Ford PESTLE Analysis - Case Study Example

? PESTLE Analysis Ford Contents Introduction 3 Methods and Reasons 3 PESTLE Analysis 4 Political 4 Economic 4 Socio-Cultural 4 Technological 5 Environmental 5 Legal 6 Current Position 6 Future Prospects 6 Reference List 8 Introduction Ford Motor is one of the global leaders in the automobile segment. The company was established in the year 1903 and is based in Dearborn, Michigan (Ford, 2013a). The company is involved in manufacturing and distribution of vehicles across six continents. The brand is the second largest automobile company is United States. The major product segment of the company includes cars, trucks and utility vehicles (Ford, 2013b). Ford cars are perceived as affordable as well as luxury cars in the market. The large product portfolio, including products such as Sedans, Hatchbacks and SUVs, cater to large group of customers. The company has differentiated itself from other automobile companies though its vision and understanding of the impact of culture on the automobile industry in future. In the present report, the current strategies and tactics implemented by the company are discussed and analyzed. A macro environmental analysis has been done to find out the present socio-cultural and environmental factors affecting United Kingdom and how the organization needs to make strategies in order to cope up with these situations. Methods and Reasons The company embraces all the traditional objectives which were given by its founder. However, looking at the current environment and continuously changing business and political culture, the brand has also established many strategies to compliment with the change. Ford is the current leader in innovative cars (Ford, 2013c). Features concerned with safety, advanced technology and effort for energy and efficacy are important factors which influence the strategies of the company. Employees in the organization work together as a team and as a global and lean enterprise for leadership in automobile (Mistry, 2005). The company operates by aggressively structuring with the objective of profitable operations. The current demand for automotives is very volatile and the mix of models has to be constantly changed to meet the demands of the customers. The organization focuses on accelerating developments of those products and services which are valued by their customers. To remain profitable and well as growing, the company always makes sure that financial planning is appropriate and the balance sheet is continuously improving. The brand operates on the goals of providing profitable growth. The brand has its presence in over 30 countries and the company has taken all measures in providing exact requirements of the different market. Looking at the different market preferences, the company has specialized in providing personalized designs and models suiting the geographic and demographic profiles of the markets where the organization is operating. PESTLE Analysis Political Continuous growth in campaigning and elections has widened the political environment in the United Kingdom. Presence of small clusters of specialty groups makes it extremely difficult for a large organization to concentrate on one political group. Factors such as exchange rates, oil prices and free trade flows have a direct impact on the functioning of automobile sector. In the present political scenario, volatility in oil prices due to various political unrest in Arab as well as major oil producing countries, have resulted in revamping of the strategies and budgeting by major automobile companies. Foreign regulations and laws and foreign ownership regulations may also impact the overall revenue generation of the company in the countries where it is operating. Economic Like the rest of the automobile companies, Ford motor has also suffered huge losses due to the current recession and volatile economic and business environment. The recession that occurred in 2008 was followed by downfall of the banking industry. However, Ford has been able to stay afloat and keep a profitable business during these times, even as other companies were trying hard to remain stable. The propensity of growth in potential as well as functional markets such as United Kingdom is one of the determining factors for the overall performance of the Company. The growth of GDP in these markets will also elevate the overall intention to buy luxury transport. Socio-Cultural Socio cultural factors play a critical role in determining the strategies for a product or brand, as they assure the overall characters of potential customers and methods to attract their attention. In the recent past, the company has been spending more on its advertising and branding budget, with the objective of making customers aware of their new brand image. The organization has also extended its base of target customers. Two of the new target profiles of customers are new drivers and parents. The geographic factors also affect the strategies of the company. Apart from these, the mental outlook of customers also affects the purchasing decision and thus sale of cars. For example, factors such as personal interest, price and safety are features which have crucial impact on the final purchase decision. To overcome these issues, the company can opt for periodic surveys and keep a track on the changing consumer preference. The website of the company can have options for feedback and suggestion which will help in gaining useful insights about the consumers (Semeijn, et al., 2005). Technological Technical factors are important as they help in increasing the overall efficiency of the company’s operations and thus achieve growth in terms of sales percentage, revenue generation and overall performance. Consumer amusement is another