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Ford Approaches and Corporate Strategies

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 3181 words Published: 1st Dec 2020

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EXECUTIVE SUMMARY

The main objective of this case study is to analyse the different approaches and corporate strategies used by Ford. This report analyse new strategies for the international growth for Ford Company. It also evaluates the current organisation structure, competitive strength, financial performance and technical competencies of Ford Motor Company.

INTRODUCTION   

Ford Motor Company is one of 4th largest company in world and activated all over in 38   countries all around the world. Company has worldwide sales of $189 billion and assets over $338 billion. It has workforce of nearly .5 million people. Ford is planning for smart future and to fulfil this dream it require consistent focus on operational development.

Corporate strategies are the strategies which help any organisation to expand and develop a particular market to compete and improve their strategies to achieve their particular goals. It also highlights the competitive strength of Ford Company and their new strategies for international growth.

Ford Motor’s corporate strategy-The overall strategy elements for the corporation as a whole, the corporate strategy involves four kinds of initiatives: making the necessary moves to establish positions in different business and achieve an appropriate amount and kind of diversification. Now Ford want to become world trusted mobility company. Ford has well known brand image and consumer trust. Ford is focusing on produce more on electric vehicle and hybrid cars and advancing their technology capabilities.

Question 1

Corporate strategies for Ford Motor

Ford Motor Company is the fifth world biggest automobile which is supported by firm’s intensive growth strategies .intensive strategies are used for the growth of organisation. However ford business is depend on the varying emphasis on market penetration, product development and market development. Ford motor intensive growth and generic strategy determine the company approaches to expand their business. (Generic &intensive growth strategies, 2017)

Ford Motor intensive strategies

Market penetration-the primary most growth strategy of Ford is market penetration. This strategy involves selling more products to their current customers to expand and flourish their business. Ford increases their number of its dealerships and increase sales volume to implement this growth strategy.

Product development- the secondary intensive growth strategy of ford is product development. This strategy involves offering new products to increase their sales revenue. This strategy is applied by R&D investments for their new products likewise all electric Ford Focus Electric to improve business growth and competitive advantage.

Market Development-this strategy is minor and supporting intensive strategies for ford growth. (Martinez, 2017)

(Ford Motor Company, 2015)

Ford Motor attractive business plans –to revamp electric car production

Ford Motor announced a plan to launch electric vehicles at Michigan plant which is making Ford Mustang. Initially they said that they would build both hybrid autonomous vehicles and electric but now they pivoted more towards electric cars at the plant   and says that plant build models based on Ford‘s next generation flexible cars architecture. Ford also introduced upcoming Mustang inspired SUV .Ford motor is going to invest $850 million in this altogether. (Green cars report, 2019)

Ford future models plans

Ford also outlines its vision for the future .the Blue oval executive president presented the company updated five year strategy in New York conference. These five platforms would be scalable and flexible to create a full family of vehicles. In this focus company introduces latest small car platform that is lighter and stronger than before.

Ford Motor will introduce two upcoming three –cylinder power plants and a new eight space torque –convertor automatic to improve efficiency, lower running costs. Ford mainly focus   being ground breaking, standard setting vehicle in order of safety, value of money, technology through offering advance features in stylish packaging.

Question 2

Organisation structure

Ford Motor organisational structure is divided according to the regional markets .the characteristics of this corporate structure are based on the global and nature of ford business. Regional market conditions according to which ford organisational structure based and control operations. (Smithson, 2018)

There are some main features of Ford Motor Company:

Corporate hierarchy-Ford is following its old corporate hierarchy on organisation structure such as Executive vice presidents report to CEO, middle managers report to executives’ presidents. The senior management control the junior like top to down control.

Geographical divisions- The second division is depend on geographical divisions .Ford motor divided into several regions per continent .there are mainly three regional divisions that cover all market the whole world. These are –a) The Americas, b)) Europe, Middle East and Africa c) Asia Pacific.

Globally function groups-The next company organisational structure is functional groups which presents specific bushiness function. These groups are under the vice president. there are few Ford organisational structure :

Global marketing, sales and service.

