Strategic Analysis of Ford Motor Company: Business Strategies

This report provides a comprehensive strategic analysis of Ford Motor Company, examining its business and corporate strategies, organizational structure, and financial performance. The analysis includes an overview of Ford's competitive strategies, such as cost leadership and differentiation, as well as an assessment of its current organizational structure and financial health. The report also delves into Ford's diversification strategy, particularly its smart mobility initiatives in new international markets, and evaluates its effectiveness. Furthermore, the report reflects on Ford's strategic approach, evaluates its strengths through VRIO analysis, and offers recommendations for future management decisions, including leveraging technology, employee training, and market development strategies. The report concludes with an overview of the company's future prospects and potential areas for improvement.

Management
Strategic management
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9/30/2019

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Contents
Introduction......................................................................................................................................2
Company Overview.........................................................................................................................2
Question 1........................................................................................................................................3
Range of business and corporate strategies.................................................................................3
Feasible business strategies.........................................................................................................4
Potential business or industry......................................................................................................4
Question 2........................................................................................................................................5
Current organization structure and business performance...........................................................5
Competitive strength assessment.................................................................................................6
Question 3....................................................................................................................................7
Reflection on Ford’s Strategy......................................................................................................7
Smart mobility in new international market segment-................................................................7
Evaluation of diversification strategy..........................................................................................8
Recommendations for the ford management –................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction
When we talk about the strategic management, it is one of the continuous process which helps in
monitoring analysis and interpreting the all the necessary aspect of the organizational for which
various strategies are set to meet the organizational set goals and objectives. Other than this,
companies adopting innovative techniques, advanced technologies in order to meet the
customers’ expectation, which further force the company to redesign the decisions tragically
which makes the company, remain successful in long run.
It allows the business to be proactive towards the actions of the competitors and ensures the long
term survival of the business. Adoption of strategic management tools aids the company in
meeting the future challenges and development of its core competencies, which further ensures
the survival of the business in the long term.
Therefore, in this concern, this entire report is formed on the basis of Ford Company, which is
the well-known American based company who deals in Automobiles. Therefore, this report
highlights information about the ford, corporate strategies, organization structure, financial
performance, people resources and technical competencies to support the business and corporate
strategy and lastly, future recommendations are made for more successful generation of the
company in long run.
Company Overview
Ford motor company is one of the well-known American based companies who is known for the
best multinational automaker whose main headquarters are in Dearborn, the suburb of Detroit.
This company was established by Hennery ford and was incorporated in 1903.Basically this,
company majorly deals in manufacturing the passenger the cars, trucks and tractors as well as the
other locomotive parts and fittings. When we consider ford today, it touches many lives of
people in every corner of the globe. This is not just the selling the technology in advance but
they are also one of the reliable, full to drive vehicle in the world. This it is most of the
operations deals in a manufacturing aspect, which further leads to a business innovation. Hence,

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the entire work within the organization is sharply works under legislations at all the levels of the
government in order to generate support the company auto and mobility business (Ford, 2019).
Question 1
Range of business and corporate strategies
Global business environment in today’s time is transforming for those companies who also
operates globally. Although it is difficult and strategically in nature to retain and faces challenges
but in future it turns out to be the most competitive yet profit gaining company. Ford competitive
strategies mainly give importance on the manufacturing aspect with the sense of adorable
vehicles for the masses which most of the competitors lacked. As Ford Company, should mostly
focus on an aspect of meeting most of the consumers’ needs and demand by using the
competitive approach centered on vehicles brands (Abraham, 2012).
Furthermore, when we look at the corporate strategy of ford should adopts of the horizontal
integration through acquisition with the portfolio comprising other company such as Volvo,
Jaguar, mercury and land rover. Other than this when we consider companies business level
strategies it mainly includes cost leadership, in which they should put greater importance on
operating lower cost to its products as compared to its competitors.
Other than this, it is also seen that Ford Company should mainly focus on the great technology
factor along with the great people, in which he should consider the human centric leadership
approach, which will helps them in unlocking the potential of the ford human resources. In this
the role of the skilled professional will grow day by day and helps the company in turning the
business and strategies in more competitive aspect.
Moreover, it was also analyzed that ford should majorly focus on its training aspects which helps
employees in acquiring the advanced set of skills and helps the company in maintaining the long
term goals and success. The technological landscape in the ford industry is also one of the
important aspects, which is the company should adopt in order to generate the business strategy
successfully. In this, employees with an effective training skills and advanced technology will
creates an effective culture of learning and cooperation, which helps them in developing and

