Ford Motors Company: Functioning And Business Strategies

Relevant factors

Discuss about  the functioning and business strategies of Ford Motors Company.

This report discusses the operational of famous automobile company, Ford. The company is among the top automobile companies in the world which operates in more than 100 countries (Ford.com 2018). There are various issues which affect the company in its business through most of them support it by creating opportunities. The company has few weaknesses which can be overcome though perfect strategies. The company has vast target market with various types of products. The position of Ford in the positioning map is high quality and medium price. Through various marketing strategies, the company has successfully promoted its products and services in all over the world. The report ends with few recommendations with which the company will be able to increase its revenue and bring variation in the products (Russell 2016).

There are various factors which impact on the company’s operation, management and marketing. Ford Motor Company is one of the largest automobile companies of the world which has successfully operated in the various countries and satisfied people cross culture. Despite the fact that this company has high level of employee engagement, loyal customers and dependable stakeholders, it faces various issues which affect the business. There are both internal factors are external facts that effect the progress of the company.

Strength: the strength of Ford is basically associated with its brand, international operations and development. There are various internal strategic factors which has made the company to the one of the leading automobile brand. It has a very strong brand image which has med it one of the top players in the automobile industry (Ihlen and Roper 2014). The company has global supply chain which intensely support the operations round the world. Ford from the beginning of its business followed the method of innovation which contributes the product attractiveness as well as customer loyalty.

Weaknesses: the internal strategic factor of the company may reduce the business potential of Ford. The company has limitation of the network of production facilities when it is compared to the expansive global network of Toyota. In addition to this, Ford has higher costs and prices and has a much slower innovation process for responding the current as well as future trends. Ford has also closed down some production facilities in Europe which has resulted in increasing its weakness.

Opportunities: tis company has great opportunity for entering new markets through market penetration. This can be done through more dealerships and improves marketing strategies. Product, prices and management innovation will help the company to attain the desired objectives. With the help of strategic supply chain management, the company can reduce cost and gain opportunities for business (Saniee et al. 2017).

Internal factors

Threats: automobile industry is one of the most competitive industries where there are no barriers to enter the market. Therefore, the company faces threat of competitors directly in all facets. He technological advancement has increased the demand of the customers which ultimately result in requirement of hi-tech automobiles in the market. In addition to this, the company faces threat due to the high cost of fuel as well as its fluctuating price which directly influence the sales performance of the company.

The automotive industry of the word can be manipulated by various external factors like political, economic, environmental, technical, social and legal which most of the time support the growth of the company but often affect the business negatively (Weiss 2014).

Political factors: political factors in different countries have positively affect the company. It gets political support due to enhance economic and technological situation of Australia. The company often receives opportunities and governmental incentives for its innovation, sustainability and environment friendly products. Ford also gets support based on trade agreements which make easier for Ford to enter the foreign countries like Australia and operated there most successfully. These supports help the company to improve their infrastructure and increasing demand for vehicles in Australian market.

Economic factors: these factors also by and large have supported the growth of Ford. Due to sharp growth of the Australian economy, the company has got the opportunity to develop itself in the region. The real gross domestic product (GDP) of Australia was around AUD 1677.47billions in 2017 and the nominal GDP was AUD 1692.43billions. This resulted in GDP deflator 100.892. This has reflected in the purchasing power of the people hence demand for high end cares have increased in the country. Moreover, Ford has spread in the markets in other developed and developing nations. The economy of the word has successfully survived the economic recession hence the developing counters also offering great market for the company.

Social factors: Ford has a great opportunity to respond the increasing demand for hybrid and electric automobiles in the Australian market. It has opportunity to improve aftersales services which will attract the customers. However, the increasing income gap can pose threat for the company’s section which produces high end luxurious cars (Qi 2018). Therefore, the company needs to emphasis on the product innovation along with customers’ services to address the socio cultural factors.

