Strategic Management INTRODUCTION 1 TASK 11 Strategic choice model to sustain competitive position of the company

Strategic Management INTRODUCTION 1 TASK 11 The strategic Direction that the company has followed in the past1 TASK 23 Detailed analysis of industry 3 TASK 36 Internal analysis of the company 6 TASK 48 Strategic choice model to sustain competitive position of the company 8 TASK 511 Resource implications of the selected strategy 11 CONCLUSION 12 REFERENCES 13 INTRODUCTION Strategic management is one of the crucial element of business organisations as it is a process by which firms can survive and succeed at marketplace by accomplishing

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
The strategic Direction that the company has followed in the past........................................1
TASK 2............................................................................................................................................3
Detailed analysis of industry .................................................................................................3
TASK 3............................................................................................................................................6
Internal analysis of the company............................................................................................6
TASK 4............................................................................................................................................8
Strategic choice model to sustain competitive position of the company................................8
TASK 5..........................................................................................................................................11
Resource implications of the selected strategy.....................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic management is one of the crucial element of business organisations as it is a
process by which firms can survive and succeed at marketplace by accomplishing its goals and
objectives. It is an art of formulating, executing and measuring functional areas or decisions.
Strategic management encompasses internal and external environment of company and then take
initiative to grow and diversify over the market (Wheelen and et. al., 2017). Strategic
management involves the related concepts of strategic preparation and execution of the plan. The
present assignment is based on Ford which is a multinational auto maker which was founded in
1903. The firm sells commercial vehicles and auto mobiles under Ford brand and mostly luxury
cars under Lincoln brand. Apart from this, the report is going to describe about various types of
strategies which was followed by an organisation in past. A detailed analysis will be made in
order to assess internal and external environment as well as competitive forces. Furthermore,
strategic choice models will also be explained here.
TASK 1
The strategic Direction that the company has followed in the past
The term strategic management is a process which defines organisational strategy; it also
implies activity through which managers make a various strategies which enables to attain better
performance of a company. Although, it is an ongoing activity which appraises firm's
competitors and then fixes goals to meet. Every business association follows certain strategies
and policies in order to grow and viable over the market (Gamble, Thompson and Peteraf, 2013).
The chosen organisation Ford also acquire certain strategies or tactics thus to competitive
position over the world. The firm was founded by Henry Ford and incorporated in June, 1903.
The company's business surrounded over four areas, such as- designing, manufacturing,
marketing and delivering a chain of cars, sport-utility vehicles, trucks and luxury vehicles. The
auto mobile giant deals in two brands, i.e. Ford and Lincoln. The organisations also sells its
vehicles for fleet, including commercial fleet customers, daily rental car for companies, and
governments.
In its past years, Ford used schools of strategy which helped it out in providing future
direction or the way that company can succeed at market. In this relation, Mintzberg's 10 schools
of thoughts support managers of multinational companies to make imperative business strategies
and gain competitive position. Following is given some school thoughts of strategy, such as -
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 The design school – There is focus on conceptional ideas and generate new ideas. For
this purpose, companies like Ford needs an internal analysis thus to match its internal
strength with market and get know the area it needs to make improvements. The planning school – The process runs towards planning the entire strategy in effective
manner thus auto mobile companies can look forward and expand their business. In
planning school though, Ford will formulate the plan from start to finish. This plan is
refereed to management whenever it wants to take new business decisions. But issues
arise when anything occurs out of the plan (Priem, Li and Carr, 2012). The positioning school – Here, management decides that they want top position of their
products and then make decisions accordingly. In this relation, managers of Ford are
required to identify market competition by using tools like – Value chain, Porters' five
forces, PESTLE analysis etc. It is assumed that once the positioned has been determined
then right strategy will be implemented. The cognitive school – In this, individuals perception and information is reviewed. The
cognitive school states that a business can be better by knowing its customers. Its a
psychological process to capture or read out customers' mind and then apply
improvements within business. It can done by making effective communication with
target audiences. The five year strategy of Ford also based upon identifying customers'
needs and wants.
Strategic direction of organisation developed within 5 year
In past 5 years Ford's grand strategy is moving forward and it is based upon these five
principles -
 To be prepare for disruption by becoming fit.