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providing opportunities of career and growth and learning new skills for the company (Nielsen,
Flamholtz, & Randle, 2012).
Feasible business strategies
The most feasible business and the corporate strategy which the ford company should adopts for
its effective organizational capabilities highlights that they must applies or majorly emphasis on
the differentiation strategy in order to offer the wide array of the products to its ultimate
customers, and along with this working over on edge of competitive advantage. Furthermore,
according to its organizational capabilities, they should maintain its cost leaderships strategy in
which the low cost or the prices are set for the product. This all is done to compete against their
competitors such as Toyota and GM. Therefore, such aspect helps the company in maintaining it
product innovation with time and gain the stronger competitive advantage over others.
Furthermore, ford can applies the market development strategy in which they need to think to tap
the newer market which will provide an entirely a new product or the entering into a new field or
the industry will helps them in growing at large. Just like, they need to enter into an newer
industry such as, in an retail sector where they can build a supermarket for all those products
which will never fail, such as the motor parts products in which the company deals in, all those
parts are to be placed in single store. Therefore, that it should be easy for the other companies to
purchase them from a single store (Hoffman, 2012).
Product development strategy, highlights that ford should with time should tap the newer product
into the market, such as applying through research and development aspect, they are majorly
focusing on the product origination aspect to recover its business progress and competitive
advantage. Such aspect helps the company to work towards the broader differentiation. This all
can be done on the basis of customers’ wants and values. The should restructure themselves
aggressively in order to operate profitability at the current demand and the changing model mix
(Vlaskovits, 2011).
Potential business or industry
List of Industry Attractiveness
measures
Industry attractive
score
Deal in retail industry
As a supermarket
Different types of
range of customers
5.8%

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are tapped
Different motor parts
are placed at the
single store
Deal in the IT sector
such as development
of new software’s
In this, development
of new techniques
with the development
of the newer
software’s of the
company
4.6%
Question 2
Current organization structure and business performance
Ford motor company structure mainly highlights that they follow the basic line arrangement,
which mainly contains of many subdivisions with over 40 different vice leaders, which all have
to report to the head of the business CEO Mark fields. Hence, this shows that they follows the
traditional business ladder in its administrative structure, for example, managerial presidents
report needs to report CEO mark field and central executives need to report to these executive.
Therefore, this shows that the company mainly follows the effective top down approach to
control their companies’ activities.
In term of financial performance of the Ford Company, it highlights that in 2017 the revenue
generation of the company was $156.8 whereas in 2018 there was an increment in the revenue
generation of the company, which increases upto, $160.3. In terms of human resource, ford is
best and blessed with the human resource aspect, as company hires people with diverse
backgrounds and makes heavy investment in the area. As the company gives employees training
at the best. Along with this, they also are doing the technological advancement, which helps the
giving proper training, and due to this training, the company can perform better than usual.
Furthermore, the company also adopts the collaborative learning practices to enable the smarter
leaning inside the organization (Ferguson, 2013).
In technological aspect, Ford motor is majorly working over their technological advancements,
moreover it is seen that ford is implementing the world class IT system and equipping its

