Business case study- A Case study of ford motor

Business case study- A Case study of ford motor

Back ground of the company

Ford motors have the history of providing high quality products that covers both small and luxurious cars. The customers can get every kind of cars and it captured almost 25% of the automobile market of US. It is ranked as a 2nd largest automobile manufacturer in the united states and it ranks fifth. Ford is ranked eight in fortune 500 list based on the its global revenues. The company earned a profit of 6.6 billion which was utilised to manage its debt requirement of 33.60 billion. Beside these the company also owned several other quality survey awards tan any other automaker.

All this was not possible if a closer look can be given in the performance of the company which shows that the company is able to maintain a constant sustainable growth since its inception. According to Ana from Myassignmenthelp marketing department, “Its market share dropped from 25% to 14% as the value of its products slashed suddenly. The company was at the verge of collapse. High debt, failed market image and retracting customers and sky rocketing operational costs were the some of the issues ford market was facing”. Ford related to its market failure with the increased prices of gasoline and weak economical condition in united states.

Competitive analysis

The main competitors of the company are the following

Toyota motors

Toyota took over the US market with low cost automobiles to compete with the then market leaders’ general motors and ford. It competes to serve the different market segments. Toyota products are considered to be efficient as compared to other models in terms of fuel consumption and have captured huge market segment. Toyota is also engaged in other business lines to support its business.

Toyota has secured large market share in US and Japanese market. Its various vehicles are well praised in the developing markets for their efficiency and reliability. Toyota has quite a few car companies in the developing markets like Russia, china or India which gives competition to it. Toyota cars are sometimes out of the range of the people in these developing markets so these small-scale regional companies are better available options to them. Toyota’s competitive edge lies in its efficient and reliable products.

General motors

The automotive industry crisis has severely affected he car makers and the credit markets as well in the form of recession, the fluctuation in the oil prices and the decreased rate of employment in the united states and western Europe. These factors create a negative impact on the car market and the factors that shape customers buying decision. this resulted in the delayed consumer purchasing or leasing decline in the vehicle sales around the globe. “The estimated worldwide market share of general motors was 12.40 13.30 and 13.50 percent respectively”– says essaycritics stats.

The negative issues create a drastic effect on the general Motors’s largest market united states. Despite these economic conditions affecting the united states, general motors have maintained the largest market share in the united states.

The company took few strategy wise changes to cope with issues relating to the declining sales and market shares. The general motors decentralised the decision-making process to get the quick decisions in the times when they require. The managers running the branches across the globe are empowered to make critical decisions on the behalf of the company. The company revised its marketing goals and devised new marketing plans. It is involved in providing innovative products to the consumers with the launching with environment friendly cars. The competitive advantage of the of the general motors lies in the innovative cars it produces.

Background of the company’s products

The BCG matrix is classified in four groups these are the

  1. Cash cows
  2. Dogs
  3. Stars and
  4. Questions

1. Cash cows

The cash cows reflect the high market share and low market growth rate the branded cars that are produced by the company are profitable and reliable. The product development costs are relatively low. Ford motor company product are focused for economic class people so it has high market share growth rate.

2. Question marks

Ford motor company have the low market share and high mix growth rate. These are more competitive for this type s at a market or product. the product is sale in less number for the selective people or area. Ricky from My assignment help explain this with example, Ferrari which is a high price car for high class people. So, this product is prepared carefully. The loss mistake in decision making create more problem.  

3. Dogs

The dogs are of the characteristics whose market share is low and market growth rate is also low. The product in this character’s market is existing for doing competition to the competitors’ products. Ford motor company brand jaguar and land rover had faced the problem and generated profit but later on the ford motor company sale the band to tata company to solve its financial problem that it faces due to the failure of this car to capture the market.

4. Stars

As per the BCG model the ford motor company mustard brand growth is in the top position which have high market share and profit. Mustang remains the number one sport car by a wide margin, with the new model driving showroom traffic.

Pestle analysis of ford motor company

1. Politicalfactors 

Political factors constitute a major risk for a big brand operating internationally. Official calm is good for business as turmoil can be highly disruptive and leads to losses. The Asia pacific region has been politically stable during the past years. the performance of ford in theses regions has been nothing less than excellent. It has sold its one million vehicles in the Asian region. Sales have risen fast in this region. Political stability in most cases also represents economic stability. So, the performance of ford has been somewhat less satisfactory and still good in Europe.

Asian market is ruling as the political and economic condition in these areas are stable. Political instability also results in the disruption of the supply chain and distribution work which is not good for the health of the company. The volatile political environment represents various hidden risks. In nations where the situation is volatile and environment changes very quickly a situation of uncertainty always remains. The political stability inspires confidence. Regulation of the environment the attitude of the government towards foreign business and foreign investment, all the factors have an impact on the revenue and profitability of the business environment friendly vehicle bands. Governments are mostly supportive in nature with such bands and products which are globally famed and, in this area, ford gets the extra advantage.

2. Economic factors

Economic factors have major role in deciding how the markets will behave and how stable the environment is for bands. The recession has passed and the situation has changed rapidly. The Asia pacific region is leading the global economic revival. Both china and India which are the trading economies of the region have kept performing well. Ford has seen highly encouraging and fast sales in these countries. Economic growth in these areas ahs resulted in an influx of foreign brands that are partnering local brands to hack into the Asian markets. Economic growth means better rate of employment and higher dispensable income. Both these factors are good for the business. Both these factors are good for the business brands. The better the purchasing ability of the customers, the more profitable is the environment for these companies. It provides opportunities for quick growth higher profitability. The better the outlook for the global economy, the higher will be ford’s revenue and profits worldwide.

3. Social factors

Social and cultural factors too have a deep impact on the operations of the big brands like ford. These global bands serve diverse markets that are different in terms of culture and society. Such cultural differences have an impact on the effectiveness of the marketing efforts of businesses and their sales. The most recent trends favour the bands that have low environmental impact and good social image. For this reason, most of the big brands are investing in the CSR and environmental protection. Maintaining a good social image is important for business because it affects their popularity and their sales. In the current years the focus has shifted towards deeper engagement of the customers and improved customer service. It is because the brands that are more focused at customer service and more friendly to their customers and community have their sales revenue high.

4. Technological factors

Even that the passenger safety and environmental concerns have grown more important than ever, one can easily understand the importance of technological factors in the automotive industry. Car makers like ford and Toyota are investing in the technological assets to make their cars safer and more convenient for their customers.

5. Environmental and legal factors

Environmental factors have more important than ever for business in the modern business world. Even the business whose environment impact is zero are investing in environmental protection efforts.

6. Legal factors

Legal factors also play an important role in the smooth operation of the business. The legal factors play an important role regarding the fact that how profitably and freely businesses can operate in a specific market. There are several laws including the product quality, safety, labour environmental, taxes and other various laws related to the business that can affect ford.           

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