Ford Motor Company as among the Leading Brands in the Automobile Industry - Essay Example

BUSINESS PERFORMANCE AND STRATEGY ASSESSED WORK By: Introduction It is important to highlight that this paper delves in the discussion of the business performance based on the strategies that were developed and put into practice by the company. The company that has been selected for the discussion is Ford Company. Positioning is a marketing tool, which is applied in order to identify the company’s real position in the market. It is also a marketing strategy which creates various opportunities and identifies the market through the help of market research. The main aim behind the positioning strategy implemented by various organisations is to increase the turnover, brand reputation, and sales volume of the company (Chris, 2001). . In this context, it can be stated that in the contemporary society, the market for products has become volatile due to the strong competition among several companies. In order to maintain a stable position and competitive advantage in the market with high market share, companies are applying several positioning strategies (Andreasen, 2001). In other words, it can be stated that positioning helps companies to build their reputation in the market with profitability. The positioning procedure implemented is used to develop the brand and product name in the global market. After the advent of globalisation, positioning has become important for the companies in order to promote the products and enhance the sales. This procedure of positioning is mainly used for highlighting the products and makes it popular among varied customers (Dabija and Abrudan, 2008). Contextually, market positioning is a method through which the brand name of the company is positively influenced with the help of marketing mix. The appropriate positioning refers to the understanding of the core market competency and applying the strategy for greater market share. Positioning is important for every industry and hence in this paper the emphasis is on the automobile sector and its positive impact on Ford Motor Company. However, in the current market, with the increase in competition in the automotive market, the use of the positioning strategy is becoming more significant (Arab British Academy for Higher Education, 2014). Overview of the Company Ford Motor Company is among the leading brands in the automobile industry. This company was initially known as Detroit Automobile Company (Sinha, 2009). However, the company saw its existence in the world of business in the year 1903 and was named as Ford. In the current global market, Ford is recognised to be one of the most profitable companies in the automobile industry (Drury, 2007). During the initiation of business, Ford owned five luxurious cars which include Volvo, Land Rover, Jaguar, Aston Martin and Mercury. However with the passage of time these luxurious brands were sold out to other companies but Ford Motors still remains the most leading brand in the automobile sector (Ford Motor Company, 2014). Strategy and Competitive Advantage: Positioning is the identification of the target market, their needs and then you develop what suit their taste and preference. The positioning strategies influence consumer behaviour to gain the market share thereby getting higher profit returns to the business. In this regard, Ford Motor Company implemented various positioning strategies to gain the market share and profitability (Andrew, John, Hal, David, Aki, and Donald, 2013). Target Market Analysis It is important for Ford Motor Company to target the market or audience in order to capture the market. Therefore, it is an important strategy of the company to target the market for better effectiveness (Simkin, 2008). The objective of the target market analysis is to identify the potential customers who are interested in the product and services offered by the company. This helps in identifying the needs, preferences of the customers by the evaluating the target market. Ford Motor Company also focussed upon the niche market to get more market share in the global platform (Staffordshire University, 2012). Brand Positioning Process This is strategy, which has been adopted by the Ford Motor Company to highlight the brand name and capture the attention of customers globally. Ford Motor Company incorporated the brand positioning to target the customers by making the brand name more distinctive from other. The aim of brand positioning is to target customers in order to create awareness and brand loyalty among customers (Grier, 2007). There are several processes of the brand positioning, which are useful to capture huge market share. First identity the needs of the customers, secondly understand the strategies which competitors are applying to create their own brand name. With regard to these steps Ford Motor Company compares its several strategies with its rivals. These are good tactics, for the benefit of Ford Motor Company (Britton & Ann Jorissen, 2007). Moreover, by analysing the market structure of rivals Ford Motor Company creates its alternative strategy to enhance the brand name. Contextually, quality positioning also refers to a vital part of the brand positioning for enhancing the market. This is apparent that the quality of the product can create a huge impact upon the brand name of the company (Horsky & Nelson, 1992, pp. 133). Each and every business always tries to maintain its product quality to generate its brand value. Ford Motor Company provides quality products as per the changing needs of the customers hence create brand value. Promoting brand value through the use of celebrity is another brand positioning strategy (Peterson, 1999). Endorsement by a well-known celebrity can create a positive impact and draw the trust of the people upon the brand name of the company such as Ford Motor Company. This type of strategies in promoting brand inspires buyers to buy the product based on trust over the brand (Horsky & Nelson, 1992, pp.153). Price Positioning Process The price positioning is a vital strategy, which is implemented by Ford Motor Company on the basis of quality of the product. It can be stated that the pricing policy is correlated with the quality of the product. This implies that higher