Ford Motor Company: Risk Assessment & Industrial Policy in New Markets

This report examines Ford Motor Company's potential expansion into the international markets of Korea and Saudi Arabia. It identifies three major risks the company may encounter: the increasing demand for electric vehicles, fluctuating economic factors, and potential shortages of parts. For each risk, the report offers suggestions for mitigation, such as adapting to electric vehicle production, carefully considering economic factors, and diversifying supply chains. Furthermore, the report analyzes the industrial policies and factor conditions in both Korea and Saudi Arabia that could support Ford's success, including Saudi Arabia's supportive industrial development fund and Korea's technological advancements. The report concludes that by addressing these risks and leveraging favorable industrial policies and factor conditions, Ford can successfully establish and grow its business in these new international markets. Desklib provides access to similar reports and solved assignments for students.

Global Business
Environment

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Three major risks that company can encounter with suitable suggestions.............................1
Industrial policy and factors conditions supporting in company's success............................4
CONCLUSION................................................................................................................................6
REFERENCES ...............................................................................................................................7

INTRODUCTION
The global business environment in different independent countries with factors affecting
decision making on capabilities and resources use of organisation. (Amirov, 2018)Ford Motor
Company is an American multinational auto-mobile founded in 1903 by Henry Ford with
headquarter in Dearborn, Michigan, United States.(Basualdo and Basualdo,, 2021) In this
research manager of Ford Motor Company wants to venture into international market with
manufacture and marketing in Korea and Saudi Arabia, with the help of discussion of three
major risk that company can encounter during the venture and solutions to resolve the future
risks. At last different industrial policy, factor conditions of country that can help in company's
success.
MAIN BODY
Three major risks that company can encounter with suitable suggestions.
Major risks that FORD can encounter during international manufacturing and marketing
in Saudi Arabia and Korea are such as,
Risks Suggestions
Electric vehicles: There is a massive shift
towards electric vehicles, as people are
demanding more of EV cars as they more
affordable on long term period and because of
constant increase in fuel is affecting customers.
Because of fuel increasing people are now
considering EV cars more. (Guo and et.al.,
2020)Since FORD is lacking in making EV
cars it can affect company new venture into
international market. Electric vehicle are
giving more benefits to customers in long term
basis so now people are attracted towards
those, but there are people are still preferring
commercial cars but due to increasing in fuel
Electric cars is major risk on business venture
into internationally, a appropriate solution to
consider risk and expand intentional is
company needs to adapt and produce EV cars
in future to offer customers demanding them.
By introducing electric vehicle in production
ensure more profits in internationally and local
on company, as it is more in demand and
people are demanding more of EV cars, as it
provides them long term profits. Company
should adapt EV cars in productions. Due to
globalization fuel sources are limited which
affect auto-mobile industry in long run process,
to avoid such situation in future many
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customers are now not buying new cars. Which
can affect directly company expansion. Electric
cars are now in trends and customers are
getting attracted towards them more, which
affect company's sales and future benefits of
expansion into international. (Porfiryev,
2018)Since FORD is planning on expanding
business into international market of Saudi
Arabia and Korea and due to high demand of
electric vehicle it become difficult for industry
to expand in their. Still is a small risks that
FORD can consider, as there are customers
who demand fuel cars.
companies are adapting electric cars, it ensure
future benefits to industry. Long term profits
company need to introduce EV cars in
upcoming years with same comfort and
advancement from existing cars. Since FORD
is offering luxury and comfort with new
production of electric cars and giving same
with better benefits will ensure long term
profits. Offering customers demand for long
term basis provides more benefits in and
ensure successful new venture business into
internationally.
Economic factor: It is the most crucial factor
affecting sales of car, in respect to fuel
economy, security and gas emissions of
vehicles. With competitive pressures on
quality, price, manufacturability and execution
is greater than ever.(Hao,, Guo, and Wu,2022)
Economic factor includes unemployment rate,
interest rate, disposable income, exchange rate
and gross domestic product. It plays important
role in determining number car sales in each
country, it also determines performance of
other auto-mobile industry. Interest rates, if
interest is low is ensure easy auto-mobile
financing and provide high sales, but is interest
is high it put small and less expensive cars
more expensive for customers. (.Harerimana
and Mtshali, 2020)Disposal income, the
growth of fuel purchase of cars in countries are
In suggestion to solve economic factor FORD
needs to take consider of economic factors for
benefits on new business venture into
international market. For making market and
operation into Saudi Arabia and Korea
company needs to focus on multiple economic
factors that can affect its venture, to avoid such
possibility organisation needs to consider every
aspect of economic changes that are happening
and that can possibly could happen in
upcoming future an affect company. Taking
into consideration of changes into interest rate
in countries and try to offer products according
, so many customers can buy to ensures more
profits. As unemployment rate of Saudi Arabia
is less so it will not gonna affect the sales of
company and also less in Korea so this factor
will not affect company venture there. Inflation
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inflation on rise, but with the low wage ensures
customers not able to purchase vehicles from
disposable income. Unemployment rate, if the
unemployment of country is low the
purchasing and demanding power become low
which cause direct affect on sales of cars as
they are not available to purchase. Inflation, if
it lower it affect on customers to afford
expenses, high inflation means high cost and
more sales but affect on buyers.