Global manufacturing, product deveoplement

Global purchasing, communications, finance, legal and accounting

                Financial performance- annually income statement data

Fiscal period December

2016

2017

2018

2019

Sales

141 546

145 653

148 294

145 630

EBITDA

12388

8637

-

-

Operating profit

7695

3674

7002

7962

Net income

4596

7602

3677

3608

P/E ratio

10,5

6,57

8,32

10,0

EPS($)

1,15

1,90

0,92

0,98

Dividend per share($)

0,85

0,65

0,73

0,63

Yield

701%

5,20%

9,54%

6,16%

Reference price

12.13

12.49

7.65

9.75

(Market scanner.com)

People resources - activities which are important for staffing organisation and sustaining level of employee performance. People are the company s only sustainable competitive advantage. The functions of HRM at Ford –recruitment include advertising, screening, testing, referencing, selecting, interviewing, application process.

The second thing is training and development include induction, training, competency based training, team development training and job specific training.

Benefits and compensation include payroll, ford privilege club.

Labour relations and corporate citizenship. Ford has 67 nationalities and company has encouraged English speaking classes to their employee

Technical competence-ford business is driven by consumer focus, resourcefulness, creativity. They are inspired and diverse team. Leader in environmental responsibility heir integrity is never compromised and make positive contribution to society.

b.Competitive strength of company-innovations in technology and procedures like virtual assembly line, centralized global, single supplier model, risk management framework and commitment to environment protection by developing low emissions technologies. Excellent engineering and production workforce possessing global competencies as well as capabilities of localization of products .moreover excellent knowledge and analytics of global markets that helped them to grow into truly global company.(ford.co.nz, 2019)

Weighted Competitive strength

Strength measure

Importance weight

Ford

Riva1

Honda

Rival 2

Volkswagen

Quality/product performance

0.10

5/0.50

10/1.00

8/0.80

Reputation

0.10

7/0.70

10/1.00

8/0.80

Manufacturing capability

0.10

10/1.00

4/0.40

2/0.20

Technological skills

0.05

1/0.05

7/0.35

10/0.50

Distribution

0.05

4/0.20

10/0.50

9/0.45

Product innovation

0.05

4/0.20

10/0.50

5/0.50

Financial resources

0.10

10/1.00

7/0.70

5/1.50

Relative cost position

0.30

10/3.00

3/0.95

5/1.50

Customer service capability

0.15

7/1.05

10/1.50

5/0.75

Sum of weights

1.00

     

Overall strength rating

 

7.70

6.85

5.95

Ford has carefully maintained their marketing tactics to achieve business profitability thus gaining competitive advantage of firm. Ford make campaign to generate brand awareness among potential consumers thus uplifting the business profits of firm. As per the manufacture point of view it has a high rating as Ford ensures to provide best products to potential customer. ( Bhasin, 2018)

Ford is regularly committed improvement of their products .One of the most important strong feature of company is its responsibility towards society and its mission to provide family vehicles to their customers that provide best quality globally.(Mulally, 2103)

Question 3

a. Horizontal diversification and mobility program -there are other automobile companies which are like ford company they are also old in automobile industry like Chrysler and GM. So these companies are not collaborated and know better to solve the crisis through ways.

Ford motor senior people thinking and discussing the company ‘s transition into  “ford mobility company” and  the notion of mobility run top to down, and also providing alternative mobility in urban areas. Mobility means different things to different people but it all about how it gets from one person to another. Both smart cities and smart mobility are linked and each benefit other .it’s very surprisingly that ford working on both and they identified 355 smart cities projects in 221 cities around world. The revenue of smart city market is projected to grow to US$94.2bnby 2026. (2018)

Today’s technology playing a crucial role in making cars smarter. Future of vehicle industry will be different in order of fuel consumption and pollution. Another concern is safety; overall the era of mobility is upcoming.

Better off test-Ford customers looking for best value money with genuine capability .Ford will continue to offer performance and leading capability with improvements across the line up to deliver values without compromise.