factor which increases the importance of advanced technology. Providing chain of association helps in increasing consumer trust in the brand. The operations of the company are accomplished in terms of providing service and improved assistance. Assembling of the vehicle parts is conducted in more than 30 countries, which make the brand competent and capable of delivering transport with exceptional efficiency and exact timings (Bennett and O'Kane, 2006). Environmental Since its establishment, the organization has initiated many creative campaigns in order to generate awareness about the environmental issues. Automobile companies have to go through strict environmental guidelines because of various global concerns such as carbon emissions, air pollutions, and emission of harmful gases and destruction of natural resources. With the help of its R&D department, the company is able to design environment friendly and hybrid cars, which run on power sources other than petroleum and diesel and have also successfully launched new breed of hybrid cars (Bogers, 2011). In the current scenario, much of attention has been going to projects concerned with going green. To be a part of this global initiative, the car company has started focusing on the development of engine which is more fuel efficient and compatible with the environment (Pilkington and Dyerson, 2006). Ford is also making changes in its sustainability regulations, to comply with the government rules and initiatives. Legal Being one of the largest car companies worldwide, the organization has taken all precautions and measures in order to be in the good books of the government, in the countries where the brand is operating. The organization makes sure that each of its design and innovation passes the inspections of the United Kingdom Federal Government. Ford Company continuously maintains all regulations and complies with the regulatory agencies which are created in order to monitor the overall process in an organization. Even though these regulatory bodies are continuously changing their regulations and laws, the company is able to maintain and comply with these laws and maintain strict transparency in its operations. Current Position Ford motor has been so far successful in maintaining the image of a worker’s truck. The performance of Ford in countries such as United Kingdom is crucial and decisive factors for economic stability of the company. At present, Ford is market leader is Turkey, United Kingdom and Hungary. The organization must make sure that the market share in these markets is constant and make strategies to upgrade these markets. In case of these markets, the company can reduce the cost of its mid-segment products, in order to attract more customers and increase market share. This will also help in maintaining its profitability. Ford motor is equipped with advanced technological and modern equipments when compared with competitors. The company has its operations in more than 30 countries which have helped in developing a unique brand equity and overall brand recognition (Hakala and Vincze, 2012). Proper delivery of vehicles and excellent after sales service are few other services which increases brand loyalty and positive word of mouth advertising among customers. Future Prospects Geographic and demographic factors can be an opportunity for penetration better understanding of a particular market. For example, in countries such as United States, customers prefer vehicles with large engines, while in European countries such as United Kingdom, customers are more comfortable with smaller engines and sophisticated vehicles. Looking at this opportunity, Ford has now started giving more thrust to characteristics such as innovation and creativity and wants to be perceived as an exciting company with pertinent and innovative vehicles which are sleek in capability and design. Apart from this, the current consumers are now more concerned with safety as well as environmental friendliness of the vehicles. Looking at this opportunity, the company has also launched many economic cars with the aim of providing environmental safety of cars. To strengthen its brand equity in United Kingdom, the company can focus on smaller cars and cross over breeds which will signify technological advancements and help in overall brand recognition. Reference List Bennett, D. and O' Kane, J., 2006. Achieving business excellence through synchronous supply in the automotive sector, Benchmarking: An International Journal, 13(1/2), pp.12 – 22. Bogers, M., 2011. The open innovation paradox: Knowledge sharing and protection in R&D collaborations, European Journal of Innovation Management, 14(1), pp.93 – 117. Ford, 2013a. Our Company. [online] Available at < http://corporate.ford.com/our-company> [Accessed 18 July 2013]. Ford, 2013b. Our Brands. [online] Available at < http://corporate.ford.com/our-company/our-brands/our-brands-ford> [Accessed 18 July 2013]. Ford, 2013c. Innovation. [online] Available at < http://corporate.ford.com/innovation> [Accessed 18 July 2013]. Hakala, S. and Vincze, Z., 2012. Consumer-based brand equity and top-of-mind awareness: a cross-country analysis. Journal of Product & Brand Management. 21(6), pp. 439 – 451. Mistry, J. J., 2005. Supply Chain Management: A Case Study of an Integrated Lean and Agile Model. Qualitative Research in Accounting & Management, 2(2), pp.193 – 215. Pilkington, A. and Dyerson, R., 2006. Innovation in disruptive regulatory environments: A patent study of electric vehicle technology development, European Journal of Innovation Management, 9(1), pp.79 – 91. Semeijn, J., Van Riel, A. C. R., Van Birgelen, M. J. H. and Streukens, S. 2005. E-services and offline fulfilment: how e-loyalty is created. Managing Service Quality, 15(2), pp.182 – 194. Read More