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employees with the software knowledge along with the hardware knowledge. Moreover they are
also growing technology, the brand is skilling its employees with software engineering
knowledge.
Competitive strength assessment
In order to measure the strength of the ford company through the testing of VRIO analysis and
knowing about the resource and capabilities highlights that-
In terms of global presence, ford is one of the well-known global brands with its great system of
the dealers, merchant and the suppliers. In terms of brand image and customers loyalty aspect,
they having a strong image of an innovative brand whose main focus is on the safety of the
customers and convenience given to them.
 Furthermore, in technological aspect ford has constructed the robust technical capabilities
in term of industrial aspect and its supply chain. Apart from this, they also have built the
world best IT system. Having a strong supply chain highlights that it is the strong
strength of the vehicle industrial company through this they accomplished the strong
relationship with its dealers (Weiss, 2014).

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(Source: Weiss, 2014).
Question 3
Reflection on Ford’s Strategy
When we talk about the horizontal diversification strategy, it involves the extension of the
production of the product or the services above or beyond the industry. Therefore, in the ford
concern, they have taken the multiple avenues to balance their company and through this they
have incremented their opportunities into the other ventures too. Moreover, it is also seen that
they have built the different platforms, which helps in, or support in every segment of the car
truck and many more aspects. Furthermore, through the horizontal diversification has expanded
into the heavy buses, tractors, airplanes and offered to finance all the purchases through its own
financing arm. Therefore, they apply this strategy because they protect their greater portfolio.
This helps them in taking advantages of economies while diversifying and capitalizing on the
opportunities to afford risk reduction, financial exploitation and building around the core
competences and the shared activities to win in the entire industry.
Smart mobility in new international market segment-
As in this Ford imitates with the aggressive fitness push, rebasing the income progress
assumption while reshaping company processes for the long-term achievement. Furthermore,
Ford is accelerating work on smart, associated vehicles, including AVs, EVs, and digital
facilities to flourish in developing transportation functioning structure. Moreover, ford is rapidly
refining themselves by accepting lower cost approach and release capital and economics growth
in which, Ford is attacking costs, reducing automotive cost growth by 50 precent through 2022.
As part of this, the business is directing $10 billion in incremental material cost discounts. The
team also is reducing engineering costs by $4 billion from deliberate levels over the next five
years by cumulative use of shared parts across its full line of vehicles, reducing order difficulty
and constructing fewer prototypes (Dijk, Orsato, & Kemp, 2013).
Secondly, they are also increasing electric vehicles income chances as company recently
proclaimed a devoted electrification team within Ford, absorbed wholly on generating an

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ecosystem of merchandises and amenities for electronic automobiles and the unique chances they
provide. This shapes on Ford’s earlier promise to deliver 13 new electric vehicles in the next five
years, counting F-150 Hybrid, Mustang Hybrid, Transit Custom plug-in hybrid, an autonomous
vehicle hybrid, Ford Police Responder Hybrid Sedan, and a fully electric small SUV (Donada,
2013).
Thirdly, ford is redesigning and thinking product growth procedures and integrate the newer
knowledge in which Ford is aiming to reduce new vehicle development time by 20 precent, with
new tools and fewer orderable amalgamations. With virtual assembly lines, the business has been
able to diminish new model changeover time by 25 precent.
Lastly, ford in its redesigning aspect of the smart mobility they are thinking of embracing
partnerships in which Ford will continue to influence partnerships, remain active in M&A and
cooperate to accelerate R&D. The business recently proclaimed it was travelling a planned
association with Mahindra Group as it alters its commercial in India, and Zoyte with the meaning
of developing a new line of low-cost all-electric passenger vehicles in China (Kaynak, Mockler,
& Dologite, 2014).
Evaluation of diversification strategy
When we talk about the test aspect it mainly comprises of three tests, -
Attractive test highlights about the diversification, which is directed towards the attractive
industry. The businesses chosen for divergence must be physically attractive
or accomplished of being made attractive. Cost admission test highlights
about the cost of entry must not exploit all the upcoming incomes. Lastly,
better off test highpoint that the new unit must gain competitive advantage
from its link with the corporation or vice versa.
Of course, most businesses will make certain that their planned plans pass
some of these tests. However, ford study evidently shows that when
businesses overlooked one or two of them, the planned consequences were
disastrous. Therefore, in the ford concern, when they redesign the process it
was passed in the entire three tests such as in attractiveness, in cost entry