 To be involve in auto mobile business and generate vehicles for people and goods.
 Produce Smart, innovative and connected vehicles.
 Products offered by company will thrive into new transportation operating system.
 Develop and capitalize new business opportunities in transportation operating system.
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TASK 2
Detailed analysis of industry
An adequate business strategy relies upon certain decisions which is required to be taken
by the top management of company. There are numerous strategic decisions that are acquired by
organisations thus to grab better future opportunities and gain competitive edge. Strategic
planning of a company effects it in several ways since as a auto mobile giant Ford has emerged
to reform its strategies time to time. There are numerous strategies which firm has shuffled and
reshuffled according to the market changes. The external environment of the company really
helps its marketing position in direct and indirect manner (Vogel and Güttel, 2013). In order to
review external environmental analysis of the company, PESTLE analysis is one of the
imperative tool that can be used to study external environment. Its description is given below-
(Source: PESTLE Analysis, 2011)
 Political factors – These factors constitute a prime risk for a brand that operates globally.
Political calm is good for every corporation as opposites can be disruptive and leads
towards high losses. UK is a nation where political situation is evaporable and
government changes more often. Therefore, political stability helps Ford to survive for
long run. On other side, Ford may also get affected by British government's taxation and
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Illustration 1: External environment

import – export policies or decisions. Enhancement in petrol prices may hinder buying
power of UK public and in turn it put a huge impact on overall cost of the company.
 Economic factors – This factor have a prime role in deciding how markets behave and
how much profitable it is for business environment. Now UK economy has overcome
with recession and now there is lot of things improve since than. But there are various
economic issues like – unemployment, poverty, less labour forces, changes in inflation
rates etc. may affect on business operations of auto mobile companies like Ford.
 Social factors – Global brands serve to numerous markets which are different in respect
of society and cultural. Such differences has put a vast impact on business profitability or
success. Nowadays, trend of online bookings of vehicles and easy access towards them
has common in UK (Goetsch and Davis, 2014). Variations in customers' preferences and
lifestyle affects sales and profitability of car companies; as in modern era people wants
innovative and luxury cars which is beneficial for Ford. In 2011, it is reviewed that 11
million households purchased vehicles specially cars online.
 Technological factors - In present scenario, development or advancements in technology
affects auto mobile business across the globe. Giving safety to passengers and
environmental concerns is growing at fast pace; auto makers, i.e. Ford is tend to invest
more and more in technology in order to make their cars more convenient and safer for
customers. Demand of hybrid cars is increasing and people are looking for less fuel
consumptions and carbon emission cars.
 Legal factors – As if UK government plan certain actions, i.e. high taxation policy,
pollution laws, health and safety law, high VAT on cars hinders adversely a business
organisation. In order to cope with all these things, car makers have to focus on
improving quality of their products (Morden, 2016).
 Environmental factors – These factors comprises – climate or whether conditions and
dynamic environment. For instance – places like- hilly areas, high terrain and erratic
heavy rains are one of the major issue that can affect Ford annual business and its
revenues as well. Car companies has started to make electric vehicles, hybrid electric
vehicles which has null impact on environment.
Competitive analysis of Ford -
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In order to assess competitive advantage over the market, Ford has acquired Porters'
generic strategy to obtain its market scope and competitive position, thus to make business
strategies accordingly. The business organisation, Ford's is fifth biggest multinational auto
mobile dealer over the world. To maintain this position, the brand acquired various generic
strategies that are clearly defined as under - Cost leadership strategy – The generic strategy implies with producing low cost products
in order to attain and retain large group of customers as well as also obtain high
competitive advantage. It is essential for Ford to apply cost cutting techniques for
reducing product prices (Bryce, 2017). This will support firm to create an economic
advantage by using optimal asset utilisation. Differentiation strategy - The strategy is emphasised on value generated by a product
over the market. Differentiation strategy is based upon generating value added or unique
products thus to obtain high profit margins. This tactics is suitable for those customers
who are not sensitive about prices cause differentiate products always remain high prices.
Most of the customer of Ford are concerned with specialisation and quality only. The focus strategy – At last, focus strategy which cannot apply separately but used with
cost and differentiation strategy. Although, Ford is a international dealer so firm can use
this tactics in respect of reducing costs and generating innovative or unique products
(Frynas and Mellahi, 2015). It defines that firm needs to emphasis on specific corporate
unit in order to raise efficiency.
