Change Management in Ford: Opportunities and Threats Analysis

This report discusses the current situation of Ford and analyzes the external environment using PEST and 5 forces analysis. It also evaluates the opportunities and threats for Ford using Ansoff Matrix. The report focuses on change management strategies for Ford.

Report

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
LO 1 ................................................................................................................................................3
1.1 Current situation.....................................................................................................................3
1.2 Analysis of external environment..........................................................................................3
LO2..................................................................................................................................................6
2.1 Opportunities and Threat analysis of Ford............................................................................6
LO3..................................................................................................................................................7
Ansoff Matrix for Ford Company................................................................................................7
LO6..................................................................................................................................................9
Kotter's 8 Model of Change for ford:...........................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Change management is the systematic process, which deals in the transformation and
change in the organizational objectives, processes and technologies. Change management refers
to the strategies which helps the people in adopting the changes. Change management are used
for the different organizational changes.
Ford is one of the biggest brand of the auto mobiles. It is an American multinational
company. The headquarters of the ford are situated at Dearborn, Michigan, US. It is a Public
company and founded in year 1903 by Henry ford. Ford deals with the products such as Auto
mobiles and its parts, luxury vehicles, commercial vehicles etc.
In this report, the current situation of the ford will be discussed. The emphasis was laid
on the analysis of the external environment through PEST and 5 factors analysis, opportunities
and threats of the Ford. Porter's Generic strategies, Ansoff matrix etc., are also evaluated .
Section 1 (LO1)
1.1 Current situation
The Ford motor company is one of the giant brand name in the list of auto mobiles, but
the current situation of the Ford is, the shares of the company are declining due to collapse in the
price of oil and also people are much more concern about the corona virus. The sales of the ford
products diminished (Arroyo, D., 2019). Ford is now focussing on the international growth. Ford
is making a strategy for capturing the shares from its competitors. Ford is planning for starting
new plants in the different parts of the country.
BREXIT again create various challenges for the firm for example raw materials cost increases
which company was importing from Europe because of increase in cross border tax and custom
duties. Unemployment rate in the country increases because of COVID and BREXIT which
again effect purchasing capacity of the customers and hence fewer consumers are available for
Ford's product. Pandemic again change normal life of British most of them avoid unnecessary
travelling and going out and which reduce attraction for personal vehicles . Increasing health
consciousness among people move them towards more use of cycles and vehicles and hence
fewer people attracted towards automobiles purchasing which decrease market share of Ford.
However, electric and racing models of the organisation still attracting large numbers of
customers in UK and company is manage to gain market share as compare to other firms in the

Britain. Company provides range of variety in automobiles which again positively impact on its
market share. Company's social media marketing again influencing diverse people of Britain and
hence company is able to protect position in this difficult time. Ford provides various offers and
discount to old customers in exchange for old vehicle which help him continuous selling of its
product.
1.2 Analysis of external environment
PEST analysis:
PEST analysis is an important tool for the company In identifying and analysing the
current situation of the company. PEST analysis includes the positive and negative impact of the
company. Analysis basically focusses on the Political, economical, social and technological
factor of the company. It is beneficial for analysing the opportunities and threats of the
company. The PEST analysis of the Ford company is as follows:
Political factor: Political factor includes the rules and regulations, security and safety measure
and restrictions that should be applied for the whole industry. Government of the country are
supporting the innovation to improve the economic condition. This particular situation is an
efficient opportunity for the ford to use the government incentives for the better innovation and
more sustainability.
Positive impact: Due to the unstable environment of the politics of Brexit, Ford has the great
opportunity to enhances the profit making due to flexibility in trading and other regulations.
Negative impact: After Brexit it is also possible that Ford may require higher custom duties in
certain regions of the EU, which results in less profit earning.
Economic factor: Ford should be aware of the changing economic condition of the country. It
analyses the effect of the economy on the macro-environment. This factor basically focusses on
the exchange rates and growth of economy globally. Due to covid 19 people are not in the
situation of buying things in big amount due to unemployment.
Positive impact: Ford can introduce its new products at lower cost.
Negative impact: covid 19 affects the sales of the company, the sales of the company decreases.
Social factor: Social factors are little tough to identify in an auto mobile company, because it
normally includes the changes in the demographics and cultures at global level. It also includes
the changes which involves the buying pattern of the customers and also their capacity. The