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test and along with this it was also passed in better off test. As in ford
attractive features, there is always a high average return on outlay will be
problematic to enter because entry barriers are high, dealers and purchasers
have only diffident bargaining power, additional merchandises or facilities
are few, and the competition among opponents is stable (Firnkorn, & Müller,
2012).
In cost entry test, Ford Company must overawe the entrance hurdles. It’s a
actual to catch-22 position, however, since attractive businesses are
attractive because these company have entry obstacles higher than normal.
Bearing the full cost of the entry barriers might well disperse any possible
incomes. Otherwise, other candidates to the manufacturing would have
already worn its success.
Lastly, in Ford Company Executives majorly disregard the better off test
most of all or deal with it through arm waving or trumped-up logic rather
than hard strategic examination. Therefore, cause is that they complicate
the size of the organization with stockholder value. In the drive to run a
better business, they lose sight of their real job. They may validate the
interruption of the better-off test by aiming to the way they achieve
diversity. By cutting commercial work to the bone and giving commercial,
units’ nearly comprehensive autonomy, therefore the company consider that
they should evade the drawbacks. Such thoughts misses the entire point of
divergence, which is to make stakeholder worth less rather than to evade
abolishing it (Lambert, Theis, and Cavataio, 2018).
Recommendations for the ford management –
 In this ford should keep in knowledge the design and good and services in which they
needs to entails such steadiness in possessions and facilities. This situation adds to Ford’s
monetary competence and its skill to enhance purchaser contentment.

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 Other than this, they should work upon the process and capacity design in which they
need to apply strategic decision in an area of operations management to supports
production goals. Ford pioneered the assembly line method, which maximizes production
capacity. In addition, Ford continues to improve its capacity by developing new facilities
for its production network and supply chain (Weiss, 2014).
 Ford further needs to redesign their layout and strategy to win in an international market
in which, planned decision area of processes administration, the objective is to exploit
competence of workflows and possessions. Ford discourses this aim through
mechanization of manufacturing procedures, such as with robotics in production
facilities.
 In terms of quality management, ford needs to make planned result, area of processes
management is the satisfaction of superiority outlooks. Ford Motor Company does so
through standard value guarantee practices. The organization also behaves
unsystematically and does lot trials on its merchandises to safeguard their superiority.
Quality assessment also contains data Ford obtains through marketplace investigation to
recognize purchasers’ superiority prospects (Phongpetra, & Johri, 2011).
 Lastly, ford needs to work over its supply chain for the future enhancement in which
management of ford in which they needs to emphases on restructuring and cost-
effectiveness in the supply chain. Ford’s supply chain is worldwide and includes
company-owned manufacturing amenities. As such, strategy help ford to empower it’s to
control the supply aspect of some of the resources used for manufacturing its vehicles
internationally (Majaro, 2013).
Conclusion
From the above report, we can conclude that the position of the ford in the entire market is high
in total. But when a company’s needs to go international they need to work over certain aspects
such as over the supply chain, redesign the product and the market strategies , maintaining the
quality management, focus on job design and human resource, scheduling, designing the good
and services and much more aspects. Furthermore, this report highlights about various strategies
of ford which can applies the market development strategy in which they need to think to tap the
newer market which will provide an entirely a new product or the entering into a new field or the

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industry will helps them in growing at large. Other than this, ford can generate the product
innovation aspect to improve its business growth and competitive advantage. Such aspect helps
the company to work towards the broader differentiation.