Possible industry scenarios faced by Ford in existing market domain - Globalisation and consolidation of Platforms - The leading global auto maker, i.e. is
forced to restructure its business strategies in response to pressure generated by foreign
competitors. There is trend in strategic consolidation over modular mega-platforms has
been replaced with successful rationalization in market segments so as to make optimal
utilisation of available resources and make modifications in current technology. New power trains and new regulations – Another challenge for Ford is to understand
changing market demographics and consumer trends over the world. In developed
countries, population is getting older that only wants traditional products whereas it is
quite difficult to attract younger buyers. The reason behind this is young people are
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voicing towards environment and acting as catalyst which forces auto makers to boost up
entire efficiency that may be expensive (Barney, 2012).
 Increasing competition – At last, the another major challenge is faced by Ford is raising
competition. Chinese and Japanese auto mobile market is highly responsible for raising
competition. It is assumed that both markets has reduced sales of auto mobile companies
by 25%. There is a tough competition with Western brands, local domestic players and
joint ventures which shows that auto mobile industry is emerged with fast pace and
becoming more competitive.
TASK 3
Internal analysis of the company
Internal analysis of any business association can be through by applying SWOT analysis
which helps managers to determine firm's strength, weaknesses, opportunities and threats.
Strength –
Ford is one of the largest auto mobile dealer over the globe and also deals in financial
services, i.e. Ford motor Credit. Thus, the brand value of the company is $19.771 billion and it is
ranked at 4h in list of world's auto mobile companies. Ford has a market share of 7.2% as of FY
2015. Apart from this, Ford also make huge investments in research and development sectors for
improvising credibility or performance of its vehicles that involves customer satisfaction, safety,
fuel efficiency and generating new products (Godoy and Naidich, 2012). Another major strength
of the company is it is committed towards boost up cut throat competition; its focus is on
adopting new technologies, i.e. six speed transmissions, Ecoboost and hybrid vehicles. In order
to extend its product quality, the brand utilise light weighting, power train and cabin technology.
Weaknesses
One of the major weakness of Ford is, the brand of company get tooled as it recall its
products due to failure of engines and safety reasons. It had to recall almost 275000 vehicles
series of F-150 to replace brake master cylinders in 2016. Along with this, again in 2015, Ford
had recalled its cars cause of safety issues in Takata Airbags. It can break up market share of
Ford because was not doing well within emerging markets. Apart from this, Ford was also faced
fierce criticism due to its working conditions and labour practices. Most of the cars of the brand
are at higher prices in comparison of its rivals' similar products. For example – Ford GT super
car that is out of reach for many people over the world.
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Opportunities –
In order to expand its market area, Ford is investing $2.5 billions in transmission plants
and new engine; it will raise daily production capacity of the company by 40%. In addition, new
plants will also driven up sales revenues which reaches Ford at new heights of success. Along
with this, the auto mobile industry is expected to grow at 6% CAGR till 2020 and reach to the
valuation of $1.5800 trillion. Focus is shifting towards fuel emission and demand of hybrid and
electronic cars is increasing which can be great opportunity for ford.
Threats –
The industry is facing various regulations related with environment protection. UK
government has made more stringent laws and all companies must adhere them by applying
several changes in their production system (Langston and Lauge-Kristensen, 2013). Apart from
this, global economy is going through a slowdown thus Ford needs to keep its prices low.
Currency fluctuations may be a game changer.
Mission and vision of Ford
The mission statement of Ford is One Team, One Plan, One Goal. In which one team
means all people work together as a lean in global enterprise for automotive leadership whereas
One plan implies restructure the plan in order to operate profitably and accelerate development
of new products. One goal is “An exciting viable Ford delivering profitable growth for all”.
Apart from this, the vision statement of the organisation is to become one of the largest auto
mobile company over the world by delivering new and innovative products to customers. Thus,
vision and mission statement of the company provides it strategic direction so that top
management use these statements in measuring Ford's performance as well as organisational
development.
