MASTER OF BUSINESS ADMINISTRATION

DELHI SCHOOL OF MANAGEMENT

SESSION (2020-2022)

INNOVATIVE PROJECT REPORT

OF
STRATEGIC MANAGEMENT
“Analysis of Automotive Industry - Ford”

Under the guidance of Submitted by:

Prof. Deepali Malhotra Saima (2K20/DMBA/107)
Shivam Prasher (2K20/DMBA/119)
Batch:2020-2022

AUTOMOTIVE INDUSTRY
Every company or organization aims to improve interest rates while operating. Proper strategies
to give organizations a competitive advantage over competitors during work hours are very
important. This cannot be achieved without a well-organized management system for the day-to-
day operations of these companies. In this analysis, Michael Porter provides an attractive
framework for providing guidelines to enable businesses to survive in markets during the
competition. Businesses need to deal with threats from replacement products in order to gain a
larger market base. Similarly, companies need to consider whether the potential for entry into a
particular market by individual competitors is inevitable. Strategic planning is essential for such
organizations to be able to withstand intense competition from competitors. Business
organizations should consider providing pricing products for their products to address the ability
to negotiate with their customers. Developing appropriate strategies for dealing with supportive
negotiations is also very important, in order to enable the company to improve its profitability
levels (Yacobucci & Cooney, 2006).

Introduction
In general, the emergence of the automotive sector has met with a wide range of influences from
a variety of innovations in business structures, public infrastructure, fuel, manufacturing
methods, suppliers, market changes, and automotive materials. According to one historian, the
automotive industry was steeped in the development of engines that led to the development of
new energy-efficient ways. Such mediums include smoke, new fuel including gasoline and gas in
the 1800s. The establishment of the first car factories and the construction of the first cars in
America and Europe took place in the year 1876. Other technological advances came in the
1890s and 1900s as a ground-based accelerator and steering wheel (Yacobucci & Cooney, 2006).
As a result, these developments accelerated the development of the automotive industry, making
automotive s easier to use.

Every company or organization aims to improve interest rates while operating. Proper strategies
to give organizations a competitive advantage over competitors during work hours are very
important. This cannot be achieved without a well-organized management system for the day-to-
day operations of these companies. In this analysis, Michael Porter provides an attractive
framework for providing guidelines to enable businesses to survive in markets during the
competition. Businesses need to deal with threats from replacement products in order to gain a
larger market base. Similarly, companies need to consider whether the potential for entry into a
particular market by individual competitors is inevitable. Strategic planning is essential for such
organizations to be able to withstand intense competition from competitors. Business
organizations should consider providing pricing products for their products to address the ability
to negotiate with their customers. Developing appropriate strategies for dealing with supportive
negotiations is also very important, in order to enable the company to improve its profitability
levels.

Industry definition
The American automotive industry is an industry that designs, manufactures, develops, sells,
and sells cars, targeting various national markets (Yacobucci and Cooney, 2006). In fiscal 2008,
the industry produced approximately a 70million vehicles that included commercial vehicles and
vehicles. In 2008, 79.9 million new cars were sold. changed, at the same time, the American
automotive industry overcame price pressures from consumer costs and changed consumer
purchasing habits. Currently, the industry is also experiencing an increase in external
competition from the public transport sector as clients re-evaluate the use of private vehicles.

Industry profile
The American Auto Industrial profile includes industrial size and growth as well as the
integration of the American automotive industry. The profile includes a significant increase in
industry investment by the industry in addition to the rapid growth of the three major leading
brands of light trucks (Yacobucci & Cooney, 2006). Included in the profile are changes in
employment between companies, health/pension countries within automotive rental processes.
In addition, there have been a variety of trade unions and health / pension issues.

Industry structure
The industry has more than a million Americans as workers in the manufacture of cars, parts, and
machinery. There have been major changes in the structures since the big or big companies of
Big Three including General Motors, Ford and Chrysler built a lot of cars and small trucks to be
sold in the US market. In 2003, most of the cars sold in the American market were made by
foreigners within North American factories or imported (Yacobucci & Cooney, 2006).
Obviously, the Big Three is very important in the production of light trucks which is why it gets
tough competition from foreign brands. 600000US workers were dumped by Big Three while
about 300000 were employed by foreign companies.

A FIVE FORCES ANALYSIS OF THE AUTOMOTIVE

INDUSTRY
Intensity of Competitive Rivalry (High)
The number of well-known and influential businesses is small, and the obstacles to leaving are
considerable. Any brand attempting to exit would have to accept significant losses. Customer
loyalty is great, and the sector, despite its size, has developed. The fight for market share
becomes even more intense as a result of this. Separate brands, on the other hand, target different
market niches, but they overlap. Price, design, quality, technology, consumer safety, and a
variety of other factors all play a role in how brands compete.
Overall, the auto industry is a competitive force, if not a tremendously competitive force. To
increase sales and client base, automakers are investing more in research and development,
digitalization, marketing, and total consumer experience. The level of competitive rivalry among
prominent companies is high, whether in the premium category or in the compact vehicle
segment and SUVs. Because of the increased competition, brands are attempting to optimise
consumer happiness and compete to give the greatest customer experience. They are also
investing in expanding their sales and distribution network, as well as a greater emphasis on
after-sales service.

