Assignment 2: External and Internal Environments Pamela Vanattia Professor Daniel BUS 499: Business Admin.

Capstone November 2, 2013

This paper is going to discuss Ford Motor Company and its belonging to the Mazda Motor Corporation. Ford Motor Company is known for being one of the top manufacturing car dealerships in the United States. Ford has been able to always stay up top with their competition of cars, trucks and SUVs. Although production cost is very high in Ford they somehow have been able to keep themselves profitable through the years. This paper will discuss the strengths and weaknesses of Ford, the general environment of the corporation aspect, Fords strategy for the future, and their forces of competition. In this paper there will be a discussion on how to improve as an organization as well as explaining the external threats and opportunities that are bound to affect the corporation. Not only will the value of the chain be analyzed but the companys core competencies, resources, and capabilities will be determined. Ford Motor Company is known throughout the United States as a top car manufacturer as it is an automaker company based in the America. Ford Motor Company is an American automobile manufacturer whose home base is stationed in Dearborn Michigan. The company was founded by Henry Ford in 1903. Ford Motor Company owns the motor vehicle brands of Ford, Lincoln, Volvo, and Mazda. Ford Motor Company has expanded subsidiary companies in the U.K., Japan, and Sweden. As of now Ford Motor Company is ranked as the fourth largest automobile provider/maker in the world. Ford has many different distribution channels throughout the world where it sells their products. Sales of this company are based solely on world level vehicle sales. Ford Company was also considered to be one of the largest and most profitable companies in the world. Ford Company not only manufactures cars, trucks, and SUVs but they also have a hand in tractors and the manufacturing of upscale luxury accessories and parts for their vehicles.

Mazda Motor Corporation which is better known for short Mazda was an automobile manufacturer that was manufacturing pickup trucks, minivans, cars, and the commercial vehicles at a steady speed. Mazdas operational manufacturing is primarily out of Japan, Europe, and North America. The general environment of Ford Company consists of six different principals which are demographic, political/legal, sociocultural, economic, technological and global segment. These elements have been based on a broad society and can be influenced not only as an industry but as a firm within an industry. Two segments of the general environment that were highly appealing to the Mazda Motor Corp. were the technological segment as well as the demographics segment. The technological segment hugely affected the Ford Motor company because it keeps competitive advantages over other companies such as General Motor. Ford needs to continue to study different technologies in order to establish more value to their customers. Fords technological segment consists of activities and institutions in order to create new ideas and translating these ideas into new processes, materials, products, and outputs. In order to remain one of the top leaders in the industry, the Ford Motor company must continue to put a large amount of time and effort into their Research and Development so they are able to continue creating and offering the innovative products that customers have become accustomed to. The demographic segment is mainly concerned with the population dealing with geographic distribution, age, income distribution, size, and ethnic backgrounds. A study was reported on the U.S. Census Bureau that stated the most populated five countries were the United States (311 million), China (1.3 billion), Brazil (203 million), India (1.2 billion), and Indonesia (246 million).

There is a large importance on finding the top five populated countries for the simple fact that it helps identify the largest markets. Distinguishing these five countries helps Ford Motor Company with opportunities for increasing their share in the world market. These five countries because of their large populations have the power to purchase and become Ford customers. Not only has Fords manufacturing been in the U.S. but it has also operated in certain parts of Canada and Latin America. Fords demographic segment is largely important to the company because they target the mass market which includes but not limited to a single person, couples, families, and their children. With the help of customer analysis and surveys Ford Motor Company is able to better understand the customers wants and needs as well as come up with products that are able to fill their customers priorities. This becomes important because the market requires a company to produce products that are customer oriented. Using customers surveys and analysis Ford is able to produce products that are appealing to their customers in terms of cost, flexibility, and comfort. Ford is able to design vehicles that suit their customers wants and needs in any given class of consumer. By doing this Ford is able to build the brand and have a competitive advantage over other companies in the motor industry. With Fords analysis it is able to segment its market for their products, they will be able to fully understand the needs of a veritable amount of groups of customers which in turn will enable the company to divide the market into multiple different segments. By doing this the company will be able to use different marketing strategies to different market segments. With market segmentation, Ford will be able to concentrate on different customer needs in order to increase customer satisfaction. Market segmentation will also help with the company to consolidate its marketing efforts through good. The Customer analysis will help Ford in