growth strategy of the ford must focusses on the product innovation for attracting and satisfying
the customers.
Positive impact: Ford can provide the products like, electric auto mobiles and hybrids as it is
commonly demanded by the customers (Coffman, 2017). Ford has improved their aftersales
services that attracted the customers in large number.
Negative impact: Increasing the wealth gap is one of the basic factor that affects the social factor
of the ford, as it threatens the most luxury product i.e., Ford's Lincoln auto mobiles.
Technological factor: In an auto mobile industry, technology is improving in many various
ways. The technology has introduced many ways such as, reduction of CO 2 and the battery
back up of the auto mobiles. In ford, technologies played a very important role in developing its
potential. This analysis focusses on the changes and conditions of the technology that affects the
ford company.
Positive impact: increasing in use of mobile computing results in growing the business through
mobile marketing and mobile service support. Online services help in improving the
performance of the company.
Negative impact: ford is providing an alternative fuel car, because there are limited fuel stations,
it laid a negative effect for the ford.
Therefore. The PEST analysis is helpful for analysing the opportunities and threats of the
Ford.
Company is able to attract large number of customer by providing vehicles according to
changing taste and trend of British consumers. Ford's electric vehicle range again influence
customers for the company's product. Advance automation in vehicle again support sustainable
growth of its market.

5 forces :
Ford company is one of the biggest manufacturers of the auto mobile. The porter
introduced five forces analysis for evaluating the strategies and the issues of the ford and also
evaluate the external factors that affects the company. The company need to develop the
strategies and policies on the basis of external factor in an auto mobile company. Five factor
analysis helps in ford In identifying the various external factors and their impact on the business.
Competition rivalry: there are many competitions faced by the Ford. The analysis helps in
identifying the external factors and also helps in competing with the industrial environment. Ford
should be capable enough to compete with its competitors. This auto mobile industry has high
exit barriers as the costs and investment are high. The firms should either compete with the
competitors or close their businesses. Ford should compete with the large numbers of the firms.
With the help of the analysis ford should improve its competitive strategies to fight with the
external factors.

Bargaining power of the customers: the customers are the most important part of the business.
The analysis helps in evaluating the effects of the customers on the company and the industrial
behaviour. Ford keeps on changing the costs of the products which result in the shifting from one
firm to another. There are many customers who buy single vehicle. These buyers are often
bargain for the lower price and company has to agree with them sometimes as they have the fear
of losing their customers as the competition is growing very fast and customers can shift to
different brands. Ford focusses on the loyalty of the customers through different strategies such
as design and quality of the products.
Bargaining power of the suppliers: Due to the more number of small players, the bargaining
power suppliers is weak. Only some are correct in the size. The supplies of the company have to
follow the rules made by the bar brands. The raw material of the Ford is always available in the
plenty, and switching is not difficult for them (Deyo, 2016). Therefore the bargaining power of
the suppliers is low.
Threats of substitutes: The substitutes of the Ford product are buses, bicycles and public
transportations. These substitutes are not always available in the certain area or localities.
Therefore the chances of switching are moderate. In terms of safety and convenience the
performance of the other products are not better than Ford's products. Though the other
substitutes are the second priority for the customers. The chances of switching towards the
substitution is only for one reason. i.e., cost, as these are cheaper in price.
Threats of new entries: It is very difficult for a new brand to enter this industry as it is requires
large number of investments and efforts to establish a branded car. During the establishment of
the company, a huge investment is required for the infrastructure, supplying and hiring the staff.
Also there is a risk from the existing competition in the market. The new brand has to be more
innovative and different from the other competitions. Therefore the chance of the new entries are
very low. Earlier law was not a barrier in the path, but nowadays government has introduced
many laws and regulations which is the hurdle for the new entries. Brand name, image and
reputation is also a barrier and more challenging. Ford has invested many amounts for the set up
and facilities for the customers. It is very difficult for the new entries to compete with the brand
Ford.

Section 2 (LO2)
2.1 Opportunities and Threat analysis of Ford
Ford Motor Company aka Ford is one of the oldest company in UK and running its
business by adopting strategies and analysis various opportunities and threat on present market
as.
Opportunities(External) Threats(Externals)
 Ford company can extreme use digital
marketing platform like Facebook,
Instagram and you tube to influence
large number of customer (Technology-
PEST).
 As the government policy changes in
UK and support new companies which
affect on profit of Ford market and also
decrease its market share (Economic-
PEST).