Technological factors: increasing use of mobile computing will help the company to go through mobile service support as well as mobile marketing. By utilising the online fulfilment services, the company will be able to improve its performance. Limited networks of alternative fuel stations will affect the company’s department of alternative-fuel vehicles.

External factors

Environmental factors: the low carbon trend is an advantage for the company as it produces products aiming to conserve the environment of the world (Abrol, Prajapati and Singh 2017). The company provides alternative-fuel vehicles which can be run with electricity or other alternative fuels. This will help to grab the attraction of the Australian customers to avoid declining oil reserves in all over the world.

Legal factors: business sustainability of the company will be increased when Ford will address the impact of the environmental protection regulations (Bayraktar and Oly Ndubisi 2014). Improved product designing will help to address safety regulations. Increasing initiatives to protect the intellectual properties and rights has helped the company greatly to avoid rights issues.

Ford uses differentiated strategy in business in order to target two and more segments through developing marketing mix for each of the segments in the country Australia. The company has diverse of products with which Ford apples too many different types of customer and satisfy their needs through different products. The actual target market of the company is the high income group and higher middle class families. The company has sports cars, station wagons, economy cars, vans, trucks and luxury cars (Ford.com 2018). The new product Ford Fiesta focuses on the young generation and women of Australia.

In order to have a successful market segmentation, the company has competent as well as reliable employees who take responsibilities of the marketing team. The segmentation variable of Ford Motor Company is geographic, behavioural, psychographic and demographic segmentation. The company has been operating in all the countries of Europe, North America and some of the countries of Asia and Australia (Al Ariss and Sidani 2016). The demographic variables include age, gender and income. The offerings of the company mainly target the high and average income group and mainly the young generation in Australia. The behavioural variables benefits the customers through safety as well as fuel efficiency. The company’s psychographic segmentation focuses on maintain reasonability of price.

Position:

Figure 1.

The position of Ford in Australia is in lower middle part of the positioning map. This demonstrates that Toyota is the nearest competitor of Ford.

The marketing strategies that Ford follows is associated with its process, pricing and promotion strategies in Australia.

Product strategies:

The products of the company are both tangible as well as non-tangible. The prod cyst and services are used to create and manage the high customer’s satisfaction and loyalty. The company’s branding strategies is reflected in the logo of Ford which carries the value and price (Bowen, Baker and Powell 2015). It has rich heritage and recognised as the trademark of the company all over the world. Labelling can be seen in the small brochure that deport the car parts specification so that the customers can easily find the ways the car works and what as well as from where the parts are.

Target market

Promotion strategies:  

Ford uses various promotional strategies for maintain their marketing edge over the rivals. The company is in the top its of companies that uses media and spend money for promotion. The company has organised various types of campaigns in order to tie up with a long lasting and strong sponsorships. It has also participated or conducted sports events which were utilised to promote the brand. Ford’s promotional strategy has two classifications. One is below the line promotion and another is above the line promotion. Above the line promotion includes the company’s promotional activities in the mass media for example on television, newspapers, online advertisements, social networking sites. The company’s below the line promotion includes all types of non-media advertisements such as sponsorship, discounts, shows and other sales promotion activities (Bloomfield 2017).  

Through different types of advertising, the company has improved corporate image as well as sales. On the other hand, personal selling helps the brand to increase and maintain good relationship with the customers Personal selling of the products is useful as this help the companies to get the customers feedback and get scope for self-analyzation and understanding. By giving some extra benefits and social offers to the customers and dealers can attract the customers as well as improve the sales (Lynch 2017).  Premium offers, merchandise, free gifts and discount are the chief factors of increasing sales. Hence the company has categorised their customers into various segments so that the saes objectives can be achieved.

Pricing strategies:

The pricing objectives of the company include marketing objectives as well as marketing mix strategies. Price usually increases when extra features are added with the existing product. The company’s marketing objectives include marketing position, profit maximization, survival, market share and product quality leadership (Baker 2015). Setting the basic price for the new products is the most important part of formulating marketing strategy and fundamental decision in marketing mix. As the company focus on the high and average income group, it has set two type of price strategy. One is price skimming and another is penetration pricing. In market the price skimming relates with thigh possible price and penetration price aims to get a high market share (Wood et al. 2015).

