Ford Motor Company Case Study: SWOT & VRIS Analysis

Question 1: Key forces in the general and industry environments

Ford Motors is one of the largest automotive companies in the US and the world. In 2009, the company suffered a severe financial crisis due to the economic recession of 2008. After this crisis, the company resolved into the manufacture of fuel-efficient vehicles and electric vehicles.

Some of the fundamental forces in the general forces that affected its choice of the strategy include:

i. Political forces: The company faces both opportunities and threats from the international political scenario. Government rules on new safety standards, federal gas mileage, and pollution control tactics may impact Ford's eco-friendly vehicle initiatives (Farooq, 2019).

ii. Economic forces: There has been a global slump in car sales across the world over the past few years. Both developed and developing nations have witnessed a nosedive in the number of cars purchased. Farooq (2019) notes that such actions could play a crucial role in driving the economy towards another recession.

iii. Social forces: The current consumers are overwhelmed with the choices regarding automobiles. Ford company may find it challenging to attract new customers due to multiple competitors and a near-saturated market. With increased demands for fuel-efficient and eco-friendly vehicles, the company needs to position itself as a significant player in the sector.

iv. Technological forces: The growth and advancement of technology have seen the demand for vehicles with modern technological devices increase. There has also been an increased demand for self-driving vehicles in the last decade, and the Ford company is not left behind in this segment (Farooq, 2019).

Industrial environment

Ford Motor has acquired a prominent position in the automotive sector. Some of the factors that contribute to the company’s strength in the automobile industry include:

i. The threat of new entrants: Investing in new startups in the automobile industry requires enormous capital investment to purchase raw materials, auto parts, and manage a production line (Ford, 2018). This creates a high barrier that provides Ford with a low threat to new entrants.

ii. Bargaining power of buyers: Ford’s customers include rental buyers and individual buyers with different bargaining power. These buyers can affect the company’s profitability since they influence the prices to some extent. Hence, the customers have a moderate bargaining power that forces the company to revise the prices and maintain the vehicle’s demand in the market.

iii. Bargaining power of suppliers: Companies supplying materials and services to Ford need to offer competitive prices to secure a long-term deal. The suppliers have a moderate level of bargaining power due to alternate buyers in the market.

iv. The threat of substitute products: The company faces a moderate threat from substitute products due to other modes of transportation such as bicycles and public transport.

v. Competitive rivalry: The company faces a high level of competition from companies such as General Motors, Volkswagen, Toyota, and Daimler (Ford, 2018). This set of competition provides the company with the challenge of maintaining market dominance. However, Ford can respond well to this competition due to its history of designing quality vehicles and awareness of quality and cost.

Question 2: Internal resources and assets

Ford Company has optimized primary and support activities to eliminate any barriers towards smooth operational performance. Ford notably enjoyed a competitive benefit in recent years because of internal resources based on the value chain analysis (Pratap, 2020). By looking at the firm’s infrastructure, the company remains competitive by having a solid financial and accounting platform. The tangible resources of Ford include physical resources such as a strong manufacturing capacity, standardized facilities, and state-of-the-art equipment. The company’s financial resources also act as the company’s tangible resources. These resources include a strong borrowing capacity that allows the company to acquire resources to conduct its operations.

The intangible resources of Ford include intellectual resources, organizational culture and human workforce. According to Ford (2018), intellectual property provides the company with different platforms for different automobile brands. The organizational culture revolves around open culture, a diverse workforce, and trust. Human resources include talent management practices and individuals with the experience and capabilities to carry out research.

VRIS Analysis

The disposition of suppliers who do not need them provides the company with added value. According to Edwards (2018), rarity and sustainability stem from customer satisfaction which allows them to reach their sales while dealers deal with profitable traders. The company's industry is also mysterious since it is casually ambiguous, dependent, and socially complex. The company also owns a brand that is expensive and hard to maintain in imitation.

SWOT Analysis

i. Strength: The company’s strength includes a strong, commanding market position with sales across China and North America (Gaille, 2021). With a strong market position, the company is the leading manufacturer of light commercial vehicles.

ii. Weaknesses: The company has significantly relied on the North American market while other markets are rapidly developing. Even though it has quickly moved into the Chinese market, it is still expanding in the Middle East, South America, and Africa.

iii. Opportunities: As technology continues to expand, Ford can leverage digital advertising to target the millennial generation to expand its market share. Digital advertising is more cost-effective than traditional marketing.

iv. Threats: Ford faces threats from an ever-increasing straight government regulation that affect the automotive industry. These regulations seek to control emissions that eventually affect the company’s financial resources while configuring the manufacturing plants (Gaille, 2021).

Question 3: Recommendations

i. The company can assure strategy control by maintaining proper teamwork towards a global enterprise and remain a leader in the automotive industry. This can be measured through the satisfaction of all stakeholders in the industry.

ii. Accelerating the development of new products to satisfy the customers’ needs and values will also enable the company to assure strategy control.

sources

Edwards, Z. (2018). VRIO Analysis of Ford Motor Company. https://www.case48.com/vrio-analysis/2862-Ford-Motor-Company

Farooq, U. (2019). Ford PESTLE Analysis | PESTEL Analysis of Ford Motor Company. https://www.marketingtutor.net/ford-pestle-analysis/

Ford. (2018). Ford 2017 Annual Report. 3,65. https://s22.q4cdn.com/857684434/files/doc_financials/2017/annual/Final-Annual-Report-2017.pdf

Gaille, B. (2021). SWOT Analysis for the Ford Motor Company - BrandonGaille.com. https://brandongaille.com/ford-motor-company-swot-analysis/

Pratap, A. (2020). Value chain analysis of Ford Motors - notesmatic. https://notesmatic.com/value-chain-analysis-of-ford-motors/