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Strategic Analysis of Ford Australia: A Case Study in Information Systems

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Added on 2024/07/29

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This report delves into the strategic analysis of Ford Australia, examining both its internal and external environments. The external analysis explores the company's business background, industry landscape, and competitive forces. It analyzes the PESTLE factors impacting the automotive industry and assesses the power of suppliers and buyers, potential entrants, substitute products, and rivalry among competitors. The internal analysis focuses on Ford's tangible and intangible resources, identifying its core competencies and capabilities. The report then proposes a suitable information system solution, the Corporate Technical Information System (CTIS), to address Ford's specific needs. The evaluation of CTIS highlights its benefits and challenges, providing recommendations for its implementation and improvement. This comprehensive analysis provides valuable insights into Ford's strategic position and the role of information systems in achieving competitive advantage.

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Assignment 1 (Strategic Analysis) STRATEGIC
INFORMATION SYSTEMS
1

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Contents
Introduction......................................................................................................................................3
PART 1............................................................................................................................................ 4
External analysis.............................................................................................................................. 4
1. Business background................................................................................................................4
2. What industry is it?..................................................................................................................5
3. General environment analysis (economic, physical, sociocultural, global, technological,
political/legal and demographic – and work out what the important facts are)...........................6
4. The industry environment ((i.e., supplier power, buyer power, potential entrants, substitute
products and rivalry among competitors) and explain briefly what is significant for each).......7
5. Competitive environment (Is there a strategic group that you need to take account of? What
is the rivalry like in this group? What capabilities do the relevant firms have? What strategies
do they follow? What threats do they represent?)........................................................................8
6. Opportunities and threats.........................................................................................................9
Part 2.............................................................................................................................................. 10
Internal analysis and proposal....................................................................................................... 10
1. The firm’s resources, tangible and intangible........................................................................ 10
2. Capabilities identification (explain the capabilities carefully to indicate what the firm really
does.).......................................................................................................................................... 11
3. Core competency analysis (For each capability, indicate which of the four tests for a core
competency it meets)................................................................................................................. 12
4. Propose a suitable information system solution that meets the chosen company needs........13
5. Evaluate the proposed system and provide your recommendations......................................14
Conclusion..................................................................................................................................... 15
References......................................................................................................................................16
2

Introduction
In this report of strategic information system, the internal and external analysis of Ford
Company Australia is discussed. The external analysis provides the basic background of
company which shows that organization was founded in Australia having large number of
subsidiaries in different countries. The industry environment describes that in which products
and Services Company deals in, rivalry competitors across the world, opportunities and threats
which impacts positively and negative on the company in this business environment. Apart from
that, the brief analysis is made about the power of suppliers and buyers, substitute products
developed by company, level of competitors’ and others. After that, internal analysis is also
explained with the support of describing the tangible and intangible resources, sound capabilities
of the organization in competitive market, four core competencies measures evaluates the
position of company. The information system of the company which is used to enhance the
growth and productivity level is also considered.
3

PART 1
External analysis
1. Business background
The ford motor company of Australia limited called by its trading name FORD Australia. The
company is subsidiary of Australian company of United States depend on automaker ford motor
company. The company is founded in Geelong, at Victoria in 1925. Henry Ford provided the
right of manufacturing to Ford Motor vehicles in the British Empire. The first products of Ford
were Model Ts joined from complete knock down kit given by Ford of Canada. It is called in
very recent time for having manufactured in Falcon; basically a US model developed in Australia
in 1960, but followed in Australian requirements and road conditions (Michael, 2014).
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2. What industry is it?
Ford Australia comes under the automotive industry, where company is involved in
development, design, marketing, manufacturing and selling out the motor vehicles. It is
considered as the world significant economic field by revenue. This industry not covers
dedicated to the automobile maintenance following provide to final user like automobile repair
stores and fuel filling spots. The automobile industry was started in 1860 with large number of
manufactures pioneered the carriage horseless. This industry comply several numbers of
regulations and norms whether national and international to be accepted in market (Michael,
2014).
5