 Ford can attract large number of
customers by investing in automation
and use more electricity vehicle with
attractive design and comfort to attract
youngsters as well as old generation
(Technology-PEST).
 Ford has a long reputation with
remarkable profit every year. It can
make new market partners which
started high influence in UK so that it
profit and fame remain stable (Social-
PEST).
 Ford Motors has a high profit every
year, it can purchase other motors
company which has positive impact on
customer but fail to operate in UK
market (Saebi, Lien and Foss, 2017)
(Political-PEST) .
 Day by day technology and taste of
customers is changing in UK which
effect on old stock as well large
proportion profit is consume in
production of new (Threats of
substitutes- 5 forces).
 As the number of new companies is
entering in the market and increasing
demand of raw material hence
suppliers cost hiking which ultimately
decreasing Ford Profit (Bargaining
power of the suppliers- 5 Forces).
 Tesla and electric other vehicle
companies increasing their investment
in UK and hence Ford is losing its
home market share (Bargaining power
of the suppliers- 5 Forces).
Technological factors affect in the growth of the organisation as with the changing
technology company quality and productivity can be increased on the other hand government
rules and regulation become disadvantage for the company if it favours new companies and law
factors like employment act like working hours, fixed wages etc decrease the profit of
organisation.
Section 3 (LO3)
Ansoff Matrix for Ford Company
Ford is one of the leading motor company and has a large market share but for the growth
of the company different method adopted like market development, diversification, penetration
and product development as listed below.

Market Development:
Market development means launching of old product in new market. Ford has large
number of diverse customer and can target new market with old product. In this company offer
franchises to local sealers and attract investor as it already hold strong position in old market
with good fame. By this chances of loss nearly reduce and gain large market with high profit on
the other hand customer trend and taste of customer can become disadvantage of the company.
Product Development:
Product development is the process in which new product is launched in new Market.
Generation change highly affect this process like youngster choose sport or attractive products
like cars while the old generation focus on comfort and long time benefit. To maintain the
market Ford launches different various product every year to attract customer and hence
attracting large number of customer as per the trend and taste on the other hand stock remain
unfilled create financial burden on organization. With deep research, product is launched in the
market which benefit them to satisfied customer demand as well as increase its profit.
Market Penetration:
In this process old product sell in old market. In this company highly used digital
marketing, media etc. to sell old products. For an example Ford used Jaguar and Land rover with
the use of market penetration, However it fails as the customer trend and taste changes and latter
the model is purchased by Tata group hence it is risky to use market penetration strategy. Market
Penetration can be successfully adopted where people remain loyal towards old products or
developed little variation with time.
Diversification:
Launching of new product in new market is known as diversification. Organisation has
diversified in different regions. In diversification company needs to check various aspect of the
region like customer trend and taste, geographical condition, competitors, supply, laws
regulation etc. which effect on its profit and revenue sometimes loss crosses profit and company
has to shutdown on the other hand if the region people and laws easily accept diversification the
Ford can boost or increase its global presence.

As the ford has long reputation all over the world, it is better to choose market
development as there are different regions where the company still did not make presence but
customer has high attractions towards its product (Cleberg, 2019).
Balance score card of Ford:
As the ford has a fame all over the world and using market development strategy its
financial performance increase, company's revenue hike in new market with old product.
Company explore in the places where customer attracted towards ford's product and hence
increase its profit and revenue. As the company approaches new market large number of
customer attracted as well as satisfaction of satisfaction increase which ultimately improves the
growth of organization. Company with new market gives better quality to customer and started
fast delivery services and maintenance of the product with short span of time increase its
efficiency as well as its growth. Company with market development strategy improves its
human capital and hence increase its efficiency on the other hand with use of technology that
was new to the new market again increasing the growth of the company. Organization again gain
benefited as new market has good infrastructure which helps in timely delivering services on the
other had new market culture create tremendous opportunities for the growth of organization.
Objectives Measures Target Initiative
Financial Increase Profit of
the ford.
Increase in gross
profit.
Increase the
profit of firm by
20%
High Gross profit
and high net
profit.

