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LONDON SOUTH BANK UNIVERSITY

M.Sc. International Business Management

(Project Management)

Individual Business Report

FORD MOTOR COMPANY

Prepared by: Manpreet Singh Sohal

Student ID: 4133450

Submitted to
Module Tutor: Yehia Newar
Module: International Strategic Management & Innovation
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Table of Contents

Sr. Particulars Page No.

1. Introduction 3
2. Findings in the Report 4
3. Description of the Current Strategic 4
Positing in the market
4. Innovation Strategy of FORD 9
5. Strategic Situation of the Company (Future) 10
6. Recommendations 13
7. Conclusion 15
8. Reference List 17
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Introduction

When it comes to the automobiles industry, Ford is the name which comes among the
most successful brands in all over the world. Ford is one of the biggest and most
famous automotive companies. The company was founded by Henry Ford on 16 th
June, 1903 with eleven associate investors. During the span of 100 years, the
companies have spread it wings in almost every corner of the world. The main
manufacturing area of the company is automotive parts and their accessories, trucks,
cars and tractors as well. The main headquarters of the company is situated in
Dearborn, Michigan, which is a suburb of Detroit.

With almost 2,00,000 employees in the company, Ford Motor Company produces,
designs, markets a full range of cards, electric vehicles, trucks through Ford Credit
and apart from this, the company also deals with autonomous vehicles and mobile
solutions. Ford company has several brands like Ford Vehicles, Lincoln Vehicles, Ford
Credit, Ford Parts, FordPass, Ford Protect and Ford Services.

The company is in the business of selling automobiles and commercial vehicles with
the brand name of Ford. Another segment of the company is its luxury cars which is
sold with the brand name Lincoln. The company has 8% stake in the Aston Martin of
United Kingdom. The Ford Motor Company also owns Troller which is a Brazilian
manufacturer SUVs.

The total market share of Ford in United States in the year 2022 was 13.9 percent. The
close competitor Ford Motor Company in US is GM in the automobile industry. Since
the company is concentrating on the business in United States only, the purpose of the
report is to analysis various aspects which makes it more promising automobile
company to enter in every country of the world. I have used various scholarly articles,
established newspapers like marketing week to support my study and some of the
ideas are my own to define some aspects in this report.
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2. Findings in the report:

