Ford Motor Company: A Comprehensive Business Strategy Analysis Report

This report provides a comprehensive analysis of Ford Motor Company's business strategy, examining both its internal and external environments. The analysis begins with an introduction to business strategy and then delves into the macro-environment using PESTLE analysis, covering political, economic, social, technological, environmental, and legal factors. The micro-environment is assessed using Porter's Five Forces, evaluating competitive rivalry, the bargaining power of customers and suppliers, the threat of substitutes, and the threat of new entrants. The internal environment is analyzed using the VRIO framework, assessing the value, rarity, imitability, and organization of Ford's resources. A SWOT analysis is also included to identify the company's strengths, weaknesses, opportunities, and threats. The report concludes with a strategic overview and recommendations for Ford Motor Company, aimed at enhancing its competitive position in the automotive industry. The report also incorporates TOWS analysis to formulate strategies based on the SWOT framework.

BUSINESS STRATEGIES

EXECUTIVE SUMMARY
In this present study, it can be stated that Ford Motor companies consider their
development in new areas of other countries. In this regard, internal and external environment
analysis consider in the present study. Furthermore, it demonstrates an understanding of PESTLE
and Porter’s five forces. This model helps to understand effectiveness of the company that assists
to develop significant results at workplace. In addition to this, it considers discussion towards the
VRIO framework that helps to know different element's effectiveness within the organization.
Moreover, SWOT analysis assists to understand strength, weaknesses, opportunities, and threats
that will help to focus on creative results in the business. It assists to lead successfully in Large
Automotive Industry.

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
EXTERNAL ENVIRONMENT......................................................................................................1
1) Macro Environment.................................................................................................................1
2) Micro Environment.................................................................................................................3
INTERNAL ENVIRONMENT.......................................................................................................5
1) Strategic Capabilities...............................................................................................................5
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The business strategy considers a different set of competitive actions and moves that use by
the organization to attract customers, performances strengthening and accomplish their goals.
This assists the enterprise towards desired ends. In this context, outline business activities
ascertained with positive results (Kompalla, Kopia and Tigu, 2016). The present study based on
Ford Motor Company which is related to the manufacturing companies. The company has the
vision to become the most trusted enterprise in the world. Their strategic goal is to become a
leader of the automotive industry.
In order to focus on the present report, it covers macro and microenvironment analysis.
With this consideration, the macro and the micro environment will be explained PESTLE and
porter strategy respectively. Furthermore, it includes internal environment analysis which
considers strategic capabilities, resources, and recommendations with strategic direction.
MAIN BODY
EXTERNAL ENVIRONMENT
1) Macro Environment
PESTLE analysis
PESTLE analysis is one of the strategic tools that help to analyze macro-environment
within the enterprise. It stands for several elements that impact on Ford Motor Company. These
elements are explained under here:
 Political factors: Political factors play a significant role which impacts on Ford Motor
Company. It consists of long term profitability in several countries. Political stability is
one of the major elements that consider the impact on the company. Furthermore, trade
regulations and tariffs that is related to consumer goods also impact on the organisation
which create negative impact on the company. This is because, company need to pay
more taxes.
 Economic factors: Furthermore, macro-environment factors are also creating an impact
on Ford Motor Company. It includes different elements such as inflation rate, foreign
exchange rate, interest rate, etc. All these aspects demonstrate aggregate demand and
investment in the economy of a particular nation. Along with this, the efficiency of
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financial markets up and down so that Ford Company face issue in identify capital that
needed for the organization (Kompalla, Geldmacher and Lange, 2017).
 Social factors: Moreover, the culture of society also create an impact on the organization
environment. In this aspect, belief and attitude of particular population plays a wide role
in the market where Ford Company operates. This is because the selected business needs
to understand customers and their requirements. Along with this education and income
level also consider power structure within the society that must be required for different
customers (KOMPALLA, GELDMACHER and LANGE, 2017). Leisure interests also
consider an important role within the business.
 Technological factors: Technology is one of the important elements in today’s
environment. In the automotive industry, this element helps to establish players to cope
up with changes. In this context, recent technological developments by Ford Motor
Company helps to deal with creative results in the market. Furthermore, the rate of
technological diffusion is also important to attracting several customers (Rowledge,
Barton and Young, 2017). However, there are several areas in the Indian market where
lack of technological advancement that impact negative on the chosen business.
 Environmental factors: In different areas, distinctive norms and standards that can
impact the organization and its functions. With this consideration, it can be stated that
different laws and liability laws helps to deal with the environment. In this context,
weather, changes in climate, recycling, etc. impact on Ford Motor Company. On the other
hand, the chosen firm face issues in different kinds of environmental aspects which need
to be followed in the country.
