BUS 499 Business Capstone Strategic Management and Strategic Competitiveness Assignment 2
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Week 3 Assignment 1
Nicole Lynn Sowards
Strayer University
BUS499 Business Administration Capstone
Dr. Joseph Keller
April 20, 2020
Week 3 Assignment 1
Ford is an American multinational automobile company founded by Henry Ford in 1903. Firstly, the paper will also discuss the impact of globalization and technology on the Ford company. Secondly, it will further shed light on the industrial organization model and the resource-based model to assess the returns of the corporation. The paper will finally discuss the vision and mission of the company, including the impact of stakeholders on the success of the company.
Globalization
According to Grant, the key element in changing an industry's profitability is in the evolution of an industry's structure. Industries around the world have changed due to globalization and maturity. Both components have contributed to competition. The competition has increased as globalization has bought firms together by shrinking the space between them and providing them with the same market (Grant, 2008). The same is true for the Ford company. Globalization means using and being a part of the world economy and profiting from it.
Companies in the global economy need ways to supply and produce automobiles that don't only cater to the needs of international clients but develop something that caters to the needs of locals. To overcome the problem of attending to local needs, Ford, for example, has created a global scale network to assemble plants to get access to the greater supply-base. Ford's partnership with Mazda, for example, has made it easy for Ford to get Mazda's well-established supply base in Thailand. Given the hassle of building local supply and the pressure, companies go through to create local content; such partnerships help companies like Ford in globalization ( (Sturgeon & Florida, 2002).
But before adjusting to the world global economy, Ford has to struggle to be a part of the globalization. The reduced restrictions in trade in the emerging market after globalization has led to a wave of investment across the globe. Before the 1970s, the companies of automobiles were dominating the market in the U.S., which was called "Big Three." But after globalization permitted foreign vehicles to enter the market, the U.S. market for automobiles changed. For example, Japanese cars that were high-quality cars and introducing new modes of manufacturing changed the industry. Ford's competition was threatened by globalization and the other two companies' restrictions in trade in the emerging market after globalization has led to a wave of investment across the globe. Before the 1970s, the companies of automobiles were dominating the market in the U.S., which was called "Big Three." But after globalization permitted foreign vehicles to enter the market, the U.S. market for automobiles changed. For example, Japanese cars that were high-quality cars and introducing new modes of manufacturing changed the industry. Ford's competition was threatened by globalization and the other two companies (Miller & Sirgy, 2011)
Technology
Technology has hugely contributed to the success of the Ford company. The crucial need to reduce cost and simultaneously increase efficiency has led Ford to use Artificial intelligence as one of the main manufacturing process and planning systems. For example, Ford had built the "Ford Body &Assembly Operations developed Standard Language" in 19990 as a standard format for writing descriptions. Before this, process sheets were used in a freeform text. These process sheets were ambiguous and inconsistent, that caused a lot of problems for the company. Standard Language was built to create a clear way of communicating with different engineers and manufacturing staff. It has eliminated ambiguity and inconsistency and helped the company to create a standard format across the corporation (Rychtyckyj, 2007).
Another tech advancement that has helped ford increase its manufacturing is the machine translation known as M.T. Ford has been using this tech since 1998 to translate English instructions to build and assemble cars to German, Spanish, Portuguese, and Dutch. It is being used worldwide in automobile companies as well to make it easier for the production of items (ibid). The company has also created and used the GSPAS AI system that represents all the "automobile assembly planning information by using its knowledge base's semantic network model" (ibid.17).
The GSPAS AI system interprets instructions and creates actions required to implement those instructions at the assembly-plant level and also the time of the instructions to execute, making the process much easier for workers (Rychtyckyj, 2007).
Industrial Organization Model
The global market for automobiles is very competitive. Ford, for example, used to be one of the best automobile companies in the U.S. but has lost its name because of poor strategic decisions and lack of innovation in its automobiles. The changes in the market for Ford were because of global competition that raised after globalization. On the other hand, Ford has been building better vehicles that meet customers' needs and desires. Ford managers lost their market and did not invest in new products while its competitors went ahead (Hanson, Hitt, Ireland, & Hoskisson, 2017).
More recently, for above-average returns, Ford takes part in the industrial organization model. The strategies of Ford company are usually centered on their external environment. For example, with the trend and popularity of vehicles that were more environmentally friendly, Ford responded to it with cars that were ford Fusion Hybrids. The external environment has a clear impact on the firm than the internal capabilities (Buisness Says, 2020).
Resource-Based Model
Ford uses a unique way to differ from its competitors, and one of the main strategies it uses it to claim that it is t it is "greener" and "more technically advanced" than its competitors such as General Motors. It uses its reliable resources and capable work staff to build innovative automobiles (Hitt, Ireland, & Hoskisson, 2017). Ford has also embraced the recently advanced technologies for decreasing pollution and waste production.
Vision
The vision of the company is “to become the world’s most trusted company, designing smart vehicles for a smart world” (Thompson, 2019, p.4). The vision of Ford is very relevant to its targeted audience, which helps ford to attract consumers every year. For example, Ford uses its vision statement to show that it is a company that leads in the automobile industry and is available worldwide. This expands their range of customers globally. The smart vehicles, for example, is the need for current worldwide customers. The world today looks for efficient products with more innovation in technology.
The vision also intends to bring forward the pursuit of Ford company in walking with the recent marking trend. For example, the electric car by Ford is an indication of the vision to produce a smart vehicle, and if customers want the latest tech cars, they know where to look for (Hitt, Ireland, & Hoskisson, 2017).
Mission
The mission of Ford is “to make people’s lives better by making mobility accessible and affordable” (Thompson, 2019, p.4). The statement forces the stakeholders to restructure their methods to guarantee expanding profits for the company at the existing model mix and market. Also, the statement asks the stakeholder of the company to work towards a more profitable, quick, and viable Ford (Hitt, Ireland & Hoskisson, 2008).
Stakeholders
The stakeholder of Ford includes its customers, employees, suppliers, and unions. All of the above impact the success of Ford in one wat to others. The company’s primary source of profit is its customers. The host companies of Ford keep the supply market for ford's product. According to Ford, for example, the company relies on” 1,200+ global production suppliers to provide many of the parts that are assembled into Ford vehicles. Another 11,500 supplier companies provide a wide range of nonproduction goods and services, from industrial materials to computers to advertising” (Ford, 2012, p.4).
The employee of the company ensures efficient work, and the company takes care of their welfare. Employees also main the company's positive work culture and make sure to deliver strong products with the latest innovation. They also improve the product's quality and maintain the company. According to the company, more than 5.7 million vehicles to our customers worldwide as of 2012 (Ford, 2012, p.1).
Sources
1. Ireland, R. D., Hoskisson, R. E., & Hitt, M. A. (2008). Understanding Business Strategy: Concepts and Cases.
2. Business Says. (2020). Auto Industry I/O Model.
3. Hanson, D., Hitt, M. A., Ireland, D., & Hoskisson, R. E. (2017). Strategic Management and Strategic and Competitiveness.
4. Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2017). Strategic Management Competitiveness & Globalization.
5. Miller, C., & Sirgy, M. J. (2011). Impact of Globalization of the Automotive Industry on the Quality of Life of the U.S. Southeast. The Economic Geography of Globalization.
6. Rychtyckyj, N. (2007). Intelligent Systems for Manufacturing at Ford Motor Company.
7. Sturgeon, T., & Florida, R. (2002). The Globalization of Automobile Production.
8. Thompson, A. (2019). Ford Motor Company’s Mission Statement & Vision Statement: An Analysis.