Strategic Management

Submitted by : Midhun Raj

MBA 12 B
FM-1182
Company : Ford Motors.
Industry : Automobile.

Opportunities
Growing auto markets, particularly in expanding economies such as China, Mexico
and India.
New uses for vehicles, such as app-bases serviced like Uber and Ola and short-term rental
services like zoom car. These could create new markets for vehicles and for vehicle
financing.
Global expansion through market penetration. Ford Motor Company has the opportunity
to grow and expand through market penetration (e.g. more dealerships and improved
marketing) and product development (e.g. innovation to introduce new products to satisfy
environmental concerns)
Cost reduction through strategic supply chain management. Ford also has the opportunity
to improve its financial standing by expanding its supply chain to achieve better economies
of scale and reduce production costs.

Increased levels of e-commerce, which could increase the demand for light commercial
vehicles that are used for delivery.

 Volkswagens diesel scandal. Ford could take some market share by marketing disgruntled
Volkswagen customers. Volkswagen will lose the competitive edge that diesel mileage
gives it.

New automotive technologies, such as self-driving or autonomous cars. These could

increase demand for new models and sales. The publicity-generated new technologies
could also increase interest in car purchases.

Improving business scenario due to expansion of consumer base.

Capitalizing on the models exclusively designed for different markets e.g. ford Ikon for
India

All the manufacturing should be done in India and China for cheap labor and cheap material
cost. Both these countries are encouraging products from other countries to make
production in their country.

Use advance technology such as Hybrid Engines, which will result in fuel efficiency of the
car. This is nowadays the increasing trend in market due to increase in petrol prices.

Threats

Some companies have a head start in alternative fuel vehicles. Toyota and Honda are ahead
in the production of fuel cell vehicles. Volkswagen has greater expertise in electric cars.

Aggressive competitive rivalry. Ford experiences the threat of competitors like General
Motors and Toyota, which engage in aggressive marketing and innovation.

New entry of high-tech firms. There is also the threat of technology firms like Google and
Apple in their efforts to make driverless cars that could compete against Fords products.

Fluctuating oil prices. Oil price instability threatens the sales performance of Ford
products, the majority of which have internal combustion engines.

Todays young people are driving less than previous generations, news stories indicate.This
means less interest in cars and could lead to fewer car sales at some point in the future.

Production problems in local plants due to labor and similar issues.

Rising Raw material Cost.

Increasing usage of public transport and increased fuel costs.

In the Budget of financial year 2016-17 taxes for luxury vehicles and SUVs are increased.

Great recession people dont have the money to buy a new car or desire when they are
upside down on a giant mortgage or face the possibility of losing their jobs.

Key External Factors

Weight Rating

Weighted

1-4

Score

Opportunities
Growing Automobile market

.08

0.32

New uses for vehicles

.05

.15

Global expansion through market penetration.

.03

.06

Cost reduction through strategic supply chain management .06

.24

e-commerce activities.

.03

.06

Volkswagens diesel scandal.

.04

.08

New automotive technologies.

.06

0.18

Expansion of consumer base.

.08

0.32

Market specific vehichles

.07

0.28

Cheap labor and cheap material cost in India and China

.06

0.18

Use advance technology

.06

0.18

Alternative fuel vehicles like electric car.

.03

0.06

Aggressive competitive rivalry.

.06

0.18

New entry of high-tech firms.

.02

0.02

Fluctuating oil prices.

.07

0.28

Less interest of young generation in cars

.02

0.02

Labour Issues.

.04

0.12

Rising Raw material Cost

.05

0.15

Increasing usage of public transport.

.02

0.04

Finance Budget.

.04

0.12

Recession

.03

0.06

Threats

Total 1

3.1

Bibliography
http://www.studymarketing.org/articles/Strategic_Management
http://www.mbaskool.com/brandguide/automobiles
http://pestleanalysis.com/ ford
http://panmore.com/ford-motor-company