Sustainability in Supply Chain Management

This assignment delves into the concept of sustainability within supply chain management. It requires students to critically analyze various scholarly articles and publications related to sustainable supply chains. The focus is on understanding key principles, strategies, and challenges associated with incorporating sustainability throughout the supply chain. Students are expected to synthesize information from the literature to provide a comprehensive overview of sustainable supply chain management practices.

Strategic Management
report on Ford

Table of Contents
INTRODUCTION...........................................................................................................................1
Critical analysis of internal and external environment of Ford.......................................................1
SWOT analysis............................................................................................................................1
PESTLE analysis.........................................................................................................................4
Assessment of Ford's current relative competitive position and advantage....................................4
Porter's Five Forces.....................................................................................................................4
Evaluation of current target market and identification of potential new segments.........................5
Current target market..................................................................................................................5
Potential new segments...............................................................................................................6
Strategic options for Ford................................................................................................................6
The most effective option for achieving sustainable competitive advantage..............................8
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic marketing means identification of sustainable competitive advantages that an
organisation has in market in which it serves and allocation of resources to exploit them. Ford is
US company that deals in automotive products in all over the world in luxury vehicles, leasing
and service, etc. It is the fifth largest automobile industry in all over the world in which approx
201,000 employees are working (Camara, Berthon and Dakyo, 2010). The present report
critically analyses the external and internal environment of Ford by conducting SWOT and
PESTLE analysis. It also assesses organisation's current relative market position and competitive
position with the help of Porter's five forces. Further, it evaluates company’s current target
market, identify potential new segments and assess attractiveness of those segments or markets.
Lastly, strategic options are generated for the organisation to achieve sustainable competitive
advantage.
Critical analysis of internal and external environment of Ford
Ford motor company is second largest company of America who make auto maker products.
Internal analysis means identifying and assessing strengths and weaknesses of the organisation.
It is specific to a particular firm. On the other hand, identification and evaluation of opportunities
and threats in the market are external analysis.
SWOT analysis
1. Strengths:
 One ford: In 2006, CEO of the company first look over strategy to streamline Ford's
global line-up of vehicle platform. They are also focused on higher quality of vehicle
which they are produced (Ashby, Leat and Hudson-Smith, 2012). In order to develop
profitability, the company has chosen improvement in fuel efficiency through diminish
costs. Ford also consolidated various number of platforms in each year after 2007.
 Loyalty – Major strength of Ford is its brand. They have continuous implement new
brand in automobile industry from 2014. They have taking top honours for overall loyalty
towards manufacturers. This is because, they have consumer blue oval shape that make
attractive brand in front of people.
 Excellent brand recognition – Ford has effective brand and recognition that create
positive impact on its operations. In this aspect, they are determining high quality
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material products and services that attract many customers towards the enterprise
(Reimann, Schilke and Thomas, 2010).
 Well managed operations – Ford is huge when it comes to operations. They are regularly
managed around 20000 cars. Thus, it can be said that there is excellent operation assist to
enhance productivity. Finance arm - Ford’s credit remains with competitive advantages for the automobile
industry. It mainly generates around pound 1.9 billion in 2014 which is end with pound
1.7 billion of net income. Healthy Ford is determines overall pre-tax profits that develops
net income around 3.2 billion.2. Weaknesses :
 Luxury – It is being continuous increasing that is more important for auto maker for
developing successful global brand which increase average transaction price and profit
margin. Ford is Lincoln brand has struggled many years. Lincoln sales cut around half
from 1,90,000 units within the US.
 Intense competition – Within the market, intense competition create low market share.
Therefore, Ford has limited market share that create adverse impact on its operations and
functions (Galliers and Leidner, 2014). Customer has many options - Within the market, there are various businesses take place.
Thus, customers has many options to purchase products from different businesses. It
creates high competition within the market that not be beneficial to attain overall growth
by Ford.3. Opportunities :
 Purchasing power is increasing – The purchase of automobile is increasing year on year.
They have become a necessity and various schemes such as loan option; finance option
has made purchase easier for the customers. In addition to this, Ford can also develop
their plan for ascertain overall profits and revenue at workplace.
