Strategic analysis is an essential concern in every company. The review helps the
organisations to understand their competitive stance in the industry. The companies can identify
and improve on areas such as necessary competencies, employee satisfaction, product
development, strengths and weaknesses in the industry. All the managers need to understand the
concepts of strategic analysis to be able to conduct such a study in their respective companies.
Therefore, the purpose of this paper is to provide the reader with a strategic review of a company
to aid in a clear understanding of the concepts.
The paper discusses the strategic analysis of Ford Automobile Company. Ford Company
is an American automobile organisation founded in 1903 by Henry Ford (Wee and Wu, 2009).
Ford manufactures a wide range of cars, including sports and commercial vehicles. Ford Motor
has a strong brand in the vehicle industry. Further, the company has built an excellent reputation
which has won customer loyalty in the market. Moreso, Ford is among the most trusted company
for giving the best quality cars in the industry.
The report comprises both internal and external analysis techniques. Firstly, the paper
examines VRIO (Value, rareness, imitability, organisation) as the internal analysis technique.
Value chain analysis comes in the second place still as the internal analysis technique. Thirdly,
the report outlines the SWOT analysis as the external analysis technique. Further, the document
explains the PESTLE analysis again as the external analysis technique. Lastly, the report
describes the strategic issues arising from the conducted strategic study. Below is a critical
strategic analysis of Ford Motor Company.
Strategic Analysis Report 3
Internal Strategic Analysis
VRIO (value, rareness, imitability, organisation)
VRIO analysis is essential in determining the company’s competitive advantage in the
industry. Generally, the framework reviews the firm’s resources and the underlying capabilities
and competencies. Ford has several resources and abilities which contribute to its competitive
V R I O Competitive
Quality Measure Parity
System (My-Key) Temporary
Aluminum Body Design Temporary
Strong Brand Sustained
Corporate Culture Sustained
Strong Distribution Network Sustained
Economies of Scale Sustained
Strategic Analysis Report 4
Value Chain Analysis (VCA)
Inbound logistics. Ford is a responsible company that uses renewable materials for
manufacturing. Moreso, the organisation is an active member of Automotive Industry Action
Group (AIAG) which is essential in training and developing suppliers and improve the sourcing
process. The company has centralised stores which facilitate the smooth dispatch of materials
and finished products to the specified destinations.
Operations. Ford ensures consistency in the provision of goods and services. Also, the
company encourages process and capacity design by expanding its premises to support more
production and distribution network. Ford advocates for an assembly line approach which
Outbound logistics. Ford works in partnership with transporting companies that move
products to the final consumers. For example, NALI and NYK are the best carriers of Ford’s
vehicles as they provide local, regional and global transportation services to Ford Motor
Company (Contreras, Carrillo and Estrada, 2010). Therefore, the company has excellent
Marketing and sales. Ford offers a wide range of products, including automobiles,
trucks, buses, and tractors. Similarly, the distribution of Ford cuts across dealerships, auto parts
stores, and Ford parts website. Also, the company has a promotion mix that comprises of
advertising, personal selling, and direct selling.
Service. Ford focuses on lowering the maintenance cost of the car to serve it better. As a
result, the car’s reliability increases. Also, the company provides after-sales services to
Strategic Analysis Report 5
customers and thus retains the customers. For example, Ford transports a vehicle to the
customer's place after making the purchase.
Procurement. Ford’s procurement process contributes a lot to the production process.
The company values consistency in the production of goods and services. As a result, Ford
focuses on establishing collaborative relations with suppliers. The company selects partners,
depending on factors such as quality, cost, technical support, and delivery. Moreso, Ford Motor
Company values single-vendor sourcing.
Technology development. Ford uses 3D printing which facilitates product development
as well as integrating technology in manufacturing lines. Also, the company continues to build
more technological centres which improve efficiency and effectiveness in production. Over
recent years, Ford has been working on ways to manufacture self-driving cars.
Human resource management. Ford is right at hiring and retaining employees. The
company searches for workers with diversified talents and skills, especially in technology and
automobile. Moreover, Ford recognises employing training as the cornerstone for an excellent
performance. Furthermore, the company values employee motivation and focuses on creating a
safe and healthy working environment.
Firm infrastructure. Ford’s organisational structure has three features. The first is a
corporate hierarchy which consists of the managers, executives and the vice president. According
to Kinicki, Williams, Scott-Ladd, and Perry (2011), this feature promotes management
techniques which are traditional and supports effective leadership. The second feature is regional
geographic divisions which include America, Asia-Pacific, Middle East, Europe and Africa. The
Strategic Analysis Report 6
third feature is global functional groups such as global manufacturing and labour affairs, global
product development and global purchasing.