1) Description of the Current Strategic Situation of Ford Motor
Company

EXTERNAL ANALYSIS
i) Macro Analysis of the External Factors
1. PESTEL ANALYSIS
a) Political Analysis : The political environment in some of the
Asian countries are stable and that thing make Ford motors in
such countries more successful because as per the company
statistics, ford motors sold one-millionth vehicle in the Asian
countries which was a great profit but since the market is strong
their then company needs to follow the government rules and
regulations to have a sustainable market their or they can face the
legal suits as well. On the other hand, in the European countries
the political situation is tangible and since the company has no
control over in such situation it is hard to have a sustainable
market in such countries until the political environment is stable.
b) Economic Analysis: Talking about the US market, the Ford
Company has favorable environment their as per the current tax
policy of the united states. Such factors like tax rate, interest rate
are how there is significance growth of Ford Motors in the US.
Since there are huge cut-off in the job in the industrial sectors,
unemployment can be an issue for the Fort Motors because it will
raise their cost (The Economist, 2017). The fastest growing sales
region for Ford is the Soviet Union Republics (Now known as
Confederation of Independent States. In this region the sales for
Ford were more than fifteen percent to almost 51,000 units
(Ausick, 2017). Oil / fuel prices also the factors which effect the
sales of Ford in US.
c) Social Analysis: The social factors for Ford changes as the
demographic area of sales changes for the company. A huge part
of the population (22%) of United State is under the age of 18
and then it is followed by the data of the people whose age is
more than 65 years (16%) old (US Department of Commerce,
2022). The main motive behind such figures is that the age group
of 18 years old is usually buys the base model of Ford whereas
the experience persons (baby boomer) are expect to have some
fully autonomous cars for their use. Although, in the previous
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time, Ford hadn’t much technology like Tesla for example but
now the company’s innovation is improving, and it is providing
everything the customer needs.
d) Technological Analysis: Like discussed before the technology of
Ford is not like Tesla as Ford was struggling to put the
electrification of vehicles on the line. But Ford has been investing
heavily in the development of electric vehicles and it has aimed
to launch more than 40 new electric vehicles. Apart from this
Ford is equipping its vehicles with the latest connectivity features
like SYNC 4 which can enable a driver to access information as
well as entertainment while on the way.
e) Environmental Analysis: When it comes to the automobile
industry, the environmental strategies of the company play an
important role. To overcome the environmental issues, Ford is
using aluminum bodies in its F-150 trucks which are the
bestseller. It makes the truck lighter which automatically
increases the fuel efficiency of the vehicle. Since Ford started
manufacturing electric cars, it is also reducing the co2 emissions
as well.
f) Legal Analysis: The NAFTA plays an important role when it
comes to the legal side of the automobile industries in the United
States. It directly impacts the suppliers as well as buyers for Ford
if anything changes in NAFTA. It means that Ford and its
competitors has to be ready to face any changes at any time. And
such uncertainties can be a issue for the company.
i) Mocro Analysis of the External Factors
2. PORTER’s Five FORCES FRAMWORK
a) Threat of New Entrants: Before 2010, the competition in the
automobile industry was not so high because almost all the automobile
companies were producing same vehicles but since the Tesla has come to
the existence (Thomas, and Maine, 2019), the threat of new entrants has
considered to be high since the electrification of the vehicles is on its peak
right now.
b) Buyer’s Power: The buyers are the customers of the Ford and it
directly affect the company. It is not like that all the buyers of the
Ford loyal to the brand but when other competitors invent
something new then it is possible that the buyers of Ford will be
automatically attracted towards it. Such an effect can cause
company substantial cost attrition.
c) Supplier’s Bargaining Power: It is not possible for Ford to get in
connection with the suppliers from one part of the world. Different
suppliers exist in different parts of the world. And apart from this Ford do
billion-dollar business in a year so it is possible that the bargaining powers
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of the suppliers will be high because some of them will have a long-lasting
relationship with the company whereas some are newcomer but providing
promising products (Shantia, Aflaki, and Masini ,2021).
d) Threats of Substitute: As the world is moving towards innovation,
the people and the different industries has also spread its wings in all
direction. Many substitutes exist in the market which affects the business of
Ford Motors. Ride sharing is one of the most recent examples of alternate
transport which people adapt a lot. Companies like Uber, Ola, Lyft etc. are
providing reliable and affordable transport options to the customer where on
driver can serve many people in the day to let them reach their destination.
Such things easily affect the sales of an automobile company and Ford is
not an exception in that matter (Enkhbayar, 2018).
e) Rivalry Among the Industry: The biggest competitors of Ford in
US are , Mercedes, Porsche, GM and BMW but when it comes to global
revenue it is the Toyota and Volkswagen which rise up the chart (Statista,
2023)

INTERNAL ANALYSIS
3. VRIO Analysis Framework
Following figures demonstrate the VRIO Analysis of the FORD.
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Resources Value Rarity Imitate Organized Competitive

Advantage

Strong Yes No Parity

Financial
Foundation
Strong Yes No Parity
Relation with
Suppliers
Strong Brand Yes Yes Yes Sustained
Reputation
Effective No Yes Disadvantage
Management
Relationship Yes Yes Yes Yes Sustained
with
4. Customers

TOWS ANALYSIS
a) Strength & Opportunities:
i) Ford can partnership with companies like Tesla which
produces electric and more efficient vehicles.
ii) Market expansion in Asian countries such as China, India
etc.
iii) Can Strengthen development and especially focus on
sports cars.
b) Strengths and Threats
i) Development of more efficient carbon emission engines.
ii) new line of development and innovation
c) Weakness and Opportunity
i) Unite Supplier Base
ii) Restructure and innovating to increase efficiencies
d) Weakness and Threats
i) Can Invest in more passenger’s car to minimize the
weaknesses
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2) Innovation Strategy of Ford

