MGT302 - Ford's Global Platform Strategy in International Business

This report examines Ford's global platform strategy within the context of international business, addressing the challenges and opportunities faced by the automotive industry. The analysis begins by contrasting Ford's pre-Alan Mulally market-adaptable strategy with the benefits and drawbacks of a standardized platform approach, emphasizing the economy of scale advantages. It explores whether Ford should continue or modify its global strategy, recommending segmentation based on common traits and standardization within those segments. The report also considers the potential for platform sharing among competitors, discussing the associated risks of privacy breaches and brand dilution. Finally, it assesses the leadership of Jim Hackett and his ability to forecast long-term trends in the automobile industry. The report utilizes the provided case study to analyze Ford's international business operations.

Running head: INTERNATIONAL BUSINESS
Ford global platform strategy
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1INTERNATIONAL BUSINESS
Introduction
The contemporary automobile sector is one of the most competitive and cost sensitive
sectors in the world. This is due to the reason that there are huge number of companies operating
in this sector and with the huge investment involved in the industry, it is challenging for the
operating entities to ensure the return on investment. In addition, the market diversity is also
posing challenges for the global automakers in meeting the differences in customer taste and
preference patterns. Global car brands are initiating different strategies in meeting these diversity
challenges (Timmer et al. 2015). For instance, Ford is one of the leading car brands in the world
that is having their presence across the world but is facing the issue of market adoptable
approach. The economy of scale for Ford is low and is affecting their profitability.
This paper will discuss about the benefits for Ford from the standardized platform along
with the drawbacks. In addition, the potential global strategy of Ford will also be discussed.
How would you characterize the strategy for competing internationally that Ford was
pursuing prior to the arrival of Alan Mulally?
Prior to the arrival of Alan Mulally, Ford followed the market adoptable strategy by
which they offered different car models according to local market trend and preferences. The
trend of automobile is different to that of the airliners due to the reason that automobile
manufacturing is more extensive compares to airliner manufacturing. This is due to the fact the
aircrafts are majorly manufactured in the United States with two of the leading manufacturers
based there and on the other hand, automobiles are getting manufactured across the world (Drauz
2014). In addition, airliners are manufactured not on the basis of individual market preferences
but automobiles are based on the local trends and patterns. Thus, it caused car manufacturers

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such as Ford to follow the market adoptable process. Ford gained success in the initial stage in
the international market mainly due to their market adoptable approach. Different markets got
products according to their needs. However, the economy of scale cannot get achieved.
What are the benefits of standardized platform strategy? Can you see any drawbacks?
The major benefit of the standardized strategy is the economy of scale. This refers to the
fact that Ford can use same parts, components, facilities and car platforms for their global
production and thus optimal utilization of the resources will be ensured. Moreover, off shoring
process can also be initiated with having common manufacturing process. Thus the cost
effectiveness in the operational facilities can be ensured. However, on the other hand, the major
drawback of this strategy is the inability to meet the market demand (O’Connor, O’Brien and
Choi 2015). This is due to the reason that customers across the world are having different
expectations from the car models. These expectations cannot be met by the standardized strategy.
Thus, the sales volume in different market might get affected.
What would you recommended that Ford undertakes in terms of continuing or possibly
changing the global strategy that Mulully put in place?
It is recommended that standardized strategy should be initiated to reduce the cost of
operation but it should not be in holistic basis. Thus, segmentation should be done properly and
foreign regions should be segmented on the basis of common traits. The standardization should
also be initiated for each of these segments. Thus, standardized process can be initiated for the
entire Asian market or European market. This will meet the market trends as well as reduction in
the operational cost (Tan and Sousa 2013). The positive factors of both the strategies can be
retained in this process. In addition, it should be noted that car platform can be standardized and

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designs are not because aesthetic factors are much region based and cannot be made
standardized. Thus, with the core platform remaining the same, cars with different designs can be
offered across the world.
Should more car competitors share building platforms to standardize their operations like
other industries?
There are number of instances where companies are planning to share the car platforms
such as Ford and Mahindra in the Indian market, General Motors and SAIC in the Chinese
market in order to reduce the cost of new product development. This will help Ford in staying
competitive by means of reduction of cost of development along with leveraging on the expertise
of the partnered firms. More frequent launches can be made in the market along with changing
along with the market trends. However, on other hand, the risk of breach of privacy will be there
in this case (Agrawal et al. 2013). The technology patented by Ford will get accessed by their
partnered firms. In addition, dilution of the brand value can also happen. It is highly unlikely
than Ford will get more competitive under the leadership of Jim Hackett because he lacks in
experience about the trends in automobile industry and will not be able to forecast the long term
trends.

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Reference
Agrawal, T., Sao, A., Fernandes, K.J., Tiwari, M.K. and Kim, D.Y., 2013. A hybrid model of
component sharing and platform modularity for optimal product family design. International
Journal of Production Research, 51(2), pp.614-625.
Drauz, R., 2014. Re-insourcing as a manufacturing-strategic option during a crisis—Cases from
the automobile industry. Journal of Business Research, 67(3), pp.346-353.
O’Connor, J.T., O’Brien, W.J. and Choi, J.O., 2015. Standardization strategy for modular
industrial plants. Journal of Construction Engineering and Management, 141(9), p.04015026.
Tan, Q. and Sousa, C.M., 2013. International marketing standardization. Management
international review, 53(5), pp.711-739.
Timmer, M.P., Dietzenbacher, E., Los, B., Stehrer, R. and De Vries, G.J., 2015. An illustrated
user guide to the world input–output database: the case of global automotive production. Review
of International Economics, 23(3), pp.575-605.