Ford Motor Company – Strategic Management Report

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Ford Motor Company – Strategic Management Report
The automotive industry is one of the major contributors in the global economy, with some key players in the industry featuring among the high-ranking global corporations in both Fortune and Forbes magazines. Toyota, Volkswagen, Ford, GM Motors, are some of the popular names associated with the industry. There is a wide range firms that are mass-producing automobiles annually in a bid to strengthen their revenue while attracting a huge customer and this encourages competition within the industry. The different industry players have capitalized on specific aspects as their competitive forces, and Ford Motor Company (FMC), one of the key industry players, has not been left behind. According to Car Logos, FMC was ranked the fourth largest car brand in the world and the best in the United States in 2020. To attain such top rankings, FMC capitalizes on various aspects that define its competitiveness: strong brand name, innovativeness, quality, excellent customer responsiveness, and mass production.
Ford is one of the most famous brand names around the globe. Founded and incorporated in 1903 by Henry Ford, FMC has managed to remain relevant in the industry because of Ford's culture that remains deeply rooted in the company (Ford par.1). Ford’s brand loyalty, especially with the North Americans, is astonishing, earning a 54% loyalty and over 1.1 million purchases every quarter in 2019 and 2020 (Suneson par.10). Ford has wholeheartedly embraced technology, and the level of innovativeness within the company is top-notch, featuring among the first automotive companies to release electric vehicles and testing on Autonomous vehicles. With such great passion in technology, systems such as Blind Spot information systems, Pedestrian detection, and computer control shock absorber systems have been a success, making Ford product not only efficient but also safe (Ford.ca).
Mass production of the automotive, courtesy of the moving assembly line production model initiated by Henry Ford, is the other element of competitiveness with Ford (Ford, “The Moving Assembly Line” par.3). The company has been able to produce over five million vehicles annually for the past decade, asserting the mass production capacity as one of its competitive aspects (Wagner par. 1). Systems such as FordPass Reward, Call Center Model, Mobile Service Pilot, and easy lease renewal have enhanced customer relations within FMC, a critical aspect that plays a key role in boosting brand loyalty and sales.
Value addition, both to the customer and the investors who are the key stakeholders of the company, is the primary goal for every business entity. Value addition to the investors can only be attained when the company is racking up profits and ensuring business stability. At FMC, the major business units within the company include the manufacture, distribution, and sale of vehicles and vehicle parts. The primary source of profitability at FMC is product sales. To grow profitability from sales, Ford has a strategic plan of increasing vehicle sales globally while expanding its operating margins (Ford Media Center par.2). The Ford Credit business segment is a major profit source to the company, accounting for 35% profits in 2018 (Howard par.11). The Ford Credit business segment, which aims at monetizing the vast amounts of user data not only serves as a profit element but also aims at covering up for the losses incurred in investing with EVs and autonomous vehicles.
There are also strategic means that Ford deploys to boost its profit margins. Investing in emerging opportunities such as electric and autonomous vehicles while expanding as an automotive company is one strategic method the firm uses to boost its profitability (Ford Media Center, Ford Outlines Growth Plan: Fortify Profit Pillars; Transform Underperforming Operations; Invest in Emerging Opportunities to Be a Leader in Electrification, Autonomy and Mobility). Also, the company focuses on transforming the underperforming products in the manufacturing and distribution business segments for more exciting and profitable products: luxury and small vehicles for trucks, vans, and EVs. Venturing into the emerging markets, that is China and the likes, os another strategic means of increasing profitability with the company experiencing a sale growth of 6% in China in 2019 (Reuters Staff par. 1).
The sustainability of Ford’s competitive advantage is wholly dependent on the different aspects that defines its competitiveness. With more and more technocrats entering the automotive industry and the dire need to transform into energy-efficient vehicles, FMC will certainly be left with no other choice but to embrace technologies of the future. Besides, the concept of EVs and autonomous vehicles is already a familiar concept within Ford. Henry Ford left a legacy and a culture of Americanisms within Ford that has been the heartbeat of the company’s bra...