Porter 's Five Forces Model

1137 WordsApr 29, 20175 Pages
The next facet of the Porter’s Five Forces model, the bargaining power of suppliers, has a low to medium level of influence in the automotive industry. Suppliers can be easily replaced if an automotive producer is unhappy with the quality or price of their product. However, suppliers can have catastrophic effects on an automotive producer when their products fail and need to be recalled. For example, Firestone produced faulty tires equipped to the Ford Explorer which caused over 250 deaths, billions of dollars in losses and the collapse of the Ford Explorer product line [5]. The fourth facet of the Porter’s Five Forces model, substitute products, has relatively low implications on the automotive industry but is largely determinant on a…show more content…
Although these resources offer incredible value to Ford’s customers, their main competitors are able to utilize comparable resources to serve prospective buyers. Ford Motor Company’s intangible resources of its historic legacy, original vision, and ONE Ford plan are valuable, rare, hard to imitate, and hard to substitute, providing the organization with a sustainable competitive advantage. Ford Motor Company’s heritage and roots in American history have created an indistinguishable and renown brand that has global recognition. Henry Ford’s iconic vision of opening up the highways to all of mankind provided an iconic foundation that continues to inspire generations today and maintains a loyal customer base. Ford Motor Company’s organizational capabilities include a revamped organizational hierarchy and progressive internal partnerships, initiated by Alan Mulally shortly after arriving to Ford [2]. With a new organizational structure in plan to provided direct support from the top of the organization, Mulally was able to stay involved in the progression of his ONE Ford plan. This aspect of Ford’s organizational capabilities is valuable, but not rare, hard to imitate, or hard to substitute. Many organizations both inside and outside of the

More about Porter 's Five Forces Model

Open Document