 Legal factors: Legal framework is also important that protect the intellectual property
rights of a particular business. In this aspect, the firm must carefully investigate before
entering different markets that lead to a competitive edge. There are different legal
factors consider in this such as discrimination law, employment law, data protection,
consumer protection law, etc. that impact on Ford Company. However, different
countries consist different legal factors which impact negative on the organization.
TOWS analysis
TOWS matric of Ford Motor
Company
Strengths (S)
 Innovation process is
Weaknesses (W)
 Few number of
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effective
 Global supply chain is
also effective
 Product portfolio is
also diverse
 Customer are also
loyal
production facilities
 Poor performances in
luxury division
 Highly dependence on
European auto markets
 Weak position in
several emerging
market.
Opportunities (O)
 Several automotive
businesses partnering
together
 Implement of 5G
technology in
automotive industry
 Increasing in
digitalisation and
advancement of
technology
 Development of new
distribution strategies
SO strategies (High)
 Expansion in
production of
emerging market
 Development of 5G
technology
 Integrated new
facilities with cloud
computing
WO strategies (Low)
 Expansion of
production facilities
 Enhancement in
production facilities
 Utilisation of cloud
computing
 Increasing in number
of operating days
Threats (T)
 Sales of luxury cars
highly depend on fuel
price
 Online shopping trends
more popular
 Exiting corruption in
global trade
 New global
government
ST strategies (High)
 Development of online
strategy
 Development of
reward based program
 Focus on customer
effectiveness
 Using mobile devices
in vehicle
communication
WT strategies (Low)
 Avoidance reliance
with mass sales
 Development of safety
program
 Become independent
Motor Company
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regulations.
2) Micro Environment
Porter’s five element strategy
Porter’s five force strategy is external environment analysis for assesses competitive
rivalry in the automotive industry. There are several elements influencing to the selected
enterprise that is as follows:
 Competitive rivalry (Strong): This factor consist strong impact on the organisation. Ford
Motor Company also face different competition. This consider competing firms which
influence within the industry. It includes high aggressiveness in the firms, existing of
high barriers, and moderate a number of firms. Toyota is one of the main player
competing in the automotive industry. It maximizes competitive advantage that linked to
competition (KOMPALLA, GELDMACHER and LANGE, 2017).
 Bargaining power of customers (Moderate): This factor consider moderate impact on the
organisation because customers are significantly influenced by the organization. Five
forces of this element effects on buyers within the enterprise that contribute moderate
bargaining power is demonstrate in switching costs, individual purchases, availability of
substitutes (Rowledge, Barton and Young, 2017).
 Bargaining powers of suppliers (Moderate): In order to demonstrate the bargaining
power of suppliers that influence moderately on Ford Motor Company. There are
different factors that contribute to the bargaining power of suppliers such as moderate
overall supply, low forward vertical integration, etc. (Ford Motor Company: Five Forces
Analysis (Porter’s Model), 2019).
 The threat of substitution (Moderate): Ford Motor Company consider effects of the
substitute on certain products so that it consist moderate impact on the organisation. With
this consideration, it can be stated that substitution moderate availability of substitute
impact on the organisation. Furthermore, moderate switching costs is related to the threat
of substitutes so that the selected business has low impact.
 The threat of new entrants (Low): Within the organisation, it has been seen that the
effects of new entrants also create an impact on the functions and operations. Therefore,
new entrants impact is low in the business. Due to high capital costs requirements,
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generally, new businesses not easily enter new areas. Therefore, in Ford Company there
is the low impact of new entrants (Kompalla, Geldmacher and Lange, 2017).
INTERNAL ENVIRONMENT
1) Strategic Capabilities
VRIO framework
VRIO framework consider in Ford Motor Company to assess competitive advantages.
With this consideration, this framework offers sustained competitive results. This model includes
the following elements:
Valuable
 Ford The company shows different kinds of financial resources within an organization
that is more valuable and assists in the investment of external opportunities. It also aids in
the chosen business that combating threats (Rowledge, Barton and Young, 2017).
 As per valuable element, local food products are highly differentiated. It considers
perceived value that valued by customers because of differentiation.
 Ford Motor Company shows consider valuable resources within the firm. A significant
portion in the workforce generally highly trained which leads with productive output in
the enterprise.
 VRIO the framework also allows the organization in the firm to sell products with more
competitive interference. It helps to generate revenue which provides more positive
results (Kompalla, Geldmacher and Lange, 2017).