Bargaining power of buyers (Moderate High)

Small individual customers who purchase single vehicles account for a major portion of the
buyers. Corporations and government entities, on the other hand, purchase fleets of vehicles.
These purchasers have the ability to haggle for lower costs. Buyers, whether little or large, can
easily move to a different brand. Switching to a different brand or mode of transportation does
not incur any significant fees. The majority of purchasers are price sensitive and would switch to
a different brand if a better product was available at a lower price.
Backward integration is not a threat to any of the customers, whether they are large corporations
or individual small businesses. In the grand scheme of things, their bargaining power is
moderate. Customers' loyalty is built through design, quality, and competitive pricing, according
to brands. The vehicle industry has become more competitive, and shifting consumer patterns
have increased customers' bargaining power.

Bargaining power of suppliers (Low)

Because the majority of suppliers in the automobile industry are small businesses, their
bargaining strength is limited. Only a few of them are large enough to be considered noteworthy.
For the reasons mentioned in the first category, the threat of forward integration from suppliers is
minimal. These vendors must follow the rules laid forth by the automobile manufacturers.
Vehicle manufacturers such as BMW, Ford, Toyota, and Volkswagen wield enormous power
since raw materials are always plentiful, and switching from one supplier to another is simple for
them. As a result, suppliers' bargaining strength is significantly reduced.

Threat of substitutes (Low)

Taxis, buses, trains, and planes are some of the substitutes and alternative modes of
transportation available. None of them, however, can match the accessibility and convenience
that comes with owning a car. Your personal car will service you around the clock, but you will
have to wait for another train or bus if you miss one. However, you won't have to bother about
maintenance if you use the alternate options. For most people, though, owning a car is a matter
of convenience as much as prestige. As a result, the threat of substitutes is diminished.
Nonetheless, substitute products pose a danger, as daily commuters may find it cheaper and
easier to use the train or bus.

Threat of new entrants (Low)

Because of the significant expenditure required to develop a car brand, it is difficult for new
companies to get into the business. At first, a significant investment will be necessary to
establish manufacturing facilities, a distribution network, and to hire experienced personnel.
Another significant stumbling block is the level of competition from established brands. Chances
of gaining a big market share are slim unless a new brand introduces a unique and differentiated
product to the market. While the law was not previously a barrier to new entrants, legal
requirements have increased in recent years, adding another barrier to entry.
New players may face significant obstacles in terms of brand image and reputation. Existing
brands have significant advantages in terms of brand image and equity. Any new brand would
have to put a lot of emphasis on product quality and engineering. It may be simple to obtain raw
materials, but tiny businesses will struggle to achieve economies of scale. Furthermore, breaking
into new markets is difficult. To discourage foreign brands, several countries have imposed high
import levies. As a result, there are various elements that reduce the threat posed by new
participants. Apart from Tesla, there is barely a new brand in the automobile sector that has been
able to create a significant imprint on a global scale.

PESTEL ANALYSIS
The automotive industry's PESTEL analysis demonstrates how several external influences might
affect their business. The vehicle business is evolving in tandem with people's changing
lifestyles. The automotive industry's PESTEL analysis reveals the issues that it may encounter in
the future. As a result, businesses will be able to figure out how to solve problems.

Political Factors:
The politics of a country have a direct impact on the businesses that operate on its outskirts. The
PESTEL analysis of the automotive sector demonstrates the impact of political concerns on the
industry:
• To safeguard the safety of passengers, most governments have enacted restrictions
governing the fabrication of automotive parts. If a business fails to meet these conditions, their
licence may be revoked. Furthermore, the organisation must devote a large amount of time to
testing before launching, which can be pricey at times.
• The administrations also want to limit the excessive use of fossil fuels, which produces
more pollution. To stay in business, automotive manufacturers must keep emissions under a
certain limit.
• The government's policies on export and import have an impact on a country's
automotive sector. If a company can import high-quality parts at a comparatively lower rate, it
can have a better profit margin.

Economic Factors:
People's lifestyles are influenced by a country's economics. As a result, it may have an impact on
the vehicle sector. Here are some economic factors that may have an impact on the automotive
industry:
• People's incomes in both stable and growing economic zones are steadily rising. As a
result, their spending power is increasing. It is for this reason that the demand for automotive s is
increasing.
• Many countries have imposed taxes on luxury items, raising their price and preventing a
certain segment of the population from purchasing one. In some nations, this could lead to a
decrease in demand for premium vehicles. However, if a number of businesses launch
automotive s that are very inexpensive, they may be able to attract more purchasers.
• If the price of automotive parts rises, the price of cars will rise as well. It could be one of
the reasons for the drop in automotive demand.

