International Business Challenges and Strategies: Ford Motor Company

This report discusses the challenges faced by Ford Motor Company in international business and provides strategies to overcome them. The challenges include economic vulnerabilities, environmental fragilities, and technology instabilities. The strategies focus on gaining market share and competitive advantages.

International
Business
Issues and
Practice

INTRODUCTION...............................................................................................................................3
MAIN BODY.......................................................................................................................................3
CONCLUSION..................................................................................................................................10
REFERENCES..................................................................................................................................12

INTRODUCTION
International business includes each and every marketable action which take place for
promoting the transferable goods, resources, services, people, ideas, technologies and many
more across national boundaries. In addition to this, international business occurs in several
formats such as movements of products from one nation to other as well as contractual
agreements which allows overseas companies to utilise goods, process as well as services
from another countries (Wettstein and et. al., 2019). Moreover, the formation as well as
operations of R&D, sales, manufacturing and distribution facilities within foreign market. In
simple words it will explain as, international business includes outside the border transactions
related to products as well as services within two or more nations. Here, transactions of
economic resources involves capital, skills and people for international production of
physical products as well as services like banking, finance, construction, insurance and so on.
Moreover, international business is also named as globalisation.
This report is based on Ford Motor Company which is now commonly known as
Ford, it is American multinational automaker who is located at Dearborn, Michigan, a suburb
of Detrot. It was founded in 1903 as well as founder was Henry Ford. They are offering at
worldwide level except some areas such as Cuba, North Korea, Iran, Sudan, Japan and
Indonesia. Moreover, they are offering variety of products such as automobiles, Luxury
Vehicles, commercial Vehicles, Automotive parts, Pickup as well as SUVs. In addition to
this, respective report will going to discuss three major challenges which have wide impact
on working of company. Along with this, to overcome with these challenges business firm
will design strategy which help them in gaining market share as well as competitive
advantages.
MAIN BODY
International business is generally related to overseas transaction within individuals,
businesses or government entities. In addition to this, within international business
transaction can be related to anything which has value such as physical products, services
(like finance, protection, construction and several other), technology (software, arms, satellite
technology, ammunition etc.), capital, knowledge as well as many more. Along with this,
there are several type of international business such as export and import, licensing,
contracting, outsourcing & offshoring, Joint ventures and strategic partnerships, foreign
direct investment and many more. Furthermore, world is becoming globalised and face of

business has changed (Tashman, Marano and Kostova, 2019). Many business firm are hoping
for stay competitive and maximising profitability are opting to enter at worldwide level.
International business is related to commercial transactions transpiring among companies
from two or more countries. Most of the organisation transacted today could be classified as
international as well as international business management is related to managing
transactions of business operating on the global scene. Most important for international
business manager is to be diplomatic, professional, courteous as well as having depth
knowledge when it comes to cultural practices and political & economical trends of country
in which companies are interacting (Luo, 2019). Furthermore, they should have background
in business or finance which is specific to industry of business firm.
Ford Motor Company which is now commonly well known as Ford, it is American
multinational automaker whose headquarter is located at Dearborn, Michigan, a suburb of
Detrot. It was originated in 1903 as well as founder was Henry Ford. They are offering at
worldwide level except some areas like Cuba, North Korea, Iran, Sudan, Japan and Indonesia.
Moreover, they are offering variety of products such as automobiles, Luxury Vehicles,
commercial Vehicles, Automotive parts, Pickup as well as SUVs. Respective company is
well known and leading at worldwide level as they are facing several challenges while
working at global level. Major challenges which company facing are economic
vulnerabilities, environmental fragilities as well as technology instabilities. It is essential for a
corporation to take major step and frame one strategy which will provide assistance to Ford
automaker company in gaining their market share as well as competitive advantages.
Explanation of these challenges are mention below along with the strategies which company
have to design for overcoming with these issues. Discussion are as follows :-
Economic vulnerabilities
It can be defined as the exposure of a particular economy to external factors that are a
result of openness of the economy. There are different kinds of vulnerabilities like physical,
economic and social. Ford is a multinational automobile company that is headquartered in
Michigan, USA. The company was founded by Henry ford in the year 1903 and offers
premium quality automobile to the customers. There are many exogenous factors that affect
the company like employment, premium pricing etc. The company has not been creating any
kind of employment for people, due to which its operations are getting affected (Nifadkar,
Wu and Gu, 2019). Apart from this, the company only manufactures automobiles that are of

