Internal and External Environment Factors - Research Paper Example

? Environmental Scan Paper Internal and external environment factors play a pivotal role in developing business strategy of a company. Ford Motor Company is known as one of the prominent manufacturers of the automobiles in the US and Unilever is a formidable player, in the home and personal care sector worldwide. The paper examines internal and external environment of these two companies; their competitive edge over their rivals; the strategies they employ and measurement devices they use to ascertain effectiveness of their strategies. Internal Environment of Ford Ford is one of the pioneering companies in the field of automobiles in the US and across the world. With strong engineering capabilities, Ford has highly skilled managers and workers to manufacture automobiles meeting stringent needs of the market. The company's brand name has evolved over time for last several decades and it is known as the reliable auto-manufacturer among customers. It has well-established R&D facilities to develop fuel-efficient engines that can meet the most stringent norms of the market in terms of flue gas emissions. As per company's website information, total 77 units – either full-fledged assembly lines or component manufacturing units are in operation globally. At least one-third of these installations are in the US alone (List of Operations Worldwide, 2013). It is pertinent to note that Ford continues to attract committed workforce with diverse background that include ethnicity, race, culture, age, religion, and gender and the company puts considerable efforts in imparting training to their workers for the organization development (Diversity, 2013). External Environment of Ford External environment of Ford Motors is quite challenging. Ever since the Japanese manufacturers such as Toyota, Nissan, Honda, and Suzuki began their onslaught on the world markets in terms of their superb quality along with economical cost, the top US manufacturers including Ford Motors have been on the most challenging turf for quite some time. It is true that Ford has been able to thwart competition to a great extent in last couple of years through its changed strategic vision and policies. The following schematic represents how Ford Motors has been adjusting to the market needs for small cars. Source: http://corporate.ford.com/microsites/sustainability-report-2011-12/blueprint-strategy Its recently launched model ‘Fusion’ with an array of technology features that matches with the luxury features of the Aston-Martin – a luxurious sports car has been able to grab one of the top slots in prestigious markets of California. Its sales are up significantly in North California replacing Toyotas and Hondas of customers (Ramsey, 2013). Current trend is towards developing and offering smart gadgets to consumers and accordingly, Ford has tied up with Microsoft to develop a “Smart Car’ with some fancy features that are not available anywhere so far. Since early 2012, Ford Motors' business strategy lies in implementing its 'ONE Ford Plan'. It essentially consists of four-point business plan for achieving success in the market place and they are restructuring operations aggressively to meet needs of the market; developing new models/products as per the need of customers; directing workforce to work effectively as one cohesive team and working towards improving the company’s balance sheet. ‘ONE Ford Plan’ encourages teamwork, brings focus on its objectives with a single global approach. Much of the emphasis has been put on working as a single team to achieve business leadership. ‘ONE Ford Plan’ is supported by a set of behaviors that govern all employees of the organization. Strategic success is measured through satisfaction levels of customers, employees, and associates such as dealers, suppliers, investors and the communities in which the company operates. ONE Ford decides about goals and expectations of employees regardless of which global plant they work at. The focus is on behaviors and skills that all workers must demonstrate to accomplish the company goals. Unilever Unilever is a multinational corporation owning over 400 brands with operations at most part of the world. The company enjoys one of the top slots in emerging markets among all FMCG companies. Currently, the company derives its 55 percent of sales from emerging markets as its roots are much deeper in India, China, Brazil and Indonesia because of its operations in these countries for last more than 50 years. The success of Unilever is attributable to "the highest standards of corporate behaviour towards everyone they work with, the communities they touch, and the environment on which they have an impact” (Unilever, 2013). Internal Environment of Unilever The company's strength lies in its operations in nearly 100 countries with over 250 manufacturing sites worldwide. At the same time, the company owns a strong portfolio of brands with huge product variety and enjoys economy of scale. This certainly gives company a competitive advantage. Growth through innovation is their key strategy and for this, the company spends around € 1 billion Euro every year on research and development activities. Strong brand equity coupled with strong social missions brings the company closer to the consumers with varying cultures across the globe. External Environment and Business Strategy External environment factors such as economical, social, and political along with competitive forces keeps on exerting influence on Unilever's performance and accordingly, the company adapts to the new situation by modifying its business strategy and business model. The company has evolved a new business strategy called 'The Compass' that navigates its sailing through the turmoil in the market place. The strategy has four strong foundations namely innovation/brand positioning, people, marketplace and focus on continuous improvement in its operations. Developed in 2009, the strategy was refurbished subsequently in 2012 without changing its core elements. ‘The Compass’ paves the way for sustainable business operations for the long-term that addresses the issues of natural resources including water and energy. The company’s strategic effectiveness can be gauged from improved financial performance for last several years (Introduction to Unilever, 2013). The company has been able to make the social impact in third world countries by enhancing employment opportunities, improving living standards of people where it operates and empowering women by providing employment opportunities through support and training (Loman, 2010). This is a unique marketing strategy of the company expanding its base in rural areas in Southeast Asian countries, where a lack of infrastructure and other issues pose a serious challenge to FMCG companies. Unilever sustainable Living Plan (USLP) aims at improving health and wellbeing of 1 billion people world over; reducing environmental impact of its products to one-half and sources 100 percent agricultural raw material sustainably (Introduction to Unilever, 2013 p.47). Thus, Unilever's business and marketing strategies have been highly successful especially in Europe, Asia and Africa and able to thwart the competition successfully through a strategic business model. References Diversity (2013). corporate.ford.com. Retrieved August 13, 2013 from http://corporate.ford.com/careers/diversity/diversity-history-440p?&ccode=IN Introduction to Unilever (2013). unilever.com. Retrieved August 16, 2013 from http://www.unilever.com/images/Introduction-to-Unilever-2012-final_tcm13-283368.pdf List of Operations Worldwide (2013). corporate.ford.com. Retrieved August 13, 2013 from http://corporate.ford.com/our-company/operations-worldwide/global-operations-list Loman, B (2010). Unilever's Shakti project: empowering Rural Indian Women, Bottom of the Pyramid in Practice. Retrieved August 16, 2013 from http://www.amazon.com/Unilevers-Shakti-project-empowering-Practice/dp/3838352408 Our Compass Strategy (2013). unilever.com. Retrieved August 13, 2013 from http://www.unilever.com/sustainable-living/ourapproach/ourcompassstrategy/index.aspx Unilever (2013). Purpose & Principles. unilever.com. Retrieved August 16, 2013 from http://www.unilever.com/aboutus/purposeandprinciples/Default.aspx Sustainability (2013). corporate.ford.com. Retrieved August 13, 2013 from http://corporate.ford.com/microsites/sustainability-report-2011-12/blueprint-strategy Ramsey, M. (2013). Ford Clips Toyota's Wings in California. Wsj.com. Retrieved August 13, 2013 from http://online.wsj.com/article/SB10001424127887324853704578587801360325508.html Read More