quality product has higher price and the medium quality product has comparatively lower price. Sometimes, higher pricing strategy is more beneficial as per the preferences of customers (Armstrong, & Baron, 2004). Few customers purchasing decision depends on the product price. Therefore, it is important to strategise pricing based in various aspects. Ford Motor Company has strategized its pricing strategy depending on the target market and audience in order to gain greater market share (Maibach, 2003). Sometimes, Ford Motor Company prices its product by analysing the market condition. In this context, it can be stated that the implementing positive price positioning strategy for countering the competitor’s price is referred as an effective positioning strategy in the competitive environment (Andreasen, 2002). There are some customers who mainly prefer high quality products and thus companies incorporate high pricing strategy to maintain its position in the market. There are few other companies which mainly target customers looking for less expensive products. Similarly, lower pricing strategies are being set up for attracting those particular customers by Ford Motor Company (Smith, 2008). The income statement below therefore shows the earnings of Ford in one accounting period. QUARTERLY DATA period ending Jun-14 Mar-14 Dec-13 Sep-13 total revenue ($) 37411000 35876000 37036000 36309000 cost of revenue ($) 31930000 31699000 33362000 30792000 gross profit ($) 5481000 4177000 3674000 5517000 Operating expenses selling general and administrative 3476000 3372000 3080000 3769000 non recurring 104000 39000 69000 46000 operating income or loss 1901000 766000 525000 1702000 Income from continuing operations expenses net 352000 282000 366000 300000 Earnings before interest and tax 2325000 1467000 1180000 2295000 interest expense 207000 208000 212000 204000 income before tax 2118000 1259000 968000 2091000 income tax expense 803000 270000 -2061000 818000 minority expense -4000 0 10000 -1000 Net income from continuing operations 1378000 1408000 3328000 1565000 Net Income 1311000 989000 3039000 1272000 The chart below therefore shows the revenue that the company earned in that one year. Product Positioning Process The product positioning is very important strategy to capture a certain portion of the market. Products are referred to as the most important and most significant factor of a company. It can be stated that the product is the most valuable aspect for Ford Motor Company. Product positioning means creating a right position and strategy for product in the market to enhance the market share (Baker, 2007). Moreover, to position the product in a right way the company need to be more specialize in quality production of the product. It has been evident that more the product is unique in nature the popularity of the product is more than others. This is again a strategy to position in the market and gain better competiveness. For proper product positioning in the market the company needs to identify the requirement of the customers (Armstrong, & Baron, 2004). The company needs to identify the target market for the product and reduce the gap or difference between markets attributes. Contextually, product positioning is mainly prepared by the company to target the mass market. To attract the mass market the company need to be more cautious regarding the product packaging of its product. The design, outlook, and the packaging strategy need to be more advanced and attractive towards the customers. Sometimes the product positioning is followed by the segmentation position. This can be useful and an easy process for creating the market of the company (University of Dayton, 1997, pp. 1-15). Demographic Related Positioning The demographic positioning is mainly followed by the segmentation process. After the demographic segmentation the company target several demographics as per the division of age, races, social classes and gender basis. The company mainly launches different types of products and promotes its brand name on the basis of different types of age and gender basis. The marketers sometimes use different types of advertisement or promotional strategies for targeting the customers and positioning itself in the market (Hearst Newspapers, LLC, 2014). Competitive Positioning Competitive positioning helps the company to reposition its status in the market. It is a common positioning strategy of the market when there are two strong competitors in a one market and struggling for greater market share. Ford Motor Company also incorporates the competitive positioning to gain high profitability globally. The company faces stiff competition from other automotive companies such as, Chrysler Group LLC, Tata Motors, Daimler AG, General Motors Company, Volkswagen AG, Honda Motor Company Bayerische Motoren Werke AG, Nissan Motor, Ltd, and Toyota Motor Corporation (Hearst Newspapers, LLC, 2014). The data below shows the net income of Ford in 10 years period. The data were from The Automotive News and Automotive News Europe, various issues. Detroit: Crain Communications Journal Year Net income (billion $) 2004 3487 2005 2084 2006 -12613 2007 -2723 2008 -14672 2009 2717 2010 6561 2011 20213 2012 5665 2013 7155 2014 6174 The chart below is the graphical representation of the data. The data are integral therefore the years are denoted by the integers. 