Final Case Study - Case 33 Is ONE Ford Really Working?

Final Case Study- Case 33- Is One Ford Really Working?
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FINAL CASE STUDY- CASE 33- IS ONE FORD REALLY WORKING?
Question 1: What are key forces in the general and industrial environments that affect Ford’s choice of strategy? Include an analysis of Porters Five Forces and the general External Environment (PESTC)
Ford is the second largest motor company in the United States. In 2009 the company suffered an automotive industry crisis. During these financial crises, there was a decline in the sales margin, and corporate bonds had declined. In 2006 Mulally was elected as the president of the company. Mulally applied ‘One ford’ to reshape the company. As soon as Ford was elected the president of the company, the majority of high ranked employees left the company. The company closed 14 plants in order to minimize down their costs. The company also lost 30, 000 plus jobs. After this crisis, the company resolved to increase the plant utilization and production levels by focusing on smaller and more fuel-efficient vehicles.
Additionally, Ford concentrated on making vehicles that were fuel efficient, for example, the hybrid. They had also launched the Focus Electric Vehicle in North America. Some of the key forces in the general and industry environment that affected Ford’s choice of strategy are competition, economic forces, political forces, social forces, and technological forces.
PESTC ANALYSIS
Political forces
The role of politics on the international business has intensified. Governments around the globe have increased their levels of control and oversight on businesses. Political environment affects the sales and distribution of products of Ford. Political stability results in higher sales and better supplies and political instability can lead to low supply and chain distribution. The new government policy on new federal gas mileage, new safety standards and new pollution control like Eco-friendly automobiles can affect Ford choice of strategy. The government also discourages fully automating operation like providing more local jobs. Ford Motor Company being an international business cannot remain unaffected political changes across the market.
Economic forces
Economic forces play an important role in shaping the business. During the recession, several brands of cars had to be bailed out through the support of the government. China and India have emerged to be the largest markets for automobiles, and all large companies are focusing on these two markets for faster growth and increased sales. The global downturn and financial crisis in 2006 weakened the economy and resulted in volatile markets. There is also a lack of liquidity in the markets. Competition is also an important factor for the growth of automobile business like Ford.
Social Forces
Social-cultural factors have become more significant in the business world. Change in social trends affects the growth of the company. For example, the rise of the millennial generation and the middle class has led to changes in the demand patterns. Ford marketing strategy is to brand their cars regional culture and taste as well. Social forces like corruption, an increase in the pric...