StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Business-Level and Corporate-Level Strategies for Ford Company - Case Study Example

Cite this document
Summary
This case study "Business-Level and Corporate-Level Strategies for Ford Company" analyzes the Ford Motor Company, a major player in the car manufacturing industry, and due to its instrumental role in the industry, the company has adopted an array of the business and corporate models. …
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92% of users find it useful
Business-Level and Corporate-Level Strategies for Ford Company
Read Text Preview

Extract of sample "Business-Level and Corporate-Level Strategies for Ford Company"

Business-Level and Corporate-Level Strategies for Ford Company School: The company to be reviewed for this paper is the Ford Motor Company. The Ford Motor Company is a major player in the car manufacturing industry, and due to its instrumental role in the industry, the company has adopted a wide array of the business and corporate models (NPR, 2006). The models of the Ford Motor Company have revolutionized the motor industry, making it a top industry player – both nationally and globally. The motor production businesses of the company started in 1919, and it focused on the mass-production of vehicles for the general public. More recently, the company launched a line of financing its vehicles, which works like the company’s subsidiaries. Due to the diversified nature of the business of the company, its operational areas can be grouped under different segments: financial services and automotive (NPR, 2006). Analysis of the best business-level strategies of the Ford Motor Company The business-level strategies of the Ford Motor company include the activities and the programs implemented, towards the provision of value to the customers and also to cultivate competitive advantage, following the exploitation of core area of competency (Koontz & Wihrich, 2008). The most important business-level strategies of the company include the launch of many subsidiaries at its different focal markets. Some of these subsidiaries include Ford Asia Pacific Africa, Ford Europe, Ford North America and Ford South America. The subsidiary tasked with the role of financing the sale of the company’s vehicles is the Ford Motor credit Company. The effectiveness of the company’s business-level strategies was evidenced from its financial success all through the period of the global financial crisis. Some of the actions that evidenced the effectiveness of the company’s business-level strategy include that in 2011, it registered overall sales of about 5,695,000 units. The company’s performance evidenced the company’s ability to adapt to the volatile financial situation experienced during the crisis (Koontz & Wihrich, 2008). The most significant business-level strategy employed by the company, which guaranteed its performance, is that of cost leadership (Koontz & Wihrich, 2008). Many references of the Ford motor company report that it has received credit for the production of vehicles that are acceptable to its customer population, as well as standardized in all areas. This standardization of vehicles has been matched with its cost-reduction efforts, which were aimed at guaranteeing that the company remained the leader of the industry. For example, the minimization of costs has touched on the reduction of the overhead costs of vehicle production, which helped to reduce the overall prices of the company’s vehicles (Koontz & Wihrich, 2008). Another vital strategy is product differentiation, where the company has continually strived to provide their customers with cars that are unique from those of their competitors. For example, through the launch of the financial services division, the company guaranteed an offering which is not available from many of its rivals. Towards the realization of product differentiation, the company has remained a major player in the areas of product innovation, image management and in their use of advanced technological systems. For example, product differentiation was evidenced through the use of sustainable production materials, including rice hulls, soy-bean and recycled cotton (Ford News Center, 2014). The business-level strategy which is most significant to the long-term success of the Ford Company is that of product differentiation, which is characterized by its unique service propositions as well as product innovation at its production facilities. This strategy is most likely, the most important one for Ford Motor Company, because it is helping the company to reduce its costs of production and also improving its carbon footprint impact rating. More importantly, the strategy is improving the company’s struggle for the dwindling resources of vehicle production, many of whose supply is under the threat of exhaustion (Eyraud, et al., 2011). Globally, there are also going-green initiatives, which are promoting long-term business to the company’s that are promising better fuel consumption and a reduction in the environmental impact caused by products – down and upstream of the supply chain (Eyraud, et al., 2011). Some