The company has a high popularity in the developed countries of Europe and America and US is the biggest market of the Ford. This may be the reason of its high price products but the company has a great prospect to penetrate the market of China, India and other Asian countries. This is due to the fact that the economic situation of these countries are developing for which the buying capacity of the people are also increasing. These can be a good opportunity for the company if Ford takes care of the pricing system. In addition to this, the demand for high technology cars is increasing hence the company need to prioritise innovation for product development. The problems related to oil diminution in the world is increasing hence the demand for vehicles run with alternative fuel have incised. Therefore, the company needs to address this issue for increasing its sales.

Segmentation

Conclusion:

Therefore, it can be concluded that Ford is one of the leading brand in the automobile industry which has a great experiences of business for a long time. There are numerous opportunities open for the company as the demand of cars is sharply increasing in different countries and the company gets support from its different stakeholders also. However, technological advancements need to be incorporated in the products which will help the company to penetrate more markets and gain competitive edge from its competitors.

References:

Abrol, D., Prajapati, P. and Singh, N., 2017. Globalization of the Indian pharmaceutical industry: implications for innovation. Institutions and Economies, pp.327-365.

Al Ariss, A. and Sidani, Y., 2016. Comparative international human resource management: Future research directions. Human Resource Management Review, 26(4), pp.352-358.

Baker, C.R., 2015. Organizational change at Ford Motor Company in the face of international financial crisis. Recherches en Sciences de Gestion, (5), pp.23-35.

Bayraktar, A. and Oly Ndubisi, N., 2014. The role of organizational mindfulness in firms’ globalization and global market performance. Journal of Research in Marketing and Entrepreneurship, 16(1), pp.26-46.

Bloomfield, G.T., 2017. The world automotive industry in transition. In Restructuring the global automobile industry (pp. 19-60). Routledge.

Bowen, H.P., Baker, H.K. and Powell, G.E., 2015. Globalization and diversification strategy: A managerial perspective. Scandinavian Journal of Management, 31(1), pp.25-39.

Ford.com (2018). Ford – New Cars, Trucks, SUVs, Crossovers & Hybrids | Vehicles Built Just for You‎ | Ford.com. [online] Ford.com. Available at: https://www.ford.com/ [Accessed 25 Apr. 2018].

Ihlen, Ø. and Roper, J., 2014. Corporate reports on sustainability and sustainable development:‘We have arrived’. Sustainable development, 22(1), pp.42-51.

Lynch, F.R., 2017. The diversity machine: The drive to change the white male workplace. Routledge.

Qi, W.A.N.G., 2018. A Study about Gene of Succession of Ford Motor Company Based on Grounded Theory. DEStech Transactions on Economics, Business and Management, (icssed).

Russell, J., 2016. Inside the Ford?UAW Transformation: Pivotal Events in Valuing Work and Delivering Results, by Joel Cutcher?Gershenfeld, Dan Brooks and Martin Mulloy. MIT Press, London, 2015, 408 pp., ISBN: 9780262029162,£ 20.95, hardback. British Journal of Industrial Relations, 54(4), pp.875-877.

Saniee, I., Kamat, S., Prakash, S. and Weldon, M., 2017. Will productivity growth return in the new digital era? An analysis of the potential impact on productivity of the fourth industrial revolution. Bell Labs Technical Journal.

Weiss, R.P., 2014. Corporate Security at Ford Motor Company: From the Great War to the Cold War. In Corporate Security in the 21st Century (pp. 17-38). Palgrave Macmillan, London.

Wood, D.J., Logsdon, J.M., Lewellyn, P.G. and Davenport, K.S., 2015. Global Business Citizenship: A Transformative Framework for Ethics and Sustainable Capitalism: A Transformative Framework for Ethics and Sustainable Capitalism. Routledge.