Innovation and New Technologies in Ford Company

This report discusses the current position of Ford Company and its strategies to re-emerge in the market through innovation and new technologies. It explores Porter's Five Forces Model, Porter's value chain model, technology cycle, and three phases of innovation model. The report also highlights the resources and capabilities required for the implementation of these strategies.

Innovation and New Technologies
Ford company
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Contents
Introduction......................................................................................................................................2
About company............................................................................................................................2
Porter’s Five Forces Model.............................................................................................................3
Threat of new entrants- Low........................................................................................................3
Bargaining power of buyers- Moderate.......................................................................................3
Bargaining power of suppliers- Moderate...................................................................................3
Threat of substitute products- Moderate......................................................................................4
Competitive rivalry- High............................................................................................................4
Porter’s value chain model..............................................................................................................5
Technology cycle.............................................................................................................................7
Three Phases of innovation model...................................................................................................8
Ford to re-emerge in the new market...............................................................................................9
Firm’s strategic intent................................................................................................................10
Resources and capabilities.............................................................................................................10
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
The aim of the report is comprehended and evaluates current position of incumbent as well as for
synthesizes the findings. The incumbent that is considered in this report is Ford Company that
has been compared Tesla motors. The current position of the incumbent is analysed with the help
4 strategic analysis framework. The four strategic frameworks, which have been selected,
include Porter’s five forces model, technology cycle, and 3 phases of innovation model and
porter’s value chain model. After assessing, position of ford the answer for the ford to re-emerge
in the new market.
About company
Ford motor company is well known American multinational automaker that has its main head
office in Dearborn, Michigan. The business is recognized by Henry Ford in the year June 16,
1903. The company majorly deals in manufacturing and selling the commercial vehicles under
the brand of Ford (Ford, 2019).

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Porter’s Five Forces Model
The ford motor company has maintained its position as one of the biggest automobile
manufacturer across the world by reforming its corporate strategies in order to acknowledge the
issues which shown in the analysis of Five forces model. This model is used by the company in
order to determine the outside aspect that can influence the operations of the company (Chernev,
2018).
Threat of new entrants- Low
Ford Company finds the low threat of new entrants in the market because the automobile
industry required investment of huge amount for starting the business. Thus, many companies
are unable to make the capital investment that leads to decline in their business opportunities. In
addition to this, the changes in the regulations that are taking place in the automobile industry
necessitate to upgrade the models of the vehicle that are majorly demanded by the customers.
This reduces the threat of new entrants in the market for the ford company.
Bargaining power of buyers- Moderate
The bargaining power of the buyers is moderate, as company is well known company who is
managing their business operations across the world (David, 2011). The major buyers include
rental buyers, customers who buy it for personal use and many others. However, many customers
are looking for advance technology as well as innovation in vehicles that makes them to switch
to other brand like Tesla. In the near future, the change in demand of customers can bring the
changes in purchasing preference of customers.

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Bargaining power of suppliers- Moderate
Ford generally gets engage with the firms who provide raw material that can be used by them in
manufacturing the cars. These raw materials include iron, aluminium, glass, rubber, and many
others (Kotler, 2015). The suppliers of the raw material offer the competitive prices to ford
company in order to ensure the long-term business relationship because if they are not able to do
so then the company will shift to the rivalry companies. Alternative buyers are also available for
the suppliers that include the company like Tesla due to which ford lose those suppliers. Thus,
this has been found that there is moderate level of bargaining power of suppliers.
Threat of substitute products- Moderate
Ford Company finds the moderate threat of the substitute products because of availability of
other transportation facilities, two vehicles, and bicycles in the market (Rothaermel, 2015). In
addition to this, other companies in the automobile industry offer the high component and quality
products to their customers such as Tesla. Tesla is capable enough to make optimum utilization
of the resources in order to bring the innovative and new technologies in the market.
Competitive rivalry- High
In the automobile industry, there is high level of competition as vast numbers of players are
available in the market that includes Volkswagen, Tesla, General motors, and many others.
However, in the intense competitive ford is able to respond well to the competitive pressure
majorly from the rival companies by illustrating the quality as well as the cost awareness in the
market. The company Tesla is giving the tough competition to ford, as Tesla Company is
specialist in electric car manufacturing and selling (Lambert, 2019). The company also brings the

