Ford Motors
While the production of fuel-efficient cars is a very good idea considering the fact that green washing is the latest fad in the manufacturing and marketing circles, there are factors that the company needs to consider before it phases out the profitable SUV line. There are a lot to company in its decision of phasing out a product line. The company needs to conduct a SWOT analysis of the firms and consider how the pest factor swill affects the proposed product line (Porter, 1998).
The production of small cars might be a very good idea, customers will come flocking in the short run however, and the competitors are also in the lookout for any move by the car manufacturer and might change to adopt the same marketing strategy (Porter, 1998). I agree theta the pros and the cons are true, based on the following reasons as discussed by porter’s five forces
Porter’s five forces
The company needs to consider porter proposed the five forces of marketing that before implementing their proposed plan.
Threat of new entry
The company must be aware that the competitor are also conducting a marketing research , so ford motors should consider the possible moves by the competitive, other companies like the Toyota are already well ahead with the production of the hybrid cars and Tata motors are enjoying quiet years after the introduction of their productive Tata nano car (Porter, 1998). The market is already flood with smaller efficient car; perhaps remaining in the production of large cars, which are profitable, is still a god idea ( Sindi & MacNamara, 2009).
Power of the supplier
The powers of the supplier in the motorcar markets lies in the number of suppliers in the market, ford motor does not have the capacity to change, there are cash trapped, they have debts making them at disadvantaged ion the competitive car market. Perhaps the company should consider other unique idea, like manufacturing large fuel-efficient car. Alternatively, producing sleek cars but low priced. Alternatively, producing small cars but basing their ideas no on the Green House Gas Emission (GHG emission).
Threat of substitution
Ford Motors Company had a lot of advantage over this force as the ford motors can easily substitute its car lines; however, the company is disadvantage in other areas. The performance of the substitute in the market is still not verified. They should stick to producing the SUVs. It is also very expensive to change; the cost of changing the product line might have a very big impact on the profitability and the capital base of the company and later be a white elephant (Brandenburg & Barry, 2005)..
Power of the buyers
Though the company controls only 37 % of the market share, Ford motor company seems to have other issues. The size of the order made by the company is relatively low as compared to the size of the car made for the SUV. The difference between the competitors is also very limited as the competitors are all following similar strategies ( Sindi & MacNamara, 2009).
The market for autos products is not price sensitive because the difference between the prices of large cars and small is almost negligible .The company s ability to substitute is also very low considering the company balance sheet over the last four years ( Sindi & MacNamara, 2009).
Competititibe rivalry
The competitive rivalry of the companies in the auto market is very distinctive, as the number of competitors are few, the quality differences is very high in terms of the materials and the features of the cars. the car brands attract different car customers, while some prefer used cars other prefer new cars, the different cars brands also have different customers loyalty ratings like Vauxhall, from general motors, Tata nano car from Tata motors, etc.
Finally, the cost of leaving the SUV market is very high the ford motors might not find easy to over, it will mean disposing some of the machineries and product line. The company might not realize the profit it intended to realize because they might not find the customer for the machineries and use it as a scrape metal (Porter, 1998).
Proposed marketing strategy IMC
The company should try the latest marketing strategy called the integrated marketing mix in which the company uses different marketing mix to reach their customers in addition to using the latest fad, the social media like general motors does (Brandenburg & Barry, 2005).
Reference
Porter, E. (1998). Competitive Advantage: Creating and Sustaining Superior Performance.. NY: The Free Press
Brandenburg, M., & Barry, J. (2005). Nalebuff, Co-competition. Boston: Currency Doubleday.
Sindi , Ma., & MacNamara, A. (2009). When Fair Value is Not Fair. ABI/INFORM Global. The CPA Journal,79, 10-11.
