Critical analyse of the external and internal environments Essay
Critical analyse of the external and internal environments
From the long run, the economy will only be developed better than before, as long there are no large scales of wars. If the economy in the world is developing in a steady and healthy way, the demand for the cars will be larger and larger. The fact that the number of Japanese cars assembled in North American will soon reach 2 million per year will lead to the oversupply, so it is likely to threaten the price structure of the U.S. auto market and in the meantime, it will bring about negative impact on the revenue of the automotive businesses in the U.S. market.
3.3 Social factors
As long as the customers have a certain level of buying power, there will be a large number of car buyers. After the World War II, nearly all countries in the world were making every effort to recover from the war. The war was destructive to all the countries that had participated in the war. In some developing countries, people even had to worry about whether they had to suffer from hunger, let alone buying car to make their life easier. However, as the recovery of economy, people begin to think about the houses and cars to improve the quality of their life(Ravichandran et al., 2005). In the meantime, the social concept is also changing. Men were the trend of the drivers, but more and more women are independent and have good economic conditions, so the demand for cars is also increasing. The changing social trend has enabled Ford to produce various types of cars in order to meet the different demands from different groups.
3.4 Technological factors
The advent of the Internet has simplified customers’ life, and the advent of cars have make customers’ life more convenient. However, Ford does not cease to make innovation in terms of technology. For instance, most modern cars have been equipped with intelligent systems such as Global Positioning System (GPS) which enables the customers not to get lost no matter where they go. The intelligent system will be able to provide the car owners with alternative lines according to the actual situation of the road. If there are traffic jams, the system will remind the car owners to choose another alternative. In addition to the intelligent system which will benefit for the car owners, the design of the cars will also be more human oriented. The innovation of technology will bring convenience to customers, so the design and the function of the cars in Ford will ! enable the customers to have better experience of driving. Therefore, more and more customers who can afford cars will choose to buy a car. 4. Internal environments of Ford The analysis of internal environment can find out the absolute strengths and weaknesses.
If the enterprise sticks to its past successful strategies, they will fail in the new competitiveness for not updating its strategies(Leidner et al., 2011). Every enterprise has its strengths and weaknesses, and the internal strengths and weakness and the external opportunities and threats will be the foundation for enterprise to formulate strategies. This section will use SWOT analysis to explain Ford’s internal environment.
Ford has long history and its brand has been well-known to the whole world, and this strength has enabled Ford to make brand marketing. As long as the brand has been known to the customers, the customer will buy the product due to the brand effect. Then, there is effective customer management system which will enable Ford to target the existing and potential customers more accurately. On the other hand, there is diversified management system that can attract real talents to Ford to make wise decisions. There are many job opportunities that are offered by Ford, and the policies on human resource management are flexible.
It has reported that the quality of the products has not met the standards in recent years, so many of the cars have to be recalled back to the factory. This incident has indicated that the quality check system has problems, and this may cause public relation crisis. On the other hand, to compare Ford with its competitors, Ford has not introduced sophisticated technology such as robot in the process of manufacturing the products. The third weakness is that the cars that have been produced in Ford have not reached 27.5 miles per gallon fuel efficiency standard(Peppard and Ward, 2004). 4.3 Opportunities As Ford is a multinational company, the international market has been developed due to the market expansion. In such case, the product will not only be sold in the native country but also in foreign countries.
In the meantime, Ford has developed its e-business system on the internet, so the international market is able to enlarge and the market share of Ford is also likely to increase. Then, the low cost of cars does not mean low quality, so the cars will be cost-effective, which will attract more customers to buy them, and thus increase the sales(Peppard and Ward, 2004).
The major threats come from the competitors of Ford, especially the Japanese cars, for the Japanese manufactures are trying to open the market of luxurious cars in the United States. In the meantime, the exchange rate of Japanese yen and the U.S. dollar is ever changing and not steady. In addition to Japanese cars, the new entrants to the U.S. will also come from China and India(Leidner et al., 2011). Another threat is that the government has been more involved in the regulations and policies on cars. Although there are concessions made by the government, the concessions may be taken back by the government. 5. Strategies for Ford in the next five years The analysis of SWOT for Ford will be helpful for the decision makers to make the strategies for the future. When the key external and internal factors have been effectively matched together, it will help Ford to be more competitive than its competitors. It is suggest that the decision makers can implement SO strategy.
This strategy will enable Ford to take full advantages of its internal strengths and external opportunities(King, 2002). Effective brand marketing and good customer management system, as well as human resource management system will enable the company to develop its e-businesses in the international market. If the famous brand has affordable price for customers, the sales and market share will increase to a certain extent. As long as the market share and sales has successfully increased, the company can rank at the first or second in the same industry. Another plausible strategy is WO strategy which will make use of the external opportunities to make up for the weaknesses. However, the weaknesses can sometimes become obstacles for seizing the opportunities, so if the company should try to overcome ! the weaknesses and turn them to strengths. For instance, if the demand for the cars which have equipped with intelligent system is large, but the factory has not acquired the technology of equipping the system, so Ford can cooperate with the companies which have this technology. In such case, both companies will benefit from this business.
On the other hand, if the company does not want to cooperate with other companies, the employees who have the knowledge of such technology should be employed to the company with high salary in order to assure the technology innovation. 6. Conclusion In conclusion, this report has conducted a close study of the external and internal environments for Ford Motor Company. The political environment has proved that the government has both positive and negative impacts on Ford, and the economic and social factors have turned out more and more people can afford a car, especially the independent women. The technology factors have also contributed to the increasing market share and sales of Ford for its convenience and comfort and affordances. Then the report has made a SWOT analysis of Ford’s internal environment, and it has suggested two plausible strategies for Ford in the next five years. One is SO strategy and the other one is WO strategy, which will enable Ford to realize its strategic objectives in the automotive industry.