 Acquire skills and competencies through acquisition - In order to fulfil its prospective
goals, Ford will have to develop new competence in the battery technology, digitalization
and autonomous driving. The cheapest and fast method of doing so is through
acquisitions of small start-ups which have already developed the skills and technology
needed for Ford (Subramanian and Ramanathan, 2012).
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 Fuel prices are expected to rise - The demand for small vehicles always rises when the
fuel prices are high. Ford did not invest much into growing its line of different cars and
has opted to compete in the various vehicle range which can be an opportunity for the
company.
 Worldwide expansion possible – The demand will increase with rising GDP and need of
products. More worldwide expansion of the brand is possible if the company tries to tap
the emerging countries. Hybrid cars / Fuel efficient cars / autonomous cars – All these types of cars are the future
of automobile industry and the manufacturers who produces these cars will lead the
market.
4. Threats :
 Intense competition – The competition is increasing and company has to face fierce
competition from the traditional automotive companies, the new players and saturation of
its main markets. Chinese manufacturers are competing by offering lower prices for the
similar quality build vehicles. New companies such as Tesla are giving tough competition
in the electric cars segment.
 Macro-economic: There are various macro-economic threats are existed that affect to
auto makers that diminish sales volume of the company in event of recession
(Mohsenian-Rad, Schober and Leon-Garcia, 2010). In addition, to this, emerging market
and fluctuations in foreign currency, exchange rates and many other elements create
threatened on Ford.
 Increasing government regulations - All government want to protect and support their
own indigenous car manufacturers over and above international car manufactures. Also,
many governments around the world are committed in reducing the greenhouse gas
emissions and are encouraging fuel efficiency initiatives. The international car
manufacturers have to make changes in the design which suits the changing government
policies.
 Union: When the automative industry dire straits before any recession, united automobile
industry accepted sacrifices in order to attempt and save bankrupt. Nowadays, industry is
booming again with leverage to enhance demand of wages and bonuses. Therefore, threat
is continuous increasing in term of cost for auto makers and potential UAW strikes.
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PESTLE analysis
1. Political factors: Ford business is address with political aspect as the external influences.
Government impact on firms with remote or macro environment consideration.
Government enhance supporting technological innovation that also increase economic
condition of the market. In this situation, the company has opportunity to use government
incentives for innovations and make environment friendly products.
2. Economic factors: Ford has an opportunity to grow their outcomes in order to slow
notable economy that make the biggest market in US. High potential developing
countries make strengthening that reduce profit margin with attractiveness of Ford
products. With considering raw material and automative parts are produced within the
US.
3. Social factors: In US demand is increase for hybrid and electric auto mobiles. It creates
opportunities to develop effective results and performances through assess market
demand. Moderate attitude about customer services also create opportunity in Ford for
developing outcomes. Ford can easily grow through providing products and services
according to customer demand to address demand of electric automobile.
4. Technological factors: Technology assist to Ford to enhance their potential and compete
with remote and macro environment. This element of PESTLE analysis is deals with the
technological changes and conditions that create impact on industry (Gawer, 2011). Poor
introduction of new technology can have an adverse effect on Ford. It should consider
intellectual property and understand its potential for development.
5. Legal Factors: Ford is developing their outcomes and performances with satisfy legal
requirements. Effect of regulations on remote and macro-environment identified
environmental protection regulations. With the help of increasing safety regulations,
opportunity has been increased for enhance sustainability to address effect of
environmental protection regulation. The chosen company can also improve their product
design to take an opportunity that are based on safety regulations.
6. Environmental factors: Environmental factors are determines condition of Ford or its
remote issues regarding natural environment. Most significant ecological external factors
perceive with climate changes, low carbon trends and decline in oil reserves. Climate
changes in an external factor that determines opportunities for Ford to grow their
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products and services through alternative fuels and electricity. Therefore, it creates
impact of the declining oil reserves on the remote or macro environment of auto firms.
Assessment of Ford's current relative competitive position and advantage
Porter's Five Forces
One of the important ways of judging the competitive position of Ford is evaluating
Porter's five force model, according to which there exist five forces in the industry that
determines overall profitability.