 Distribution of the network is also a valuable resource that helps to attract more
customers. It helps to ensure that greater revenue also ensure that promotional activities
help to increase sales.
 In the chosen company, the cost structure is not valuable. This is because, production
method leads to greater costs than the competition which create affects to gain more
profitability in the organization (Kompalla, Geldmacher and Lange, 2017).
Rare
 Financial resources in the Ford Motor Company are generally found to be rare. Strong
financial resources are generally possessed by the organization within the industry.
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 Local food products are generally found that are not rare and identified by the chosen
company. These are generally competing by other competitors. It means that different
resources assists to gain competitive advantages (KOMPALLA, GELDMACHER, and
LANGE, 2017). Therefore, resources are valuable that make creative results in Ford
Company.
 Employees of the chosen organization are considered rare resources identified in the
selected business. These staff members are highly skilled and trained. With better
compensation and environment of work ensure that employees not leave for other
enterprises.
 With the help of a distribution network in Ford Company is rare that it is identified in a
successful manner. This is because, competitors also require more investment to cope up
with more effective results (Hosseini, Hosseini and Ahmadi, 2016).
Imitable
 Financial resources of Ford Motor Company is also costly that is identified in a
systematic manner. These resources also acquired by the enterprise for prolonged
profitability over the years.
 Local food products are not too much costly that identified in Ford Motor Company.
These can be acquired by several competitors to invest a certain amount in research and
development. Local food products by Ford Company to provide with temporary
competitive advantages to acquire in long run aspects.
 Staff members of the Ford Company are also not costly with VRIO analysis.
Improvement in skills also better compensation package, benefits, work environment,
growth opportunities, etc. (Kompalla, Geldmacher and Lange, 2017). It helps to make
temporary competitive advantages to acquiring the future.
 With the help of a distribution network, Ford Company is also costly in the competition
which is imitated by it. This is generally developed over the many years that helps to
invest a significant amount to imitate a similar distribution system.
Organisation
 Financial resources in Ford Company are generally organized that capture value as
identified by the VRIO model in the chosen organization. These resources generally used
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strategically to invest amount at the right places (Kompalla, Geldmacher and Lange,
2017).
 In Ford The company, not well organized that identified which related to VRIO aspects.
It means that the chosen organization which not using patents to develop full potential.
Unused competitive advantages exist which can be changed into a sustainable
development program.
 The distribution network of the Company is generally organized that is identified for
Ford Motor Company. Using this network helps to reach out to customers that ensure the
availability of outlets. As a result, these kinds of resources prove to attract more
customers (Kompalla, Kopia and Tigu, 2016).
Resources in VRIO framework
V R I O
Cost structure
Distribution network
Financial resources
for more investment
Research and
development
Staff members skills
Sustained competitive
advantages
Distribution network
Value chain analysis
Primary activities
 Inbound logistics: This is first step in which Ford Company start their production. They
are receiving raw material from different suppliers such as US, Japan, China, etc. Hence,
raw material distributed to manufacturing unit.
 Operations: It is second stage where main production considered. It can be divided into
different parts. It is basically process that considered by chosen company to save cost in
regional markets.
 Outbound logistics: It is process of final goods that being moved from manufacturer to
retailers.
 Marketing and sales: This is critical and important part that must be followed for
advertising, distribution, sales and services. Main aim of this department is to increase
profitability of Ford Company.
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 Services: This is final activity of primary to provide ultimate products to their customers.
In this way, Ford company need to make their better brand image to increase customer’s
satisfaction.
Supportive activities
 Infrastructure: In the business infrastructure consider key role in business success. It
considered management, finance, culture and many other resources. It is one of the great
way to enhance profits of Ford Company.
 HRM: HR management is important for organization to focus all the different areas of
vehicle brand. On the basis of well management human capital, employees are motivated
to gain key success.
 Technology: Nowadays, technology play very important role in the organization. It is the
best way to enhance sales with marketing. Hence, it is important to maintain passenger
safety, emission, etc.
 Procurement: It is more important for Ford Company which includes procurement of raw
material from suppliers. For example, the chosen company purchasing their raw material
from different businesses such as plastic, iron, etc.
2) Resources
SWOT analysis
In order to consider different resources, SWOT analysis consider following strength,
weakness, opportunities and threats:
Strength
 Global recognition: Form Motor Company is well known company that is recognised in
global market. It helps go gain more success with marketing and advertising. Brand value
of the organisation successfully lead in success (Chen, Hsieh and Wee, 2016). Political
stability is also important aspect for strength of the chosen business.
 Research and development: The chosen company consider their success with its key
strength that is research and development. In this consideration, they are continuously
improve their performances towards vehicle.
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