3. General environment analysis (economic, physical, socio-cultural, global, technological,
political/legal and demographic – and work out what the important facts are).
Ford industry PESTLE evaluation identifies the very essential opportunities and threats, depends
on the external factors of the company based on macro environment factors.
Political: government of the country increasingly helping technological innovation to improve
economic conditions. This condition gives opportunity to Ford to use motivations for innovation,
friendly sustainability products. Company has better opportunity to spread its business operations
on trade agreements to make foreign markets and to grow at international level (Simchi-Levi, et.
al., 2014)
Economic: Company has opportunity to groom on notable and slow growth of U S Economy; it
is the company biggest market. The power of strengthening US dollar decreases the profit
margin and effectiveness of company products because many of the materials are produced in
United States.
Socio and cultural: Company can rise by giving products which meets the high demand for
electric and hybrid automobiles. Company has opportunity to increase its services in after sales
services to gain more consumers.
Environmental: Changing climate is the outer factor which affects the company and its products
in positive and negative manner. Company provides new advanced products with the
consideration of sustainability (Waibel, et. al., 2017)
Legal: Company sells its products into number of different countries and also follows rules and
compliances of such countries for better operations. It increases the reputation and goodwill of
organization at worldwide.
Technological: The technology used by Ford industry is more advanced and innovative as per
the demands and preferences of customers in the market.
6

4. The industry environment ((i.e., supplier power, buyer power, potential entrants,
substitute products and rivalry among competitors) and explain briefly what is significant
for each).
Buyer power: Ford users significantly control the business, by liberal switching cost, affordable
size of person purchases, and moderate accessibility of substitutes. In this situation customers
can make easy transfer to business firms, and in little change in demands of customers makes a
significant impact on company.
Supplier’s power: The moderate supply and suppliers provide effective but restricted power of
bargaining in Ford. Suppliers have less forward vertical connection that means they have not
control on sales and distribution of Ford products (Waibel, et. al., 2017)
Potential entrants: There is threat of new entry into the market for ford industry, and they spend
huge amount to maintain and set up facilities and business.
Rivalry competitors: Ford requires competing with top firms that market and innovate the
products. The automobile industry has huge exit restriction means firms have to compete with
ford due to high investment and cost.
Substitute products: There are certain substitutes of company products like bicycles and Public
transportation but such substitutes are not proper and accurate in some circumstances and areas.
7

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5. Competitive environment (Is there a strategic group that you need to take account of?
What is the rivalry like in this group? What capabilities do the relevant firms have? What
strategies do they follow? What threats do they represent?)
The business environment of the Ford is very competitive due to GM, Nissan, Toyota and they
are strong competitors of the company. Business can get the benefits of available sources like
cheap human resources; developing countries have lack of resources. Toyota is the largest
manufacturing unit of car related to sales, as per the annual report the company gives Jobs to
320808 employees having 530 subsidiaries and capital of company is 397.05b yen. The major
functions of the company are good designing, assemble and sell, race cars, cars and trucks.
Toyota established units in all parts of different countries assembling and manufacturing to serve
the demands in that markets (Jing and Jia, 2017). The strengths of the company are customers of
the Toyota are satisfied with the products and such products are launched by with the support if
customers and their acceptance. The owners of the company have sound decision making skills
and leadership. The relationship with banks and financial institutions are effective and they
provide finance to accomplish the development of products and spread into new markets. The
employees and other officials of the organization are productive factors and they contribute large
to the organization. So there are some threats present in the environment which may impact on
the Ford and its objectives (Orzheshkovskaya, 2016).
8

