The company's competitive advantage comes from four values which include people, products, profit, and the organizational culture. Likewise, the company has several objectives that promote the development of successful growth strategies. Ford's primary goal is to reduce the long-term emission to stabilize climate. Also, the company aims at reducing reliance on fuels by establishing bio-fuels. Another goal is minimizing energy and water usage by 27% and 25% respectively.
Ford has several ways of gaining competitive advantage. The company has foreseen the development of smart cars which offer fuel efficiency. As a result, the consumers are happy to use less-harmful products due to low emission. Centralized decision making has helped Ford to create better unique products to its customers (David & David, 2013). Also, a centralized decision-making process helps Ford to satisfy the demand at fuel economic prices as well as lowering the cost of maintenance. Therefore, the company is an excellent choice for consumers searching for cars with low price and maintenance costs.
Additionally, the company has focused on reducing the cost of production by establishing technology that makes the production process online-based. As a result, the company gains a competitive advantage over its rivals since it utilizes this strategy combining it with smart cars to create a win-win situation to its customers. Also, the company has developed an entirely technology integrated system which enables customers to control and track their vehicles with smart gadgets like phones and tablets. Moreover, Ford has maintained a good reputation with a strong brand in the industry which has won its customers' loyalty.
Ford Motor Company has three intensive growth strategies (Wilson & McKinlay, 2010). The primary approach is market penetration. The company focuses on extending its customer base to which it will sell more products. Also, the company creates more dealership to boost sales. The intensive strategy is in conjunction with the aim to retain customers and increase sales. The plan also supports the aggressive approach to differentiate its products and process and minimize costs of operation.
Product development is the second intensive growth strategy that Ford puts in place. The company believes in boosting sales by introducing new products in the market. The policy of developing new products goes hand in hand with R&D investments such as all-electric Ford Focus Electric. Moreover, the product development strategy helps the company to adjust to the differentiation process. The third growth strategy for Ford Motor Company is market development. However, this strategy is not common to Ford in recent years. Ford utilized this strategy in the early stages. The company used to enter new markets with new products to tap potential customers.
Ford's Swot Analysis
Ford has a robust R&D. The company is dedicated to make and improve its vehicle's performance through safety and fuel efficiency to increase customer satisfaction. Also, the company puts a lot of effort and capital on R&D by establishing research centers, for instance, the new center in Palo Alto. Ford utilizes to integrate new technology in the production process. As a result, the company enhances fuel efficiency by producing hybrid vehicles. Currently, the company is focusing on improving quality by developing powertrain and cabin technology.
Ford has two significant flaws. The company suffers from product failure. For example, in 2015, some of Ford's vehicles experienced safety failures of the Takata Airbags, and hence the company had to recall them. The case led to the risk of damaging the brand name and loss of customers' faith in the company. The second weakness lies in emerging markets. The company experiences break-ups on market share and hence unable to focus on the emerging markets.
Ford gains the advantage to increase markets by expanding its operations globally. For example, the company has established new plants in some of the Spanish and Mexican states like Valencia and Chihuahua respectively (Chang, 2016). The new establishments are expected to boost the overall production by 40%. The company focuses on manufacturing hybrid and electric vehicles which are fuel efficient. The focus to use alternative fuels to reduce emissions is a great opportunity.
The company faces stiff competition from companies such as General Motors, Toyota Motor, Renault-Nissan and Honda Motor. The global economy is very dynamic regarding currency fluctuations, and hence the company needs to be very cautious with its prices. Also, the company faces challenges from environmental regulations that come up nearly every day.
Steps in strategy formulation and implementation process
Strategy formulation involves choosing the best action to realize the company's goals and objectives (Bamberger, Meshoulam & Biron, 2014). The method comprises six significant steps. The first step is setting the organization's objectives. It involves devising the company's long-term goals. The second step is the evaluation of the firm's environment. It consists of reviewing the organization's competitive position in the industrial environment. The third step is the setting of quantitative targets. It helps in assessing the departmental contributions in the company. The fourth step is matching context with divisional plans. It helps to analyze macroeconomic trends. The fifth step is performance analysis. It involves finding the gap between the projects and the speculated results. Lastly, management chooses the right strategy.
Strategy implementation is the process of transferring the chosen strategy into a desirable action that can achieve the organization's goals and objectives (Chang, 2016). The process involves several steps too. Firstly, the organization establishes potential management in carrying out the implementation process. Then the organization distributes resources accordingly. Policy formulation follows. The policies formulated are then employed in the process to promote improvement effectively. The organization then integrates a reward structure to the outcomes of the process. Finally, the organization adopts strategic leadership.
Bamberger, P. A., Meshoulam, I., & Biron, M. (2014). Human resource strategy: Formulation, implementation, and impact. Routledge.
Chang, J. F. (2016). Business process management systems: strategy and implementation. Auerbach Publications.
Chang, J. F. (2016). Renewable energy in eastern Asia: Renewable energy policy review and a comparative SWOT analysis for promoting renewable energy in Japan, South Korea, And Taiwan. Energy Policy, 74, 319-329.
David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A competitive advantage approach. Pearson.
Wilson, J. M., & McKinlay, A. (2010). Rethinking the assembly line: Organisation, performance and productivity in Ford Motor Company, c. 1908-27. Business History, 52(5), 760-778.
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