the Forbes list of America's Best Employers, #47 in the Global 2000 and #45 in the World's Most Valuable Brand.  Today the company employs over 180,000 workers and attracts a revenue in excess of $146 billion.  In 2015, the company is set to take a risk again, releasing the revolutionary F-150 Pickup, making them the first truck manufacturer to move away from traditional steel panels to lightweight aluminium.

Two of the highest earning businesses worldwide

Following an upturn in the global economy, here we examine two of the highest grossing companies worldwide.  Investors the world over like entrepreneur Tony Freeman will be keeping a keen eye on up and coming companies throughout 2015, forging ahead amongst the green shoots of recovery.

Toyota Motors

Toyota Motor Corporation is based in the city of the same name in Aichi, Japan.  Founded on 28th August 1937 by Kiichiro Toyoda, this public company employs some 338,875 workers worldwide.   As at November 2014, the company was ranked the 12th largest in the world by revenue.  In 2012, Toyota was the largest producer of automobiles in the world, placing them ahead of General Motors and the Volkswagen Group.  Toyota reported the production of its 200 millionth vehicle in July of that year.  The company is the first car manufacturer to produce over 10 million vehicles a year.  As at July 2014, the Toyota Motor Corporation was listed as the largest in Japan by market capitalisation.

Kiichiro Toyoda created the company in 1937 as a spinoff from his father's Toyota Industries.  Whilst Toyota Industries manufactured automobile and truck parts, Kiichiro Toyoda wanted to concentrate solely on the production of automobiles.

 

In the 40s and 50s, Toyota's small-sized cars were sold under the name "Toyopet".  Toyopet production went on to include light trucks.  When the Toyopet was released on the American market the name proved unpopular and was later dropped, though it continued to be used in other markets until the mid 60s.

In the 1990s, Toyota branched out from the manufacture of reasonably priced compact cars and light vans, adding many more larger and more luxurious models.  These included several lines of SUVs, a full-sized pickup branded the T100 (later renamed the Tundra) and the Scion brand which was a range of sporty yet affordable cars targeted at young adults.  In 1997, Toyota began production of the world's best selling hybrid car: the Prius.  This award winning car is definitely one for those watching the market like Tony Freeman to keep an eye on, proving popular with both the general public and celebrities alike as an environmentally responsible alternative to relying solely on petroleum

Toyota ranked eighth in the Forbes list of leading companies in 2005.  In 2014 Toyota achieved a $230,201 million revenue for the sale of motor vehicles and car parts, equating to sales of over $7,000 per second.

 

BP

BP, or British Petroleum as it was formerly known, is one of six of the world's "supermajor" gas and oil companies.  Its headquarters are situated in London.  The company deals with not only oil refining and production but also distribution and marketing, power generation, petrochemicals, trading and exploration.  BP also has interests in renewable energy including wind power and biofuels.

The company, original trading as the Ango-Iranian Oil Company and Iraq Petroleum Company, was founded in 1908 after a team of British geologists discovered a substantial amount of oil in Masjid-i-Suleiman, Iran.  This was the first commercially significant discovery of oil in the whole of the Middle East.  The Shah of Iran granted William Knox D'Arcy a concession, enabling Britain to drill for Iranian Oil.  Following the establishment of the Burmah Oil Company, a subsidiary of Anglo-Persian Oil, the Abadan Refinery was constructed in 1912 and the pipeline from Abadan to Masjid started.  In 1915, the Anglo-Persian Oil Company established the British Tanker Company, enabling them to distribute petroleum all over the world.

The Deepwater Horizon Explosion

On 20th April 2010 an explosion and subsequent fire on the semi-submersible Deepwater Horizon Mobile Offshore Drilling Unit caused both an environmental and a public relations disaster.  Located some 40 miles to the southeast of the Louisiana coast in the Macondo Prospect oil field, the rig was operated by Transocean, a company drilling for BP.  The explosion injured 16 workers, killed 11 and sinking the Deepwater Horizon drilling rig.  A total of 115 people were evacuated, 98 by lifeboat and 17 by helicopter to trauma centres.  The accident resulted in a massive offshore oil spill in the Gulf of Mexico which is considered to have been the largest US environmental disaster to date and the biggest accidental marine oil spill in global history.  In the wake of the incident, BP were criticised heavily for their involvement.  BP filed $40 billion in lawsuits against the rig owner, Transocean, alleging that the irresponsible behaviour of contractors and failed systems had led to the explosion.  On 4th September 2014, District Judge Carl Barbier attributed 67% of blame for the incident to BP, ordering the company to pay fines per barrel spilled which, under the Clean Water Act can be awarded up to $4,300 per barrel, at the discretion of the judge.  The court contended that some 4.2 million barrels were spilled, causing an ecological disaster on Louisiana's beaches and a PR nightmare for BP.  BP's appeal is ongoing.

BP has operations in over 80 countries worldwide, employing almost 84,000 workers.  In the United Kingdom, BP operates over 40 offshore gas and oil fields, four onshore terminals, as well as a pipeline network which transports 50% of gas and oil produced in the UK.  Despite the public relations disaster in the wake of the Deepwater Horizon explosion, BP continues to lead the pack in terms of oil and petroleum producers.

In 2004, the company topped sales of over $9,000 per second, amounting to a $291,438 million annual revenue.