rate can also affect company venture to avoid
the risk needs, to come up with better solution
to products and offer more affordable cars to
customers to increase sales. By taking into
consideration all these factors and take
necessary action against all issues it will ensure
smooth venture into internationally without
any circumstances.
Shortage of parts: in auto-mobile industry
company import their spare products of cars
from other countries such as china and because
of recent pandemic issues of trading country
can cause declined and affect every industry in
one or the other way.(Nosov, and Kiseleva,
2019) Due to issues in trading it affect
operation, as to import spare parts of products
get delay or cancelled or the price range
become high directly affect company
production and led to failure
Technology factor: it is the most significant
factors that helps to increase in sales of every
category, as it is human tendency to go for
latest technology and advance products that are
available in market. Technology helps to lower
production cost, with low price ensure access
in wider market and more profit.(.Uyarra,,
Zabala-Iturriagagoitia,2020) Constant change
in technology ensure risk on auto-mobile
industry as there are new technology every
To avoid shortage of parts FORD needs to
imports its parts from some other place to
continue production. Conditions are getting
better with trading in china so company can get
their part. For long term basis organisation
needs to concentrate on getting spare parts
other place to continue its products without any
circumstances. To ensure successful business
venture in Saudi Arabia and Korea company
needs to focus on providing production and
provide cars to customers for success.
To avoid technological factor affect company
sales and profits, organisation needs to
consider new technology into production.
(Piant, Lucchese and Nascia, 2020)As latest
technology cause increase in price and
customer not buy products, to resolve this
issues company needs to focus on providing
cars with latest technology but in less price to
increase sale. Taking into consideration of
these factors it ensure successful venture into
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now and then which cause risk on company
international venture and not every country has
latest technology available. So it become
difficult to operate in those countries with
products that are latest technology update.
Which affect sales. To keep up with every
technology in market sometimes become
difficult as there are new technology not all
companies can adapt every tech into their
operation.
international market.
Industrial policy and factors conditions supporting in company's success
Industrial policy is a strategy effort by state to encourage economic transformation, it
provide framework of regulations, reservation and rules of activity for private and public sector.
(Wen, and et.al., 2021). Its main aim is to reduce non-competitive trend and prevent concentrate
on economic power in hands of only few industrial companies, encourage development and
growth of all parts of economy focus on manufacturing sector.
In context to Saudi Arabia funds as Saudi Arabia industrial development fund (SIDF) to
position on industrial and logistics leader through participation of private sector in Saudi Arabia
market. Country has such no restriction of new entrant coming into market, rather encourage
industries into market supporting competitive enterprise. SIDF offers a range to short, medium
and long term loans also technical assistance. ( Flanagan, and Magro, 2020)As this policy can
helps company to establish successfully to bring new venture into market of Saudi Arabia and
ensure future success. Because the country has no restriction and rules related to bring industries
and fund policy into market, it becomes easy and benefits with encouragement of new venture of
business which ensure success for company.
In context to Korea has guided its economy for spectacular growth, with responsibility of
allocating funds into industrial and financial sector with great competitive discipline and
regulatory oversight. Establishing new framework affect on policy with addition on complexity
of transition, with rising technology level and development of institution which led to increase
flow of information and reduce conflict to economic progress.( Hoek,, 2021) The government
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provide subsidies through fiscal and financial incentives also indirect support to promote
infrastructure to selected industries, with various other measures to promote industries growth in
market. Industrial policy is concerning on financial sector with emerging role of state to
epitomized Korea's environment and experience of other developed economies. (Wei,
Thurasamy and Popa,, 2018)Since there is biased policy in Korea still it gives benefits to FORD
to operate and marketing there, as there is more developed technology available in country which
will benefits to company in many ways. Hence Korea industrial policy will benefit successful
new business venture into market of Korea and helps to establish successfully.