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innovation and technologies in order to meet the customers need. However, considering the same
ford company has decided to bring improvement in electric vehicles.
Porter’s value chain model
Type of activity Description
Primary
Activities
Inbound logistics The inbound logistics that is performed by Ford include
performance for quality control, warehousing for the
raw material, schedules for the supply of products.
Operations Suppliers operations were streamlined by the company
in order to bring the improvement in the accountability
as well as in the performance. The suppliers of the
company were trained to set the procedure and logistics
technologies. The performance is measure by the
company in order to increase the real-time visibility of
delivery status, routine schedules, as well as
productivity.
Outbound
logistics
The outbound operations that are generally performed
by the company include material handling, assembling
the plants, and many others (Wilson and Gilligan,
2012).
Marketing and
sales
The company has the strong dealership network
through which they easily make their products available
to the customers. Ford company will strive on the

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premise of the strongest network of the dealer who
commits to maintain and grow the contact in the local
markets.
Service The service which is offered to the customers include
after sales service in which they make the customer
updated about the car features, car service, warranty on
products and many others (Lambert, 2019). In addition,
to enhance the experience of customer the company
offer training to their employees.
Support
Activities
Firm
infrastructure
The infrastructure of the firm includes the machinery
and equipment’s that helps them in the production of
the products. In addition, when it comes to selling they
ensure that their dealers are able to maintain set
standard and can enhance their experience like Tesla.
Human resources The company employees majorly include skilled and
experienced employees who can effectively contribute
in effectively performing the business operations.
Procurement The procurement of the raw material is done by the
company in their warehouse for the production by
contacting the different suppliers and selecting the best
quotation.
Technology
development
The development of the technology supports the
company to produce the products and supply it in the

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market (David, 2011). The company keep bringing
innovation and technology in order to meet the
requirements of customers. The company is willing to
explore electric technology in the market that shows the
use of new technology to bring innovation.
Technology cycle
Utterback and Abernathy tried to break with the standard due to which they formed a model
where the manufactured goods innovation, innovation in the process, competitive environment as
well as the organisational structure were all closely and interacting connected together. The
Utterback and Abernathy characterized the technology cycle majorly into the two phases that
include the fluid phase and dominate design (Huenteler, Schmidt, Ossenbrink and Hoffmann,
2016). However, in the company also lead to the era of ferment and era of incremental change
 Era of ferment: - It is a stage of technology, goes through a turbulent period of the rapid
evolution by the company.
 Era of incremental change: - In the era of incremental change, the company often cease
in order to invest in the learning about the alternative design rather than focusing on the
developing the competencies that are linked to the dominate design (Cantamessa and
Montagna, 2016).
Considering the analysis, this can be said that according to me ford company falls in the era of
incremental stage which is in the dominate phase. In this stage, the firm starts to study more
about the application of the technology for the requirements of the customers. Ford Company is

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willing to bring the major changes by learning the innovation. The company is willing to bring
innovation through electric as well as hybrid technology in the market with different innovation
and these plans of the company shows that they fall under the change of incremental. The
company is aware about their major competitors, which is Tesla Company who deals in most of
electric cars and other vehicles. Thus, the company knows that to deal with the Tesla they need
to adopt the new technology and innovation in their products within market in order to deal with
the competitors.
Three Phases of innovation model
The Utterback and Abernathy characterized the three phases of the innovation model that are
represented with the graph given below: -
(Source: Yeo, Kim, Park and Kang, 2015)
 Fluid Phase: - The first and foremost stage is fluid phase where the technology as well as
the market uncertainties prevails with a countless contract of the fluctuations that take
place. In this phase, the competition will not be as aggressive as in the advanced phases

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as the company is not aware about the possible implementation for the innovation and the
course of market.
 Transitional Phase: - Second phase is transitional phase that shows that producers start
in order to learn more about the implementation of technology and about their desires by
bringing the standardization. In this phase, the receipt of the innovation begins to enhance
and the market begins to grow (Yeo, Kim, Park and Kang, 2015).
 Specific Phase: - This phase occurs just after the leading design when the competition
will get shift from differentiation to the performance of the product as well as cost. This
phase shows that the businesses have the strong image of the market segments due to
which they concentrate on offering the detailed clients. Competition will become stronger
and market starts moving near an oligopoly (Cantamessa and Montagna, 2016).
Considering the analysis, this has been found that Ford Company as incumbent falls in
Transitional Phase, as they are aware about the innovation and technology that they have to bring
in the market. Company is aware that in the coming years the market of customers are moving
towards the electric as well as hybrid technology due to which they are aware that they need to
bring the different innovations with the technology. This will not only help them to deal with the
competition like Tesla who is leading in this segment but also assistances them to encounter the
desire of customers.
Ford to re-emerge in the new market
Ford Firm as an incumbent need to re-emerge in the new market by making use of hybrid as well
as electric technology in high segments like SUV/ pickup trucks and many others. The new
market for ford will be electric Transit commercial van as they are planning for the same

