Ford vs. GM: The Evolution of Mass Production (B) SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Technology & Operations
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Ford vs. GM: The Evolution of Mass Production (B)
This case explores the very different paths taken by the Ford Motor Company and the General Motors Corporation in the first three decades of the twentieth century. Henry Ford's Model T was a car for the masses. After considerable experimentation, Ford Motor perfected a mass production system that converted the vast majority of jobs in the factory into routine tasks. It pioneered the moving assembly line, and it pursued processes that became increasingly integrated and mechanized. While it's single-minded focus on cost minimization led to spectacular market success for a time, the resulting inflexibility made it difficult for the company to respond to market changes. This created an opportunity for General Motors and others, particularly in the face of technological shifts to closed-body designs and metal stamping technology, as well as the marketing-led idea of the annual model change. The case offers a setting to examine several frameworks: exploration versus exploitation, the emergence of dominant designs, and vertical integration versus transaction costs and supplier hold-up. The (A) case closes with the question of what GM should do about supplier Fisher Body. The (B) case summarizes the shift to all-steel body stamping and engine manufacturing as the core technologies for automobile production, and how these changes made it difficult for Ford to maintain its first-mover advantage.
Swot Analysis of "Ford vs. GM: The Evolution of Mass Production (B)" written by Willy Shih includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ford Body facing as an external strategic factors. Some of the topics covered in Ford vs. GM: The Evolution of Mass Production (B) case study are - Strategic Management Strategies, Change management, Collaboration, Entrepreneurship, Growth strategy, Marketing, Mergers & acquisitions, Product development, Strategy execution and Technology & Operations.
Some of the macro environment factors that can be used to understand the Ford vs. GM: The Evolution of Mass Production (B) casestudy better are - – talent flight as more people leaving formal jobs, increasing energy prices, geopolitical disruptions, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, there is backlash against globalization, competitive advantages are harder to sustain because of technology dispersion,
increasing transportation and logistics costs, technology disruption, etc
Introduction to SWOT Analysis of Ford vs. GM: The Evolution of Mass Production (B)
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Ford vs. GM: The Evolution of Mass Production (B) case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ford Body, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ford Body operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Ford vs. GM: The Evolution of Mass Production (B) can be done for the following purposes –
1. Strategic planning using facts provided in Ford vs. GM: The Evolution of Mass Production (B) case study
2. Improving business portfolio management of Ford Body
3. Assessing feasibility of the new initiative in Technology & Operations field.
4. Making a Technology & Operations topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ford Body
Strengths Ford vs. GM: The Evolution of Mass Production (B) | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ford Body in Ford vs. GM: The Evolution of Mass Production (B) Harvard Business Review case study are -
Sustainable margins compare to other players in Technology & Operations industry
– Ford vs. GM: The Evolution of Mass Production (B) firm has clearly differentiated products in the market place. This has enabled Ford Body to fetch slight price premium compare to the competitors in the Technology & Operations industry. The sustainable margins have also helped Ford Body to invest into research and development (R&D) and innovation.
Ability to lead change in Technology & Operations field
– Ford Body is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ford Body in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Learning organization
- Ford Body is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ford Body is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Ford vs. GM: The Evolution of Mass Production (B) Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
High switching costs
– The high switching costs that Ford Body has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Successful track record of launching new products
– Ford Body has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ford Body has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Ability to recruit top talent
– Ford Body is one of the leading recruiters in the industry. Managers in the Ford vs. GM: The Evolution of Mass Production (B) are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Training and development
– Ford Body has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Ford vs. GM: The Evolution of Mass Production (B) Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Low bargaining power of suppliers
– Suppliers of Ford Body in the sector have low bargaining power. Ford vs. GM: The Evolution of Mass Production (B) has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ford Body to manage not only supply disruptions but also source products at highly competitive prices.