of the innovative strategies used by the Ford Motor Company to position it well in the industry – both in the short and the long-term – include the production of the F-series power train. The innovative power train guarantees the reduction of carbon dioxide production by 15 percent and the improvement of fuel economy by 20 percent, when compared to similar V8 systems (Ford News Center, 2014). Through the differentiated consumption of production materials, and also their innovation towards offering better fuel economy to their consumers, the company is likely to gain more credibility among its consumers both in the short as well as the long term. Analysis of the best Corporate-level strategies of the Ford Motor Company The Ford Motor Company has adopted a wide array of corporate-level strategies, including that of increasing sales through the operation of company outlets at the different operational zones. Other corporate-level strategies include those of accelerating the development of innovative products that offer value to their customers, the discontinuation of the Mercury brand in 2011, the ownership of a stake in Mazda and the increment of the funds channeled towards research and development, to foster the development of new products (Ford Motor Company, 2014). Among the different corporate-level strategies adopted by the company, the development of innovative products is the most important strategy for the long-term success of the company. The production of innovative products for the company’s customers is highly significant and timely, mainly because it has come during an era of resource crisis as well as an increase in consumer awareness. For example, following the recent cases of oil supply shortages, crises and increases in prices, customers are continually looking for ways of reducing their consumption of fuel. This offers them a cost-reduction opportunity during this time of increasing financial pressure. Through the corporate-level strategy of developing highly powerful, yet low-consuming engines, the company has offered its premium customers, more cost effective vehicles, when compared to their competitors. For example, the Ford Motor reported that the development of its F-series power train guarantees a reduction of 20 percent for CO2, while at the same time improving fuel economy by 15 percent for their V8 engines, when compared to those of their competitors. This corporate-level strategy is highly timely, noting that it offers the customer committed to environmental protection, the opportunity to reduce their carbon footprint, while still maintaining the power of their vehicles (Eyraud, et al., 2011). This corporate-level strategy also features the company’s shift to the usage of sustainable materials during the production of their vehicles, which guarantees that the production capacity of the company will remain sustainable in the long term (Ford Motor Company, 2014). This corporate outlook is absolutely essential, noting that the resources used for the production of vehicles in the past are continually getting exhausted, which is likely to restrain the productivity of different vehicle makers. For example, the company has been investing in the replacement of polypropylene with rice hulls, which offers a wide array of advantages to the company (Ford News Center, 2014). The first advantage is that it helps in reducing the costs of producing their vehicles, particularly the F-150 truck; the strategy is improving the company’s green-business credibility, and the change is guaranteed continued productivity, irrespective of the fact that the traditional resource is expensive and under the threat of exhaustion (Ford Motor Company, 2014). Analysis of the Competitive environment to determine the most significant competitor for the company From the 1950s to 2008, the big players in the vehicle production industry, including Ford Motors, Chrysler and General Motors remained the dominant industry players. However, in 2008 the three lost their dominance, by over 40 percent of the US market share to Toyota motors, which made the Japanese company the major player in the industry (Klier, 2009). The huge loss of market share among the three companies, which had dominated the US market for over 50 years resulted from the innovative adoption of the hybrid drive train employed for the Toyota Prius. Starting from 2008, the Toyota Motor Company took away industry leadership from General Motors, which had remained the dominant player of the three companies, for more than 77 years (Klier, 2009). The major changes taking place during the past years have contributed to the highly competition and a market outlook that disadvantage Ford Motors along with GM and Chrysler. These changes include the adoption of government regulations on emission levels and vehicle safety, the entry of foreign vehicle makers in the US and the global market, the huge shift in the quality standards for vehicle production and the adoption of a different vehicle production system (Klier, 2009). This exploration of the competitive environment of the US market as well as the global market which is relatively similar, it is clear