Social Factors:
A land's socio-cultural conditions have an impact on its enterprises. Social developments have a
significant impact on automotive manufacture. The PESTEL analysis of the automotive business
can reveal the social conditions that may affect the industry.
• Automotives are not just transportation, but also fashion statements. As a result, when
creating new cars, corporations must consider the preferences of their customers. Otherwise, it
may fall out of style and be difficult to sell.
• The population distribution of a country has an impact on car sales. Big cars, such as
SUVs, sell well in states with dense populations and large families.
• The vehicle business is influenced by community culture and tendencies. For example,
countries with well-connected bus services may experience a reduction in the number of people
who own cars. Developed countries also have a proclivity to own one or more automotives.

Technological Factors:
The state of technology has a significant impact on vehicle company sales. Here are some
technical concerns that can affect the automotive industry's business:
• To secure people's safety, the vehicle industry is heavily reliant on cutting-edge
technology. To make their cars as safe as possible, companies must enhance their technologies.
• Companies must focus their efforts on reducing emissions. They can reduce emissions by
employing current technologies.
• Self-driving cars are already available. As a result, they may face high demand in the
future. The corporation should push self-driving and electric automotive s in order to win more
clients.
Environmental Issues:
Environmental issues can have a significant impact on the vehicle sector. As public awareness of
pollution grows, the situation may have an impact on their business. The PESTEL analysis of the
automotive sector might reveal the following environmental challenges that may have an impact
on the business:
• Environmentalists and government officials are concerned about automotive emissions.
Companies can leverage cutting-edge technology to develop battery-powered or electric
vehicles, which will assist to reduce pollution.
• Countries' governments are more ready to implement environmental legislation to reduce
pollution levels, and automotive manufacturers must follow the rules. Automotive
manufacturers' profit margins may be lowered as a result.
• Automotive businesses' research divisions must be meticulous in their testing. If they can
pass the stringent pollution tests, they should put a unit on the market.

Legal Factors:
A country's rules and regulations can have an impact on the automotive industry's business.
Automotive companies are governed by regulations in the majority of countries. Here are some
legal concerns that may affect the automotive industry's business:
• Many countries have tight restrictions in place to reduce the number of automotive s on
the road, which can aid in the reduction of air pollution.
• If it is discovered during an accident's forensic examination that there was a problem with
faulty parts or airbags, the manufacturer may face legal action.
• If a vehicle manufacturer works in a global market, it must adhere to tax and
environmental regulations. If they do not, the company may be barred from operating in the
country.

ENVIRONMENTAL THREAT AND OPPORTUNITIES

ANALYSIS
Steel is one of the most significant modern materials, and the automotive sector is the largest
importer. The automobile industry encompasses the design, manufacture, and distribution of self-
propelled vehicles such as cars, trucks, and other commercial vehicles. Because of the large
number of people employed in the sector, it has become a critical force in economic
development.

Steel is one of the most important contemporary items, and the automotive industry has become
the largest importer of it. Automobile industry refers to the production and marketing of self-
propelled vehicles such as cars, trucks, and other commercial vehicles.

Opportunities for Automobile Industry

The ETOP analysis highlights the most promising automotive opportunities. Large businesses in
this field have an easier time identifying and capitalising on growth possibilities. They can take
advantage of these chances to change the course of events. Recognizing opportunities that are
compatible with the company's growth is an important part of its fundamental planning. They
can easily consider the options because they only have a small number of focuses. Let's have a
look at a few of them:

Efficiency
As technology progresses, people are becoming increasingly concerned about efficiency levels.
As a result, during the next decade, the number of cars with cost and fuel economy features will
increase. With advanced technology, this may potentially open up a huge market for businesses.
Using renewable energy sources could also considerably improve market performance.

Alliances
With more competition among businesses, a better solution for mutual progress may emerge.
Firms may present a variety of solutions to the market by combining separate specialised
strategic competencies, resulting in significant sales for participating organisations. This could
lead to a competitive edge in a difficult market.

Consumer Groups
As the world's economy grows at a breakneck pace, changes in lifestyle are becoming more
obvious. Customers from poorer countries are becoming more common. The demand for autos
develops in tandem with the number of nuclear households. For a variety of reasons, including
comfort and safety, many developing families are interested in private autos. The demand for
two-wheelers and small cars will rise as a result of these changes.

Market Expansion
As additional Asian and BRIC countries enter and flourish, vehicle demand will climb. This
expansion has the potential to spread to other countries. As additional countries open their doors
to the automobile industry, the market will continue to grow and thrive.

Threats for Automobile Industry

Every analysis that has been deemed useful comes with a unique viewpoint on threat concern. At
the moment, the business in the technology industry is evolving at a rapid pace. Stagnation and
lack of progress may be alarming for any firm in this circumstance. Automobile industries have
distinct dangers, but effective planning can help them withstand the circumstances. Some of the
dangers are as follows:

New entrants catching up

The market grows more competitive as more enterprises invest in the vehicle industry. The more
rivals there are, the more shares of the market's wealth are available, and the more difficult it is
to scoop up a large chunk of cash.

