INFS 3065 Assignment 1: Ford IT Strategy and Management Case Study

This case study analyzes Ford Motor Company's IT strategy and management, examining the company's responses to competitive pressures and technological advancements. The analysis covers Ford's strategic decisions, including restructuring, cost reduction, and product differentiation. It explores the challenges Ford faces, such as environmental sustainability and market share, and its business priorities, including innovation and financial stability. The study applies Porter's Five Forces model to assess the competitive landscape and evaluates the impact of IT strategies on Ford's performance. It discusses the internal environment, IT performance evaluation, and strategic opportunities and risks. The case study also includes recommendations on IT strategies, the importance of technology, and the impact of management decisions. Finally, it considers the influence of Red and Blue Ocean strategies on Ford's future competitive edge.

Running head: INFORMATION TECHNOLOGY STRATEGY MANAGEMENT
Information Technology Strategy and Management
Name of the Student:
Name of the University:
Author Note:

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1. Ford in accordance with the decision of empowering managers and reducing
bureaucracy, and restructuring the operations worldwide has taken the transformation
plan which includes the implementing of new vehicle architectures, redesigned
product line-ups, and organizational cultures that are revamped. Its strategies also
have focussed on the negotiation and building relationships in order to have a broader
alliance for the electric and the self- driving development of the vehicle. The
reduction in the upper-level managers also would have increased the decision-making
ability (Guajardo, Cohen and Netessine 2015).
1.1 The factors on behalf of the managers which involve the insecurity of competition
and uncertainty. Ford had to implement new strategies in order to keep its
customers with themselves and so that they can remain competitive in the market
and sustain their competitive advantage. Unmanaged distribution channels, the
slow decision-making ability of the company and in order to grab the market and
take control of it before the other competitors do, are the factors that enabled the
company to take the strategic decisions.
1.2 The implementation of the Information systems in the business has helped to
enhance its business activity. The low-cost leadership strategy had been aiming at
reducing the cost of production by cutting down all the other cost operations. Also
the product differentiation strategy has helped the company to offer entertainment
platforms with the growth of smartphones and social media. These strategies have
helped the company to have a cost savings powerhouse, in the reduction of the
supply chain as well as achieve a reduction in the customer backorder lines. The
strategies also enable the company to eliminate the layers of management and
improve the communication process across different levels. The long term

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benefits of the company involve technological changes and the new competition
in the market and delivering its better customer value and satisfaction.
2.
2.1. The top five challenges of Ford are that the company’s present business plan
lacks environmental sustainability and it also is not financially stable. Restructuring of
the new products and the new inventions of the automobiles is also a great problem
for the company. The foreign market share is also not up to the mark that had been
initially expected by the company (Hwang et.al., 2013). Ford is also facing a problem
in the profit dealership, especially in China. Also, the global economic markets for the
company are at their worst performance, which was not expected by the company at
the beginning. The Chinese market does not allow the company to sell its products
since there are a lot of options already lined up in the global market scenario.
2.2. The top five business priorities of Ford involves the enhancement of the people’s
lives, advancing the planet, innovating future motion, gaining both environmental and
financial stability and sustainability, and finally having low-cost sales in the regions.
3.
3.1
3.1.1 According to the analysis of Porter’s Five Forces Model of Ford, the
competitive market scenario and the rivalry between competitors influence the
industry environment to a great extent. It competes against its top players which
include Toyota and General Motors (Etzion and Pe’er, 2014). The small change in the
customers’ demand has a great influence on the market of Ford. The moderate

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availability of the different substitutes of the company leads to higher bargaining
power of the customers of Ford. They tend to move to different other firms due to less
satisfaction. The bargaining power of the suppliers is of moderate force since they
have low forward vertical integration and they do not have the control or distribution
of the supply of their products to the company. The threat of substitutes is also
moderate. Ford’s customers can shift to the other substitutes because there is
moderate switching of costs, however the company rules in the context that its
products have greater convenience or safety. There are entry barriers for the new
entrants in the market because the cost of capital investment is pretty high as Ford has
effectively kept its standards high.
3.1.2. The balance of power resides with the competitions that the company of
Ford faces in the global market scenario. The companies like General Motors and
Toyota have a greater threat to the market share of Ford, since the new products and
they have greater control over the market.
3.1.3. The Porter’s Five forces including the competitive rivalry and the entry
of new firms along with the threat of the new competitors in the market and
the customers have a positive effect on the Information systems of the
company. Ford will be more encouraged to implement the low-cost effective
technology so that it can have a grab of the customers and the bargaining
power for the buyers reduce.
3.2
3.2.1 With respect to the case study of the Ford in 2019, in order to save its
competition and to succeed in the competitive market, the Ford strategies to
reduce the bureaucracy and empower the managers. This would help in the