1. Threat of new entrants (Week) : In automobile production business, threat of new entrants
is quite low because there is high capital investment is required to perform functions and
operations (Lin, 2013). Cost of marketing and brand development is very high so that
creates major impact on business results. Investment in research and development in
customer services and supply chain is high. Thus, there is limit to entrance of new
businesses due to high capital is needed.
2. Vendor's bargaining power (Week): Bargaining power of Ford suppliers is also week so
that they are influences in Ford case. This is because, mostly people are forward
integration so that there is lack of control on the sales and distribution. Ford's vertical
background integration is also a major factors that reduce bargaining power of suppliers.
The chosen company need to reduce their dependence on its suppliers so that they will
easily work to enhance capabilities.
3. Threat of substitutes (High): Threat of substitute products is very high. This is because,
there are many substitute products exist in market available in front of customer (Baker,
2014). When Ford is enhancing their products and services quality, they can easily
compete with effective products and services in market. Potential in engage the services
create innovation in products with safety features.
4. Market competition (High) : Automobile industry is growing continuously so that
intensity of market competition is very high. Ford faces many intense competition from
its rivals. Investment for entry and exit barriers is also high so that firm need to focus on
heavily with competing aggressively. Over a time number of players are increased in the
country regularly so that level of competition is grown. Number of firms within the
market determines technological innovation or marketing so that there are several tactics
assist to gain market share.
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5. Negotiating Power of customers (Moderate high) : Customers are very important key
element that influence to the businesses. Switching the cost and size of each individual
purchase moderate so that contribution of the businesses is also small. Customer demand
is very important element that assist to enhance performances and revenue at workplace.
In addition to this, brand of Ford need to be focused on increasing size of customer to
attract them towards the firm.
Evaluation of current target market and identification of potential new
segments
Current target market
Understanding the target market is key in developing the appropriate product and
campaign. Target marketing is done primarily through segmentation which helps Ford in
tailoring marketing mix. Market segmentation allows the efficient distribution of products and
services to the right consumers (Baker, 2014). It eliminates or mitigates threats, creates
opportunities and consolidates a brand or company reputation in the minds of targeted
consumers. The four major segmentation groups are : Geographic segmentation : Ford has strong worldwide presence. It allows the company
to get close to their current and future consumers effectively. It has factories or
assemblies lines in many parts of the world, thus, target markets enjoy minimum delay in
delivery, implementation and service. In addition to this, the company can also make
their effective brand and position to target the different types of customers according to
their needs. Demographic segmentation : Demographic factors include age, gender, education,
income, occupation, family status etc. In general, all the product lines of Ford are
dedicated to customers aged 18-49 years old (Wheelen and Hunger, 2011). Mainly the
chosen enterprise deals with income perspective customer. Therefore, it assists to create
new base of people with high standard performances. Psychographic segmentation : It includes values, attitudes and lifestyle. Ford divides car
by fuel consumption which are meant for family or utility purpose. Some other luxury
brands like Bugatti and Lamborghini are targeted for consumers who value their status
and want to prove this to surrounding audience. In this way, they can target customer
with utility purposes that create effective impact on performances.
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 Behavioural segmentation : Ford differentiates its cars by dividing models in classes,
size, engines, and by optional features. The types of engines differentiate from sizes of
the very small 270 dm3, to the enormous 2674 dm3. This helps to know the usage rate,
brand loyalty and benefits sought from the offered products.
Potential new segments
Ford has high potential to enter into new markets such as Asia, New York and China. It can
access these markets by considering geographic, demographic, psychographic and behavioural
segmentation of regions. Although the competition is intense in automobile industries and to
expand in international market, company will have to fierce competition from the local
manufacturers as well (Gawer, 2011). The government policies of different countries may also
act as a barrier because such policies favour the local manufacturers only. Moreover, there are
different policies and regulations in different countries so those will be required to complied by
the company. As the pockets of the company are deep and it possesses a strong brand image, it
can target new markets and design such products which suit the government policies and satisfy
the needs of customers. This will enhance brand loyalty and help to establish long-term
relationships with customers and increase brand value in the eyes of targeted consumers. The
company cam also target old-age group by producing autonomous cars which are comfortable
and easy for them. Ford is trying hard to access the potential segments which will enhance
expansion and its brand value.