Sustainability
For the worldwide vehicle production industry, emissions have proven to be a serious headache.
The automotive sector has become governed by a tight regulatory range as air quality continues
to deteriorate as a result of fuel-powered vehicles. Automakers must comply to a rigorous
emissions cap imposed by regulatory authorities. Carmakers are finding it extremely difficult to
offset an adequate profit margin, resulting in massive financial losses, as unfavourable publicity
about diesel emissions grows and CO2 capping becomes more stringent.
Fuel price volatility
For the consumer segment, fuel price volatility remains the determining factor for growth.
Government rules governing the use of alternative fuels such as CNG and Shell gas are also
having an impact on stockpiles.

High Fixed Cost

As a result of the increasingly competitive industry, companies are seeking to invest more in
R&D centres. They are building facilities in order to break into the market. This investment,
however, must be lucrative, which is a huge issue. The return on investment (ROI) must be
capitalised. However, in today's uncertain world and future, it could be seen as a potential threat.
 FORD
Introduction
Ford Motor Company, an American car company founded in 1903 by Henry Ford and 11
investors. In 1919 the company was reorganized, and Ford, his wife, Clara, and his son, Edsel,
acquired full ownership; they, their heirs, and the Ford Foundation (founded in 1936) were the
sole shareholders until January 1956, when the general sale of public stocks began. The company
manufactures passenger cars, trucks, and tractors as well as car parts and other equipment.
Headquarters is in Bornborn, Michigan.
Ford Motor Company (Ford) is the world's largest car manufacturer, operating in 200 markets on
six continents. The product includes Ford, Lincoln, Mazda, Mercury, and Volvo. Ford also sells
the luxury sports car, Aston Martin. The company is primarily based in the US and Europe and
has employed 246,000 people since December 2007. Ford's goal is to create highly desirable
products for profit. They are also doing this with the increase in the number of new products
from around the world. In the 2007 financial year, the company recorded $ 172,455 mill, an
increase of 7.7% over 2006. However, the residual loss was $ 2723 mill in 2007, compared to $
12,613 mill in 2006, with a performance gain of $ 5631 mill in 2007 compared to the $ 8,190
mill in 2006 (data keeper).

Early History
Henry Ford built his first test drive workshop behind his home in Detroit in 1896. After the
formation of the Ford Motor Company, Ford's first car was assembled on Mack Avenue in July
1903. Five years later, in 1908, the successful Model T was introduced. The demand for this car
was so great that Ford developed new mass-production methods to make it in sufficient quantity.
In 1911 he established the first branch of the U.S. branch office. (Kansas City, Missouri) and
opened the company's first production plant (in Manchester, England); in 1913 introduced the
line of the first major car assembly; and in 1914, further advancing labor productivity, introduced
a $ 5 daily eight-hour salary (instead of $ 2.34 a nine-hour day).

Reorganization And Expansion

By early 1906 Henry Ford had received 58.5 percent of the company's stock; then, when some
stockbrokers disagreed with the idea of building a large (and expensive) River Rouge plant in
Dearborn, he bought them; Edsel Ford (1893–1943) became president (1919). With Edsel's death
in 1943, Henry Ford returned to the presidency, but in 1945 handed it over to his grandson,
Henry Ford II, who reorganized the company's confusing financial management system and
revived its corporate culture by hiring talented new managers. The failed launch of Edsel (model
1958-60) took place amidst this success. Henry Ford II continued to lead the company as chief
executive (1945-70) and chairman of the board (1960-80).
In the 1950s and 60s the Ford Motor Company began to have a limited variety, but by the 1990s
it had focused on its concern for motor vehicles and financial services. 1989–90 Ford acquired a
Jaguar, a British manufacturer of luxury cars. Aston Martin became a fully owned company in
1993. Later acquisitions included car rental company Hertz Corporation in 1994, Volvo car
division in 1999 and Land Rover sports utility vehicle in 2000. Ford also bought a large share of
Mazda Motor Corporation. However, as Ford fought back in the early 21st century, it began to
sell these products. Ford sold Hertz in 2005 and Aston Martin in 2007. Sell Jaguar and Land
Rover to Tata Motors Ltd. of India in 2008. Ford started selling its shares in Mazda in 2008 and
completely split in 2015.

Ford In The 21st Century

December 2008 Pres. George W. Bush has announced an emergency rescue plan to help “Three
Big” car manufacturers — Chrysler LLC, General Motors Corporation, and Ford - prevent the
collapse of the country's struggling car industry. The program has promptly obtained $ 13.4
billion in government loans from the Troubled Assets Relief Program (TARP), a $ 700 billion
fund approved by Congress to help the financial industry following the subprime mortgage crisis.
The loan will allow car companies to resume operations in March 2009, when they were required
to demonstrate "financial efficiency" or repay the loan. The additional regulation requires
companies to be restructured. The money was initially donated by General Motors and Chrysler;
Ford is said to have had enough money to continue operating, so it did not immediately seek the
government's help.
It is able to avoid a collapse - put in place by General Motors and Chrysler - Ford experienced a
sharp increase in sales and market share in 2009. This growth is partly due to the provincial
government's "cash-in-transit" program to provide consumers with up to $ 4,500 in trade - old
cars with new fuel-efficient models. In addition, Ford has adopted a variety of cost-cutting
measures and focused on solid products. In 2010 automakers sold Volvo to Chinese company
Zhejiang Geely Holding. A few months later Ford announced it would suspend its Mercury line.
However, as sales declined, the car manufacturer looked to expand its products. In 2016 Ford
Smart Mobility was created to improve car-sharing and self-driving systems, among other
programs. The following year the car manufacturer announced that it was stepping up its electric
motor. However, in 2018 Ford announced that it will eliminate all its vehicles, with the exception
of the Mustang and Ford Focus Active. Instead, the company would focus on photos, SUVs, and
crossover cars.

