Ford is one of the most renowned automobile giant in the automobile industry. Since its inception, Ford has proved to be one of the most technologically advance and competent automobile manufacturing companies in the market…
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It has the legacy of providing cost effective cars along with the rapid technological change, proving to be the smartest among its competitors in the industry. Recent developments by Ford include the invasion of electrical cars in enormous amount in to the U.S consumer market. (Gomes, Donnelley & Collis, 2010) reports that the great recession of 2008 affected the automobile sector badly as the sales dropped down tremendously. The big guns in the industry were financially disturbed by the recession as loss reached new paramounts. Till the June of 2009, Ford was the only company left of Detroit’s “Big Three” which didn’t faced bankruptcy. General Motor and Chrysler were bankrupt and their borrowings from the financial sector increased. Ford was able to survive due to some active decisions made by the financial officer and the operational management team. However Ford faced a loss of $14.7 billion in 2008. The major cause of this downfall was the elimination of stockholders which pushed the company to this tragic fall. This report has examined all the chief causes of the catastrophic scenario prevailed in the automobile sector. What sort of political, economic, social and technological barriers were there in the industry and how companies indulged those? Determining the industry as a whole, what are the opportunities, threats and most important competitors of Ford; how they have challenged company’s repute and what steps should have taken by Ford. Also discussing the core competencies of the company, how do they actively utilize their resources, capabilities and what are its core competencies. Exploratron of the business level strategy; with the corporate level strategy plus making strategic plan of the company for the next five years are the major parts of this research work. PEST Analysis PEST Analysis is a vital tool for analyzing the market position of a firm. Political, economic, societal and technological factors are discussed for understanding the standing of a company. Applying this tool to Ford presents the following picture: Political Factors: Ford along with other automobile companies was in turmoil due to the bad economic scenario of the country. After the Presidential elections of 2008, Obama Government started operating on January 1st, 2009 and encouraged people to purchase new cars and old ones were scrapped. The enforcement of this order was a beginning of a new sun for the automobile sector as people had to purchase new cars. The old cars were scrapped and this political decision thus really helped Ford too. The first quarter of 2009 brought good news for the company as Ford only had $1.4 billion loss in that tenure. These were promising figures because last year Ford faced mammoth loss of $14.7 billion. Hence the political decision of newly established government was appreciated among the automobile industry (Gomes, Donnelley & Collis, 2010). Economic Factors: Ford was the survivors of bankruptcy so they had to utilize their finances very carefully. The economic factors suggested that now revival of the economy will start very soon. The Chief Financial officer of Ford estimated that breakeven would be achieved in 2011. The economic and
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