Country factors conditions includes nation production resources, such as infrastructure,
land, natural resources, natural resources and labour force, it creates important factor of
production. It provides elements to create country's economy such as technological innovation,
capital, large pool of skilled labour and infrastructure.
In context to Saudi Arabia has huge infrastructure land and natural resources with high
labour force available in country with land is huge for Industries to develop and grow, it has fuel
efficiency in there which become beneficial for company has it produce cars. With huge
infrastructure land it allows industries into market to establish and grow which cause more
beneficial for FORD to establish into market. (International Labour Organisation (ILO), 2020)
(With production fuel in country it will cause more benefits for company it helps to develop and
ensure more customers to buy cars and ensure hug sales. With labour force available in country it
become more easier for organisation to hire them and get production starred easily. To grow in
Saudi Arabia for FORD as country offers infrastructure to set industry over and has major labour
force available which provides new business venture successful and long term benefits.
In context to Korea in textile and apparel industry has major role in country development
with competitive decrease in labour cost the country development is increasing. Country has
achieved success in combing economic growth and reduction in poverty. Country has many
things to offer to new industry and development is major in there,production resources are huge
and available in there. With maximum labour force available. As it has less competitive in auto-
mobile industry that it will become easier for FORD to establish in market of Korea, it provide
natural resources for company as gain profits.(Vargas,, 2020) With huge labour force available in
country it will be benefits for company to hire for its production and operation in there, which
will led to success and profits for company. For new business venture and marketing in Korea
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with the helps of factor conditions available in market of Korea it will become more benefits and
successful establishment and future benefits for company.
CONCLUSION
From the above report it concluded that FORD can start its new business venture in
market of Saudi Arabia and Korea without any issues. By considering factors that can affect
company growth and establishment in countries are to be taken into consideration before operate,
such as, electric vehicle company needs to adapt into its production and offer into market for
future benefits. From economic factor analysis company needs to consider all economic factors
of countries that can affect future of company for success. From technology factor it ensure that
company already up to date with latest technology available in market and considering them
customers. At last with industrial policy and factors condition in related and supported company
growth and success of FORD.
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REFERENCES
Books and Journals
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Competitiveness and Economic Development of the Country. Administrative
Consulting.
Basualdo, E. and Basualdo, V., 2021. Confronting Labor Power: Ford Motor Argentina and the
Dictatorship (1976–1983). In Big Business and Dictatorships in Latin America (pp.
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from twenty major cities in China. JournalofCleanerProduction, 249,p.119372.
Porfiryev, B.N., 2018. The green factor of economic growth in Russia and the
world. Studies on Russian Economic Development, 29(5), pp.455-461.
Hao, Y., Guo, Y. and Wu, H., 2022. The role of information and communication technology on
green total factor energy efficiency: Does environmental regulation work?. Business
Strategy and the Environment, 31(1), pp.403-424.
Harerimana, A. and Mtshali, N.G., 2020. Using Exploratory and Confirmatory Factor Analysis to
understand the role of technology in nursing education. Nurse Education Today, 92,
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International Labour Organisation (ILO), 2020. COVID‐19 and the World of Work: Country
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Nosov, V.V. and Kiseleva, N.P., 2019. The Role of the Resource Factor in the Socio-Economic
Development of the Eco-system. International Journal of Recent Technology and
Engineering, 8(4), pp.3638-3644.
Pianta, M., Lucchese, M. and Nascia, L., 2020. The policy space for a novel industrial policy in
Europe. Industrial and Corporate Change, 29(3), pp.779-795.
Uyarra, E., Zabala-Iturriagagoitia, J.M., Flanagan, K. and Magro, E., 2020. Public procurement,
innovation and industrial policy: Rationales, roles, capabilities and
implementation. Research Policy, 49(1), p.103844.
van Hoek, R., 2021. Lessons from CSCMP Supply Chain Hall of Famer Henry Ford and the
research that they call for in modern supply chains. International Journal of Physical
Distribution & Logistics Management.
Vargas, M.J., 2020. Dodge v. Ford Motor Co. at 100: The Enduring Legacy of Corporate Law's
Most Controversial Case. Business Lawyer, 75(3).
Wei, L.H., Thurasamy, R. and Popa, S., 2018. Managing virtual teams for open innovation in
Global Business Services industry. Management Decision.
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