Strategic Management Report: Ford Motor Company's Business Strategies

This report provides a strategic management assessment of Ford Motor Company, examining its approach from both outside-in and inside-out perspectives. It analyzes the application of Porter's Five Forces, generic strategies, and the value chain within the company's operational framework. The report delves into the models and theories Ford utilizes, including purpose over profit, managing oneself, the five competitive forces, and decision theory, to achieve its long-term aims. It contrasts the two strategic perspectives, highlighting their differences in focus and application. Furthermore, the report discusses Ford's historical context, market dynamics, and the impact of factors like competition and economic shifts on its business models and strategic decisions. The analysis underscores Ford's use of these strategies to maintain a competitive edge and achieve financial goals, providing insights into the company's response to market challenges and its strategic evolution.

Strategic Management
Assessment

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of company............................................................................................................3
Strategic management perspectives: Outside-in perspective and inside-out perspective......3
Models/theories used by Ford Motor Company in business..................................................5
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management is a part of management which comprise decisions to evaluate
number of strategies and implement the best among them by which goals and activities can be
attained. Its purpose is to gain competitive advantage and make higher profit as compared to
other entities operating in the same industry (Alfes and et. al., 2013). There could be more than
one decision based on requirements of a firm and to improve its performance. In other words, it
can be defined as prediction of unforeseen contingencies. The company taken in this report is
Ford Motor whose headquarter situated at Dearborn, Michigan, United States. The report
comprises an evaluation outside in and inside out perspective together with an analysis of models
applied in the entity. Along with this, long term goals and aims and various tables or graphs
depicting position of entity in the market.
MAIN BODY
Overview of company
Ford Motor Company is an American auto-maker having its head office at Michigan US.
It operates in international markets as well which makes it an multinational company. The
founder was Henry Ford who incepted it on June 16, 1903. It deals in auto-mobiles and
commercial vehicles under the brand name of Ford and luxury cars are being sold under Lincoln
brand (Budhwar and Debrah, 2013).
Strategic management perspectives: Outside-in perspective and inside-out perspective
Outside-in perspective in strategic management
According to outside-in perspective, the focal point in customer value in every decision
made in the corporation. Entities opt for this to create products that will provide high level of
satisfaction and is considered as a way to become successful. In other words, needs of a buyer is
the ultimate foundation on which strategies are made for implementation to fulfil demands and
create value in the marketplace (Chelladurai and Kerwin, 2017). Under this, a company think
from the perspective of its customers including potential and then proceed with any action. A
clear distinction between what products are being produced and what actually the individuals
need should be understood. This helps in exploring new opportunities to increase the demand.
Micheal Porter penned three main strategies which can be done under this, these are:

Five Forces for evaluating external factors of Ford company: It provides insights of the
auto-mobile industry in which Ford Motor is operating.
Generic strategies to be implemented at business level: Porter has given two different
elements which are directed towards cost leadership in carrying operations at global level
(Huselid and Becker, 2011).
Value chain for internal analysis of Ford Motor: It has been defined as a connection
between internal and external forces which help the firm to implement various strategies and
decisions.
Ford Motor Company uses Porter's Five forces to assess various aspects pertaining to
competition, suppliers, buyers, substitution and new entrants. This is done to get results about
number of factors in industry. If the outcomes are in favour, this means industry is offering
opportunities to work on advance level for creating something innovative. Furthermore, Ford
always leave scope for adjustments in existing strategies according to pressure from various
external forces. Apart from this, low cost and differentiation which is concerned about
conducting business activities at low cost and providing variety of products completely different
from competitors. It majorly focuses on competitive advantage with a view to create a stability in
its activities so that cars can be manufactured according to customers' demands (López-Nicolás
and Meroño-Cerdán, 2011).
Inside-out perspective in strategic management
It is completely opposite to outside-in perspective which means that a company focuses
on its own capabilities, competencies and strengths. It was first introduced by Edith Penrose,
who developed Resource-Based Value according to which available resources must be utilised
optimally to achieve above-mentioned elements for future growth. Company may have problems
in adopting changes in business environment. There is no involvement of customers' perspective
and it can be said that, shareholders are considered valuable than buyers because, they have
invested their funds in the entity. Ford Motor Company uses this approach to make choices and
decisions which can add in the efficiency of internal systems and processes. It is useful in
gaining from short term objectives. Along with this, financial leverage gets stronger by
mitigating weaknesses in the business practices (Marvel, Davis and Sproul, 2016).
It has been termed one of the high profit making company. The position it has reached
currently is due to its strategic management. It has successfully used these two perspective to