Business Model of Ford

As Ford expanded in and out of the world, competition from other car and truck manufacturers
became a major issue and they began to feed on the company's salaries. To make itself more
competitive, Ford has revised its business model and announced a new approach in 2008 under
the title "One Ford." The One Ford approach sought to integrate and simplify international
production operations. Instead of producing a more sophisticated variety of sub-carriages (belly
car) of its many cars in the U.S., Europe, and elsewhere, Ford has reduced the number of models
sold and relied on a more standard production chassis. As reported by the New York Times, the
merging process has led to the disappearance of other Ford components such as Mercury, as well
as the separation of many luxury products such as the Jaguar, which were sold to other
businesses. The review of Ford's business model was not enough to fully restore the company to
its former glory in the early 20th century. Today’s competition is fierce in the industry and
changes in technology and consumer preferences are accumulating very quickly.

As a result, Ford has recently adopted a new type of business that falls under the umbrella of
"Creating the Future, Together." The emphasis on "tomorrow" is key, as Ford is once again
getting used to new technologies such as self-driving cars and electric cars that the company sees
as a direction for the future.
As described in a recent Ford annual report, their business model now rests on four pillars:
● A portfolio of cars, SUVs, and trucks that are second to none.
● A choice for consumers of propulsion options, including conventional gas, hybrid
vehicles, and fully electronic vehicles.
● Highly trusted, safe and secure driver-assist and self-driving systems.
● Cloud-based mobility, that is, in-car entertainment and information services that benefit
customers and provide ongoing subscription revenue to Ford.

So. it could be said that Ford's current operations focus on three key aspects of the company's
business model:
● Integration: Ford uses strict control over overall production, marketing, and sales
processes to achieve quality in all categories. With so many things coming from external
suppliers, Ford is building a strong partnership network where it is supplied, refining production,
and developing new products in partnership with suppliers.
● License: Ford earns money by licensing its company name and logo on everything from
after-sales products to retailers, toys, and video games. This not only makes money but
strengthens the product in the minds of consumers.
● No Frills Options: To appeal to a wider number of consumers, Ford does not include frills
models in its product offerings. These discounted cars offer a few simple and redesigned features
but make the work done at an attractive price for some car buyers.

VALUE CHAIN ANALYSIS OF FORD

Michael E Porter, a Harvard business school professor, coined the term "value chain." It
comprises all processes that add value to the product, from planning to manufacture, sales, and
after-sales support. Primary activities and support activities are the two categories of activities in
the supply chain. The primary activities are those that directly contribute to the development of
value, while the secondary activities primarily support the core activities. Ford has improved its
value chain's core and support activities to remove bottlenecks that impede smooth operational
performance.

Primary Activities in the value chain of Ford Motors:

Ford Motor Company's major value chain activities are directly involved in the production and
sale of the product to specific consumers. As mentioned below, analysing primary value chain
operations can help Ford Motor Company enhance its performance.

● Inbound logistics:
Ford's production network stretches around the globe. It has production and assembly operations
all throughout the world, from Africa to the United States and China. Ford collects raw materials
from all over the world from its sources. With the support of third-party logistics companies, the
raw material is subsequently supplied to the assembly factories. DHL is one of Ford's most
important logistics partners. It has been critical in assisting Ford in maintaining its European
supply network. DHL has been granted a new contract by Ford Motor Company to supply freight
management services as part of its Lead Logistics Partner solution.
● Outbound logistics:
The smooth and profitable operation of Ford's supply chain relies heavily on logistics. The role
of logistics, whether inbound or outward, is critical to supply chain efficiency. The assembled
vehicles are sent to Ford dealerships from the company's manufacturing locations. Apart from
environmental sustainability, Ford has adopted a balanced mix of transportation solutions that
focus on lowering road miles as well as optimising efficiencies. It works with its logistics
partners and industry to correctly analyse and enhance transportation's impact throughout its
supply chain.

● Operations:
Ford is a global brand with dealerships in practically every corner of the globe. It has offices,
assembly plants, and dealerships all around the world. It has separated its company into five
segments based on geographic location of operation: North America, South America, Europe,
Middle East & Africa, and Asia Pacific. Manufacturing and assembly facilities, distribution
centres, warehouses, sales or administrative offices, and engineering centres are among its most
important holdings. Ford also owns nearly all of its production and assembly plants in the United
States and abroad. However, outside of the United States, the majority of its part distribution
locations are either leased or provided by vendors.