1 denotes 2004 as it ascends to 10 which denotes 2014. Different types of Positioning Strategies applied by Ford Motor Company Ford Motor Company is one of the leading brands in the automobile industry. In modern day scenario, competition in the automobile industry has been increasing in a rapid manner. This has lead to the rise in the automotive market and competitiveness (Cronk, & Hill, 2008). In this context, it is crucial to state that market players are increasing in the automobile sector. So it is more important for each and every market player to apply several market strategies to maintain its position in the industry. The Ford Motor Company has also applied several marketing strategies to capture the market and achieve success in the long run. It is also important to consider certain factors that can make a company to lose its competence in the market (David, Xiaobo and Zhiyong 2012). When the highly skilled and knowledgeable employees have left an organization or sacked because of stringent and oppressing rules in an organization, that would means competence is lacking in regards to leadership. Another key factor that epitomizes lack of competence is the poor performance review in a company. Another reason that makes a company to loose competence is when it is not encouraging workers on developing their career paths. Focusing on the employees’ welfare as well as that of customers is very fundamental and needs to be put into consideration at all cost to avoid losing competence (Arab British Academy for Higher Education, 2014). Brand Positioning by Ford Motor Company Brand positioning by the Ford Motor Company is one of the most effective strategies adopted in order to capture the huge market in the competitive environment. The tag line by Ford Motor Company is “Go Further” which is another important brand positioning attribute for the company and its success (Rapp. 2005). The tag line states the fact that Ford Motor Company believes in innovation. With regard to brand positioning Ford Motor Company launches several fuel efficient vehicles to attract more customers. In this context, as per positioning strategy customers, who spent less money in fuel consumption prefer Ford vehicle more than the others. It can be stated that after launching fuel economic vehicle in the market Ford Motor Company are facing more competition due to the volatile market scenario (John, 2010). Due to the incorporation of positioning strategy Ford Motor Company was achieving success by providing a strong competition to the Toyota and Honda the then competitor. Moreover, promoting brand through effective and strong tag line by the Ford Motor company its competitors were facing a strong competition. Hence, Ford Motor Company was successful in establishing its position in the market. Therefore, it can be stated that the positioning strategy of Ford Motor Company is comparatively better to counter its rivals in the industry (Ford Motor Company, 2014). Product Positioning Strategy by Ford To capture the global market of the automobile sector Ford Motor Company focused upon its products. Ford Motor Company focused upon the design and product quality of the new vehicles market analysis and paying attention towards the customer preferences. It launched huge range of smart cars in market as per the market analysis and research (Damodaran, 2010). This range of smart cars attracted the attention of several customers globally. Moreover, Ford Motor Company imposed fuel efficient cars with smarter look and design. Innovation of products is also an important positioning strategy for Ford Motor Company for achieving the long term success. The economic fuel efficiency in vehicles made the Ford Motor Company the top most company in automobile industry (Dabija and Abrudan, 2008). Ford focuses on the design and the internal quality of the products. Ford not only brought variations in the design of the cars but also made several changes in the product features. In this regard, it can be stated that Ford motor has prepared its products not on national level but on global level (Ken and Nicholas 2010). Furthermore, Ford Motor Company has paid attention towards product strategy by the launching good quality products in the market for very segment. Another, strategy implemented is that Ford is providing the elite services to all its customers in the form of after sales services. Good quality after sales services can help the company to attract and attain more customers for greater market share as a part of the positioning strategy and success Ford Motor Company used forum to take feedbacks from the customers directly about the product and service. This created a trust in the mind of the customers regarding the company. The graph below therefore shows the performance of Ford in regards to the units produce, sales mane and the net income of the company from 1990 to 2000. The 100 denotes 2000 (Dabija and Abrudan, 2008). The graph below shows the performance of the company for 10 years. The data re integral and therefore the years are denoted by integers from 1 to 10. 1denotes 1990 in ascending order to 2000, Data from The Automotive News and Automotive News Europe, various issues Detroit: Crain Communications Journal Valuable Positioning by Ford Motor Company The value positioning refers to making position of the product on the basis of sustainable price of the product. It is also refers to the fact that Ford Motor Company offers product in a comparatively lower price during the time of recession (Ken and Nicholas, 2014). In this regard, providing good quality product at a lower price is referred as value positioning. Ford uses the value positioning in its product strategy. The value position in the market has been created by Ford Motor Company by providing the best values to the customer. Ford Motor Company is retaining its customers by applying the valued positioning strategy. Ford is efficient in delivering the good quality basic features in its product with a comparative lower price therefore the success for Ford motor is high. Ford Motor Company also provides additional discounts in the retail price to achieve better sales target. The value positioning strategy is referred to be one of the most challenging strategies in order to compete with its rivals (Gale and Swire, 2006). Competitive Positioning by Ford Motor Company Ford Motor Company is a leading brand. It has main competition in the market with the manufactures of the SUV segment cars. Toyota and Ford are the leading brand of automobile sectors, which are specialized in manufacturing the SUV segment cars in the market. So the competitive positioning is mainly done by these two market players for gaining better market share (Ford World, 2008). Current Position of Ford with Respect to Positioning Strategy To trade effectively and gain a competitive advantage, the company chose to do market and below is the SWOT for the company: STRENGTHS It has a strong and better market position. Larger capital base and that was why the company never needed incentives from the US government A good economic growth in China by about 46% Single line orientation in terms of production. WEAKNESSES There is less profit