Business Strategies

Business strategies are meant for how a company will compete in its businesses. Based on Porter’s 5 forces model following are the activities of the company

• Current rivalry- Ford faces five major competitors: GM, Toyota, Chrysler, Honda, and Nissan. Toyota, Honda, and Nissan have grown in market share largely as a result of their ability to deliver better products at lower prices, particularly for more fuel efficient smaller vehicles. Ford has been losing money on its smaller vehicles. Ford has managed to remain competitive in Europe by designing cars which appeal to European tastes and by increasing the quality ratings of its vehicles. This has led to stable market share and profits over the past three years.

• Bargaining power of Suppliers - Currently, Ford wields significant buying power over its parts suppliers. Many parts suppliers rely on contracts with only one or two automotive firms, meaning changes in production at Ford can dramatically impact the stability of its supply chain. In the past few years Ford has made a concerted effort to reduce the number of suppliers it contracts with.

• Bargaining power of buyers - Retail bargaining power for automobiles is very limited throughout the world. The dealer not the automotive company bears the costs of these concessions. Dealers typically finance their purchases through Ford Credit. Overall, diseconomies of scale effectively eliminate buyer power in retail circumstances.

• Threat of new entrants - Within the developed world, there are significant barriers to entry for the automobile manufacturing sector. Substantial fixed costs, the influence of brand names upon sales, and the dealership model all hinder new entrants. The entry threat to Ford in the medium run will continue to be from manufacturers with existing access to these developed markets

• Threat of substitutes - public transportation may pose as an imperfect substitute. As oil supplies dwindle and fuel prices rise .This has provided an additional impetus for Ford provide highly fuel efficient vehicles for the consumer.

Organizational Structure

Ford being a global organisation exhibits a very complex structure fairly mechanistic in nature.

According to classification based on functions; there is a CEO, a chairman and a number of vice presidents. ^[6]

Under CEO work-

• Chief operating officer

• Chief technical officer

• Chief financial officer

• Executive vice presidents

• Group vice presidents

Under the following listings a rigid departmentalization can be seen

The group vice presidents deal with-

• Procurement

• Legal

• Manufacturing and labour affairs

• HR and corporate service

• Quality and new model launch

The executive vice presidents handle operations related to -

• Europe, middle east and Africa

• The Americas

• Ford motor credit company

• Global sales and services and Lincoln

The Chief Operating Officer handles-

• Global trading and automotive risk management

• Communications

The Chief Technical Officer handles-

• Ford of Europe

• Sustainability, environmental and safety engineering

• Engineering and global product development

• Powertrain engineering

The Chief Finance officer deals controller and treasurer.

Under these chief officers works a number of respective directors hence showing a low span of control overall.

There is a clear chain of command flowing from CEO to Vice presidents to Department directors and employees.

The degree of centralization is fairly high. Although employees are free to give opinions the ultimate decision power resides in the hands of top management only.