● Sales and marketing:

To persuade clients that its offering is better than competitors, Ford Motor Company will stress
the benefits and differentiating factors of supplied items at this stage. Ford Motor Company
cannot create value by delivering a high-quality product at a reasonable price with unique
features unless it engages in marketing and sales activities. Here, salespeople and marketers play
a crucial role.

Sales force, advertising, promotional activities, pricing, channel selection, quoting, and creating
relationships with channel members are some examples of Ford Motor Company's marketing and
sales activities.

● Services:
The Ford Motor Company's pre-sale and post-sale services will play a significant part in building
customer loyalty. Post-sale services are as crucial to modern customers as marketing and
promotional activities. In today's digitally savvy society, the impact of negative e-WOM owing
to bad customer service cannot be underestimated. To prevent undermining the firm's brand
reputation, the company must examine its support operations and instead use them as a vehicle to
spread positive word of mouth as a result of rapid, timely, and efficient support services.
Secondary Activities:
The support activities aid in the coordination and facilitation of the primary value chain
activities. Analysis of Ford Motor Company's support efforts, as described below, can also be
beneficial.

● Firm Infrastructure:
Quality management, legal matters handling, accounting, financing, planning, and strategic
management are all examples of business infrastructure. Ford Motor Company can optimise the
value of the entire value chain with effective infrastructure management. To improve its
competitive position in the market, Ford Motor Company can control infrastructure operations
(also known as overhead costs).

● Technology:
Almost all value chain activities in today's technologically advanced period rely on technology
support. Ford Motor Company must recognise the importance of technology development
because of the technological integration in production, distribution, marketing, and human
resource activities. It can be separated into two categories: product and process technical
advancement. Automation software, technology-assisted customer service, product design
research, and data analytics are just a few examples. This category includes Ford Motor
Company's research and development department.
● Human Resource Management:
Ford Motor Company can evaluate different areas of human resource management, such as
recruiting, choosing, training, rewarding, performance management, and other personnel
management operations, to analyse human resource management. Based on the motivation,
commitment, and abilities of its personnel, good HR management can allow Ford Motor
Company to lessen competitive pressure. The organisation can also achieve its cost-cutting goals
by comparing the costs of hiring and training to their respective returns. The importance of this
value chain support activity will grow as Ford Motor Company's reliance on employee talent
grows.

● Procurement:
The activities involved in obtaining inputs such as equipment, machinery, raw material, supplies,
raw material, and other items necessary for creating the finished product are referred to as
procurement in the value chain. Ford Motor Company should carefully analyse its procurement
efforts to optimise the inbound, operational, and outbound value chains because they are linked
to many value chain activities.

RESOURCE-BASED VIEW OF THE COMPANY- FORD

The resource-based view [RBV] is a strategic management tool and framework that firms and
organisations use to identify and harness strategic resources in order to build a long-term
competitive advantage for the organisation. The RBV framework is built on assessing and
selecting resources that will prove to increase an organization's competitiveness, as well as
strategically aligning them.

According to the RBV, all organisations and businesses have access to, possess, and control
resources that enable them to develop a competitive advantage. In turn, a subset of these
resources enables greater long-term performance. Possession and control of important resources
may lead to a long-term, sustainable competitive advantage based on these resources.
The RBV categorizes resources available to the firm broadly as being tangible or intangible in
nature.

Tangible Resources
Tangible resources are those that are physical in nature and that the organisation and rivals can
easily identify. Furthermore, these resources can be easily obtained from the market or
developed over time. As a result of this, where competitors may obtain same or similar
resources, They will provide the company with little to no competitive edge in the future.

At Ford Motor Company, tangible resources include, for example:

● Land
Ford Motor Corporation's land is a tangible resource that includes all locations owned and rented
by the company for the purposes of hosting production units and warehousing. Furthermore, all
units owned or rented by the corporation for packaging purposes are considered tangible
resources under the land.

● Equipment
For Ford Motor Company, equipment is a tangible resource that encompasses all of the
company's equipment used for manufacturing, packaging, and other operational functions. In this
way, all technical breakthroughs and technological integration for improving processes and
operations can be viewed as an extension of the equipment that the firm uses to improve its
product line and achieve economies of scale.

● Materials
Materials refer to all of Ford Motor Company's raw materials and other packaging materials used
in the successful production and packaging of its goods. The materials are tangible in nature, and
competitors can simply acquire them for their own manufacturing processes and other uses.

● Supplies
Supplies at Ford Motor Company are a tangible resource that encompass all materials and goods
used and required to support the company's packaging and production functions. All products
and supporting materials required by other Ford Motor Company departments for the successful
achievement of business goals and targets are included in supplies.

● Facilities
With respect to Ford Motor Company, facilities are also a tangible resource that is easily
identified by competitors. All of the company's manufacturing units, warehouses, offices, and
supporting structures and functions are included in the facilities, which enable the company
streamline its procedures and operations and contribute to good results. Interior design and
building interiors are also part of Ford Motor Company's facilities, which are meant to improve
performance and maintain brand image.

● Infrastructure
This comprises all of Ford Motor Company's property and facilities in terms of technology,
buildings, office supplies, and maintenance, as well as the allocation of power resources like
energy to its plants. The company's infrastructural development is a vital resource for assuring
high performance and simplicity of operations. Competing players, like other tangible resources,
may be able to easily access it, and may produce equivalent resources for their own products and
purposes in the future.

