Essential of Strategic Management
What are the strategic issues discussed in the case? Please identify five strategic issues in the form of brief one sentence-bullet point list.
In the case study concerning the Ford Motor company, various strategic issues affect the operational manner of the auto motor organization. The normal routine of the Ford Motor organization relies on the strategic management to complete certain operations in the firm. Some of the strategic issues discussed in the Ford Motor organization case study encompass of;
- Poor management from the leaders
- Competition for customers
iii. Unsustainable marketing and advertising techniques
- Conflict between management and employees
- Lack of appropriate finance management
The old & new vision & mission statements of Ford Motor Co. are as shown below. Please identify some similarities & differences between the two sets and critically evaluate them.
In the old and the new mission statement and vision, various similarities and differences are identified hence indicating the change that has evolved in the organization. Some of the similarities found in the old and new vision is the Ford Motor organization still provides product to the entire world. The automotive company is focused on offering mobility to the customers in the entire world. The similarities existing between the vision is the fact that the Ford Motor firm is dedicated to deliver outstanding auto motors to the customers.
The difference between the vision and mission statement of the Ford Motor firm entails that in the old mission, the organization improved all the activities to provide returns to the shareholders. Currently the mission is to improve quality, sustainability and safety of the customer. This implies that the Ford Motor industry has decided to better the existing of the loyal customers to receive appropriate profitable returns.
Conduct a PESTEL (political, economic, social, technological, environmental, legal) analysis of the macro-environment of the U.S. auto industry.
In accordance to the Ford Motor management, various factors found in the microenvironment affect the nature of the organization. The decisions made by the management strongly depend on the amount of impact the eternal environment inflects on the organization. To assist in the study of the external aspects that affect the Ford Motor firm, the PESTEL analysis is vital.
The political aspect that affects the nature of the decisions made by the management of the Ford Motor firm encompass of international trade and taxation policies implemented in America. The economical factors that affect the nature of operations implemented in the Ford Motor organization encompass of exchange rates, unemployment, inflation, and interests rates. The social factors found in the microenvironment surrounding the Ford Motor company and affecting the operations in the firm involves attitude of the workers and the general ageing population in America. The technological factors affecting Ford Motor organization consists of innovations and development of new product and behaviors of the commodity in the marketplaces. The environmental aspects include the globalization and global warming and the legal issues in the PESTEL affecting the operation in Ford Motor firm include employment laws implemented by the government and health and safety laws enforced towards the rights of the workers.
Develop an understanding of the U.S. auto industry environment by applying Porter’s Five Forces model. Please comment on each of the forces (rivalry, new entry, suppliers, buyers, and substitutes) and summarize the overall effect of these forces on the industry profitability.
The use of the Porter’s Five Forces model assists in the industrial analysis of the strategies appropriate in undertaking the change needed in the firm. In the use of the model, it is evident that the most essential part of the study encompass of competitive rivalry, threat of emerging competition, bargaining power of the supplier, bargaining power of the customers and threat of substitution.
Competitive rivalry in the U.S. auto industry encompass of the forces that will affect the nature of the easiness of another competitor to join the organization. Competition is one of the aspects feared by most organizations. For this reason, the Ford Motor firm ensures that it avoids new entry of competitors. This is done through increasing the investment coast and diversification of product including branding.
The bargaining power of the suppliers refers to the nature in which the supplier determines the profitability that the Ford Motor organization receives. The higher the company earns the bargaining power of the supplier the low profit.
The bargaining power of the customers refers to the ability of the customers in purchasing the products from the Ford Motors company. The customers determine the expansion of the firm since the more the customers purchase the products the more the organization receives profits. The aspects affected by the customers in relation to the Ford Motor firm include the size of the buyers, size of the order to the firm and cost of switching to a new product. The threat of substitution also determines the effectiveness of the firm in the sense that the organization conducts duty in regards to such threat. The cost of substation to a new product and size of the loyal customers, determines Ford Motor company competitive ability.
Conduct an internal analysis of Ford Motor Co.: First, clearly identify its resources (tangible & in-tangible), capabilities, and core competencies. What are the Ford Motor Co.’s competitive strengths relative to its key rivals? What is its competitive advantage? How sustainable is or was Ford’s competitive advantage?
Ford Motor organization has various competitive strengths over its competitors in the sense that it remains one of the leading car companies. One of the competitive strengths encompass of the good interrelation that exists between the management and the employees. The appropriate management of available capital also enables the Ford Motor in coordinating the manner in which completion of tasks and duties in the firm is undertaken. The competitive advantage of Ford Motor over the other firms is that it has loyal customers willing to purchase all the products of the organization. The Ford Motor competitive advantage over the other firms is suitable since it enabled the firm in obtaining profitable gains than other organizations. The existence of the customers also assists in the maintenance of the image of the Ford Motor to the other customers. Please clearly identify the elements of Ford Motor Co.’s two sets of strategies: First, its Corporate strategy; Second, its operational or functional strategies as articulated in the case or by Alan Mulally? You can apply and develop these through bubble maps or activity system maps that were discussed in the class (but it is not necessary, if you find this time consuming – just write down the elements of its strategy!)