With a hundred years of history, Ford Motors is actively investing in the

research and development of area. The company is currently focusing on the
development of sustainable transport solution as part of their innovation. The key
strategy is to produce autonomous driving system, electric cars by implementing
advance as well as AI technology.
Being sustainability as core part of the business and innovation strategy, the
company has started manufacturing new vehicles which are currently in development
which will be equally popular as their icon Mustang & E-Transit (Ford Motors, 2023).
Apart from this, the company has invested $2 million to innovate and modernize the
vehicle assembly which is situated in Cologne, Germany according to the current
innovation environment which will be the welcoming place to all electric future.
According to the Ford 2023, the company has introduced the KeyFree System
where you just need to walk towards the car and the KeyFree system by using the
power starter button will sense the key even it is in your bag or pocket or somewhere
else and it will unlock the doors for your automatically.
Hands-free tailgate is a technique in which you need to just wave you foot
under the rear bumper of the car, and it will automatically open the tailgate for you
(Ford, 2023).
Ford is also using the Eco boost which is an award-winning technology. The
purpose of using this technology is that the engine combines serious power to produce
remarkable fuel efficiency. Turbocharge plays an important role in this technology
where they use the waste exhaust gases to push compressed air into the engine which
will produce eco-friendly boost to the power of the engine (Ford, 2023).
Ford Intelligent Protection system has introduced two functions which avoid an
accident. First is active system focus will help the driver to control the car by using
Electronic Brake Force Distribution, Traction Control and Anti-Lock Braking.
In 2020, Ford launched its new Ford Plus plan which aimed to transform the
entire company into more customer oriented, agile, and profitable considering the
present requirement of the automobile industry.
Currently the alliances experience, the e-commerce for its sale and other value-
added services are some of the main key focus area of Ford Motor Company. All these
things are becoming more important since the customers are also moving towards the
innovation and they just don’t want to compare the experience of Ford Vehicles with
the other car brands. There are a huge list of brand across the world which the
customer use to compare two companies with each other. For example, customer find
Apple’s iphone is the most among the mobile sector where Amazon as the best e-
commerce platform. It simply means that the company needs to compete with all these
world-wide famous brands when it comes to offer for the services which it provides.
(Tesserus, 2022).
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According to Pete Zillig, Ford Motor Company, the purpose of making

innovation in the car is that it will behave like a smartphone which moves on the
wheel, and it will give a complete bucket of experience for the driver. Apart from the
innovation in the car, which is the primary focus, the company also focusing on the
digital experiences as well which will differentiate the current viewing experience.
The company has started making bigger screens for the dashboard and they will grow
bigger in the future as well. This is a very important aspect in the automobile industry.
In term of relationship with the customers, the company needs to focus on the
simplicity, easiness and intuitiveness of the product so that the same can be easily
adopted by the customers of that related segments. If the technology which the
company is using in its vehicles are harder than the technology of using smartphone,
then it is obvious that the customers are not going to like that and will feel the same
challenging which will automatically decrease the value of the product. Apart from
this, the company cannot stop innovating at any stage and it needs to be carried
forwarded and keep revising the innovation strategy to stand itself in the crowd of
competitors. (Tesserus, 2022).
Recently the Ford Motor Company has launched its Mustang-MachE and 80%
of the customers who choose this model were the new customers for the Ford Motor
Company and it was one of the biggest brand change moments for Ford Motor
Company and following the same, the company needs to step up again and again.
The commercial vehicles business of the company is another segment which is
fresh and newly innovated. A new business model has also been launched with the
name Ford Pro which is going to concentrate on productivity only. For example, the
company’s transit van and E-transit are the useful ones which provide the services of
charging and telematic.
All these innovation ideas and the opportunities have lead Ford Motor
Company to vehicle provider with all the services and the software where five years
ago, the Ford Motor Company was just a vehicle manufacturer, but journey doesn’t
stop here and if company needs the same reputation then it has to be continue the
innovation at every stage (Tesserus, 2022).

3) Strategic Situation of the company.

