Ford Motor Company


Ford Motor Company




Ford Motor Company

Executive Summary

Ford is an American international automobile company founded 113 years ago headquartered in Detroit Michigan. It is the second and fifth largest automaker in the US and worldwide respectively. With annual revenues north of 100 billion dollars, it is one of the most profitable companies in the world and provides employment to more than 200,000 employees. The company has pioneered many innovations that have been instrumental in the development of the automobile industry. These include the development of the conveyor belt technologies that increased efficiencies and effectiveness. It was also the first company to introduce safety features to their vehicles. These included the seatbelt and the seatbelt warning light. The global financial crises of 2008 nearly broke the automotive giant as it came close to bankruptcy. This period saw it dig deep into its hedge fund reserves in order to stay afloat. It also saw the automaker lose two of its most valuable brands. The company had to sell off Jaguar and Land Rover subsidiaries in the UK to Tata motors. The company has since come out of the red and is enjoying renewed profitability.

Strategic Planning Methodology/ Process

Ford has had a long history of success in the car manufacturing industry. The industry is however currently experiencing a high rate of change prompted by the need to enhance sustainability and more environmentally friendly processes (Bayou and De Korvin, 2008). Research and innovation are also at an all-time high in the motor vehicle manufacture industry. This has especially increased competition by allowing the entry of alternate propulsion systems developers and green car developers. Consumer trends are also quickly changing as gas prices across the globe become unstable forcing consumers to pay more at the pump. More competitors, even high end luxury models like Bentley and sports car manufacturers like Lamborghini, are also launching their own lines of SUV vehicles which was once a niche dominated by Ford. Analyzing the internal structures of the firm and performing an evaluation of the external environment would enable the company to develop sustainable and flexible strategies to ensure it can adapt to the dynamic changes in its operating environment.

There are three steps to facilitate this analysis and assessment. First, enhance progressive and dynamic research and analysis (Bryson, 2011). This enables a thorough and comprehensive review of previous strategies and processes. This has two functions; first, it enables the company to ascertain the legality and ethicality of all previous strategies and processes. This helps in setting a strong foundation for their future strategies. Second, it helps in taking stock of Ford’s past strategies and processes as well as those of the competition highlighting what worked and what did not work. Some strategies and processes fail not because they are ineffective, but because they are used before their time. This will help the company save a lot of money, time and resources. This process is also instrumental in collection and consolidation of customer feedback and third party views and opinions. This will be necessary in developing practical and market-centered strategies and processes effectively increasing Ford’s market share. This process is further instrumental in identifying the challenges in the sector and the current consumer trends enabling the company to adapt its processes to comply with changing regulations. It also helps the firm to enhance their products with features that increase their demand in the market. This is also useful in informing the development of effective marketing and promotional campaign materials that help increase the Ford products’ market presence. This research also enables the company to understand the market problems and challenges as well as prevailing consumer trends.

Second, using the comprehensive data generated from the first step, Ford will be able to practice evidence-based practices and strategies. This enhances the firm’s flexibility in the market and enables it to develop practical and market oriented products and strategies. This collection of knowledge will also enable the company to link their innovations and developments to specific consumer challenges and problems. This will result in more practical and consumer focused additions to their products effectively enhancing their utility and increasing their demand (Gibbons and O’Connor, 2005). Enhancing communications channels to increase the ease of getting customer feedback on product performance and customer satisfaction will also go a long way in ensuring the company remains flexible. It also enables the company to increase its employee motivation and morale by increasing their ease of access to process information and performance review. This also effectively reduces the time taken to make decisions making processes faster and improving efficiency. This also enhances leadership at the firm by increasing the autonomy of all employees. This increases the total net worth of each employee and effectively the net worth of the firm in terms of skills, leadership and management. This increases employee morale and motivation and effectively increases their effectiveness and efficiency which results in higher profits. This step also helps the firm to develop sustainable metrics for success that ensure continuous and progressive assessment of strategy and developmental effectiveness. This is also instrumental in helping the company tweak their strategies and products progressively. This helps them remain flexible and adapt to changing regulations and consumer tastes and preferences.