Strategic options for Ford
The company can adopt various strategic options to achieve a sustainable competitive advantage.
Following strategies can be adopted by the company :
1. Pricing strategy – In this type of strategy, Ford can expand their business through
concentrate on affordable price as per customer requirement. Therefore, it assists to grow
outcomes and results in successful manner to increase profitability. Price is the value that
is put to a product or service. Pricing strategy of a company consists of set of complex
activities aimed at finding optimum price and includes overall marketing objectives,
consumer demands, product's attributes, competitors pricing and economic trends (Lin,
2013). Ford prices range from affordable to expensive depending upon the size, level of
exclusivity, options and power of engine. However, Ford is a US company, and being a
worldwide exporter, there are naturally several cost considerations which makes it less of
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a value for money product and more of a bit costlier product. For example – price of Ford
is high as compared to Hyundai I10 or Maruti Suzuki. Thus, the company can modify its
pricing strategies which will enable people of different economy class to purchase its
products. A new pricing strategy should be formed which ensures the Ford's products
become affordable for all the segments of society. Also, it can use price skimming for its
luxurious and exclusive cars like Lamborghini which are generally demanded by high
class section as their status symbol. The chosen company is providing different types of
products in size, price and many other concepts.
2. Mergers and Acquisition strategy : With the help of merger and acquisition strategy, the
chosen business can take over or merge with another automobile industry. Therefore,
they can share profit and loss of the company that enhance profitable outcomes at
workplace. The businesses tend to adopt merger and acquisition strategy for satisfying
varied range of reasons. Some businesses go for merger and acquisition for expansion
purpose. On other hand, other group of organizations adopt acquisition strategy so as to
achieve competitive edge (Gilmour, 2013). As there is fierce competition in the
automobile industry, Ford can adopt for mergers and acquisition which will help it to
combat the ever increasing competition. Moreover, the company wants to expand its
business worldwide, so acquiring local smaller start ups with technological competence
can prove to be highly beneficial for the company. This would not only reduce the
competition from existing rivalry but also help the company to gain skilled and
competent employees who have a knowledge base of that particular region. It would
enable to understand customer needs and expectations and help to satisfy them. Mergers
and acquisitions provide synergy of benefits to the company. It would aid the company to
take benefit of individual efficiencies and competitive advantages of two organizations.
There are different types of merger and acquisition strategies like conglomerate,
cogeneric, horizontal, vertical merger etc. The company can opt any of such strategies
according to its business and need of time. This strategy is beneficial as it would reduce
the costs, provide synergy benefits, achieve economies of scale, reduce competition and
hence, increase the profitability which is main aim of all the businesses (Chen, Duan and
Cai, 2011).
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3. Technological advancement : In the emerging technological world, it is must for an
organisation to keep a pace with the technology in all walks of business. Lacking behind
in technology can be the biggest barrier in the success of the company. Ford has long
disregarded the demand for electric vehicles and made little efforts to enter the market.
The company will have to acquire more patents, new skills and gain more expertise to
produce all the electric vehicles. Hybrid cars, fuel efficient cars, autonomous cars and
electric power-train are the future of automobile industry (Kristal, Huang and Roth,
2010). Ford is required to switch over its single battery design philosophy for electric and
hybrid vehicles. Building on its intellectual property and activities in the hybrid and
electric vehicle space, the chosen firm will be able to take off some heat from the diesel
crisis and reposition itself as a leading proponent of low-emission vehicles. Up until now,
Ford only has few electric vehicles. Ford has range is only about 83 miles, compared to
Nissan Leaf’s 107 miles at nearly the same price. The company is in dying need to
develop strategies for technological advancement to survive in the market and face tough
competition. This would help the company to gain competitive edge and increase
profitability and enhance its brand value.