The corporate strategy refers to the overall direction and scope of an organization and the way the business work together to achieve fulfilling goals. Some of the cooperate strategy of the Ford Motor firm encompass of establishing operating model and high payments offered to the customers. The operational strategies of the Ford Motor firm involve the offering payment to the employees and organizing the duty to be undertaken by the employees. The employee in the Ford Motor firm has a schedule appropriate in accomplishing the available duties. This means that the by ensuring that the employees are safe and secure, the management of the ford organization receives the most appropriate workforce.
A good strategic leader is a combination of two elements: vision+ execution. Do you think Alan Mulally is effective as Ford’s top strategic leader, in terms of his experience, personality, management style, foresight, people skills, implementation skills, etc.
Alan Mulally is an effective top strategic leader in the Ford Motor because of the fact he ensure that all the available duties are completed at the most preferable time schedule. The management style of the Ford Motor firm indicates the experience Alan Mulally in making the most effective decisions. The implementation skills of Alan Mulally in working out the current strategies also assist in the execution of the workforce available. This assists the Ford Motor organization in making the most suitable decisions hence remain competitive in the marketplaces.
Analyzing Ford’s strategic challenges in terms of company’s labor relations and its imminent contract negotiations with the UAW. Do you think that the board of directors should better manage executive compensation to reduce the negative impact it is likely to have on operating costs and competitiveness if used as a bargaining chip by union representatives?
Ford Motor Company faces various challenges when it come to labor relations and contract with the employees contracts with the UAW. For this reason, the board of directors needs to execute an operational compensation plan that will assist in reduction of the negative impact facing the firm. The operating cost and competitiveness if used, as the bargaining chip by the union will ensure that the Ford Motor firm wills create the labor relation with the employees. This will affect the conflict that exists between the management of the Ford Motor and the UAW.
Please construct a SWOT Matrix for Ford Motor Co. This should be similar to the Robin Hood Case Exercise we did in the class, and as shown in the McDonald Corporation’s example that I handed out in the class (those absent see the last page of this document! The exact one page handout is attached). AFTER YOU HAVE IDENTIFIED THE S’s-W’s-O’s-T’s, PLEASE PROPOSE AT LEAST THREE – SO, WO, ST, WT Strategies for Ford Motor Co.
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FORD MOTORS COMPANY SWOT ANALYSIS |
Strengths – S
1. The highly productive employees increasing the yields of the firm 2. Increased numbers of the distributors and suppliers all over the universe. 3. Strong and recognized brand portfolio even in the developing nations 4. Competent and efficient engineering
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Weaknesses – W
1. Decline in the market shares in most of the developed nations 2. Poor returns from the major investment projects Product recall |
| Opportunities – O
1. Explore other nations to increase the profit. 2. Increasing the number of brands to increase awareness in the marketplaces 3. The increasing demand in almost all the nations of the dual fuel vehicles.
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SO Strategies
1. Developing of unique car brands 2. Increasing car distributors to most of the nations 3. Increase the number of the loyal customers
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WO Strategies
1. Increase the working hours of the employees 2. Increasing the number of car production in a financial year 3. Increasing the amount of salary offered to the employees as motivation
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| Threats – T
1. Regulations of the laws concerning the European nation vehicles. 2. The increasing slowdown of economic growth in the united states of America 3. Production of light vehicle in the third world nations
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ST Strategies
1. Increasing the number of advertisement and promotions 2. Increasing strategies of management and the employers 3. Increasing the value of the brand of cars offered to the customers
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WT Strategies
1. Reduce the labor to reduce the amount of capital in paying employees 2. Increasing the development of the firm in other nations apart from the US 3. Selling shares to the customers |
What are the key lessons or take-aways from this case? Please identify five lessons in the form of brief one sentence-bullet point list.
Various key lessons are evident when studying and analyzing the Ford Motor company case study. Some of the lessons obtained from the case study encompass of
- The organization need to increase the advertisement techniques to attract more customers purchasing the brand available
- The organization need to increase the marketplaces including globalization to ensure that the profitable margins are increased
iii. To increase the competitive advantage, the organization needs to reduce the cost of the products to increase the number of customers purchasing the product.
- Product differentiation assists in maintenance of the loyal customers who promote the purchase of the product.
- Establishing the target market increases the amount of products sold to the customers hence increasing the returns.