premium quality and priced very high. The customers have demanded increased quality of
products that are not very expensive. The company should pay focus on manufacturing such
vehicles.
The consumers’ demand for high quality and a wide range of products has created an
impact on the overall productivity of the company. This is because the management will have
to think and plan about various options that can be offered in the market. This is because it
can lead to low profits for the company which can affect its overall performance as well as
productivity. /the company should plan with its suppliers because they will play an important
role in this. Suppliers can provide material that is cheap but can be used to manufacture
something with a better quality. If the company will not pay any attention to the demand of
customers in the market, it will have to cut down on its overall profits. This is because the
demand will not only affect the performance of the company, but its suppliers as well.
On the other hand, the prices of fuel are also increasing which means that the
customers will demand vehicles that are fuel efficient and cheap (Modak, Kazemi and
Cárdenas-Barrón, 2019). One of the other factors involved in this can be global warming and
the increasing concerns among people about the environment as well as its safety. As a result,
Ford Motors might have to change some of the features as well as parts of its vehicles in
order to produce vehicles that are more fuel efficient and cause less carbon emissions. This is
a fact that if the prices of fuel will decrease the driving time of the customers will increase.
One of the metals that the company can use while manufacturing the engines of the vehicles
is Magnesium. It is not only light-weight, but will also the company in manufacturing fuel
efficient vehicles. In order to fulfil customers’ demand, the company should review its prices
and then manufacture vehicles that are fuel efficient.
Apart from this, Ford Motors should also focus on its manufacturing business
completely. This will help in manufacturing the right vehicles and also, increasing the overall
profits. This will also help in satisfying the demands of customers. Also, the demand for
cutting cost had affected the company in a lot of ways. This has led to creating an impact on
the decision-making process of the company (Quoquab, Mohammad and Sukari, 2019).
Another factor, which is creation of employment is also affecting the company. The company
should generate employment so that an increased number of people get a job opportunity.
This will also contribute to the overall goodwill as well as performance of the company. The
company should also work on improving its overall efficiency, so as to maximize the

opportunities available to it in different foreign markets. Also, it will be able to serve its
customers in an effective manner.
The wealth gap among the customers is increasing day by day and this is another
macro environmental factor that the company should take under consideration. If this
continues to grow, the company will have to think over its innovation strategy and bring in
products that are unique and more innovative. This will also contribute to the company’s
overall performance and it will be able to reach out to a large number of customers across the
world. Currently, the company has only limited fuel stations, which means that there is
economic vulnerability. This can act as a barrier on the company’s overall growth as well as
plans for expansion. So, the company should also focus on the wealth gap and develop
strategies that help in overcoming the same (Deshpande and et. al., 2019). Otherwise, the
company will have to face negative consequences which is not good for its brand image in
the market.
The company should carry out a market research that will help it in analyzing the
various exogenous factors that can affect its overall performance. Oil prices, unemployment,
interest rates and inflation are some other factors that can affect the overall performance of
the company. The customers are Ford are price sensitive and demand for vehicles that utilize
less oil. This is also because the company only produces premium price automobiles that
people with average income levels cannot afford to buy. Therefore, it is important for the
company to analyze the situation and accordingly develop strategies that help it in performing
in an enhanced manner. Also, since the company is recognized by people across the world, it
will help the company in maintaining it customer reach and even attract a lot of new potential
customers. Apart from this, the company should also work on implementing its technology
into creating and manufacturing vehicles that are fuel efficient.
Lastly, the automobile industry has seen a push towards being more concerned about
the environment. The customers are also becoming ware of the environment and Ford is one
such company that has pursued technology in order to address this concern. The company
should keep trying implementing different technologies that help it in developing vehicles
that do not cause any kind of harm to the customers (Klein, Puck and Weiss, 2019). This will
also help in generating employment opportunities for people who don’t have jobs. Therefore,
all of this will contribute to the overall performance as well as productivity of the company.
And, it will be able to maintain its position in the various foreign markets.