Diverse revenue streams
– Ford Body is present in almost all the verticals within the industry. This has provided firm in Ford vs. GM: The Evolution of Mass Production (B) case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Cross disciplinary teams
– Horizontal connected teams at the Ford Body are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Strong track record of project management
– Ford Body is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Analytics focus
– Ford Body is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Willy Shih can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Ford vs. GM: The Evolution of Mass Production (B) | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Ford vs. GM: The Evolution of Mass Production (B) are -
Increasing silos among functional specialists
– The organizational structure of Ford Body is dominated by functional specialists. It is not different from other players in the Technology & Operations segment. Ford Body needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ford Body to focus more on services rather than just following the product oriented approach.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ford Body supply chain. Even after few cautionary changes mentioned in the HBR case study - Ford vs. GM: The Evolution of Mass Production (B), it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ford Body vulnerable to further global disruptions in South East Asia.
Low market penetration in new markets
– Outside its home market of Ford Body, firm in the HBR case study Ford vs. GM: The Evolution of Mass Production (B) needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Ford Body is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Ford vs. GM: The Evolution of Mass Production (B) can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Capital Spending Reduction
– Even during the low interest decade, Ford Body has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Ford vs. GM: The Evolution of Mass Production (B), it seems that the employees of Ford Body don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Ford Body products
– To increase the profitability and margins on the products, Ford Body needs to provide more differentiated products than what it is currently offering in the marketplace.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study Ford vs. GM: The Evolution of Mass Production (B), in the dynamic environment Ford Body has struggled to respond to the nimble upstart competition. Ford Body has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Interest costs
– Compare to the competition, Ford Body has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
Workers concerns about automation
– As automation is fast increasing in the segment, Ford Body needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
High operating costs
– Compare to the competitors, firm in the HBR case study Ford vs. GM: The Evolution of Mass Production (B) has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ford Body 's lucrative customers.
Opportunities Ford vs. GM: The Evolution of Mass Production (B) | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Ford vs. GM: The Evolution of Mass Production (B) are -
Creating value in data economy
– The success of analytics program of Ford Body has opened avenues for new revenue streams for the organization in the industry. This can help Ford Body to build a more holistic ecosystem as suggested in the Ford vs. GM: The Evolution of Mass Production (B) case study. Ford Body can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Building a culture of innovation
– managers at Ford Body can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Technology & Operations segment.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Technology & Operations industry, but it has also influenced the consumer preferences. Ford Body can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Ford Body can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ford Body in the consumer business. Now Ford Body can target international markets with far fewer capital restrictions requirements than the existing system.
Buying journey improvements
– Ford Body can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Ford vs. GM: The Evolution of Mass Production (B) suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ford Body is facing challenges because of the dominance of functional experts in the organization. Ford vs. GM: The Evolution of Mass Production (B) case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ford Body can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ford Body to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ford Body to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Ford Body has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Technology & Operations industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Ford Body can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Ford Body can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ford Body can use these opportunities to build new business models that can help the communities that Ford Body operates in. Secondly it can use opportunities from government spending in Technology & Operations sector.
Leveraging digital technologies
– Ford Body can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Threats Ford vs. GM: The Evolution of Mass Production (B) External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Ford vs. GM: The Evolution of Mass Production (B) are -
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ford Body in the Technology & Operations sector and impact the bottomline of the organization.
Easy access to finance
– Easy access to finance in Technology & Operations field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ford Body can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ford Body can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Ford vs. GM: The Evolution of Mass Production (B) .
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ford Body needs to understand the core reasons impacting the Technology & Operations industry. This will help it in building a better workplace.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ford Body in the Technology & Operations industry. The Technology & Operations industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ford Body business can come under increasing regulations regarding data privacy, data security, etc.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ford Body.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Ford vs. GM: The Evolution of Mass Production (B), Ford Body may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Technology & Operations .
Shortening product life cycle
– it is one of the major threat that Ford Body is facing in Technology & Operations sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing wage structure of Ford Body
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Ford Body.
Consumer confidence and its impact on Ford Body demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
High dependence on third party suppliers
– Ford Body high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Weighted SWOT Analysis of Ford vs. GM: The Evolution of Mass Production (B) Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Ford vs. GM: The Evolution of Mass Production (B) needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Ford vs. GM: The Evolution of Mass Production (B) is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Ford vs. GM: The Evolution of Mass Production (B) is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Ford vs. GM: The Evolution of Mass Production (B) is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ford Body needs to make to build a sustainable competitive advantage.