Strategic capabilities of Ford -
The business is enhanced by various aspects, i.e. consumer focus, availability of proper
resources, innovation and entrepreneurial spirit. Ford is having an inspired and diverse team
which helps it in generating new and innovative products. The brand respect and value for
contribution of everyone and health and safety of their employees are always at paramount. In
content of environmental responsibilities, Ford is a leader as its integrity can never be
compromised because the organisation makes higher contribution towards society. Another
strategic capability of the company is it always strive to boost up all innovations; guided by these
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values the auto mobile giant will provide superior returns to shareholders (Jenkins and
Williamson, 2015). As it is the reason many investors are willing to invest their money in Ford.
Along with this, most of the cars of are developed with higher quality, innovative design, faster
delivery, long lasting vehicles, effective advertisements; all these supports company to ensure its
competitive position over the world and stay successful as well.
Business Canvas model of Ford
It is known as one of the best strategic management and lean start up tool for developing
new and existing business models. Although, business canvas model is strategic chart with
components that describes company's product value propositions, customers, infrastructure and
finances. It helps companies to align their business activities or practices by illustrating potential
or future tradeoffs.
By considering Ford, in 2008 the firm has established a business model named One Ford
and prepare a comprehensive plan in order to sell products in global markets whereas some of its
models are developed only for local markets only. Although, Ford is being faced insolvency
which can befell its global rivals, i.e. Chrysler and General Motors in 2009. Still the auto maker
found the needing of restructuring its business model in order to remain solvent as well as
effectively respond towards changing customer preferences. The brand is focusing on creating
separate business model for each country as per their cultural and values. For instance - its Figo
sub compact is novel for Indian market as the car is build on Fiesta platform, but its lower costs
help Ford to compete in such developing markets.
TASK 4
Strategic choice model to sustain competitive position of the company
In this over dynamic business environment, various strategies and policies are acquired
by companies thus to sustain its competitive position at marketplace.
Another model of strategic planning is Ansoff Matrix which helps managers their executives to
develop effective strategies by analysing the overall market. The tool is adopted by companies to
review the value that is being provided to target audience; it also renders certain guidelines that
supports Ford to attain its marketing goals and objectives (McKiernan, 2017). Ansoff Matrix is
supportive in evaluating efficiency of new technology in product development process. The
market grid is classified into four quadrants -
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Market penetration – The business strategy suggests that penetrate in a market by using
existing products and services help Ford to gain high competitive advantage. The auto mobile
giant is having an ample range of products and services thus it can sell them into markets. For
this purpose, the firm is persuade strategy like – One Ford, Global marketing” which helps Ford
to communicate worldwide and get customers know more about the brand. Due to less risky
nature, Ford can use the market penetration strategy to look ahead for increasing its substantial
market portfolio. In order to generate, more market penetration Ford needs to make more
initiatives, like – using attractive promotion and advertisement channels, social medial presence
etc.
Product development – The tactics means to generate absolutely new products which
suits market trends and customers' desires. In order to develop new and innovative products,
Ford is investing to create less less fuel consumption and hybrid vehicles thus to attain balanced
over global auto mobile market. In addition, for promotions of new products the company is
using effective communication techniques as well expanding licensing merchandise thus to
capture markets over the world (Baumgartner and Rauter, 2017).
Market development – The third quadrant of Ansoff Matrix refers that expanding market
area beyond those within current offerings will be sold. To develop its new markets, it is
essential for Ford to recognise customers' requirements and cultural. Although, perfect pricing
and cost evaluation is essential with references to stay ahead from competitors. The primary
focus of companies is to provide high quality at minimal cost. There is high risk to enter into
new markets, so that Ford is required to conduct a market research for assessing market
behaviour or trends.
Diversification – The strategy means to deliver new product in new markets. Ford is
going to launched range of new products in upcoming years in emerged and emerging nations. It
is planning to introduce small cars. Battery powered vehicles and plug in hybrids etc. with smart
technology and environmental friendly. Diversification is known as higher risky strategy as
company has no idea of new markets.
Another business strategy used by Ford -
BCG matrix – The strategy is used for product portfolio management and helps in
prioritising opportunities so as to get best return on investments. There is defined four major
aspects of BCG matrix, such as -
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 Star – It involves those products which have high market share and profit. In context of
Ford, Mustand brand is at top position it remains as number one sport car that deliver
large profit margins.