A) Ford motors is one of the most popular automobile brands which has an
extensive global existence. The company has a large portfolio and
currently it is also known as its innovative technologies being used in
the vehicles. If we must talk about the generic strategy of the Ford, then
it is a mixture of cost leadership and the differentiation strategy which
company uses to increase its growth in the automobile industry. United
State is the largest market for Ford Motor Company. A description of the
different generic growth strategies is as follows.
Cost Leadership: Since the company does not produce or sell low-cost
products, the generic growth strategy which has been implied cannot be
completely cost leadership. The company is maximizing operational
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efficiency by which it can keep the production cost and the prices of the
product under control. But this scenario can be challenging when it
comes to selling the products in the competitive market. The purpose
behind the company’s pricing is to sustain itself in the market to retain
the market share and keep the leading position. Cost can be effective
because Ford motors is not limited to only car, but it has a wide range of
luxury automobile vehicles which completely affect the cost.
Considering all the facts the company has concentrated on providing
high quality and high-performance vehicles rather than depending on the
minimized cost and competitive growth which is a unique aspect of the
company’s culture toward customer satisfaction.
Differentiation: Almost all the automobile companies in the world use
the differentiation growth strategy for their business. The main aspect
which comes under differentiation strategy is the innovation and the
technology which a company uses and thus it makes differ from the
other competitive companies. Ford’s branding strategy has been
different from its competitors, and it has helped the company to achieve
its desired goals. Being one of concernment brands in the world, Ford
always focuses on the safety of the passengers, the fuel efficiency of the
vehicles and the environmental concern are also kept in mind. Ford’s
luxury brand Lincoln has a unique set of automobile vehicles which put
the company in the differentiation position when other competitors are
launching, they luxury products. Lincoln brand of Fort Motor Company
specialize in luxury SUV, Cars, and trucks.
Focus: The purpose of choosing focus strategy for Ford Motor
Company is to focus on both terms which low cost and the best value. It
is not like every customer of Ford Motor Company riche. There is a
niche market available which is attracted towards the low cost. And to
match the customer’s expectations and needs, the company focus on the
best value when it comes to the design, look and luxury. Since the world
is changing everyday with the innovation, the company is focusing on
the different product attributes of its competitor and keeping the threats
in mind, the company continuously revised its production design and
branding strategies.
B) Methods for Strategic Expansion & Directions
Geographic Expansion: Ford has a long history of bans and shutting
down of the services in different countries. Such as In India, the ford
could not keep up the competition and exited the Indian market on
September 09, 2021. Due to the invasion in Ukrain, Ford has suspended
the business operations in Russia. And since the World War II, there has
been no business of Ford in Japan and Singapore. Such issues are very
major when it comes to a world-famous automobile industry. These are
some of the strongest markets in the world when it comes to the
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automobile industry and Ford can try to tie up the relationship between
such countries.
Merger and Acquisition: The M&A can be an important aspect for the
strategic expansion of Ford Motor Company. By using this strategy,
Ford can acquire smaller automobile maker which are specialized in
making electric and hybrid vehicle or someone who is experienced in
autonomous driving technology. The main purpose of this can the
gaining of knowledge of more advance technology available in the
market. Apart from this Ford can acquire small companies which
produce batteries for the electric vehicle. Also, there are lot of
companies that supply parts and services to the automobile companies
and Ford can easily acquire such companies. For example, recently Ford
has hired Doug Power (Dearborn, 2021) to help themselves for the
strategic investment in the connectivity, EVS and services of Ford Motor
Company. He is responsible for the company’s M&A strategy to
developing, sustaining, and carrying out the striving plans for Ford’s
industrial sector.
Market Penetration: Other than United States, if we walk about China,
then market penetration approach can be useful for the Ford Motor
Company in the Chinese market. As discussed above the company has a
worldwide dealer footprint. It has also been noticed that consumer
preferences have been shifted to more sports utility vehicles and
crossover travel solutions.
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Recommendations
After having the external and internal analysis in this report for Ford
Motor Company the following recommendations are suggested for the company.
1. Strategic alliances or partnership with other Companies:
The first recommendation which I have suggested for the
company is strategic alliances. Talking about the last two
decades, partnership or alliances between companies has become
an important factor in the automobile industry which successful
to improve their market existence (Whipple, and Frankel, 2000).
A strategic partnership is usually an agreement between two
companies in which they aim to achieve mutual goals to improve
productivity and performance of both companies. (Parise, and
Sasson, 2002). As part of this, alliance experience can be a
superior way to gain knowledge in the different sectors of the
development process. Several scholars have found that it is
always the positive impact that two companies face when there is
a strategic alliance between them because then there are more
ways for productivity and innovation.
As part of the strategic alliance, the companies share the concept
of inter-partner learning. In this term the learning consists of the
acquisition and knowledge & use of new skills and information
by the organization in various ways. The same can be done by
Ford Motor Companies by joining hands with companies like
Tesla who are, in current times, outperforming the other
companies when it comes to electric and fuel-efficient cars.
Effective ways of sharing knowledge and experience can help an
organization to improve its competence. Knowledge transfer is
also considered to be the most important factor for the
organization resources to improve the competitiveness (Dhir,
Ongsakul, Ahmed, and Rajan, 2020). In other term knowledge
transfer can be described as a factor to share the existing
knowledge from one entity to the other to secure a sustainable
future for the organization. Knowledge transfer involves sharing
information about the tools, strategies, technology so that after
sharing some beneficial decisions can be taken for both
companies. A huge investment can be made by Ford and the other
joining companies to achieve the desired result for the growth of
the companies.
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Talking about the example, in 2018, Volkswagen and Ford signed