Intangible Resources
Organizations like Ford Motor Company own and hold intangible resources, which have no
physical value but are nevertheless owned and possessed by them. Because of connected
characteristics and aspects of historical uniqueness, causal ambiguity, and social complexity,
competitors are frequently unable to purchase or acquire the intangible resources available to
Ford Motor Company. Intangible resources are primarily unique and are more likely to remain
within the firm over time, forming the foundation of Ford Motor Company's competitive edge.

Intangible resources are also seen as a source of Ford Motor Company's success because they are
difficult to replicate in factor markets by competitors. Intangible resources for Ford Motor
Company include, for example:

● Brand Reputation
Ford Motor Company's brand reputation is based on its historical uniqueness, since the
company has worked hard for decades to deliver high-quality products and earn
consumer trust. Competitors cannot copy the company's brand reputation, which is built
 on its organisational culture and unique relationship with customers, and it may become a
source of competitive advantage.

● Intellectual property
Ford Motor Company’s production processes and its product uniqueness is safeguarded
by intellectual property rights which prevent other competing players from copying or
having access to its unique product blend, and product ingredients and inputs. This
ensures novelty to Ford Motor Company and makes its products inimitable for competing
players.

● Patents & Copyrights

Ford Motor Company has patents and copyrights not only for its manufacturing
techniques and product composition, but also for its product improvement and
enhancement research and development operations. These patents and copyrights
safeguard Ford Motor Company from infringement or imitation.

● Goodwill
Ford Motor Corporation's goodwill is once again built via historical distinctiveness,
where the brand's reputation and customer experience have allowed the company to
develop long-standing goodwill. As a result, Ford Motor Company's entire brand equity
has improved. The Ford Motor Company brand's goodwill has been built over a long
period of time via continual hard effort, and it cannot be replicated by competitors.

● Trade names
The company's trade name is also an intangible resource because no one else can use or
replicate it. Customers recognise the trade name, which provides instant awareness for
the company across borders. The trade name also serves as a source of competitive
advantage for the organisation by communicating the brand promise and values to
customers around the world.

● Customer experience
Ford Motor Company provides a unique customer experience to its customers through its
brand activities, and offerings – as well as marketing activities. Though marketing
activities may be copied by competing players, the strategic direction and intent with
which the customer experience and brand activities are planned is inimitable and prides a
unique source of competitive advantage to Ford Motor Company.

Heterogeneous and Immobile Characteristics of Resources

The RBV for firms holds that all resources possessed, controlled and owned by organizations
have two core characteristics – of heterogeneity and immobility.

● Heterogeneity
The RBV assumes that resources based on skills and capabilities – such as human
resource operations, training, and talent – vary from firm to company under
 heterogeneity. This diversity is critical for avoiding the development of perfect
competition characteristics. As a result, despite similar external forces and conditions, the
RBV posits that each company has a distinct amount and mix of resources, which leads to
varied strategic trajectories and strategic options.

This means that, given similar external environmental conditions, Ford Motor
Corporation's strategic decision and choice will differ significantly from its rivals due to
the distinct mix of resources available to the company. Ford Motor Company may finish
products and surpass the competition in various markets, as well as achieve competitive
advantage through the deployment of unique resource bundles and mixes, thanks to the
assumption of heterogeneity under RBV.

● Immobility
The RBV presupposes that the firm's resources remain immobile, and that they cannot be
transferred from one organisation to another - at least not in the short run. Based on this
notion of short-term immobility, the RBV assumes that rival companies will be unable to
mimic and recreate Ford Motor Company's resources, as well as devise and implement
strategies and decisions identical to Ford Motor Company's. Nature is mostly stationary
when it comes to intangible resources.
In general, all of Ford Motor Company's intangible resources are heterogeneous and
immobile. In the near run, Ford Motor Company's tangible resources are likewise static in
character, and may be homogenous to the participant in the factor markets, depending on
the advances and strategic advancements of competing players.

VRIO Analysis

The traits of heterogeneity and immobility are insufficient for Ford Motor Company to gain a
competitive advantage by utilising resources. It is critical that resources identified for the
organisation meet the VRIO criteria in order to decide if they can be exploited and enhanced to
generate a competitive advantage in the long run with sustainability.
The VRIO framework evaluates tools based on their value, rarity, uniqueness, and organisation.
The VRIO strategic tool can be applied to the identified resources at Ford Motor Company to see
if they can be used to develop long-term competitive advantage.

