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 - – there is increasing trade war between United States & China, wage bills are increasing, central banks are concerned over increasing inflation, talent flight as more people leaving formal jobs, challanges to central banks by blockchain based private currencies, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic ,
banking and financial system is disrupted by Bitcoin and other crypto currencies, digital marketing is dominated by two big players Facebook and Google, 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 -
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.
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.
High brand equity
– Ford Body has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ford Body to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Innovation driven organization
– Ford Body is one of the most innovative firm in sector. Manager in Ford vs. GM: The Evolution of Mass Production (B) Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
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.
Organizational Resilience of Ford Body
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Ford Body does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Superior customer experience
– The customer experience strategy of Ford Body in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
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.
Effective Research and Development (R&D)
– Ford Body has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Ford vs. GM: The Evolution of Mass Production (B) - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Digital Transformation in Technology & Operations segment
- digital transformation varies from industry to industry. For Ford Body digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ford Body has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
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.
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 -
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.
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.
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.
Skills based hiring
– The stress on hiring functional specialists at Ford Body has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
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.
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.
Products dominated business model
– Even though Ford Body has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Ford vs. GM: The Evolution of Mass Production (B) should strive to include more intangible value offerings along with its core products and services.
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.
High bargaining power of channel partners
– Because of the regulatory requirements, Willy Shih suggests that, Ford Body is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Aligning sales with marketing
– It come across in the case study Ford vs. GM: The Evolution of Mass Production (B) that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Ford vs. GM: The Evolution of Mass Production (B) can leverage the sales team experience to cultivate customer relationships as Ford Body is planning to shift buying processes online.
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.
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 -
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ford Body can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Developing new processes and practices
– Ford Body can develop new processes and procedures in Technology & Operations industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing 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.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ford Body to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Learning at scale
– Online learning technologies has now opened space for Ford Body to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Harnessing reconfiguration of the global supply chains
– As the trade war between US and China heats up in the coming years, Ford Body can build a diversified supply chain model across various countries in - South East Asia, India, and other parts of the world. This reconfiguration of global supply chain can help, as suggested in case study, Ford vs. GM: The Evolution of Mass Production (B), to buy more products closer to the markets, and it can leverage its size and influence to get better deal from the local markets.
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.
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.
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.
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.
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.
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.
Better consumer reach
– The expansion of the 5G network will help Ford Body to increase its market reach. Ford Body will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
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 -
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.
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.
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.
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.
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.
Stagnating economy with rate increase
– Ford Body can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
Technology acceleration in Forth Industrial Revolution
– Ford Body has witnessed rapid integration of technology during Covid-19 in the Technology & Operations industry. As one of the leading players in the industry, Ford Body needs to keep up with the evolution of technology in the Technology & Operations sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Ford Body with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
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.
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.
Environmental challenges
– Ford Body needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ford Body can take advantage of this fund but it will also bring new competitors in the Technology & Operations industry.
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 .
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.