providing its manufacturing department with a good potential sales forecast. This is the key to the company in order to have a practical production plan that will help utilize the companys resources efficiently. With the help of customer data Ford Motor Company is able to develop a logical and sound marketing strategy. This is primarily because the company has and will continue to develop their market strategies with their customers and future customers in mind. The company will be able to understand the characteristics of the consumer they are dealing with and develop strategies that will match. The management team will have a better understanding of the competitions environment and will be able to develop strategies that will remain competitive in their market with the help of good customer analysis. This is all because of the customer analysis the company will now understand what their customers prefer in other motor manufacturers that at this time Ford does not offer. The analysis information will help the company change their products to help keep then competitive in their current and future environments. There are five forces of competition. These forces of competition are the threat of new entrants, the threat of substituted services and/or products, the bargaining power of customers, the bargaining power of intensity, and the suppliers for competitive rivalry. The two main forces that will have the most impact on Ford is the threat for the new entrants and the bargaining power of the customers. The threat for new entrants had accessed to distribution channel. It was mainly based on the business that depends on the economies of scale. With the bargaining power of the customer it makes things difficult. As a customer there is a variety of different products at a wide range of price values. Since there are so many products out there customers feel as though they are entitled to a deal and if they dont get one they often times settle for another product elsewhere willing to negotiate with them on their wants and

needs. In the recent years, the above two forces of competition had addressed well. With the threats for the new entrants the brand of equity was good, the loyalty to customers was good, the cost was absolute, requirement of the products were capitalized and so on. The bargaining the power of customers had addressed the availability information of the buyers, price sensitivity of the buyers, and different advantages of the product industry. Ford Motor Company is a multinational company that operates in many countries so the political environment in these countries has become very important when dealing with the companys operations. With globalization the company can look at the current state of the political climate in the world as many governments are forming alliances. Being an international corporation is a good sign to the company that the worlds political environment is favorable to the Ford business. With this it proves that there is an increased freedom for the company to enter into any growing markets on the globe which is a good opportunity to have. The political environment of the major Ford Motor Company markets which includes Japan, Australia, America, and United Kingdom are conducive for business operation. These governments are moving toward free economy states which in turn will provide multinationals with a good business environment. With the threat of new entrants and the bargaining power of buyers Ford has to find ways to improve the ability of the company. In order to improve the companys ability Ford must be able to somewhat accurately predict its ability to deal with these same issues in the future. Reducing cost will also help improve the ability of the Ford Motor Company. Distribution channels will also improve the company. New technology will be able to be introduced. Models will be of the latest designs making them more attractive to their buyers. The company should be established in their own countries. The main aim of the company is to reach the level of success

and the loyalty of the customers to the company. When it achieves the above things it will reach the satisfaction of customer and a higher level of success in the future. The automobile industry has been severely affected by the global financial crunch. A lot of major automobile makers have had to file for bankruptcy and even close their doors to the general public. Fortunately, for the Ford Motor Company they have not had to experience either. Ford Motor Companys current economic environment is still in recovery from the financial crunch but with time will hopefully be fully recovered. In order to survive Ford needs to adjust their current economic condition and plan for a major comeback within the booming period. Although the current economic environment is not ideal for the company it will show that the company can strategize and come up with ways to protect themselves against bankruptcy. The current strong environmental factor that is affecting the Ford Motor Company is the increased need to reduce the environmental pollution through clean exhaust from the motor vehicles. Customers have adopted a new way of life by Going Green and that in turn affects companys sales. This has made some countries to come up with laws that govern the environmental pollution. This factor shows the company should make sure than it produces automobiles that meet the required standards so as to avoid problems with authorities and also to show its corporate responsibility. One of the biggest external threat affecting Ford Motor Companys operations would have to be the global recession. The recession has led to a reduced market for Fords products. There has been an increase in the cost of production as well as in fuel prices and raw materials. The phishing threat was the main threat that affected the financial services of the company which hacks out all the details of the company. These factors will threaten the survival of the Ford Motor Company.