6. Opportunities and threats
Opportunities:
Ford has certain opportunities and threats in the market, and some are here as mentioned, the
company determined the significance of small and fuel preserving vehicles and it is properly
changed into market. Due to this, company can claim and it result in 20% fuel efficiency and
fewer 15% CO2 emissions. Company has chance to create important margin enhances for small
line of vehicles, such as Ford fiesta. The market growth of the company is emerging in North
American and Europe market, and company has possess as important share in the markets of
Asia regions and South America that will must give immense success in future to earn and
spend the money in automobiles. At the peak of company, it provides good amount of dividend
to its shareholders (Orzheshkovskaya, 2016).
Threats:
On the other side, there are certain threats are also present such as, automobile industry is very
competitive in the global environment and it is typical to give best products in low prices. At the
time prosperous economic position, people wants to spend money in high rate items like cars, so
countries have to face several issues of misery for many years. There are several competitors of
the Ford such as Toyota Motor, General Motors company, etc. and they both competes the
company all of core markets.
9

Part 2
Internal analysis and proposal
1. The firm’s resources, tangible and intangible
Tangible resources are the quantifiable assets of the company like tools and techniques,
production plants and other equipment’s. In regards with tangible resources there is a need to
look towards the financial resources, technological resources and other organizational resources.
Financial resources include proper analysis and evaluation of account and records of the
company, profitability, solvency, capital restructuring, liquidity ratios, investor ratios,
shareholders values, sales and revenue of the organization (Guajardo, et. al., 2015)
On the other side, intangible resources cannot be seen easily, in this world of modern technology,
global competition and information with accounting and financial models which was developed
in 100 ago years. Intangible assets are the most particular section which evolves in accounting.
In the business area, assets play a significant role in economic resources as well and it is
considered as tangible and intangible resources. The good will of company, registration and
security of patents, trademarks and copyrights are the intangible assets of organization and their
valuation is essential (Binion, et. al., 2018).
10

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2. Capabilities identification (explain the capabilities carefully to indicate what the firm
really does.)
Ford is one of the most iconic and oldest automobile industries in the whole world. This credit
was given to Henry Ford who launched the innovative modern technologies in automobile
industry be developing a large market of cars. As per statistics, Ford ranked the fifth in very
valuable automobile industry in the world and it’s the seventh biggest manufacturer of cars.
Company has strong status in the American market, and has economic position in United States,
Europe and China as well. Company recounted a free cash flow of $3.477 billion in June 2018.
Company has good position in research, development, manufacturing and marketing in
automobiles. The dealership network of the company is also very strong and at present it has
7500 networks. Ford expertise in producing and marketing of vans such as light trading vehicles.
Due to the expansion of e commerce the requirements of delivery services are increases then it
grows high demand of such trading vans. Company has capable in producing the F series pickup
trucks in 2017, company sold 896764 f series trucks. The brand reputation of the company is also
very strong with the loyalty of customers, and it has very strong position in automotive market of
China (Guajardo, et. al., 2015)
11

3. Core competency analysis (For each capability, indicate which of the four tests for a core
competency it meets).
Determining strategies is continuous process where internal analysis of the company plays a
significant part. The distinct combination arises from the capabilities and resources give birth to
a new thing such as core competencies. It is the capability of company to cooperate and
coordinate all tools and techniques to provide the best strategy. Core competencies are identified
in the manner of, are it provides best value, is it permits to enhance and covers the market share,
is it typical for rivalry competitors to copy, and is it provide better competitive advantage
(Binion, et. al., 2018).
In this case of ford industry, Value means perceived advantage to the final customer of the goods
and services of cars. Ford factory has increased its value in the market by providing good quality
cars and services, and it has ability to give better services at local and international level. Market
of the company is expanded at worldwide level with the help of internet and globalization and its
products are sold in all over the global world. Further, it is very difficult to copy the methods and
process by other competitors of the ford such as GM and Toyota. When company has ability to
give competitive advantage then it is effective to determine the core competence (Mao, 2018).
12