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(Hanley, 2019). In addition to this, the innovation in hybrid as well as in electric technology will
help the company to re-emerge in the market. In addition to this, this will help them to give the
tough competition to Tesla. While bringing innovation for re-emerging the company needs to
make practice of the new disruptive technology (Korosec, 2019). The company will make use of
new disruptive technology like Artificial Intelligence, Internet of Things and many others.
Firm’s strategic intent
This solution will help the ford company to meet the strategic intent that is clear with the mission
of the company that is “One Team. One Plan. One Goal.” In addition, the vision of the company
is “people working together as a lean, global enterprise for automotive leadership” (Thomson,
2017)
The suggested strategy will help the business to achieve market position that is the goal of Ford
Company. In order to achieve the goal, Ford is working for new strategy that is to bring
innovation in products of different segments.
Resources and capabilities
In order to achieve the strategy, there will be need of some resources as well as capabilities to
Ford. These resources as well as capabilities are given below -
 Technology: - Ford need to push to its capability of its explorer and Lincoln Aviator
hybrid SUVs (Ferris, 2019).
 Human resource: - In resources, the company need experience personnel who have
different skill set for handling the technology, managing the operations and many other.

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 Suppliers: - Ford company need to form the tie-ups with different suppliers who can
offer them different types of technology.
 Capital: - Ford company need to extent its capabilities by extending the capital which is
required not only for research and development, for buying the technology, hiring the
experience staff and others.

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Conclusion
In the end of the report, this has been found that Ford company current position majorly in
normal commercial or personal purposes vehicles. Company is trying to upgrade them by
adopting the technology as company wants to compete with the benchmarking companies like
Tesla. The position is evaluated with the help of four different frameworks based on which the
re-emerge strategy of the company is stated. This re-emerge is possible by bringing innovations
and technologies like hybrid and electric. In addition, these strategies are linked with the vision
and mission of the company. In the end, resources and capabilities required by the incumbent to
adjacent the gap between its present position and its strategic intent are stated.

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References
Cantamessa, M. and Montagna, F. (2016) The Dynamics of Innovation. In Management of
Innovation and Product Development (pp. 53-79). Springer, London.
Chernev, A. (2018) Strategic marketing management. Chicago: Cerebellum Press.
David, F.R. (2011) Strategic management: Concepts and cases. India: Pearson/Prentice Hall.
Ferris, R. (2019) Ford is developing hybrid and all-electric F-150 pickup trucks it says won’t
skimp on power [Online]. Available from: https://www.cnbc.com/2019/01/17/how-ford-plans-to-
get-buyers-to-pay-more-for-hybrid-and-electric-pickups.html [Accessed on 20th April 2019]
Ford (2019) Ford [Online]. Available from: https://www.ford.com/ [Accessed on 20th April
2019]
Hanley, S. (2019) Ford Claims 370 Mile Range For Electric SUV, Brings PHEV Power To
Explorer & Cargo Vans [Online]. Available from: https://cleantechnica.com/2019/04/02/ford-
claims-370-mile-range-for-electric-suv-brings-phev-power-to-explorer-cargo-vans/ [Accessed on
20th April 2019]
Huenteler, J., Schmidt, T.S., Ossenbrink, J. and Hoffmann, V.H. (2016) Technology life-cycles
in the energy sector—Technological characteristics and the role of deployment for
innovation. Technological Forecasting and Social Change, 104, pp.102-121.
Korosec, K. (2019). Ford is bringing an electric Transit van to Europe by 2021 [Online].
Available from: https://techcrunch.com/2019/04/02/ford-is-bringing-an-electric-transit-van-to-
europe-by-2021/ [Accessed on 20th April 2019]

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Kotler, P. (2015) Framework for marketing management. India: Pearson Education.
Lambert, F. (2019) Ford teases Mustang-inspired electric SUV as Tesla Model Y competitor
[Online]. Available from: https://electrek.co/2019/03/20/ford-tease-mustang-inspired-electric-
suv-tesla-model-y-competitor/ [Accessed on 20th April 2019]
Rothaermel, F.T. (2015) Strategic management. UK: McGraw-Hill Education.
Thomson, A. (2017) Ford Motor Company’s Vision Statement, Mission Statement [Online].
Available from: http://panmore.com/ford-motor-company-vision-statement-mission-statement
[Accessed on 20th April 2019]
Wilson, R.M. and Gilligan, C. (2012) Strategic marketing management. New York: Routledge.
Yeo, W., Kim, S., Park, H. and Kang, J. (2015) A bibliometric method for measuring the degree
of technological innovation. Technological Forecasting and Social Change, 95, pp.152-162.