Strategic Analysis Report 7
Strengths. Ford has a strong brand that ranks among the best car sellers in the World.
Also, Ford commits a lot of resources in R&D to facilitate product development and overall
process improvement. Further, Ford has a significant market share in the industry which give it a
broader customer base.
Weaknesses. Ford has experienced some product failures. For example, the company had
to recall and remake about 271,000 cars in 2017 and risked losing the customer’s faith. Ford is
finding it hard to catch up with the emerging market since it has been experiencing market splits
in the industry.
Opportunities. Ford is expanding its premises Globally. For example, the company is
putting up new facilities in Mexico and Spain. Also, Ford is focusing on producing hybrid and
electric vehicles to save on fuel use. As a result, the company continues to minimise emissions
which turns out to be environmentally friendly.
Threats. Ford encounters stiff competition from other market leaders such as Toyota,
Volkswagen and General Motors. Also, the company suffers from currency fluctuations in the
global economy. With 67 plants across the World, Ford experiences difficulty in balancing the
Political factors. Ford can benefit from political considerations in three ways. Firstly,
governments offer support for technological innovations. Therefore, Ford can utilise such
Strategic Analysis Report 8
incentives to promote product development. Secondly, governments support foreign trade.
Hence, Ford can use trade contracts to expand its business globally and enter into international
markets. Thirdly, governments focus on improving infrastructure in developing countries. Thus,
Ford has the opportunity to sell vehicles in remote areas.
Economic factors. The growth of the U.S economy is an excellent opportunity for Ford
since it provides the most significant market for the company. However, the strengthening of the
U.S dollar leads to a decline in profits since Ford’s products become less attractive in the market.
Also, Ford has a chance to grow in countries with a high rate of development since it can expand
its premises in remote places.
Sociocultural factors. There is a shooting demand for electric and hybrid cars in the
industry. Therefore, this is an opportunity for Ford to produce vehicles that meet such needs.
Also, customers say that companies offer moderate customer services. Thus, Ford can improve
its services to potential buyers and win more customers. However, there is an increasing wealth
gap which is a threat to Ford’s luxury vehicles such as Lincoln Navigator.
Technological factors. Ford has a chance to utilise mobile services and increase its
marketing services in the industry. Also, Ford can make use of online services to support
functions such as delivery arrangements. On the other side, Ford has few fuel stations, and thus
the alternative vehicles may suffer due to lack of sufficient stations.
Ecological factors. Climate change provides a golden chance for Ford to manufacture
products which are friendly to the environment. Also, the company’s initiative to produce an
alternative vehicle with low emissions is another opportunity that can bring competitive
Strategic Analysis Report 9
Legal factors. Ford can improve on CSR to support environmental safety. Also, Ford can
make the necessary improvements to the products to provide customers with more regulated
goods and services. Further, Ford can adopt the macro-environment intellectual laws to increase
protection on its premises.
Ford’s Strategic Issues
Even though Ford is contributing significantly in the automotive industry, the company’s
automobile vehicles are facing a lot of challenges in the industry. Such difficulties include
environmental issues and sustainability problems. Also, cars are not efficient in energy usage.
According to Debye (2014), innovation is one of Ford’s primary concern. However, it falls
behind Toyota and General Motors, which are far much ahead in terms of change.
Ford’s faces a significant challenge from the Global economy. The company’s poor
planning has caused the loss of a substantial decline in sales revenue due to the injury of
customers’ faith in their processes. Also, Ford seems to be performing poorly in developing
countries. Ford has fewer market shares compared to Toyota, General Motors and Volkswagen.
Moreso, the market share keeps on declining.
Strategic Analysis Report 10
Contreras, O.F., Carrillo, J. and Estrada, J.A., 2010. The creation of local suppliers within global
production networks: The case of Ford Motor Company in Hermosillo, Mexico. The
Prospects and Limits to the Development of the Automotive Periphery, 42.
Debye, Y., 2014. E-car industry analysis from the perspective of the business model
dynamics (Bachelor's thesis, University of Twente).
Kinicki, A., Williams, B.K., Scott-Ladd, B.D. and Perry, M., 2011. Management: A practical
introduction. McGraw-Hill Irwin.
Wee, H.M. and Wu, S., 2009. Lean supply chain and its effect on product cost and quality: a case
study on Ford Motor Company. Supply Chain Management: An International
Journal, 14(5), pp.335-341.