returns especially from Europe Bad environmental records with focus on pollution High cost make up such as compensation schemes and pensions to the employee OPPORTUNITIES The rising prices of fuel in the global market. Positive attitude of the car users towards the purchase of green vehicles. Good strategic partnerships and association with other stable automobile companies. THREATS Fluctuation in the currency valuation in the global market. Stiff competition High cost of production due to increases in price of raw materials Ford Motor Company has taken several strategies through proper analysis of the market. In this context, marketing mix is one of the most important strategies which have been applied by Ford to understand the market and achieve sauces in the long run. It can be concluded that to identify the different needs of customers company need an efficient research and developmental team to understand the current market trend. The successful marketing positioning includes several processes for strong market positioning (Reinhart, 2013). Marketing Mix Strategy Ford Motor Company is an American multinational company, which has expanded its business all over the globe with the help of marketing strategies (Edward, 2013). It has focussed upon the four P’s of the marketing mix. The first P is ‘product’, i.e. Ford has manufactured as per the preferences off the customers with innovation and advanced technology. The products of the Ford are more innovative in nature. The second P is ‘Price’, which Ford Motor Company has strategized as per the customer requirement. The third P is ‘Place’ which is crucial for the success of Ford Motor Company as it targeted consumers globally. The promotional strategy of Ford is refers to be one of the strongest strategy. Ford has applied several promotional strategies such as advertisement through international channels, campaigns and many more. Through this, the tabulated data below shows the income earned for the past 3years (Ford World, 2008). From the table, it can be graphically presented as shown and the y axis values are raised to ‘000000 $ and that it starts from 2014, 2013 to 2012. The data was from PriceWaterhouseCoopers Autofacts, www.autofacts.com Segmentation Strategy Segmentation strategy enables Ford Motor Company to understand the preferences of the consumers based on the different geographical location. It can be stated that countries, with huge population small, economical and comfortable cars. In this context, Ford Motor Company has segmented the market into three profiles, one is geographic profile, second is demographic profile and the third is behavioural profile (Field, 2007). Ford has it products and designed as per the need of the customers on the basis of segmentation. To meet the demand of the people Ford has launched cars. To satisfy the economic classes’ people Ford has launches the fuel efficient, small vehicles. On other hand, to satisfy the need of the people who belongs from higher class or elite class, Ford has launched high price vehicle with comparatively better basics features (Senna, 2013). Targeting Strategy Ford has been targeting the whole market place in different group. Ford Motor Company implemented the differentiate marketing to meet the demand of the customer. Ford divided its customer base into three types of targeted group. One group is based upon the age, second group is based upon income and the third group is based upon psychographic. This strategy helps Ford to understand the market in better way and achieve success (Vlasic, 2011). Competitive Analysis After the analysis of several attributes of the market it can be stated that Ford efficiently adopted several market changes and faced the competition. As per the modern era, Motor Company has redesigned its products as per the segment. It can be sated that the Ford brought several changes in its products as per the demand of the customers. In current scenario Ford has launched several segments of cars, which are popularly known as smart cars. Ford motors adopted few internal strategies, which are helping Ford to earn better revenue by targeting better sales (Michael, and David, 2003). Ford has implemented internal cost cutting process to gain profit. Ford has eliminated all the external and additional cost, which increases the expenses of the company. Ford decided to do develop a sustainable marketing segment by launching the fuel efficient cars in the market. Moreover, it has launched the eco-friendly products by launching the bio gas vehicle. This type of sustainable marketing also attracts the people towards the brand of the company and helps in proper positioning (Gioia, 2011). Conclusion After reviewing the study it can be apparently stated that the Ford Motor Company is recognised to be one of the strongest market players in the automobile industry. The automobile industry has become competitive market and effective market strategy is needed for gaining market share and profitability. Moreover, by analysing the brand positioning strategy it can be concluded that Ford Motor Company provided lot of focus to highlight its brand values in the market to gain its strength. By highlighting its brand values the company has been able to focus upon the tag line and goodwill factor. Therefore, it can be also stated that to highlight upon the brand name the company also had to focus upon the quality of the product (Verma. 2012). Ford launched few products, which helps the company to raise its brand value and quality with the help of brand name. Ford also focuses upon the sustainability marketing by launching fuel efficient products as per the need of customers. The fuel efficient products also helped the company to attract more customers and position itself in the market effectively. Motor Company provides better quality product with lower price for reaching widespread market globally. Innovation in the product is another crucial positioning strategy by Motor Company which made it a success in the long run. The value positioning and the elite services are the most effective strategy for automobile sectors, which was effectively followed by Motor Company. These strategies were helpful in attracting and retaining the customers (Wes, 2012). 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