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speed making decisions and cut the costs. The IT strategies involve the
reduction of the cost in order to gain its market back and so that the customers
cannot move to the other firms.
3.2.2. The balance of power resides over the managers, and in order to gain
profitability and reducing the bureaucracy, the company has decided to reduce
the number of managers in the firm so that the decision making could be easier
and it would have a positive effect upon the competitive market scenario of
the company (Liu and Shankar, 2015).
3.2.3. According to Routley, Phaal, and Probert (2013), if the bargaining
power of the customers as well as the suppliers of Porter’s Five forces is high,
then it would negatively impact the Information technology of the company.
However, in this case, the bargaining power of the suppliers is moderate and
rather weak. According to the case study, the company is striving to reduce the
cost of the products so that the customers can be kept intact. This means that it
has a negative impact on the System’s strategies.
3.3.
3.3.1. The internal environment of Ford does include its strong brand image
and its global supply chain. However it does not have a proper innovation
process due to the presence of a large number of managers and experienced
workers. There is also limited global scope if the production network and there
is slow decision making due to the increased bureaucracy. There are higher
costs as compared to its other competitors.
3.3.2. How do you evaluate the performance of IT?

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The technical support has an influence over the value chain activities of the
company Ford. The performance of the information technology is greatly
influenced by the production, distribution and the marketing as well as the
human resource activities. The automation software and the technology
supported customer service of the department of Ford is influenced to a great
extent by Porter’s value chain system since it does not allow the Ford to take
all the important activities according to the service delivery process as well as
the performance.
3.3.3. The IT strategies need to be developed based on the value chain analysis
of the company Ford. The company could face a number of challenges which
might include the loss of its overall strategy since the operations would get
divided. However effective value chain analysis would help the company to
take the decisions regarding the different strategies which involve the
reduction of costs as well as the entertainment development.
3.4.
3.4.1. The best kind of the IT strategies implemented by the company of Ford
involves the attraction of the customers by improving the brand equity and
also by using different channels of distributions like the authorized dealership
and having a strong as well as large portfolio in the developed nations.
3.4.2 The worst strategic mistake that the company did in the last four years
was to keep relying on its own IT team for technological advancements, when
competitors like Ford had already been advancing in technological
development, owing to partial outsourcing. This got the company significantly

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behind in terms of technological advancement in the automobile industry, the
ground of which it is still recovering.
3.4.3. The important strategic opportunities that Ford missed out on, were
paying less attention to the customer preferences due to which it had a decline
in its productivity and the profit as well. If the customer preference could be
taken into consideration and the passenger cars could be focussed upon, it
could have helped the company to keep its customers.
3.4.4. The possible risks that Ford faces in the present scenario are the decline
of the profit margin. A significant portion of the company’s revenues and
profits are dependent upon the products of the industry. Another risk is the
damage to the supply chain and its interruption. The negotiation with the
information could have helped in the review of the supply chain.
4.
4.1
4.1.1. According to me, the importance of Technology in the Ford Company
involve automatic emergency braking, with the detection of the pedestrian. It
also helps in the innovation of the information system and auto high beam
lighting.
4.1.2. Yes, Management does underestimate the role of IT in Ford.
4.2. I do not agree with the decision of the management to cut down on the number of
job opportunities. What would have been more feasible would have been to open up
newer firms, and allocating the extra workforce to those firms. This would have
increased production and would have also helped in keeping the workforce intact.

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4.3. Taking the examples from the Indian automobile industry (the companies like
Toyota, Suzuki, and Honda), it can be found that the market share is constantly
decreasing, and to increase the profitability of the companies, similar technique is
applied.
Due to advancements in automation, the requirement of the manual labour force has
been decreasing over time.
5. The factors which influence the Red Ocean strategy are the predictive automobile
technology, the backup cameras, the autonomous vehicles, and the smart home integration.
The factors responsible for the Blue ocean strategy that would be responsible for providing
Ford with a competitive edge in the future include the following:
 Automatic pedestrian detector
1499 cc solar SOCIOLOGY CRITICAL ANALYSIS
 energy-driven engine
 Face recognition engine ignition.

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References:
Etzion, D. and Pe'er, A., 2014. Mixed signals: a dynamic analysis of warranty
provision in the automotive industry, 1960–2008. Strategic Management
Journal, 35(11), pp.1605-1625.
Guajardo, J.A., Cohen, M.A. and Netessine, S., 2015. Service competition and
product quality in the US automobile industry. Management Science, 62(7), pp.1860-
1877.
Hwang, S.N., Chen, C., Chen, Y., Lee, H.S. and Shen, P.D., 2013. Sustainable design
performance evaluation with applications in the automobile industry: Focusing on
inefficiency by undesirable factors. Omega, 41(3), pp.553-558.
Liu, Y. and Shankar, V., 2015. The dynamic impact of product-harm crises on brand
preference and advertising effectiveness: An empirical analysis of the automobile
industry. Management Science, 61(10), pp.2514-2535.
Routley, M., Phaal, R. and Probert, D., 2013. Exploring industry dynamics and
interactions. Technological Forecasting and Social Change, 80(6), pp.1147-1161.