Gradable Assignment 1 1) Define and discuss Ford's business-level strategy: Ford's business-level strategy approach is to lower the cost of the product than their competitors by reducing the operating expenses which gives a great advantage to consumers, Ford had six distinctive vehicle brands and four distinctive service brands

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Gradable Assignment 1

1) Define and discuss Ford's business-level strategy:

Ford's business-level strategy approach is to lower the cost of the product than their competitors by reducing the operating expenses which gives a great advantage to consumers, Ford had six distinctive vehicle brands and four distinctive service brands. Among these vehicle brands Ford groups Jaguar, Volvo, Aston Martin, and Land Rover into its Premier Automotive Group (PAG), with several different brands under the name Ford a number of products with an overwhelming set of characteristics has been developed. These strong brand names, along with unique models within each brand assist Ford to build long-term, sustainable links to customers throughout the world. The brand characteristic of a Ford truck is "Built Ford Tough" while the characteristics of a sport utility vehicle is "go anywhere, do anything, practical adventure." The Jaguar XJR is another example of a unique brand of Ford. There are no others like it on the market today. The XJR is targeted at those customers who are looking for that extravagant "muscle" car. All of these sub-brands share the same global promise of the Ford Motor Company.

Even though ford business strategy was good, however it lacked innovation and virtue, Ford acquired few rival brand companies which did not yield the expected results, there were losses which had triggered the board of directors compromised of different diverse backgrounds to request for a change in leadership of William Clay Ford, Jr and find a new CEO. Alan mullaly became the New CEO and made major revamp to the Ford nature of working.

 

2)            How can the company's value-chain activities be better linked to create value for the company?

Value Chain activities are just a set of activities that are defined to represent the list of stages from design to parts manufacturing to assembling and servicing.

With respect to ford, the best they can to create value is by focusing more on

1)            Research and development, Ford can use innovation and technology to advance and design smart automobiles in this competitive market.

2)            Supplies play very important role in the auto industry, maintaining a key supplier and at reasonable prices of parts could affect the finished product. 3

3)            Robotic or Artificial intelligence technology could be used to cut down cost and produce quality goods.

4)            Fords’ strength is its customers, Ford should be able to supply products that consumers wants to buy with great quality, design performance and the cost consumers are willing to pay.

5)            Even the Management team which is mentioned in the case study cleary indicates that, there are been to many layers of management, to many people getting involved to solve tasks, less is more approach needs to inherited.

 

 

 

3)            In what ways can the company effectively manage customer relationships to increase strategic competitiveness?   

 

Ford has been doing good progress as per the case study in customer relationship sectors, however there are areas where can company can enhance its customer loyalty by introducing new programs such as

1)            Providing cost effective warranty features and faster service timelines.

2)            Relationship marketing focuses more on retaining and improving satisfaction of the current customers rather than focusing on gaining new target audiences Customer relationship marketing serves to surpass the purchase-exchange activity with the consumers in order to develop a more meaningful and richer contact with them through the provision of more holistic and customized purchasing processes. Also this strategy makes use of the customer experience to facilitate the establishment of stronger ties between the firm and its customers.

3)            Consistent customer survey and feedback has to be done inorder to understand the requirement of the customer and achieve those accordingly.

4)            Organize rally or trainings or workshops to enhance knowledge and skills of customers about their vehicles

All these strategies are opportunities for business expansion, increasing customer loyalty, brand loyalty and customer satisfaction, which help in increasing the profitability for the business

 

4)            Outline a rough competitor analysis.  What can be learned about expected competitor behavior by using the model of competitive rivalry to understand Ford's situation?

 

Ford has competitions from around the world, at least 22 firms compete in the

U.S. market, the four largest firms GM, Ford, Toyota, and DaimlerChrysler control more than 68 percent of the market and the top six firms (including Honda and

Nissan) control 83.5 percent of the market.

General Motors holds the 1st position, Ford is second, Chrysler had been the third largest U.S. auto manufacturing firm before it merged with Daimler-Benz AG in 1998 to form DaimlerChrysler. Many of the foreign firms who compete in the U.S. market also produce vehicles (BMW, DaimlerChrysler, Honda, Hyundai, Mazda, Mitsubishi, Nissan, Subaru, and Toyota)

The five forces of competition in the auto industry in general

1)            Threat of New Entrants The threat of new entrants is very low in this industry. In order to compete in this industry a manufacture must be able to achieve economies of scale.

2)            Bargaining Power of Suppliers-The bargaining power of suppliers is also very low in this industry. There are so many parts that are used to produce an automobile, that it takes many suppliers to accomplish this. Manufactures can easily switch to another supplier if it is necessary.

3)            Bargaining Power of Buyers-The bargaining power of the buyers is high. Consumers purchase almost all of the industries output.  If they cannot keep their buyers happy then they risk losing them to their competitors

4)            Threat of Substitute Products-There are few other substitute products for automobiles. Some of the substitutes are walking, riding bike or taking a train. Substitutes products all depend on the geographic location of the consumer.

5)            Rivalry among Competitors is very strong in this industry. The competitors are compared to one another constantly. People research and compare via internet for price, quality, durability, and many other aspects

 

5) What role will strategic leadership play in helping Mulally and the organization meet its strategic objectives? 

Strategic leadership is all about effectively managing human capital, the next obvious question is what is human capital?

Human Capital is a measure of the skills, education, capacity and attributes of labor which influence their productive capacity and earning potential.

Alan mulally (CEO of ford) has understood its importance and has taken various steps to ensure that the current Ford Managers are up-skilled.

One of the major problems faced by ford was its Management Team, which consisted of six to seven ford family members who yielded great power in board of directors meet, Company’s leadership structure remained complex, highly bureaucratic, and comprised of a six-layered management scheme on which pay is based.

This kind of leadership chain affected the process of work since it took a long time get any action done due to its approval process, however Alan has tried to lean size the management team and has to have more meetings with its product core managers regularly and also has tried to get union labor team to work with efficiently to reduce the work force issues and has slowly trying planning to eliminate 40 percent of its workforce by 2008 in an effort to cut manufacturing costs and save more than 1.2billion annually, so that the company can bounce back to its glory profit making days.