Building a Competitive Advantage
Ford Company sells commercial vehicles and automobiles under its brand name. It is classified under the manufacturing sector code 31-33 in the section of motorhome manufacturing code 336213 in the NAICS. According to the 2015 vehicle production, it was ranked the second largest automaker in the US and the fifth largest in the world. Using Michael Porter's model, the company’s management can utilize the strategy to increase its business attractiveness. The most significant force affecting the company is the high industrial rivalry. It faces massive competition from different firms such as General Motors, Toyota, Hyundai-Kia, and VW. The external factors resulting in this increased competition include high exit barriers due to the high investment costs, high aggressiveness of firms leading to creativity and increased innovation, and a moderate number of firms offering substitute products to customers. The firm's management, therefore, has to come up with ways to ensure that they retain a high market position.
The firm also experiences a moderate threat of substitutes because of the increased alternatives in the market. Factors that contribute to the high force include the presence of other means of transport other such as bicycles, motorcycles, and public modes of transportation. There is also the presence of high switching costs because customers can readily switch from Ford's products to other companies' products. However, the management has come up with measures to reduce the effects of this force (Ferguson, 2017). Such actions include the adoption of technology to differentiate its products, equipping their products with superior safety measures, and also enhancement of customer satisfaction and loyalty through offering quality products that enhance comfort.
However, the firm enjoys a weak threat of new entrants due to the high capital outlay required, the high cost of conducting business, and t...
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