The most effective option for achieving sustainable competitive advantage
To face the intense competition, expand the business worldwide and increase brand
value, Ford is required to modify its current strategies and adopt new ones that would enable it to
achieve its objectives. The major focus the company is required to have is on technological
advancement (Taticchi, Tonelli and Cagnazzo, 2010). Ford can position itself as a pioneer in the
automobile industry by keeping a pace with technological developments. The current position of
company is quite good and it enjoys with excellent brand image. But on the other hand, it is
unable to compete its rivalries such as Tesla's electric cars. To combat the tough competition and
increase its brand value, the company is required to work on its single battery designs which is
outdated. The company should focus on manufacturing hybrid cars, autonomous cars and electric
power-trains which are going to be the future of automobile industry. Thus, by manufacturing
these products, Ford can lead the market. Moreover, it will help the company to gain the trust of
stakeholders if the company tries to produce fuel efficient and emission free cars. This will
enhance the brand image and thus, objectives of the company can be achieved (Monczka,
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Handfield, and Giunipero, 2015). Therefore, technological advancement strategy is the most
effective option for achieving sustainable competitive advantage.
Conclusion
The above report provides an understanding about internal and external analysis of Ford.
The SWOT analysis of the company gives an insight about the strengths, weaknesses the
company possesses, potential opportunities it has in the market and threats it faces in the
industry. It can be concluded that various external factors like political, social, legal,
environmental, technological and economic factors can immensely influence the operations of
the company. Lastly, it is articulated that company can opt for new strategies such as pricing,
merger & acquisition and technological advancement strategies to combat competition and
enhance its brand value. Among them technological advancement is the most effective option to
gain competitive advantage.
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REFERENCES
Books and Journals
Ashby, A., Leat, M. and Hudson-Smith, M., 2012. Making connections: a review of supply chain
management and sustainability literature. Supply Chain Management: An International
Journal. 17(5). pp.497-516.
Baker, M.J., 2014. Marketing strategy and management. Palgrave Macmillan.
Camara, M. B., Berthon, A. and Dakyo, B., 2010. DC/DC converter design for supercapacitor
and battery power management in hybrid vehicle applications—Polynomial control
strategy. IEEE Transactions on Industrial Electronics. 57(2). pp.587-597.
Chen, C., Duan, S. and Cai, T., 2011. Smart energy management system for optimal microgrid
economic operation. IET renewable power generation. 5(3). pp.258-267.
Galliers, R. D. and Leidner, D. E., 2014. Strategic information management: challenges and
strategies in managing information systems. Routledge.
Gawer, A. ed., 2011. Platforms, markets and innovation. Edward Elgar Publishing.
Gilmour, P., 2013. Benchmarking supply chain operations. International Journal of Physical
Distribution & Logistics Management.
Kristal, M. M., Huang, X. and Roth, A. V., 2010. The effect of an ambidextrous supply chain
strategy on combinative competitive capabilities and business performance. Journal of
Operations Management. 28(5). pp.415-429.
Lin, R. J., 2013. Using fuzzy DEMATEL to evaluate the green supply chain management
practices. Journal of Cleaner Production. 40. pp.32-39.
Mohsenian-Rad, A. H., Schober, R. and Leon-Garcia, A., 2010. Autonomous demand-side
management based on game-theoretic energy consumption scheduling for the future smart
grid. IEEE transactions on Smart Grid. 1(3). pp.320-331.
Monczka, R. M., Handfield, R. B., and Giunipero, L. C., 2015. Purchasing and supply chain
management. Cengage Learning.
Reimann, M., Schilke, O. and Thomas, J. S., 2010. Customer relationship management and firm
performance: the mediating role of business strategy. Journal of the Academy of Marketing
Science. 38(3). pp.326-346.
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Subramanian, N. and Ramanathan, R., 2012. A review of applications of Analytic Hierarchy
Process in operations management. International Journal of Production Economics.
138(2). pp.215-241.
Taticchi, P., Tonelli, F. and Cagnazzo, L., 2010. Performance measurement and management: a
literature review and a research agenda. Measuring business excellence. 14(1). pp.4-18.
Wheelen, T. L. and Hunger, J. D., 2011. Concepts in strategic management and business policy.
Pearson Education India.
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