that the most significant competitor for Ford Motors is Toyota Motors. A comparison of the strategies of Toyota Motors and Ford Motors shows that Toyota is utilizing its dominance of the Japanese and North American markets; it is also continuing a take-over of the South American and Asian markets. On the other hand, Ford is struggling to restore its place in the US market, through the adoption of Toyota’s hybrid technology (Wernle, 2013). Toyota has channeled its market dominance to its three main brands, including Toyota and Lexus, and is upgrading them to meet the increasing pressure to reduce CO2 emissions. Due to its specialization in the production of large vehicles, Ford is reorganizing its vehicles to reduce its high fuel and material consumption, due to changes in oil prices and legislation (Wernle, 2013). The Ford Company has resolved to short-term cost minimization, by focusing on the production of more economic models, including Ford Focus and Ford Mondeo. Toyota has kept the economical consumption of their engines their sale proposal, while Ford is working on shifting to the production of more economical engines also. Toyota is the dominant player in the hybrid vehicle market, and Ford is working on the development of its own hybrid drive train, while taking advantage of the lease of the one owned by Toyota (Wernle, 2013). Taking note of the advantaged position of Toyota motors in the industry, both in the US as well as globally, the strategies and the strategic position of Toyota are more likely to favor its long-term performance, unlike Ford Motors, which is focusing on the short-term reduction of costs. For example, from the hybrid technology of Toyota, the lease by ford is among its expense areas, but for Toyota it is a new line of revenues (Wernle, 2013). Further, noting that Toyota is the dominant player in the modern drive train technology, Ford Motors is less likely to out-compete Toyota’s dominance in the US as well as the global market. However, taking note that Ford is in the process of developing its own hybrid technology, it is likely that Toyota will not maintain its dominance in the long term (Hitt, Ireland & Loskisson, 2010, p. 145). Assuming that the car manufacturing industry was a slow-cycle market, where competitive advantage areas are sustainable and shielded from imitation, Toyota motor’s dominance of the industry would be guaranteed, both in the short and in the long term. However, assuming that US as well as the global industry is a fast-cycle market, where competitive advantages like the hybrid technology are not sustainable and shielded from imitation, the dominance of Toyota would be very much likely to be overturned by Ford Motors (Hitt, Ireland & Loskisson, 2010, p. 145). References Eyraud, L, Wane, A, Zhang, C, & Clements, B. (2011). Who’s Going Green and Why? Trends and Determinants of Green Investment. IMF Working paper, WP/11/296, 3-6. Ford Motor Company. (2014). Our Strategy: Sustainability 2011/12. Ford Motor Company. Retrieved from: http://corporate.ford.com/microsites/sustainability-report-2011-12/blueprint-strategy Ford News Center. (2014). Built Ford Green: Sustainable Materials Make America’s Best- Selling Truck Environmentally Friendly and Tough. Ford Motor Company. Retrieved from: http://corporate.ford.com/news-center/press-releases-detail/built-ford-green- sustainable-materials-make-americas Hitt, M., Ireland, D., & Loskisson, R. (2010). Strategic Management: Concepts: Competitiveness and Globalization. Mason, OH: South-Western Publishers. Klier, T. (2009). From tail fins to hybrids: How Detroit lost its dominance of the U.S. auto market. Economic Perspectives, 2Q/2009, 2-5. Koontz, H., & Wihrich, H. (2008). Essentials of Management: An international Perspective ( Seventh Edition). New York: The McGraw-Hill Company. NPR. (2006). A Timeline of Ford Motor Company. NPR. Retrieved from: http://www.npr.org/templates/story/story.php?storyId=5168769 Wernle, B. (2013). Toyota still reigns, but Ford is flexing its muscles. AutoNews. Retrieved from: http://www.autonews.com/article/20130701/OEM05/307019995/toyota-still-reigns- but-ford-is-flexing-its-muscles Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(Business-Level and Corporate-Level Strategies for Ford Company Case Study Example | Topics and Well Written Essays - 1750 words - 1, n.d.)
Business-Level and Corporate-Level Strategies for Ford Company Case Study Example | Topics and Well Written Essays - 1750 words - 1. https://studentshare.org/business/1808493-business-level-and-corporate-level-strategies
(Business-Level and Corporate-Level Strategies for Ford Company Case Study Example | Topics and Well Written Essays - 1750 Words - 1)
Business-Level and Corporate-Level Strategies for Ford Company Case Study Example | Topics and Well Written Essays - 1750 Words - 1. https://studentshare.org/business/1808493-business-level-and-corporate-level-strategies.
“Business-Level and Corporate-Level Strategies for Ford Company Case Study Example | Topics and Well Written Essays - 1750 Words - 1”. https://studentshare.org/business/1808493-business-level-and-corporate-level-strategies.
  • Cited: 1 times