Customers Decrease interest
on Car loans
Low interest rate. Reduce interest
rate by 5%
Decrease EMI per
car
Business Process Improve quality Quality of car
manufactured.
Investment of
£5lac in quality
management.
Decrease Error in
quality
Learning and
Growth
Increase demand
of cars
Numbers of cars
sold.
Invest £1m in
advertisement.
Increase demand
as per market
conditions.
Ford will follow the strategy of decrease the loan as it attract customer for purchasing
cars and hence increase its profit. Company can reduce the interest by 5% and also decrease
EMI on car which it helps to target large proportion of British customers.
To conclude the market development is best strategy as company gain more customer and
expanding its business all over the world and creating a global presence ultimately company can
eliminate upcoming possible threat by different competitors (Loredana, 2016).
Section 4 ( LO6)
Kotter's 8 Model of Change for ford:
Kotter suggests that for change to be successful, 75 percent of a company's management
needs to "buy into" the change. In other words, you have to work really hard on Step 1, and
spend significant time and energy building urgency, before moving onto the next steps.
Creating an urgency:
By increasing the changing demand in Ford like for quality and productivity the growth
of organisation can be achieved.
Forming powerful guiding coalitions:
By identifying company's potential employ and leaders for the new market will
benefiting better hold on market. For the successful execution of market development, Ford

needs local talent who can influence employee and can maintain strong coalition with stake
holders as well employee.
Developing a Vision and a Strategy:
Change in company can not be possible without clear values, strategies and vision .For
the new market Ford needs proper execution of strategy with clear vision, value and goals so that
any deviation in the future can be eliminated.
Communicating the Vision:
Vision and need for change in structure and strategies for market development can be
clear in the by communicating with all members of Ford so that they remain motivated for long
term goals, and change according to demand of organization. In the new market company for old
product company needs members honesty with involvement.
Removing Obstacles:
In the execution of the Ford faces many obstacle like test and trend of customer,
competitor, laws etc. for the better execution of market development company has to ready for
barriers and run according to pass it through.
Creating Short-Term Wins:
For effective run of the business Ford has to set short terms goal in the beginning so that
small victory encourage employee and hence increase their efficiency for long term goal. As in
the new market not possible to execute all the target that is achieving in old market and hence
setting small target and checking them and giving rewards to the people who meet the target will
increase the potential slowly but benefit in upcoming long term plan (Galli, 2018).
Consolidating Gains:
learning and changes continuation encourage the workforce for improvisation in the
organization and their work and hence improve the growth of Ford as well as employee
(Korzhova, 2020).
Anchoring Change in the Corporate Culture:
Ford can be run successfully if the leaders can properly execute changes and remain
stick to it so that long terms goals of the company can easily accomplished.

CONCLUSION
To conclude in any organisation strategy and change management plays significant role
in the growth of the organisation. For better understanding of the market of organisation has to
check various factors that are influencing it like political, economical, social and environmental.
On the other hand to over come from the above factors company has to know its threats and
eliminate it on the other hand opportunities timely take can help in growth of the organisation.
For the expansion of company, it has many choice like Market development, penetration,
diversification etc. but by choose the one is fitted to trend and taste of region benefit for long

term growth of the organisation and for adopting it properly need clear description and guidance
on the process change as discussed above.

REFERENCES
Books and Journals
Arroyo, D., 2019. Ford and the New Auto Industry.
Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.
Coffman, M., Bernstein, P. and Wee, S., 2017. Electric vehicles revisited: a review of factors
that affect adoption. Transport Reviews. 37.(1). pp.79-93.
Deyo, F.C. ed., 2016. Social reconstructions of the world automobile industry: Competition,
power and industrial flexibility. Springer.
Galli, B.J., 2018. Change management models: A comparative analysis and concerns. IEEE
Engineering Management Review.46.(3).pp.124-132.
Korzhova, A., 2020. Change Management and Sustainability in a Business Context.
Loredana, E.M., 2016. The Use Of Ansoff Matrix In The Field Of Business. In MATEC Web of
Conferences (Vol. 44.p. 01006).
Saebi, T., Lien, L. and Foss, N.J., 2017. What drives business model adaptation? The impact of
opportunities, threats and strategic orientation. Long range planning.50.(5).pp.567-581.
Zif, J., 2016. Patterns of Response to Global Threats and Opportunities. Journal of Management
and Strategy.7.(1).pp.37-44.
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