Introduction

Headquartered in Michigan, United States, Ford Motors Company is one of the leading automobile
manufacturers in the global market. With an extensive sales and distribution network across the
globe, the company had achieved net revenue and sales worth $155.9 billion and 5.5 million
respectively. Despite its popularity for being an excellent assembler of some of the world’s finest
vehicles, Ford Motors substantially invests in its R&D, which is imperative to its success amidst
continuously rising competition[ CITATION Bay08 \l 1033 ]. The company operates in regions based
on a group segment comprising of Europe, Latin America and Asia Pacific through various mergers
and acquisitions.

Pestle Analysis
For a large multinational company such as For, PESTLE analysis is an extremely important component
of their framework which understands their market dynamics and improves business continuity as
well.

Political Factors
As a multinational brand, Ford face various geopolitical challenges that affect its operations. For
instance, due to uncertain market conditions in recent years, the company has seen its profits soar
high in Asia but has experienced dwindling sales in European market. Following Brexit, the company
had to face numerous issues including high costs, lower sales and difficulty in carrying out its
operations. While Asia is the largest growing market for Ford, the company has been unable to reap
full benefits due to political uncertainties and government policy changes in India, Asia’s 4 th largest
market for automobiles. Higher fuel prices and taxes on imported vehicles has also reduced
company sales. Meanwhile the trade war between China and Us has increased cost of steel thus
slowing down production levels. Hence for a better global market, the company has to focus on
improving its diplomatic ties massively irrespective of its origin of production.

Economic Factors
With widespread global market, Ford has to deal with varying economic stability scenarios which
impacts its operations and sales. The Asian market is considered to be the most stable in terms of
economic conditions hence any major disruption would likely affect Ford’s activities. The recent
increases in cost of production due to high fuel and steel prices, trade war between US and China
and decreasing disposable incomes has shifted consumer perception of maintaining a vehicle thus
reducing sales. Ford is further faced up with the challenge of new entrants and models with
innovative technologies which can lead to future market saturation. However, Ford has an
opportunity to increase its sales after a drop in corporate taxes and RBI repo rates.

Social Factors
Since Ford operates in different international markets, the company has to deal with varying cultures
and traditions which has a deep-seated impact on its operations and forces them to change their
approach towards each market. The rising trend of mutual growth benefitting all stakeholders has
been the major shift in businesses with CSR activities taking the center stage. Ford has also tried to
incorporate the value creation and customer satisfaction in its offering. For sustainable mobility and
commute to convince consumers, Ford needs to further invest in renewable automobile energy
sources and compete against giants like Tesla Motors.

Technological Factors
In order to cater the shift in consumer behavior and demand, Ford must invest in technologies to
improve its positioning. The company’s initiative to develop a low-cost battery-driven model
following its partnership with Mahindra and Mahindra is a step in the right direction as it provides
luxury to customers, especially Asian and Indian markets at a affordable prices. Its partnership with
Holoride and Universal Pictures to install technologies to provide a virtual reality-based ride has
gained huge popularity as well[ CITATION Dva20 \l 1033 ]. Technology is the biggest attraction for
the new generation hence introducing disruptive innovations such as driverless cars, fuel-efficient
and hybrid cars will give Ford a huge opportunity to succeed.

Legal Factors
Like every other MNC, Ford Motors has to curtail its business practices that are in line with
production and environmental laws of different countries. For instance, the shift in India from BS4 to
BS6 was a drastic change for the company. Similarly, due an unclear definition of hybrid automobiles
in some regions, the company operates with uncertainty over its products[ CITATION Dva20 \l
1033 ]. any future changes will force the company to reevaluate its business model and
simultaneously impact its profitability. In addition, Ford has to manage its production accordingly to
meet legal standards of quality as well as pricing factor. Other legal factors that are kept under
consideration labour working hours, anti-bribery law and regulations in line with acceptable business
practices.

Environmental Factors
Following the footsteps of large corporations, Ford has taken a step forward in sustainability
initiative. The company has changed its practices to incorporate various policies and programs across
its markets. Not only does it work to reduce its carbon footprint, but it also invests in innovations to
create a positive impact on the society. Recent business activities in line with this mission include the
100% electric fleet of cars to go emission-less whereas it has also vowed to fulfill UN SDGs of shifting
100% renewable energy for all its manufacturing by 2035, eliminate use of plastic by 2030, and 100%
reduction in waste to landfills[ CITATION Bay08 \l 1033 ].

Ford Motors Company Value Chain

Ford has optimized its value chain to reduce wastage, increase cost efficiency and productivity by
appropriate allocation of resources. The company has emphasized on it primary and support
activities to eliminate various bottlenecks and streamline operational performance.

Primary Activities
Inbound logistics
Fords manufacturing network comprises of plants spread globally from Africa to US and Asia while it
resources finest raw materials from suppliers across the globe. The company utilizes 3PL operators
such DHL for timely transportation of its raw material which is one of their strategic partners in the
European market and has been recently awarded a new contract from Ford to lead its Logistics
Solution by managing movement of prototypes parts to Fords plants from suppliers all over the
world[ CITATION Hun05 \l 1033 ].

Outbound logistics
Logistics is a key element of Fords efficient and productive operations network. In this network, Ford
uses a mix of transport solutions which prioritize mileage reduction and optimize environmentally
sustainable movements of its assembled vehicles to their dealerships. This is achieved by working in
collaboration with logistics and industry partners to evaluate and forecast the impact of
transportation.

Operations
With sales and business operations in every corner of the world, Ford offices are placed into five key
segments. North America, South America, Europe, Middle East, Africa and Asia Pacific are the major
domain of its plants, offices and dealerships[ CITATION Gre20 \l 1033 ]. Other properties include
warehouses, distribution centers, corporate offices. While Ford has ownership of majority of its
establishments in the US, most of these outsides of US are leased. As of 2019, Ford had eight
regional engineering, research, and development centers, and 55 manufacturing and assembly
plants [ CITATION Hun05 \l 1033 ].
Marketing and Sales
Due to rising competition, Ford has invested in marketing and sales channels. A large sum of its
budget is spent on advertising and offline/online sales channels; $4 billion has been spent on
average in last four years [ CITATION Bay08 \l 1033 ]. In addition, the brand uses events, auto shows
and dealership to promote its product and leverage sales.

Products and services

Through continuous investment in research and development, the company has gradually improved
its products by innovating. The company had sales exceeding 5,386,00 vehicles in 2019 including its
premium brand, Lincoln [ CITATION Gre20 \l 1033 ]. Its wide range of automobile offering includes
cars, SUVs, trucks, hybrid and electric vehicles as well. It also caters financial services through Ford
Motor Credit Company.

Support Activities
Technology
To drive its competitive advantage and increase market dominance, Ford manufactures its vehicles
based on high quality technology which increases its productivity and enhances supply chain
network. The company has further invested in tech-based innovations to improve its manufacturing
plants and R&D.

Infrastructure
Fords operations are managed on global and regional basis with a CEO to oversee operations in each
region while the structure is further divided on functionality such as production, supply chain and
marketing etc.

Human Resource Management (HRM)

Employees are the major source of competitive advantage for Ford and with 190,000 employees in
2019, Ford provided its employees a career with purpose, growth and success. It does so by
investing in strategic HRM, training and development, appraisals and incentives [CITATION Dva20 \l
1033 ].