Third, cultivate relationships and the community. Technology has created tools that allow people around the globe to interact with each other. These tools have also made it possible for companies and brands to interact with a wider pool of consumers and clients. Facebook has been especially instrumental as helping brands and companies interact with consumers and clients due to its credibility and large user base.  Buying is an emotional activity no matter how much logic people try to incorporate into the activity. It has also been proven that people are more likely to make more purchases after they have made their first (Reger and Mietzner, 2005). The first sale is always the hardest. Cultivating relationships will ensure that Ford can keep the conversation going effectively enabling it to enhance its feedback process and increasing customer satisfaction through impeccable customer service. This will also allow the company to collect valuable and actionable information from consumers and customers on how to enhance their products and their brand. Keeping in contact with existing clients also ensure the company is able to increase its revenues and profits through cross selling and up selling other products to existing clients. This also reduces customer churn and ensures Ford has a larger market share in the motor vehicle industry.

Industry Dominant Features

The vehicle manufacturing industry has several dominant economic features. First, it has a high market size that is growing by the day fueled by innovations and research into alternative greener fuel and powertrain technologies. The industry is also experiencing a renewed rapid growth stage as a result of these new developments. Second, the motor vehicle manufacturing industry has experienced significant changes since the financial breakdown of 2008. Although Ford was able to stay afloat due to its significant hedge fund, other companies had to merge with others or accept to be bought off  in order to avoid bankruptcy and going out of business. This effectively increased their financial and innovative strength increasing their threat to Ford. Third, understanding the scope of competitive rivalry will allow the firm to start developing strategies and products that will enable it remain ahead of the game long before others catch up. Fourth, Ford will have to invest in progressive and dynamic research and feedback generation to enable the company to align their developments and innovations to consumer needs. Fifth, cars are still undergoing a lot of evolution which opens up the industry to a lot of competition. Sixth, due to the relatively low product cycles in the automotive industry, Ford will need to increase its investments into research and development since there are still a lot of vehicle parts and processes that could use improvement through horizontal innovation (Poister and Streib, 2005). This will also help it keep up with the fast technological changes in the industry prompted by interdisciplinary collaboration and specialization. Seventh, ford should look at its competitors’ to understand the level of integration. This will also help the company horizontally innovate existing technologies and devices. Horizontal integration will potentially save the firm millions in costs and generate higher revenues and profits from the increased utility Ford will be offering its clients. Last, Ford could benefit from separating its product ranges into fully autonomous units. This will enable all units to have enough resources to sustainably develop and innovate independently effectively ensuring continuity of all products and enhancing their brand market capitalization and visibility.

Competitive Forces

The motor vehicle industry has five significant competitive forces. First, due to the high profitability of the motor vehicle industry, it encourages the entry of new players. This has increased the number of competitors in the industry and makes it much harder to maintain their number of customers and high profits. Second, the transport industry is experiencing increased developments in faster and relatively cheaper and greener forms of transportation like electric trains. Cycling is also fast gaining popularity due to its inherent health and wellness benefits and easy maneuverability in traffic. Third, growing consumer bargaining power fueled by the internet and the advent of social media has greatly affected product prizes by giving consumers more power over product prices. Introducing loyalty programs and enhancing communications channels to enhance customer feedback will increase customer satisfaction and ensure their loyalty effectively ensuring high profits. Fourth, the increase in competitor numbers has increased supplier and labor bargaining power effectively increasing the overheads of operating companies. Companies now have to pay more for raw materials and labor due to the increasing competition for them (Steiner, 2010). Last, Ford has to find ways of staying ahead in the automobile industry which is characterized by high intensity of competitive rivalry. This rivalry is only set to intensify further as research and technology leads to the development of better processes and products.

What forces are driving changes in the industry, and what impact will these changes have on competitive intensity and industry profitability?

There are three significant forces driving changes in the motor industry. First, the unsustainable oil prices have increased the need for more sustainable fuels and drive train technologies to enhance efficiency. This is further compounded by the need to stop the degradation of the environment and reining in the effects of global warming. There has also been a global revolution in manufacturer regulations that requires them to reduce the amount of emissions or risk huge penalties and sanctions. Consumers are also more cautious about buying more environmentally and health friendly products. Second, consumer trends are fast moving towards safety from the traditional performance. With the growing baby boomer population, more people are buying vehicles that promote the health and safety of their families especially their children. This has prompted manufacturers to research into collision prevention and protection features. These developments have even led to the development of self-driving vehicles which promise increased safety by removing human factors from the process. Last, there is a global increase in incomes with the number of rich people being the highest in history. This has created a new group of consumers who want to set themselves apart from the rest by having the bespoke products. Catering to the needs of this niche has been proven to open up new lucrative markets that have seen some companies soar in profits and revenues.