Environmental fragilities
Fragile environment is something which is delicate as well as precious part of world
as well as environment can be build or natural. In addition to this, build environment is
created by human beings such as parks, buildings, roads, schools as well as houses which all
are of build environment and it can be also known as man made environment. Whereas,
natural environment is which made up of living as well as non-living things and these cannot
be modified by humans. These includes plants, animals as well as things like mountains,
rocks, valleys all make up of natural environments. In addition to this, both built and natural
environments don’t necessarily last forever. Some of these environments have delicate
balance related to wildlife or are made up of important as well as ancient buildings. This
simply means that environments are fragile and they require special care to ensure that they
will survive for generation to survive (Cumming and Zahra, 2016). Thus, it is responsibility
of each and every individual living on the planet to care of environment because it play
essential role in each and every person life. In relation of an organisation it is important for
them also to take care of environment because it is giving the natural resources for production
of goods and services. Nowadays customers are more motivated towards environment and
protection as a less they are also attracted towards the company who are focusing on
Environment protection. In addition to this government also prepare several regulations and
act in relation of Environment protection for every sector business firm (Welch and et. al.,
2020). For organisation it is important to implement these regulations as well as registration
within their working for effective running of their organisation and ensuring that there will be
no negative impact on environment of their production. Ford company also have to ensure
that their working will not impact negative on Environment but there are several challenges
which are facing by respective automaker company in relation of environment. Explanation
of these challenges are as follows:-
Production and destruction – Production of car consumes lot of energy before they
come on open road as well as automotive production leaves huge footprint due to material
such as rubber, steel, glass, plastics, paints and several other before new ride is ready for roll.
In same manner, end of car life don’t mark end of its environmental impact. Because there
are several other products which stay within environment such as plastics, toxic battery acids
and many more. But approx. three-quarters of car now a days involve bulk of steel frame
which can be recycled (Derudder and Witlox, 2016). Cost related to production, recycling as
well as disposal are not easy to quantify as well as its beyond the control of consumers. It is

true that Ford impact environment at large level where 80 o 90 percent will be because of fuel
consumption, emission of air pollution as well as greenhouse gases which result in global
warming. Fortunately impact level on environment is in control of drivers.
Air quality - Vehicles are America's most noteworthy air quality compromisers,
conveying around 33% of all U.S. air tainting. The fumes cloud, carbon monoxide, and
various harms transmitted by vehicles are especially upsetting in light of the fact that they
leave tailpipes at street level, where individuals breathe in the sullied air really into their
lungs. That can make auto transmissions a substantially brisker prosperity stress than harms
released high in the sky by current smokestacks. Thus, it is responsibility of automaker
company to ensure that their vehicle will not impact in environment in negative manner
especially quality of air. Because if air quality will get polluted then it will impact of health
of human beings as well as destroy or give negative impact on other natural resources.
Infrastructure – It is hard to evaluate, another related effect of vehicles is the structure
of streets to help them, just as the never-ending suburbia that will in general follow afterward.
This issue can be hard to coax out of different components, for example, populace
development and asset utilization, however it is additionally not handily tended to by
mechanical progressions like eco-friendliness and electric drive (Armstrong and Taylor,
2020). Street building bigly affects outflows and untamed life. In addition to this, it is
important for an organisation to ensure that their working will not hurt infrastructure of
environment.
All such practices gives negative impact on brand image of Ford Company and for
them it is essential to design proper strategy to overcome with challenge of all such. Along
with this, strategy will provide them assistance in gaining market share as well as competitive
advantages. Explanation of strategies are as follows :-
It is important for Ford Company now to invest within Electric cars because it have less
impact on environment within negative manner. Along with this, government is also
promoting electronic vehicles now a days because environment is getting polluted day by day
and this creating issues for human beings as well as animals both (Rana and Morgan, 2019).
Thus, it is one of the best strategy to invest in electric vehicles because it will help in several
manner such as gaining market share as well as competitive advantages of business. In
addition to this, another strategy is that, while doing production it is essential for Ford to
ensure that their overall production procedure is not harming environment. Because

customers also like to purchase products and services from the brand which is eco-friendly ad
result in positive impact on business firm. Thus, in simple term it can be said that for an
business it is important to ensure that their working will not give negative impact on
environment. In addition to this, it is also important that each and every negative activity
should be stopped by company and find some ways through which they can give only
positive effect on business firm.
Technology instabilities
Technology is the utilisation of scientific knowledge for practical purposes or
applications, whether within industry or in our everyday lives (D’Angelo and Presutti, 2019).
Thus, whenever individual using scientific knowledge for accomplishing specific purpose
they are using technology. In addition to this, technology simply involves particular piece of
equipment but that can be simply or dazzlingly complex. Technology is changing day by day
and this have wide impact on working of business firm. So in simple term it can be said that,
technology is instable because it get modify as per the changes of current trends and having
both positive as well as negative impact on working of business firm. In same manner
technology instabilities become wide challenge for Ford automaker company because
advancement is coming day by day and this required to be implement by an business firm so
that company will able to work in better manner as well as gain better advantages. For an
organisation it is important to implement latest technology within their working as it will
provide them assistance in gaining competitive advantages as well as increasing market share
and making customer satisfy. Moreover, technology sometimes result in creating issue for an
organisation when it get change rapidly and it is important for an business firm to implement
latest trend in company within effective manner (Allen, 2016). So that competitive
advantages will gain, customer get satisfied, market share and many more. Thus, in simple
term it can be said that, for an business firm it is important to bring with some latest or
innovative technology in market area so they will be able to attract large number of
customers in effective manner as well as also make them satisfy in better manner. Issues
which Ford company is facing due to technology instabilities are mention below :-
Electric vehicles – It is one of the major technology challenge which Ford Company
is facing now a days because most of the respective sector companies has introduced their
electric vehicles. Because electric vehicles produce over 50% less CO2 emission rather than
average gas-powered vehicles, governments as well as environmentalists strongly promote