There is strong competition from other motor manufacturers around the world and there is a lot of competition in the motor industry. Each company will try to expand its market and work on improving their performances. Competitors have come up with great brands and threaten the competitive position for the brands of Ford. Toyota is a great example and they are a great threat to Ford. Toyota brands are becoming increasingly popular and at one point were threatening to take over the market. Ford Motor Company has had opportunities for expanding their market for products in developing countries. Emerging economies have a high demand for motor vehicles which will be rising primarily because of social class in these developing countries. The market is still growing and opening for an opportunity for the company to establish new markets with the primary reasons of increasing their sales for products. Since most of Fords competitors have been experiencing bankruptcy it would be wise that the company take advantage of their current economic situation and improve its position in the market. Doing so will put Ford in a good position to align its markets and overtake their competitors. Ford Motor Company has its fair share of strengths and weaknesses. The strength of the company lands on the basis of having strong customers, loyalty of a strong brand, high qualified employees, retain its individual and corporate clients, enable for maintaining the good sales of the company, improves its products to meet the international standards, remains competitive, and well set of distribution network. The weakness of the Ford motor company were many times it was operated by debts, incurring high costs while paying the debts, and high interest loans. It is safe to say that Ford Motor Company is very weak at their financial base. Fords strategy is a managements game and shows how they can make the business grow, how to please and attract customers, how to conduct the operations, how to complete them

successfully, and how to achieve the targeted objectives. On the other hand Mazdas Motor Corporations strategy towards the strength was the emotional bonds with its customers, and excellent brand image with the customers. The main weakness was with the financial services is that the cost of the product was too high. The companys resources include infrastructural resources, equipment & machinery resources, financial resources, raw material resources and human resources. The companys resources will help out to develop an organization. The capabilities of the company can be defined as the ability of the company for exploiting the resources. The core competencies of the company can be defined as the coordination and integration of cross functional of capabilities. The value chain was also known as the Generic value chain. They create their value with the human resources management, marketing sales, customer service, distribution, production, research and development and design of products, process or services. The business administration includes planning, organizing, coordinating, directing, controlling and budgeting. The business administration of an organization will meets the goals of an organization. Ford Motor Company needs to come up with a good cost cutting strategy that is aimed at reducing the operations of the company. This can easily be achieved by reducing the number of employees dealing with the companys operations and at the same time effectively utilizing the remaining employees. Ford should also look into restructuring and reducing the cost of producing motor vehicles. They can achieve this by looking at their engineering processes in order to save money on the cost being spent to manufacture these motor vehicles. With this the company should experience a good financial performance and high profit margins. Ford should expand its markets into the developing countries and do what they can to build an exceptional customer base within these countries. In doing so it will provide new

markets to the country and will guarantee Ford products will be continually used meaning the companies continued profitability. Ford needs to continue engaging their research and development department into producing motorized vehicles that are not only cheap but have a low fuel usage. Doing so will help Ford cope with the rapidly changing trends of the market. Today consumers are very cautious of how they spend their money on fuel with the rapid increase fuel has experienced. This has made the demand for cost efficient vehicles to rise. If this is achieved Ford Motor Company will be able to have sustainable demand for its products. In Conclusion the Ford Motor Company belongs to the Mazda Motor Corporation. Manufacturing costs should be cut down in order to remain profitable. Although Ford has a weak financial service they have a lot of strengths such as their highly qualified employees and strong customer bonds to make up for their faults. Ford Motor Company will only become as strong as their bonds with their customers and in order for them to do that an eco-friendly car at an affordable price is the route they should take. Ford will finally reach success when they are fully able to satisfy their customers.

References

"FORD MOTOR CO CIK#: 0000037996." SEC.gov. U.S. Securities and Exchange Commission, 2013. Web. 02 Nov. 2013. <http://www.sec.gov/cgi-bin/browseedgar?CIK=f>. "Heritage." Ford Motor Company. Ford Motor Company, 2013. Web. 01 Nov. 2013. <http://corporate.ford.com/our-company/heritage?releaseId=1244755696925>. "MAZDA | History." MAZDA | History. Mazda Motor Corporation, 2013. Web. 02 Nov. 2013. <http://www.mazda.com/profile/history/1920_1979.html>. Austenfeld, Robert B., Jr. Mazda Motor Corporations Strategy. Rep. No. 2 ed. Vol. Vol. XXXXV, 2004. Papers of the Research Society of Commerce and Economics. Web. 02 Nov. 2013. <https://www.google.com/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=5&cad =rja&ved=0CFkQFjAE&url=https%3A%2F%2Fshudou.repo.nii.ac.jp%2F%3Faction%3Drepository_uri%26item_id%3D402%26file_id%3D18 %26file_no%3D1&ei=mKN2UrudO6WF2gWThYGQAw&usg=AFQjCNELXXS8JLyk K0c6AnoLmSG6c4QbVA>.