create a balance between customers and shareholders. There is one more concept available in
inside-out perspective which is core competence. It refers to skills and knowledge of employees
to provide a base so that entity can maintain sustainable competitive advantage. It can very well
assessed by using VRIO framework.
Comparison and contrast of the two perspectives
The two perspectives have underlying focus entirely different which creates some
differences that need to understood for opting the right one, it is as follows:
 Outside-in is more about views and needs of customers whereby decisions for
manufacturing products that will fulfil all the criteria are taken. On the other hand, inside-
out takes into consideration appropriate allocation of various resources and capabilities. It
emphasizes in developing core competencies.
 The two aspects of low cost and differentiation in which adjustments is made according
to need in the market. It is done with a view to gain competitive advantage. On the
contrary, inside out holds the fact that competitive advantage is achieved through using
the resources strategically (Mahoney and Kor, 2015).
 Outside-in emphasizes on various guidelines, directions which helps employees in
making products having each and every element of company's instructions. Whereas,
inside-out perspective reply on the fact skills and knowledge of people working in
organization contribute to its success.
Models/theories used by Ford Motor Company in business
An organization apply a specific business model which defines plans or rationale to make
profit. It is a part of strategic management that put focus on business practices, deals,
infrastructure and many more elements. It is the structure upon which viability of a business
depends. Number of policies and processes are implemented to achieve goals. Authors have
developed variety of theories and models according to number of situations. These can be
changed as per the circumstances (George, Schillebeeckx and Liak, 2015).
Business model refers to a structure which is implemented to assist the companies in
creating plans and policies so that it can achieve its goals. In the words of Peter Drucker, “a
business model is supposed to answer who your customer is, what value you can create/add for
the customer and how you can do that at reasonable costs. Ford Motor has come a long way to
achieve the position in current scenario. It is aggressive about its growth and profitability. It has

cut off costs and utilised it in using capital for making cars which can help the company is
gaining highest growth. Ford has also created a special team dedicated to manage its strategies
for creating a strong position in the market. It is one of the oldest car manufacturing companies.
When it was the only entity producing cars in America, it had monopoly in market. Thus, it was
free to decide prices, technology, etc. also, it had market dominance (Emeagwal and
Ogbonmwan, 2018).
After some year, during its evolution, Japanese and German car manufacturing
organizations entered into business world of US and other countries. This made Ford lose its
monopoly in the domestic market. The new entrants contributed to tough competition which
negatively affected business of Ford. It become complexed for it to survive with this degree of
competition. From the data of 2018, it has business in North America, South America, Middle
East and Africa, and Asia-Pacific. Due to various factors like inflation, currency fluctuations,
unfavourable exchange rates etc. added more difficulties for it to carry its business. The demand
for this brand was reduced because of lack of awareness between the people about this brand
reason being monopoly took huge place in the world. So that company can not achieve their
goals effectively and together company faces lot of problems and issues with in the US market
negatively. By this Ford was the only one who was much occupied with the public pressure
under the monopoly system. At the same time this company sells their model at very much
higher level so that mostly people are not able to purchased them that's why company faces
different phase in an negative manner. This is all because in the US market their model demand
was very high but higher strategy of pricing lost their customer negatively (Rani, 2018).
Due to these circumstances of monopoly Ford has launched their 2 business models in
order to increase their sales according to the consumer's choice effectively. Ford sells over the 6
million vehicles every year with in the U.S. Market in order to emerge with the financial issues
to stay viable at the market place. This vehicles company has expanded their business globally
with the helps of their two business model all over the decades. As per their global success Ford
has five large geographical classifications such as South America, North America, Middle east
and Africa and Asia specific (Morley, Heraty and Michailova, 2016). Whereas, North America
have lot of development opportunities for this company so that ford can easily achieve their
goals effectively with the helps of this Ford started their business model and also able to give full
facility to people in a particular way. With the help of this (business model) company is able to