Ford Motor is very anxious regarding its future pans. They are reducing their cost and reallocating capital for growth. Ford has created a special team for its coming project of electric vehicles called team Edison. This team will work on product development and technology and manufacture capabilities.

 Diversification-Ford motor company wants to diverse its international market strategies. For does this merchandise in four different regional markets with the help of variety of markets ford needs to be diversifies not only on cultural diversification but also on its linguistic, biological, ecological diversification. (Powoh, 2015)

Ford is regularly committed improvement of their products .One of the most important strong feature of company is its responsibility towards society and its mission to provide family vehicles to their customers that provide best quality globally.(Mulally, 2103)

Ford is planning to launch a pure battery electric and hybrid vehicles which reduce emissions. Importantly, company’s diversification philosophy has take into consideration of cultural stance of countries in which company is operating their projects.

a. Dynamic shuttle program- a program which allows employees and visitors to get point to point rides on demand .the Company believed to be mulling partnership with Google for self driving cars. (2016) Most of the analysts believe that ford is doing right thing that ride sharing service and autonomous vehicles will erode old car ownership in the next upcoming years .  

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Ford motor company should acquire connected cars future processing program. Therefore, we are almost at dawn of where developments over the generations as like Ford production line. Because of pollution, traffic congestion, jams, lack of parking spaces all these things led to origin of connected cars. Its very difficult to get into connected cars future, it is case of go ahead with precautions to avoid rush headlong into tragedy. Here’s the answer why:

Disadvantages- security- security wise it’s very complicated and become easy prey for hackers.

Infrastructure-In small cities its fine but in cities like Delhi its very challenging   drive from place to another without difficulties.

Investment and Time- it’s very enormous task and demanding huge investments and time consuming.

Mobile partner-the automobile and mobile industries have different objectives in order to satisfy their customer needs.

Advantages

Safety-its take s less time and safety wise its very secure in the situation where every second count. They will give warning before any hazard.

Traffic management-these modern cars have GPS, navigation system that connect to owner mobile phone and sensors make it easy for the driver to control car system.

Sustainability and Services-customers want more services and relieve from burden and these advance driver assistance provide some relief from these difficulties such as free parking services and cars tell us where the customer is waiting for the car and no need to travel alone. (Rocque, 2106)

Conclusion

The Ford Motor company’s fastest growing automobile global  company and in future they are going to introduce their new strategies and product development that customer really looking and want .they are continuously changing their operations to match their demands and they are now more balanced product line offering high quality safety, fuel economy and value. To keep Ford technologically advance, company need to keep their tier 1 suppliers on track and develop direct contact with tier 2.Another thing Ford should focus on technological level and investment should be minimized for both sets of suppliers.

References

  • Smithson, Nathaniel. 2018. Ford Motor Company’s Organisational Structure Analysis.
  • Alveeson, M.2012.Understanding of organisational culture.
  • Ford Motor Company.2015. Supporting One Ford.
  • Martinez, M. 2017. Why Ford's new structure might make sense.
  • Hickman, C.R. and Silva, M.A., 2018. Creating excellence: Managing corporate culture, strategy, and change in the new age. Routledge.
  • Howard, M., 2016. Building a strategic security organization. Journal of business continuity & emergency planning9(4), pp.298-303.
  • Montasser, M.H.H. and El-Nakeeb, I.S.L.A.M., 2017. Investigating solid waste supply chain: A proposed framework for achieving the environmental sustainability case study Alexandria, Egypt. International Journal of Business and Economic Affairs2(3), pp.165-172.
  • Mudambi, R. and Puck, J., 2016. A global value chain analysis of the ‘regional strategy ‘perspective. Journal of Management Studies, 53(6), pp.1076-1093.
  • Paley, N., 2017. How to Develop a Strategic Marketing Plan: A step-by-step guide. Routledge.
  • Pawełoszek, I., Grabińska, A. and Turek, T., 2016. Linked Data in Supply Chain Management.
  • Rossiter, J.R., Percy, L. and Bergkvist, L., 2018. Marketing communications: Objectives, strategy, tactics. Sage.
  • Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.

 

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