4. Propose a suitable information system solution that meets the chosen company needs.
Ford motor company corporate technical information system is an in-house system for technical
information and company products which is conducted in customer survey in 1987. It is
considered that this system is accepted very well, hardware parts of the system are performing
very well and it is also judged as data are supportive and authoritative. Some issues raised in the
survey were solved very fast such as the requirement of good customer services and needs for
important growing system content is defined (Law, 2017). CTIS solved out these issues by
online methods and help from telephone in a simplified user guide as well as highly significant
search software. It also identified that file content and new files are combined to new different
files known as manuals of company. A Michigan university of MBA is teaching the ability for
CTIS marketing to suppliers and vendors of services and components to the Ford factory.
13

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5. Evaluate the proposed system and provide your recommendations
The proposed system of CTIS is very helpful in making the good relationship with suppliers who
may help and support in increasing the high range of tools and techniques in total quality
management. The aim of this technique is increases the level of production with regular flow,
and manages the needs and demands of several components on time. This information system
provides the order at right time on right place, in clean, predictable and flexible manner. It is also
believed that it gives good quality, increased customer satisfaction, stability, good plant
productivity and reduced cost of company and dealers (Vorona, 2016). With the use of SAP
software, Ford is able to achieve the good presentation in customer support management supply
chain management certain challenges and issues are faced in the development of SAP and CITS
information system are, it is so expensive to develop the information although Ford is a big
company. Due to large structure of organization, there is not only maintenance of hardware and
software, but also personnel cost, consulting cost, training cost etc. it is not easy to gather the
information and follow it in this changing environment, difficult to control the tools and
technology, etc. (Khurana, 2014).
It is further recommended that, information system in very beneficial to be adopted in
organization in this competitive market. Ford provides T model cars to the customers and this
model are depends on cost leadership. Company has to reduce the overcoming issues by
applying the effective techniques and methods.
14

Conclusion
It is concluded from the whole report of Ford industry that, Ford is the largest car manufacturing
unit in the world having more number of branches in different countries. The automobile
industry is providing the large scale revenue to the world and increases the position of country in
the global world. There are certain competitors of the Ford like Toyota, GM that used the
competitive strategies and methods to compete with Ford. The company has powerful strengths
to sustain for long period of time in this business environment with more advanced opportunities.
The CTIS and SAP information technology systems are used by organization which is very
supportive in managing and handling the business process and systems.
15

References
 Binion, T., Harr, J., Fields, B., Cielocha, S. and Balbach, S.J., State Farm Mutual
Automobile Insurance Co, 2018. Vehicle sensor collection of other vehicle information.
U.S. Patent 9,892,567.
 Guajardo, J.A., Cohen, M.A. and Netessine, S., 2015. Service competition and product
quality in the US automobile industry. Management Science, 62(7), pp.1860-1877.
 Jing, X. and Jia, B., 2017, September. Research on the application of vehicle network in
optimization of automobile supply supply chain. In IOP Conference Series: Materials
Science and Engineering (Vol. 242, No. 1, p. 012067). IOP Publishing.
 Khurana, A.C., 2014. Strategies for competitive advantage in the automobile industry.
 Law, C.M., 2017. Restructuring the global automobile industry. Routledge.
 Mao, C., 2018. Research on competitive advantages of supply chain based on its time
competition: Case analysis of automobile industry.
 Michael, W.L., 2014. Labor on Display: Ford Factory Tours and the Romance of
Globalized Deindustrialization.
 Orzheshkovskaya, D., 2016. Identification of Employee Motivators and Proposals for
Implementing Motivating Practices in SMEs: Cases: Automobile Technologies Ltd and
TrulyProtect Ltd.
 Simchi-Levi, D., Schmidt, W. and Wei, Y., 2014. From superstorms to factory fires:
Managing unpredictable supply chain disruptions. Harvard Business Review, 92(1-2),
pp.96-101.
 Vorona, D., 2016. System for transmitting, processing, receiving, and displaying traffic
information. U.S. Patent 9,286,795.
 Waibel, M.W., Steenkamp, L.P., Moloko, N. and Oosthuizen, G.A., 2017. Investigating
the effects of smart production systems on sustainability elements. Procedia
Manufacturing, 8, pp.731-737.
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Strategic Analysis of Ford Australia: A Case Study in Information Systems

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