earn their profit efficiently because they launched their model according to the customer budget
effectively (Rossi, C. and et. al., 2016). In order to manage their business models Ford uses
several business theories which are given below:
Purpose over the profit: Purpose is mainly enhance the key value of the company in an
attractive way. It always refers to the several term like what you are, what you are going to do
and so on. Whereas profit explain the overall income from the company by good customers in an
effective manner. Therefore, overall both part tell about the passion and strength of the company
owner effectively (Giannakis, Harker and Baum, 2015).
Managing oneself: This business theory is very much important for the business owner
who always think about the company in a positive manner and in order to increase their sales
effectively. As per this manager of the company manage their work and all operations
accordingly in a effective manner.
Five competitive forces: According to this business theory company's manager always
try to cope up with their business rivals in order to handle their work easily. It also refers to the
strategy term whereas, this can be said that innovative ideas or thought can be used effectively.
On the general basis company mainly focuses on the different things like suppliers, customers,
new entrants and product of substitute. With the help of five forces shape it justify that company
needs to maintain their organisation structure in a effective way in order to gain competitive
advantages effectively (Junni and et. al., 2015).
Decision theory: As per this company owner focused on their actual work in order to
make good decision in an appropriate manner. As per this company also make several ways
which is depends upon the presented frame in or to gain relevant data from different sources
efficiently. With the help of this concept company make their decision in a well manner to make
future growth and development in a creative manner (Sthapit, 2018).
Long term aims of Ford:
Long term aim of the company included in the restructuring of an organisation process in
order to operate their business profitably in an effective manner. As per this company will form
their marketing mix channel in a particular way in order to provide good and service to the
people directly (Martínez-Ferrero, Banerjee and García-Sánchez, 2016). This situation is only
possible when Ford will remove one plan from another country. With the having of long term
purpose company manufactures innovative or unique product in order to meet the consumer

requirements and wants as per the perfect value (Nowacki and Bachnik, 2016). For the better
understanding of this long term purpose there are different ways which are given below:
Staying profitable: As per this goal Ford maintain there profit accordingly in oerder to
collect cost of business. Company also focusing on the both cost production and operation as
well.
People and resources and productivity: In this employee maintain their company's
equipments, machines and productivity of firm in an effective manner. So that they can achieve
their goals effectively in a specific manner.
Excellent customer services: On the basis of this company can make their lot of
potential customer by providing them great facilities with good product. This develop the
revenue value of an organisation so that their can keep happy and company will achieve their
goals effectively (Zarim and et. al., 2017).
Sustainable growth: The company development is based on the future data and
projections in which company fix their assets value on the basis of financial aspects effectively.
By this company can achieve their goals easily.
Dealing with change: It is the regular process of management in order to deal with the
different creative processes within the organisation to deal with a developed market in an
effective manner. Whereas Ford follow this structure in order to attain their goals effectively in a
simplest way.
Reaching the right customer: This is the good aim of Ford by this concept their
employees can target the good customers in order to understand them and also satisfy their needs
effectively. By developing this aim all customers will help the company in order to enhance their
sales and productivity effectively (Boxall, 2018).
With the help of these purposes company can make their effective goals and able to
achieve them in an appropriate manner. So that the Aim of company is very clear in a effective
way. Now it can be said that Ford can easily accomplish their goals and also able to staying for
long term with in the market place effectively.
Growth strategy rate of Ford:
According to the growth strategy make purpose in order to make large market share
effectively. There are four major growth strategies which are includes in product development.

Market penetration, market development and diversification. Now these strategy are explain
below:
Market penetration: It is the expansion growth strategy. It mainly collect development
of market and current product in the market. According to this there is lot of competition where
in any organisation can determine the strategy of market expansion. As per this if any business
does not have any new market than the business is not able to enhance their sales and profit
effectively (Approaches to strategic hrm - strategic human resource management, 2019). In
context to Ford, they use market expansion strategy in order to find and discover the unique
product in a different way.
Market development: As per this company expend their product line in an effective
manner with the help of their sales and profit effectively. In reference to Ford, develop their
market by using effective tools like they mainly focus on the regular selling and adopt different
technologies in order to make changes in their company in a better way.
Diversification: In this any firm sell their new product in to the market but some time
this type of strategy can be difficult or risky. In this company need plan very much carefully in
order to use the diversification growth strategy in a effective way. In this company also describes
the consumer in the market like they are potential or not. In reference to Ford, they do not follow
this strategy because they have large background in an effective manner (7 Steps to Strategic
Human Resource Management, 2019).
Product development: In this company expand their product with aiding the several
kind of features in an effective manner. In this company always selling their product in the
existing market with the good specification of product. According to the product development
company also adopt lot of new features which attract customers. In reference to Ford motor
company they aid different type of features in their product so that customer can get easily attract
in an efficient manner.
CONCLUSION
From the above report, it has been concluded that strategic management is an essential
part of a company which helps it achieving objectives and goals. It involves certain steps and
actions which should be followed every time it has some changes. Furthermore, it requires
precision as all the decisions are based on strategic management that have happened in the past.
A company can create a positive image by carrying work efficiently. Along with this, it

contributes to productivity which has direct impact on profitability and performance. Also, it is
necessary to gain competitive advantage and become a leader in the sector it is operating. A new
as well as existing businesses would require strategic manager and it is done by manager
responsible for handling the company strategically.

