Ford Motor and Maintaining Competitive Advantage

Introduction

The Ford Motor Company is among the top three car and truck manufacturers in the United States of America. This company carries out the manufacturing and distribution of automobiles in more than 200 market outlets all over the world. The company has about ninety-five plants throughout the world and its core and affiliated brands are Volvo, Mazda, Lincoln, Mercury, and Ford.

In the years that have just passed, this company has realized slow-moving growth in revenue. According to Datamonitor (2008), the revenues of the Ford Motor Company have grown at one percent between the year 2003 and 2007 from a total of $164, 631 million in the year 2003 to $ 172,455 million in the year 2007.

The business-level strategy of the Ford Motor Company

The business-level strategy refers to the strategy which is selected by a business organization to achieve a competitive advantage in the market in which it is operating. This strategy has to be selected by firms due to the tough competition that is found in a particular industry. Therefore, the managers identify the vitality of coming up with business-level strategies that aim at achieving a competitive advantage over the competitors (other firms) within the same industry. This is a choice that a business organization has come up with when it decides to get involved in competition within a single product market in which the products of every firm have some similarities. The generic strategies adopted by the firms include; cost leadership, differentiation, and focus. Ford has been employing these strategies and this has enabled it to achieve a competitive advantage. This company has been renowned for its focus on cost leadership. For instance, in the year 1997, the company was able to cut $ 1 billion in costs as a consequence of employing standardized parts for various Ford models. The Company has been known to be an innovator in this industry in regard to technology. These trends have enabled the company to sustain its success and efficiency in the automotive industry (Highfill, 2004). The innovations have enabled the company to bring on the market the products that are differentiated and also enabled the company to employ the focus strategy. More so, the innovations have enabled the company to realize cost leadership.

Value chain activities

These activities are not isolated from each other. There is the affecting of a single value chain activity on the other value chain activities. There may be linkages between the primary activities as well as linkages between the support activities and the primary activities.

The company may be in a position to bring down the costs in one activity and as a result, get the benefit of a reduction in another. For instance, at the point when a simultaneous change brings down the cost of manufacturing and brings improvement in reliability for the service costs to come down. By way of these developments, Ford Company will have the potential to improve a realized advantage (Anon, 2007).

How Ford can successfully position itself in terms of the five forces of competition

Threat to new entrant

This threat is quite minimal in the automobile industry. This industry has greatly matured and attained success in reaching economies of scale. In order for the company to succeed in competition, it is supposed to acquire economies of scale. It must get involved in mass production of the automobiles so as for these products to be affordable to the customers. More so, another barrier to entry is access to the channels of distribution. The firm should get a dealership to make the selling of its automobiles or get a dealership of its own.

Bargaining power of supplier

This power is quite low in regard to the automobile industry. This makes it possible for the company to easily switch to another supplier whenever it deems it necessary as long as this move will aid in enabling the company to gain a competitive advantage.

Bargaining power of the buyers

This power is moderately high in this industry. The consumers who are the buyer buy nearly all the outputs of the industries. The company relies on the buyers in order for them to carry on with their business successfully. Therefore, the Ford Company should hold on to the responsibility of serving their customers in the best way possible in order to keep them happy by offering them the products and services they desire. This will enable the company to win competitive advantage by acquiring the customers’ loyalty.

Threat of substitutes

There exist a very large number of substitute products in this industry. Following this, the Ford Company should make efforts to come up with the best quality low-cost products for its customers.

Rivalry among competitors

This rivalry is quite strong in the automobile industry. There is a very intimate balance among the major competitors and this is what brings about an increase in rivalry. In order for the company to gain the market share, it must take it from the competitors.

Competitor analysis

Several firms are offering stiff competition to the Ford Company. The competing companies are bringing to the market the products that are new and what the customers actually want. The products have been appealing to the consumers in terms of the price, the way these automobiles appear, and their performance. This has brought about a relative reduction in the market share for the Ford Company.

Role of strategic leadership

Strategic leadership will play a major role in enabling the new manager as well as the organization to achieve the strategic objective of the Ford Company. This will enable in working in an uncertain environment on problems that are quite complex that affect the organization. As a strategic leader, the new manager will have to apply many of the leadership skills mastered as the direct or organizational leader.

Strategic leadership will quickly facilitate the processing of information, assess the incomplete data, and come up with decisions and the generation of support.

Conclusion

In order for the Ford Company to retain market leadership through achieving a competitive advantage, it must capitalize on the sale of new vehicles and it should be ensured that the vehicles are what the customers actually want. There should be aggressive advertising campaigns in order to entice the customers to go for their products. At the same time, the company should go on with its spirit of having cost leadership in order to maintain higher profit margins.

Reference

Anon. (2007). The Value Chain. NetMBA. Web.

Datamonitor (2008). Ford Motor Company: Corporate and Strategic Assessment Report – Company Strategy, SWOT Analysis and 5-year Adjusted Financials with In-depth Company Profile. Web.

Highfill D., Baki M., Copus S. Green M., Smith J., and Whineland, M. (2004). Automotive Industry Analysis – GM, DaimlerChrysler, Toyota, Ford, Honda. Web.

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NerdyRoo. (2021, December 11). Ford Motor and Maintaining Competitive Advantage. Retrieved from https://nerdyroo.com/ford-motor-and-maintaining-competitive-advantage/

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NerdyRoo. 2021. "Ford Motor and Maintaining Competitive Advantage." December 11, 2021. https://nerdyroo.com/ford-motor-and-maintaining-competitive-advantage/.

References

NerdyRoo. (2021) 'Ford Motor and Maintaining Competitive Advantage'. 11 December.

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