a memorandum that they will be having a strategic alliance. As
per the press release of Volkswagen, 2018, Volkswagen and Ford
are exploring a strategic alliance by which they can investigate
several joint projects – involving combined development of a
special range of commercial vehicles which can satisfy the need
of the customers. Fords president also mentioned that this
strategic alliance will be useful to become more fit in the
automobile business for the customer needs while creating a
winning global portfolio and expansion of the abilities of Ford
Motors Company.
.
2 Market expansion in the Asian countries
When it comes to the population, India and China are the two
countries which has topped the charge in the worldwide population
(Worldometer, 2023). Any company who is successful enough to sustain
its business in such countries and there is no doubt the growth rate of the
company will touch the sky. The same implies with the Ford Motor
Company has as well. As part of the suggestion, the company needs to
focus on sales and production in India and China rather than fully
concentrating in one country which is the United State of America.
Since most the people are related to middle class in India and China, it
can be a plus point for the Ford Motor Company to product base model
cars with innovation in it which can afford by such customers. Apart
from this Unemployment rate is also high in these countries comparing
to the other countries which will benefit the company with cheap labor
cost as well. After a successful business in North America, as the
company has started its expectations to have a sustainable business in
the Asian countries (Vlasic, 2011). Its biggest obstacle looks to be
China, where other automakers have stronger consumer relationships
and more well-known brands. According to IHS Automotive, G.M. is
the market leader in China with a 14 percent share, while Ford has less
than 4 percent.
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3 The proposed business plan for Ford motors for the future
strategies is as follows.
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Conclusion
Considering all the facts which have been mentioned in this report, it
has been found that Ford Motor Company has faced several challenges in recent years
and with these challenges different opportunities have also arisen for the company as
well. The innovative strategies which have been adopted by Ford Motor Company
have become helpful to turn these challenges into a successful path for the auto
industry. It is a noticeable and significant move by the Ford Motor Company to
produce electric vehicles now. Ford has taken significant steps to develop autonomous
vehicles and such steps show that the Ford Motor Company is very desperate about
innovation. The ford motor company has been streamlining as well as globalizing its
operations which will play a major role to introduce products that are customer centric
and also the according to the preference, value and want of the customers. The one
major drawback of the company it that it is concentrating only in the US market.
There is whole world outside which needs to the company. With the growing
competitions and the newcomers in the market, it has become compulsory for Ford
Motor company to establish its relationship with the other Asian countries like China
and India. These countries can bring immense production to the Ford Motor Company
if the relation is good enough. Currently the ongoing financial crisis in the US and
Europe has threatened the business environment of the Ford Motor Company which
can cause loss for the company. As the company has recently launched its best-selling
product, which is the Mustang-MachE, the company needs to keep launching such
products which will bring the non-customers to the company as well.
The brand portfolio and its diversification and differentiation market segment
made it possible for Ford to meet the highest level of competition in the automobile
industry. It has also affected the manufactured cost for the company has well because.
Currently Ford Motor Company is dealing in almost six continents but still some
major countries in these continents are yet to deal with the company. Talking about the
major alliance of the company, then Ford Motor Company has alliance with BMW,
Toyota, Mazda, Tata, Maruti, Fiat and GM as well. At the present moment, the
company has been providing the customers the best fuel economy cars which is the
main plus point of the company and it has relevant strategies to keep producing such
car to achiee the higher success rate. With all these strengths factors, it has ben found
that there were some drawbacks in the company as well. In some cases, the company
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depends on the outsourcing of material components which will result in achieving the
flexibility and reduction of the costs.