 Cash Cow – It represents high market share with low market growth. Most of products of
Ford are reliable and profitable and the brand is focused for economic class people thus
its offerings are high market share but get profits with low growth rate (Hitt, Ireland and
Hoskisson, 2012).
 Question Marks – It involves those products which market share is low but having high
growth rate. In context of Ford, one of its model named Ferrari is a high priced car and
consumed by high class people. Dogs – Here, market share and growth rate both are low, such products are produce only
for competing over rivals. Jaguar and Land Rover has been faced problem for the
company.
The strategic choice model -
Strategic choice is an approach that is used for making business decisions; its a
continuous process within uncertainty of strategic management plays a vital role. Although the
model focus on decisions which are being made in peculiar planning situation, whatsoever their
time frame and components. The strategic choice approach is an incremental role instead of the
one that looks upon end product of a comprehensive strategy. It is not only designed for use of
experts even the strategic choice is a framework that helps to manage communication and
collaboration among people at workplace with diverse background and skills. In addition to this,
strategic choice approach describes how to handle risks or uncertainties around the decisions has
to be taken whether they are political, technical or procedural (Hill, Jones and Schilling, 2014).
There is given three major elements of strategic choice model which supports to address
problems and then take imperative decisions, such as -
 The Decision Area
 The Comparison Area
 The Uncertainty Area which divides into three broad categories
Uncertainties to do with the working environment
Uncertainties to do with guiding values
Uncertainties to do with related choices
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There are four modes of strategic choice
Shaping – In this first stage, management of the company thinks to give a proper shape to
business, for this the person identifies certain strategies or policies that helps to deliver
new height of success to their business.
Designing – Afterwards, the planning managers design an effective framework in which
all necessary aspects are involved which helps in formulating a business strategy. In this
stage, there is design various plans or policies which will ensure high market growth of the
company.
Comparing – Here, all designed strategies are compared with each other by address their
pros and cons. Managers also assess all strategies by putting them into a real time situation
so as to realise which one strategy will be beneficial for the company.
Choosing – Finally, an effective strategy the best one is chosen which help Ford to obtain
competitive edge in a certain time period.
TASK 5
Resource implications of the selected strategy
There are various types of resources are required in strategic implementation process of
the company; managers are required to understand resource requirement at workplace. They also
focus on effective or proper implementation of resources thus to ensure business growth and
success in a certain time period.
 Human resources – These resources are assistive in accomplish all tasks or activities in
proper manner thus management should ensure that employees have enough skills or
capabilities which are require in creating new or innovative cars.
 Financial resources – Having sufficient availability of funds help company to determine
that how much amount will be spend in completion of different business activities. In this
manner, management has to formulate an adequate budget and invest accordingly in each
activity (Ginter, Duncan and Swayne, 2018).
 Marketing resources – To introduce new products and services, it is essential for
managers to make proper communication with target and potential customers. Marketing
can be done through by attractive advertisement and promotional campaigns.
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 Technical resources – As an auto mobile company, there is needed new and innovative
technology as per the market changes which helps business to grow and diversify over
the world. Ford needs to focus on applying new technologies in its business processes for
gaining high competitive edge.
While developing any business strategy it is essential for managers to ensure about that a
strategy is successfully meet these three satisfy criteria, such as -
 Suitability – it defines that whether or not firm have adequate options in order to assess
its strategic position.
 Acceptability – It considers that whether or not available options will meet and be
consistent to attain organisational goals and acceptable by stakeholders.
 Feasibility – It analysis availability of required resources to carry out working activities
and tasks.
CONCLUSION
From the above mentioned assignment, it get comprehended that strategic management is
one of the critical task for every business association. It is suggested to managers to focus on
applying effective business strategy which can help their business to obtain high market growth
and success across the world. The report has stated, in its past years strategic decisions of the
company was based upon school thoughts of strategy but as per the time changes various
modifications has been made in process of strategic planning. On the other hand, external
analysis of company is an intermixture of political, economical, social, technological etc. factors
which may hinder their strategic decisions. Internal environmental analysis has been done by
SWOT analysis which evaluate strength, weaknesses, opportunities and threats of the company.
In addition to this, while formulating business strategies there must be required to use Ansoff
matrix that provides guidance to firms as it can grab better future opportunities.
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REFERENCES
Books and Journal
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