REFERENCES
Books & Journals:
Alfes and et. al., 2013. The link between perceived human resource management practices,
engagement and employee behaviour: a moderated mediation model. The international
journal of human resource management. 24(2). pp.330-351.
Budhwar, P. S. and Debrah, Y. A. eds., 2013. Human resource management in developing
countries. Routledge.
Chelladurai, P. and Kerwin, S., 2017. Human resource management in sport and recreation.
Human Kinetics.
Huselid, M. A. and Becker, B. E., 2011. Bridging micro and macro domains: Workforce
differentiation and strategic human resource management.
López-Nicolás, C. and Meroño-Cerdán, Á. L., 2011. Strategic knowledge management,
innovation and performance. International journal of information management. 31(6).
pp.502-509.
Marvel, M. R., Davis, J. L. and Sproul, C. R., 2016. Human capital and entrepreneurship
research: A critical review and future directions. Entrepreneurship Theory and
Practice, 40(3), pp.599-626.
Mahoney, J. T. and Kor, Y. Y., 2015. Advancing the human capital perspective on value creation
by joining capabilities and governance approaches. Academy of Management
Perspectives, 29(3), pp.296-308.
George, G., Schillebeeckx, S.J. and Liak, T.L., 2015. The management of natural resources: An
overview and research agenda.
Emeagwal, L. and Ogbonmwan, K.O., 2018. MAPPING THE PERCEIVED ROLE OF
STRATEGIC HUMAN RESOURCE MANAGEMENT PRACTICES IN
SUSTAINABLE COMPETITIVE ADVANTAGE. Academy of Strategic Management
Journal, 17(2).
Rani, G., 2018. Strategic Human Resource Management (HRM) Practices Adopted By Indian
Insurance Companies. International Journal of Research, 5(7), pp.1180-1185.
Morley, M.J., Heraty, N. and Michailova, S., 2016. Managing human resources in Central and
Eastern Europe. Routledge.
Rossi, C. and et.al., 2016. The strategic assessment of intellectual capital assets: An application
within Terradue Srl. Journal of Business Research, 69(5), pp.1598-1603.
Giannakis, D., Harker, M.J. and Baum, T., 2015. Human resource management, services and
relationship marketing: the potential for cross-fertilisation. Journal of Strategic
Marketing, 23(6), pp.526-542.
Junni, P. and et.al., 2015. The role of strategic agility in acquisitions. British Journal of
Management, 26(4), pp.596-616.
Martínez-Ferrero, J., Banerjee, S. and García-Sánchez, I.M., 2016. Corporate social
responsibility as a strategic shield against costs of earnings management
practices. Journal of Business Ethics, 133(2), pp.305-324.
Sthapit, A., 2018. Management of Human Resource Surplus: Exploring Strategic
Manoeuvres. Kosh: Journal of Employee Provident Fund, 85(1).
Nowacki, R. and Bachnik, K., 2016. Innovations within knowledge management. Journal of
Business Research, 69(5), pp.1577-1581.
Zarim, Z.A. And et.al., 2017. The role of organisational commitment, leadership style, strategic

human resources practices and job satisfaction towards sustainable tourism industry:
comparative study in the UAE and Malaysia. In Leadership, Innovation and
Entrepreneurship as Driving Forces of the Global Economy (pp. 255-268). Springer,
Cham.
Boxall, P., 2018. The development of strategic HRM: reflections on a 30-year journey. Labour &
Industry: a journal of the social and economic relations of work, 28(1), pp.21-30.
Online
7 Steps to Strategic Human Resource Management. 2019. [Online]. Available
through<https://www.deputy.com/blog/7-steps-to-strategic-human-resource-
management>.
Approaches to strategic hrm - strategic human resource management. 2019. [Online]. Available
through<https://www.slideshare.net/manumelwin/approaches-to-strategic-hrm-strategic-
human-resource-management-manu-melwin-joy>.