Reference List:

 Dearborn, Mich, 2021, FORD HIRES DOUG POWER TO HELP STEP UP

STRATEGIC INVESTMENT IN EVS, CONNECTIVITY, SERVICES –
AREAS KEY TO FORD+ FUTURE, available at
https://media.ford.com/content/fordmedia/ fna/us/en/news/2021/07/21/ford-
hires-doug-power.html, accessed on 06-04-2023.
 Dhir, S., Ongsakul, V., Ahmed, Z.U. and Rajan, R. (2020), “Integration of
knowledge and enhancing competitiveness: a case of acquisition of Zain by
Bharti Airtel”, Journal of Business Research, Vol. 119, pp. 674-684
 Enkhbayar, A., 2018. Ford Motor Company's Financial Analysis.
 Ford Motors, 2023, THE HISTORY OF FORD MOTOR COMPANY - THE
STORY CONTINUES, available at
https://www.ford.co.uk/experience-ford/news/our-future# , accessed on 05-04-
2023.
 Ford, 2023, FORD INNOVATION, available at
https://www.ford.co.uk/technology/ ford-technologies, accessed on 05-04-
2023.
 Parise, S and Sasson, L. (2002) “Leveraging knowledge management across
strategic alliances”, Ivey Business Journal Vol. 66 No. 4, pp. 41-47
 Shantia, A., Aflaki, S. and Masini, A., 2021. Contracting for technology
improvement: The effect of asymmetric bargaining power and investment
uncertainty. European Journal of Operational Research, 293(2), pp.481-494.
 Statista, 2023, Revenue of leading automakers worldwide in 2021, available at
https://www.statista.com/statistics/232958/revenue-of-the-leading-car-
manufacturers-worldwide/, accessed on 05-04-2023
 Tesseras, Lucy, 2022, ‘Smartphones on wheels’: Why Ford is prioritising
innovation as cross-category comparisons rise, available at
https://www.marketingweek.com/ford-prioritising-innovation/, accessed on 08-
04-2023.
 The Economist Editorial, 2017, Euro-area GDP growth outpaces America’s,
Available at
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https://www.economist.com/finance-and-economics/2017/05/06/euro-area-gdp-
growth-outpaces-americas, Accessed on 04-04-2023.
 Thomas, V.J. and Maine, E., 2019. Market entry strategies for electric vehicle
start-ups in the automotive industry–Lessons from Tesla Motors. Journal of
Cleaner Production, 235, pp.653-663.
 Volkswagen, 2018, Volkswagen AG, Ford to Explore Strategic Alliance to
Extend Capabilities, Strengthen Competitiveness, Better Serve Customers,
available at
https://www.volkswagenag.com/en/news/2018/06/VW_Group_Ford.html#,
accessed on 06-04-2023.
 Vlasic, Bill, 2011, Ford Strategy Will Call for Stepping Up Expansion,
especially in Asia, available at
https://www.nytimes.com/2011/06/07/business/07ford.html#:~:text=The
%20company%20expects%20to%20expand,of%20its%20overall%20volume
%20currently.&text=Its%20steepest%20challenge%20appears%20to,and
%20deeper%20ties%20to%20consumers.
 Whipple, J.M. and Frankel, R., 2000. Strategic alliance success factors. Journal
of supply chain management, 36(2), pp.21-28.