What market positions do industry rivals occupy – who is strongly positioned and who is not?

Industry rivals have for long capitalized on Ford’s low number of options in the sedan range of vehicles. The company has had to rethink its position especially with the growing demand for more economic vehicles. There has also been a significant reduction in off-road enthusiasm over the years.

What strategic moves are rivals likely to make next?

Alternate fuels and drivetrains are the future of the automobile industry. Most rivals are positioning themselves to offer greener vehicles and relatively more tolerant and resistant to wear and tear. This provides consumers with more utility between services ensuring higher customer satisfaction.

What are the key factors for future competitive success?

Investing in alternative propulsion systems that do not rely on fossil fuels will ensure Ford remains competitive into the future. Enhancing safety and driver assistance will also be instrumental in enhancing consumer vehicle demand choices. This is because of the increasing number of vehicles on the road and the increasing workplace challenges that take their toll on many drivers. Enhancing customer service will also go along way ion enhancing relationship building and maintenance effectively helping a brand maintain its position in the industry. Offering trade-in options for owners would also offer the company the company the chance to cut raw material costs through recycling and open up new markets for secondhand and refurbished vehicles.

Does the outlook for the industry present the organization with sufficiently attractive prospects for profitability?

The demand for vehicles is currently at an unprecedented high. This demand is projected to increase each year with the opening up of new markets. With the demand for new and used cars growing across the globe, automobile manufacturers still have a lot of unexploited markets to explore.

Implementation and Evaluation

There are three key factors that influence success. First, Ford needs to develop and enhance structures to ensure they support and complement the new strategies. Adequate structures ensure that there are enough resources to ensure the success of the implementation process. Structures also enhance reporting and evaluation by providing a clear chain of command effectively reducing ambiguity and confusion. Structures also provide provisions for employee training and sensitization to ensure high level of adoption for the new strategies. Second, enhancing communication channels is instrumental in ensuring greater ease of dissemination of information. This enables all employees and line managers to have sufficient operational information on implementation and also gives them the sufficient avenues to report progress and challenges. Communication also enhances leadership and makes decision-making easier and faster effectively increasing the rate of implementation and integration. Last, it is important to establish progressive and dynamic metrics to enhance flexibility of the implementation process. This also helps to quickly establish challenges and gives the company the opportunity to tweak strategies and methods to increase their effectiveness and efficiency of implementation. This step also helps to measure the strategies performance with employees and line managers. The information gathered can also be instrumental in the development of a comprehensive knowledge base. This knowledge base will form the basis for future decision making on strategy development and implementation effectively reducing decision making cycles and resulting in more successful implementation. The choice of metrics will also determine whether the strategies are successful in making the company’s prosperity sustainable or not (Whittington, 2007). Metrics define what the company focuses on during its implementation process and can either make or break the company.


Strategic planning and implementation requires the development of adequate structures to support implementation. The process’ success can be increased by involving employees. This increases their investment in its success and effectively increases their level of acceptance and morale in implementation. Continuous and progressive tweaking of processes enhances their effectiveness and success. Developing a comprehensive and dynamic knowledge base enhances the decision making and strategic planning process by reducing the associated time cycles. It also provides precedents that help to avoid repetition and duplication of efforts.



Bayou, M. E., & De Korvin, A. (2008). Measuring the leanness of manufacturing systems—a case study of Ford Motor Company and General Motors. Journal of Engineering and Technology Management25(4), 287-304.

Bryson, J. M. (2011). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement (Vol. 1). John Wiley & Sons.

Gibbons, P. T., & O’Connor, T. (2005). Influences on Strategic Planning Processes among Irish SMEs*. Journal of Small Business Management,43(2), 170-186.

Mietzner, D., & Reger, G. (2005). Advantages and disadvantages of scenario approaches for strategic foresight. International Journal of Technology Intelligence and Planning1(2), 220-239.

Poister, T. H., & Streib, G. (2005). Elements of strategic planning and management in municipal government: Status after two decades. Public administration review65(1), 45-56.

Steiner, G. A. (2010). Strategic planning. Simon and Schuster.

Whittington, R. (2007). Strategy practice and strategy process: family differences and the sociological eye. Organization studies28(10), 1575-1586.

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