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

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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

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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
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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.

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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).

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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.

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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.

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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).
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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.

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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).
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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)
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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).
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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.

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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.

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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.

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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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