Ford Motor Co
The paper will contain an in depth analysis of the Ford Motor Company, a US based automakers, based in Detroit. The paper will look into the strategic and competitive performance of the organization. 01. Define and discuss Ford’s business-level strategy. Ford Motor Company was founded in 1903 by Henry Ford. It worked on to establish itself as the number one car manufacturing firm in the world. To do so, the Ford Motor Company created their brands and started to compete in the market. This caused the organization to have a wider look at the organizational activities.
The business level strategy of any organization is to establish the organization as the best against its competitors, by gaining competitive edge. This could be done through specializing or through incorporating the strategies of differentiation, being a low cost firm or by targeting niche market etc (Ford. com, 2010). During the economic downturn of 2008, Ford decided to make sure that the liquidity of Ford is not in any danger and despite the difficult situation they maintained four key points of the business plan submitted to the Congress.
The priorities were to consistently reform the business structure of the organization and to produce the vehicles to meet the existing demand regardless of the credit crunch being faced. It also resolved to produce fuel efficient and environmentally conservative vehicles. They decided to review their financial position and make their financial position better. They targeted towards team performance as being “One Ford” globally, and decided that they would harness on this mission statement. It also decided to divest few of its previous strategic units. Ford decided to finance itself by selling the Swedish premium car unit. 02.
Explain how the company’s value-chain activities can be better linked to create value for the company. A company’s value chain activities are those which help an organization deliver superior value to its customers. These activities might by the part of a daily routine of any organization or some specific strategies to be followed. However, the goal of it is to satisfy the customers who consume the products of the company. Ford Motor Company is very concerned about the value chain of the organization. It has divided the value chain activities into nine activities all interlinked together to execute their work and reach their goals.
These activities are; product planning and design, logistics, raw material extraction, parts and components, assembly and painting, sales, use, service, end of life. Each step of the value chain has its impact on the one followed. These activities help in produci9ng world class vehicles of Ford. Ford has also done materiality analysis to ensure that along with their vehicles, they are prompt in conserving the environment too. These are important aspects that help an organization show how responsible they are for the society.
Ford Motor Company made it sure that the issue of carbon emission was handled as a separate issue and was dealt with to help conserve the environment (Hill & Gareth, 2007). They also came up with materiality matrix which focused on two major aspects. These were the concern that were important to the stakeholders of the organization and the other ones were the issue important for the company itself. The issues that were of high impact for both the organization as well as stake holders included the financial concern of the organization, the issues of the climate change, the safety issues and the human rights issues.
Throughout their value chain, they have made sure that organization and the stake holders would both work together to make sure that goals of both the parties are met and it’s also helps in satisfying the customers by producing superior quality vehicles for them. They have also showed their concerns for ethical business practices and work place safety for their Human resources. They are also very careful about the aspects of manufacturing efficiency and cost reduction processes. All of these issues are well served in the value chain of Ford Motor Company and are also building blocks towards a better strategy for the future of Ford (Ford.
com, 2010). 3. Explain how Ford can successfully position itself in terms of the five forces of competition. The five forces of competition as stated by Porter are: bargaining power of supplier, bargaining power of customers, threat of new entrants, threats of substitute products, competitive rivalry within an industry. First of all, the rivalries with in an industry will create the value for an organization in a particular industry. The rivalry can come out to be the main reason for being competitive. The major competition for Ford comes from General Motors, Toyota, Volkswagen and Honda.
In the industry of automakers this gives a very tough competition. The organizations that are competing together are well known thorough out the world and hence make the industry very attractive. The threat of new entrants is also an important force of competition. This threat of entry exists when an industry is relatively new and only one or two producers exist. However, in automobile industry where there are other car and other vehicle manufacturers exists, there can a lesser threat of new entrants and the competition is already fierce amongst these companies as mentioned above.
The threat of substitute can be said as the generic substitution. This substitution can come in the form of availability of motor bikes and scooters. In a country like India, where car manufacturing is also done by a local company, people have an easy access to motor cycles and bikes rather than cars. The power of buyer makes competition severe if there is a concentration of buyer for a particular product and buyers are well aware about other competitors too. For instance, the cars manufactures by Honda and Toyota much be less expensive than those made by Ford.
Even the luxury cars made by Ford would be costlier than the luxury cars made by Ford. The cost and price benefits for Toyota make it a preferred company than Ford. Hence, the competition gets sever amongst the companies. The power of supplier is another aspect. As same as power of buyer, the supply chain must be well made to make sure that suppliers are not in the power and the organization has more power to bargain. The concentration of supplier in an industry makes them expensive, and so would the cost of purchasing go up (Porter, 1988). 4. Outline a rough competitor analysis.
The competition analysis of Ford Motor Company can be illustrated as: Volkswagen is a Germany based organization that specializes in small cars and luxury cars. The annual production of VW is nearly six million cars per years. Some of the famous luxury cars such as Audi, Lamborghini, Bentley, and Bugatti are manufactured by VW. They are the number one car manufacturer across Europe. Toyota is the Japan based car manufacturing company which is famous for low cost cars. Japan has taken over the US based firms when it started to produce low cost small cars affordable to majority of the people.
Lexus is the famous luxury car manufactured by Toyota. General Motors produces a wide collection of cars and trucks, with products such as Buick, Cadillac, and Chevrolet. The organization is currently facing some financial crisis and is facing a difficult situation. 5. Describe what can be learned about expected competitor behavior by using the model of competitive rivalry to understand Ford’s situation. The organization in comparison with the rivalry force can face further competition in coming years. The competition can be overcome by understanding the threats and opportunities that can come up in near future.
