Porter's Five Analysis of Ford
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|✓ Wordcount: 1248 words||✓ Published: 4th Nov 2020|
Ford Motor Company is considered one of the great leaders of the automotive industry. Currently, the market is full of imported and domestic competitors, yet, Ford has managed to stay competitive, promoting itself as America’s top-selling brand. The standard approach for the company seems to be a mixture of market infiltration in the domestic front, market utility vehicles. This approach can be practical play as consumers' preference in Ford's largest markets moves near these vehicle styles. According to Jim Farley and CEO of Frankfurt AA, their prospects are that they will increase sales 200%. It’s implied that the SUV is the heart and soul of Ford’s Company. It is a new trend globally, and in Europe, the SUV also has the same consumer pull, and over the next three years they will lunch five new products. The products Ford creates helps its customers make emotional lifestyle choices. These products create using unique critical growth for their brand.
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One in four millennials in Europe thinks about purchasing an SUV in the next year or so are the millennials of car buyers who are here to stay.The SUV has more of a sporty feel, look and enjoyable to drive. Fifty-two percent of SUV is keeping them safe in an active lifestyle, environmentally safe and fuel efficiency. The trend Ford set forth has become a natural choice for consumers. With the new stylish left-hand drive which is the first can compete with premium brand —incredible technology.Ford has an appealing brand builder, the KUGA, which pulls punches making it right for Europe. With advanced electronics and their commitment to the consumer makes puts Ford at the forefront. Ford makes sure that the SUV is an important brand in Europe, complete with luxury player long term liability which is critical for long-term sustainability. A company like Ford, that has been around as long as they have, refuses to be put on the back burner, so therefore Ford continues to revive themselves, keeping them as one of the main leaders in automobile engineering. Ford Motor Company’s Five Forces assessment shows that aggressive rivalry or competition is the highest major external power in the automotive industry environment. Here are the strengths of the five forces in influencing Ford’s business.
- Competitive rivalry, which is a (strong force)
- The trading power of consumers or customers (moderate force)
- Negotiating power of providers (moderate force)
- The danger of replacements (moderate force)
- Risk of new candidates or new entry (weak force)
Ford Motor Company's challenges are tough competition. This feature of the Five Forces analysis points to opposing firms that impact the industry's environment. The following are the exterior factors that lend itself to the strong strength of competitive rivalry against Ford:
- Excessive assertiveness of firms (strong force)
- Elevated exit barriers (strong force)
- A reasonable number of firms (moderate force)
Ford should compete against top players (e.g., Toyota) in the market that consistently transforms and market their products.
Also, an industry like the automotive can easily encounter situations when deciding to leave the market. Some factors that can affect a company exiting the industry are how the company begins to manage the company, especially trying to minimize cost; for example a company is faced with the harsh decision to let employees go or even double the workload one person will do. Another factor that is a part of this exciting strategy is financial. From the monetary side of it companies that have equipment leased for a certain period can now lose money. Breaking agreements beforehand puts the company in more debt.
Such a state can employ a strong force of competition against Ford. Also, Ford should compete alongside an adequate number of firms, particularly ones like General Motors. Based on this attribute of the Five Forces analysis, Ford must expand its competitive benefit to take care of the external factors associated with the competition. (Ferguson, 2017)
Ford is redesigning its operations to better participate in this competitive technology era.
The F-Series has reaped market shares, and the regular business price has increased 16 percent. It the fuel economy has gotten better and increased its potential for customers on behalf of a 700-pound weight cutback that aided the F-150 the company’s most optimistic provider to CAFE standards for model year 2018. Besides, 90 percent of the manufacturing products can be recycled for the next-generation F-150, shrinking their potential capital.At last, the invention of aluminum will pay off amongst a variety of Ford trucks and SUVs.
Ford begins to alter product growth and incorporate new technology. In the upcoming future, Ford's target is to lower new vehicle expansion time by 20 percent, with brand-new tools and less orderable combinations. Using virtual meeting lines, the company has decrease new model exchange time by 25 percent.
Looking at Ford’s beginning and its current situation it would be to Ford’s advantage to do some restructuring to their workshops. Promoting 3D invention, automation, and simulated devices could help to enhance logistics and give strength to a further operational industrialized mark.
(Ford’s Future: Evolving to Become Most Trusted Mobility Company, Designing Smart Vehicles for a Smart World, 2017)
Question: Perform a competitive strength assessment of Ford’s prospective partners in the mobility industry. Based on the assessment, which partner makes the most sense for Ford?
Answer: Performed below is the competitive strength assessment for the potential partners for Ford. The ratings are given to each company based on the competency matrix, case study, relevant to the goals that ford wants to achieve in the long run. Our team, after having analyzed each of the potential partners thoroughly have rated each company based on the following scale: 1-weak; 5-average; 10-very strong.
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Ford is excited about unveiling its “Mustang-inspired electric SUV” sooner than later and is aligning its EA to give its customersa better shopping experience. The new EV, which is referred to as the Mach E, at this time provides 150 kW DC charge rapidly is attainable at every EA charging station. Its future is improve 47 miles of range in about 10 minutes.
- Abuelsamid, S. (2019, October 17). Ford Partners With Electrify America To Charge New EV. Retrieved from Forbes: https://www.forbes.com/sites/samabuelsamid/2019/10/17/ford-partners-with-electrify-america-to-charge-new-ev/#55f88ad5b3bd
- Ferguson, E. (2017, February 5). Ford Motor Company: Five Forces Analysis (Porter’s Model). Retrieved from Panmore Institute: http://panmore.com/ford-motor-company-five-forces-analysis-porters-model
- Ford’s Future: Evolving to Become Most Trusted Mobility Company, Designing Smart Vehicles for a Smart World. (2017, October 03). Retrieved from Business Wire: https://www.businesswire.com/news/home/20171003006487/en/Ford’s-Future-Evolving-Trusted-Mobility-Company-Designing
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