Five Forces Analysis Of Ford Motor Company

Michael Porter wrote about five forces affecting the profitability and viability of companies. The five forces are existing competitors, new entries into the market, substitute products, bargaining power of customers, and the bargaining power of suppliers. (quickmba)

Ford motor company offers a wealth of variety to the automotive consumer. As they start their second century of business, they are now in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality

The bargaining power of suppliers is low because of the presence of powerful buyers who are able to direct terms to the suppliers who are generally small firms. Besides these suppliers of tires, parts, electronic, mechanical equipment are small players and may have only one or two clients (ancillaries).

The Bargaining Power of Suppliers (Moderate): Most of the industry’s products are sourced and manufactured by a network of third parties. The supplier group is diluted compared to the industry; KMD alone has over 45 suppliers. There is credible threat of suppliers adopting forward integration resulting in loss of major suppliers and emergence of new competitors for the industry. Highly effective and specialised products will pose high supplier switching costs for industry firms.

Every external factor exhibits an open door or risk that the business must address through vital activity. As one of the main five players in the worldwide car industry, Ford guarantees that it addresses the issues in its PESTLE analysis. These issues are an immediate determinant of the hierarchical advancement direction of Ford.

Bargaining power of supplier: High levels of competition among suppliers act to reduce prices to producers. This is a positive for Ford Motor Company. Standardization of parts allowed Ford to reduce dependency on fixed supplier/vendor which goes into producer’s favor.

Organizations that strive to be a leader in an industry must look beyond their domestic boundaries and expand into international markets. The Ford Motor Company remains the second largest automotive manufacturer in the United States and fifth largest automotive manufacturer in the world with Toyota leading the way. This essay will address the Ford Motor Company’s strategic approach to compete internationally and identify which resources and capabilities make it attractive to compete internationally. Additionally, the Ford Motor Company’s diversification strategy options will be described. Lastly, we will identify how chosen diversification strategy options would lead to a strategic fit for the Ford

Ideas introduced in the article assist in understanding Ford’s current situation. Ford reported sharp falls in U.S. auto sales in May 2008. Sales of its most profitable pickups and SUVs suffered the most (“US Auto Sales Slide”). Some of the main

The automotive industry is one that has proved to be lucrative, which may compel more competitors to partake in it. Construction of overseas facilities and the merging of large multinational automakers have attributed to the globalization of the auto industry (Esterhuizen, n.d.). This globalization of the industry increases competition, putting pressure on domestic companies to compete with their foreign counterparts. This pressure may lead many big companies to merge or establish partnerships with other companies. In fact, “The Big Three” of the United States (General Motors, Ford, and Chrysler) have done so with European and Japanese manufacturers. Merging may be done to diversify a company, grow its market share, increase its supply-chain pricing power, or even eliminate competition (Renaud, 2006). Whatever the reason,

Ford Company basically has to fulfill and satisfy the legal requirements required of it, it does so through:

The second force on Porter’s Five Forces Model is supplier power. Supplier power is the “suppliers ability to influence the process they charge for supplies” (Baltza, 2015, p. 21). In many industries, supply power is one of the primary forces that that shape the competitive structure of the business (Wilkinson, 2014). However, supplier power is not as

* 3. Executive Summary Page 1 Introduction Page X Company Description Page X Ford’s Values Page X Ford Today Page X Strategic Focus and Plan Page X Mission Page X One Team Page X One Plan Page X One Goal Page X Vision Page X Goals Page X Nonfinancial Page X Financial Page X Core Competencies Page X Situational Analysis Page X The Situational Analysis Page X

In this section we analyse the political, economical, social, technological, natural and legal environment of Ford Motor Company.

Growth of Competitors- With growing competition in the market, Ford must find a way to regain its market share and rebound from the recent decline from the top 3 in the industry. Toyota is leading the way as is Renault-Nissan per recent polls, Ford has dropped to fifth in World automobile production. Growth in alternative mobility platforms has also allowed for new competitors to enter the market such as Tesla. As

The power of buyers is high because this company depends of the businesses and consumers’ demand. This is because they can decide where to buy