CHECK THESE SAMPLES OF Business-Level and Corporate-Level Strategies for Ford Company

PepsiCo Business Level and Corporate Level Strategies

This paper delves into a brief description of the PepsiCo, business and corporate level strategies of Pepsi and how the company can enhance its competitiveness.... Later on, the company acquired Tropicana in 1998.... The company aims to be a global leader in the production of convenient beverages and foods.... The company is divided into PepsiCo Americas Foods, PepsiCo Europe, PepsiCo Americas Beverages and PepsiCo Middle East and Africa....
6 Pages (1500 words) Research Paper

Business-Level and Corporate-Level Strategies of McDonalds Corporation

It mainly performs its operational activities through the company-owned and franchised stores.... The company has been able to offer a wide variety of products and at a lower cost.... The company has acquired a good brand image in the global market and is highly valued by its customers worldwide.... The company's strategy is to satisfy the needs of its target customers by providing them with good quality food products that are less expensive and in quick time....
6 Pages (1500 words) Case Study

Relationship between Business Level Strategy, Corporate Level Strategy and Network Level Strategy

A corporate level strategy value is determined by the degree to which the different segments of businesses will prove worth to continue under the same management of the company than they would be under any other form of organization or ownership.... Thus an effective corporate level strategy creates across all the business units of the firm cumulative returns that will exceed those returns which the company would earn without the corporate strategy.... A corporate level strategy value is determined by the degree to which the different segments of businesses will prove worth to continue under the same management of the company than they would be under any other form of organization or ownership....
10 Pages (2500 words) Essay

The Links between Corporate Strategy and Human Resources

The formulation and implementations of corporate strategies have been seen as a decisive tool in the growth of a company only if a proper correlation between the same and the human capital has been made.... A strategy is simply a plan that is aimed at making a company or a business organization to market itself to attain a larger share of market from its competitors (Miller, 1989).... If the management's plan of making the company to gain a competitive advantage involves the entire shift in an organization, then the plan becomes a corporate one....
30 Pages (7500 words) Research Paper

Business-Level and Corporate-Level Strategies

According to the paper, business-level and corporate-level strategies, Tesco also aims to bring in growth and innovation in business with a wide range of product offering.... The company follows a number of business strategies in order to sustain in the retail market.... These are the finest customer retention strategies utilized by the company.... The United Kingdom (UK) based company wants to further expand the business and product lines so as to retain the competitive edge....
7 Pages (1750 words) Assignment

Business and Corporate Level Strategies for Honda Motors Company

This research is being carried out to analyze the business-level strategies and the corporate-level for Hondas Motor company.... This research will begin with the statement that Hondas Motor company is a Japanese multinational popular for the manufacture of automobiles, power equipment and motorcycles.... The company also is the biggest manufacturer of internal combustion engines with an annual production of over million of them.... The founder believed that the company should always maintain an international viewpoint, looking at the rest of the world as the potential market base and factory footprint....
8 Pages (2000 words) Assignment

Strategic Management at International Level: Nature of Economic Market

Lamb (1984) defines strategic management as 'an ongoing process that evaluates and controls the business and the industries in which the company is involved; assesses its competitors and sets goals and strategies to meet all existing and potential competitors, and then reassesses each strategy annually or quarterly [i.... In the process, strategic management creates vision, mission, objectives and strategies in line with organisational goals.... Strategic management is a complex intertwining of different functions of organisations through specific strategies....
12 Pages (3000 words) Research Paper

Business-Level and Corporate-Level Strategies

The paper "business-level and corporate-level strategies" states that the beverage industry displays qualities of a fast cycle market.... In such markets, a product reaches its maturity stage early and hence it is mandatory for the Coca-Cola company to continue working hard.... PepsiCo is the major competitor of the Coca-Cola company and for years the two companies have engaged in a bitter battle over the global market share in the beverage industry....
8 Pages (2000 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us