them. In addition to this, Ford car manufacturer require to invest within developing
technology if they want to stay competitive in business once the stranglehold of CO2
regulations tightens around their necks. Moreover, business firm which can’t produce
solutions which are cheap as well as efficient enough are likely to go out of business. In
addition to this, it is one of the major technology challenge which Ford is facing as well as it
is required to be address within effective manner for gaining competitive advantages as well
as market share in appropriate manner (Comyns, 2018). In addition to this, now a days
government of every nation is promoting environmental safety as well as security and it is
responsibility of each and every business firm to take care of their environment and take
major steps in relation of same manner. Along with this, it is essential for Ford to implement
latest technology within their working for making customer satisfy and gain competitive
advantages as well as market share.
Smart, Connected and self-driving vehicles - The rise of the Internet of Things and
AI in vehicles may change the vehicle business for eternity (Aguilera and Grøgaard, 2019).
Vehicles that drive and communicate with one another without human investment will totally
change the manner in which individuals travel, it won't occur without any forethought in any
case, when it begins, it won't stop until this model totally replaces the old worldview. Up
until this point, numerous vehicle producers are gaining advances into this domain yet ground
is moderately moderate, and none of them have progressed far enough to totally guarantee the
wellbeing of everybody out and about. The organization that initially accomplishes this will
get the opportunity to turn into the predominant power in the vehicle showcase for a
considerable length of time to come which implies that every driving producer need to put
colossal measures of assets into this venture on the off chance that they need to stay
applicable later on. When people are spending much amount in vehicles they want that with
high technology as well as satisfy their needs and wants within effective manner.
These are the major challenge which Ford company is facing and they need to work
on it for gaining better advantages as well as market share. Because government also now
promoting electronic vehicle more instead of petrol and diesels because these are not harming
business environment (Bapuji and Beamish, 2019). Thus, for Ford Company it is important to
invest in electronic vehicle technology as it will provide them assistance in gaining high
market share as well as competitive advantages. For quite a while, the car business has been
gotten in a sticky situation; or, all the more explicitly, between clients' requests and the
weight from preservationists and legislative guidelines. As transportation is answerable for

about 30% of CO2 discharges in the European Union, vehicle makers are compelled to
persistently work to diminish CO2 outflows from their new models, which thusly builds their
cost and diminishes their presentation and wellbeing (on the grounds that the most well-
known way to deal with meeting new prerequisites is bringing down the vehicle's weight,
which means utilizing lighter and flimsier materials). This makes creation of vehicles
utilizing non-renewable energy sources an inexorably costly and unpromising setting,
particularly when joined with the general flimsiness of the oil showcase. In simple term it can
be said that, it is important for Ford Company to analyse current technology trends within
effective manner and implement these within their working for gaining better outcomes.
By implementing electronic vehicle strategy Ford Company will be able to gain
competitive market advantages by serving their customers latest technology vehicles as well
as services. Because everyone want latest technology offering when they are investing their
hard earned money within something (Urzelai and Puig, 2019). So in relation of this it is
responsibility of Ford Company to ensure that they take care of their customers requirement
and desires within appropriate way and will able to serve their customers in effective style.
Apart from this, implementation of latest technology will offer advantages to corporation in
gaining several advantages such as competitive benefits, customers need and want satisfied,
market share, goodwill, high profitability and many more. In addition to this, implementation
of better strategy provide assistance to an business firm in several manner such as gaining
competitive advantages, high market share, enhanced profitability, goodwill, making
customer satisfy and many more.
CONCLUSION
From this entire discussion it has been concluded that, international business is
essential part of economy as it plays wide role within development of economy by rising
living standards of people, providing job opportunities and many more. In addition to this,
international business occurs in several formats such as movements of goods from one
country to another as well as contractual agreements which allows foreign companies to
utilise products, process and services from another countries. Along with this, there are
several issues or problems that an corporate can face while working at international level and
it is important for them to focus on these challenges as well as find way to overcome with
such issues. Along with this, it can be said that for a organisation it is essential to determine
challenges in effective manner o that their impact will minimise on business firm. Moreover,

it become easy for corporation to implement better strategy for minimising negative impact
and gaining competitive advantages. In addition to this, implementation of better strategy
provide assistance to an business firm in several manner such as gaining competitive
advantages, high market share, enhanced profitability, goodwill, making customer satisfy and
many more.

REFERENCES
Books and Journals