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Henry Ford pioneered the concept of mass production using the assembly line. He was also well known for the development of Ford into a fully integrated concern which encompassed financial firms, auto component suppliers and automobile manufacturing. 2. Case Analysis In our analysis, we briefly look at the problems faced by Ford using the strategy analysis framework. We highlight some of the issues mentioned in the case and support it with research in the automobile industry domain. 2.1 External Analysis The focus is restricted to the US automobile market; though we need to consider the global car market since the automobile industry is global in nature. Manufacturing, Research and Development and raw materials are often sourced from across the globe. Similarly, products manufactured in one country are often exported and sold in several other countries. 2.1.1 Industry Here, we are discussing the case in the context of the automotive industry in US. There are references to the global environment also. Some of the peripheral aspects of the case also deal with the global scenario. 2.1.2 General Environment The company was operating in a highly competitive US market. The US market was marked by consumers who were facing the brunt of a slow-growth economy with several macro-economic indicators at an all-time low. Naturally, this led to the demand for highly efficient automobiles. The concerns were with maximizing the value of every dollar earned. This was applicable to all consumer durable products. The political setup was stable and emphasized robust economic growth. Socio-economic forces tended to be positive for all the consumer durable goods that dominated the market. The environment was technology intensive and it permeated to all classes of products, more especially in the area of communication services. In automobile industry, hybrid cars, electric vehicles and traditional gasoline and diesel vehicles with higher fuel efficiency were making their presence felt. 2.1.3 Industry Environment We use the Porter’s 5-forces framework (Porter, 1980) to analyze the industry environment in brief. Bargaining Power of Suppliers: The industry was driven by the car manufacturers. Supplier power was low since they could not bargain for higher prices easily. Additionally, there were more suppliers who could cater to automobile companies; hence their potential to get better deals was poor. Bargaining Power of Buyers: Buyers could bargain and choose since there was tremendous choice. A customer could choose from at least 15 different companies out of which GM, Chrysler, Toyota and Honda were prominent. Threat of New Entrants: since the industry was highly capital intensive, this was not a prominent threat. A new player could not enter the industry without a high infusion of capital. Rivalry among existing firms: Competitive rivalry was intense and the basis of competition was product differentiation and price Threat of substitutes: there were no substitute products for passenger cars. The only choice lay in the customer’s option to shift between hatchbacks, sedans, SUVs, or pick-up ...Show more
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Summary

Case Analysis: Ford Motor Company TABLE OF CONTENTS S No. Subject Page No. 1 Introduction 3 2 Case Analysis 3 2.1 External Analysis 3 2.1.1 Industry 3 2.1.2 General Environment 3 2.1.3 Industry Environment 4 2.1.4 Competitive Environment 5 2.1.5 Summary of Opportunities & Threats 6 2.2 Internal Analysis 6 2.2.1 Firm’s Resources (Tangible & Intangible) 6 2.2.2 Capabilities Identification 6 2.2.3 Core Competency Analysis 7 2.2.4 Value Chain Analysis 7 2.2.5 Weaknesses 8 2.3 Integration (Pulling it all together) 9 2.4 Current Strategies 9 3 Recommendations: The road ahead 9 Reference List 12 1…
Ford Motor Company
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