SWOT ANALYSIS OF FORD

Ford’s Strengths – Internal Strategic Factors

➔ Global Recognition: Ford is a well-known brand in the automobile sector and is also
well-known in international markets due to its marketing and advertising success. Ford Motor
Company owns and runs two brands: Ford and Lincoln. According to Statista's 2021 study, its
brand worth is $10.44 billion.
➔ Automotive Segment: Ford is the second-largest carmaker in the United States (after
GM) and the fifth-largest in the world (behind Toyota, Volkswagen, Hyundai, and GM). Ford
Motor Company sold 4,187,000 automobiles worldwide in 2021.
➔ Research and Development: Ford's research and development department is one of its
core strengths, as the firm is dedicated to creating and developing new products. They strive to
increase the performance of their automobiles on a regular basis. Fuel efficiency, safety, and
customer happiness are among the aspects that are assessed.
➔ Diverse Offerings: Ford has a wide range of brands and automobile types that appeal to
a wide range of demographic groups. They cater to the demands and desires of their customers
by offering a wider range of automobiles and commercial vehicles.

Ford’s Weaknesses – Internal Strategic Factors

➔ Weak Foothold in Emerging Markets: Ford's operations are diversified in various

geographical locations, therefore they lack emphasis in terms of performance and productivity in
emerging markets. They do not have a significant presence in emerging areas such as India.
➔ Poor Reputation: Ford has a bad reputation when compared to its European and
Japanese competitors. In comparison to English and German luxury automobile brands, Lincoln
is seen as a lesser brand.
➔ Overdependence on Trucks and SUVs: As Ford concentrates more on trucks and
SUVs, the company's diverse range is gradually dwindling. Trucks currently account for more
than half (54%) of Ford's total vehicle sales in the United States, with ambitions to enhance SUV
sales in the future. Because most consumers are aware of climate change and are turning away
from large gas-guzzlers, relying too heavily on trucks and SUVs is problematic.
➔ Dependence on U.S Markets: Ford's business is heavily reliant on the US and European
markets. Its profits and revenues are restricted. Experts estimate that emerging nations such as
China and India will account for the majority of future car sales. Ford's sales in the United States
have been dropping year after year owing to market saturation.

Ford’s Opportunities – External Strategic Factors

➔ Increase Customer Base: Ford is already attempting to get into the Indian and Chinese
vehicle markets, and they now have a fantastic potential to expand their customer base into other
tiny countries across the world. Ford's sales in China increased by 25% to 164,352 units from
July to September 2020, indicating the company's expanding consumer base in Asia.
➔ Digital Marketing: Because digital marketing is so prevalent these days all over the
world, Ford has an opportunity to improve its digital marketing skills in order to increase
consumer and supplier engagement.
➔ Expand into Related Fields: Ford has substantial experience in a variety of auto-related
fields. Jim Farley, the business's new CEO, recently declared that the company would be
expanding into software, fleet management, electric vehicle charging, and other related
technology industries.
➔ Eco-Friendly Vehicles: Ford has a tremendous potential to manufacture fuel-efficient
automobiles and commercial vehicles because they are already trying to be technologically
flexible. They can, for example, create cars that run on several types of energy. They will have
more possibilities in constructing environmentally efficient automobiles as a result of this.
Because they have already captivated the market with this new model, the 2018 C-Max and
Fusion Hybrid car model could be their most significant opportunity.

Ford’s Threats – External Strategic Factors

➔ High Competition: Ford is already up against tough competition from Toyota, Tesla,
and Tata. Ford continues to struggle to maintain its industry-leading position in terms of
innovation.
➔ Increased Prices of Raw Materials: Increasing steel and steel coil raw material prices
can have a direct impact on the company's cost and profit margin.
➔ Ford shuts down manufacturing plants in India & Brazil: Ford has ceased production
of automobiles in India. Ford will no longer sell the Figo, Aspire, Freestyle, Ecosport, or
Endeavor in India. Ford's business solution, engineering, and customer support functions, on the
other hand, will remain in India. Similarly, in 2021, Ford will close three production units in
Brazil.
Ford is on a reorganisation effort to increase profitability, and the global pandemic has hastened
this decision.
Strategies:
● Product development Strategy- Product development strategy refers to the methods and
actions taken to introduce new products to the market or to modify existing products in order to
generate new revenue.
● Widening the Car Market- Modernizing the world. Citizens are heavily reliant on the
transport facilities. It’ll boost motor vehicle sales. Seeing that FORD is coming to India and it
has a great opportunity to grow.
● CSR- To gain trust amongst the stakeholders as well as the community or consumers.
They need to show that they are doing something for the local community. They can centre it on
how their businesses safeguard human rights, protect health and safety, provide access to social
goods, and improve society economic success.
● Aggressive global expansion- The SWOT analysis of FORD shows that the company can
have higher long-term success potential through aggressive global expansion, especially in
countries like India and China. The company’s internal strategic factors (strengths and
weaknesses) represent capabilities for this kind of expansion.
● Gaining the trust of Suppliers back- The company can reach heights of success, they need
to create trust amongst the suppliers again. For that the company needs to spread their words
amongst the stakeholder and make them trust the whole process again.
● Electric Vehicles are the demand of the new generation. Tata Motors must introduce new
electric cars to compete with new emerging players.
● Merger and Acquisition Opportunities: Merger and acquisition is a fairly common
tradition in the automotive sector. Tata has a long track record as one of India’s oldest
companies. As it grew larger, it has acquired acquisition capabilities. It also has its own proven
management policies which may help manage newly acquired businesses.