Generic Strategies

Topics: Automotive industry, Value chain, Ford Motor Company Pages: 5 (1523 words) Published: March 5, 2014
Analysis Of Sector Matrix For Ford Motor Company Marketing Essay Three tools are largely popular and relevant for analysing as well as prescribing remedies pertaining to the improvement of organisational performance. These are the Value Chain – propounded by Michael Porter, the Global Commodities Chain (GCC) Framework – put forward by Gary Gereffi and Miguel Korzeniewicz, and the Sector Matrix Theory – conceptualised by Julie Froud. This essay will aim at critically examining whether the sector matrix framework, gives a better strategic understanding of product markets than the concepts of product or commodity chains. Literature review and discussions will be centred on the Ford Motor Company which is, apart from being one of the Detroit Three (Sperling & Gordon, 2009, P. 55), also a significant player in the global automotive industry. The essay will also try to discuss the significance of the said tools at firm level as well as sectoral level by taking into consideration the changes in organisational activities at the firm level and their impacts on the intermediate as well as the macro levels. Propounded by Michael E. Porter (1985), the Value Chain model is centred on organisational processes. Generally the manufacturing facility is categorised into subsystems – each having its own inputs, throughputs and outputs. The efficiency of activities aligned through value chain determines the cost of production and hence influences the profitability of the organisation. The activities are grouped into primary activities and secondary/support activities (Needle, 2010, P. 275). Figure 1: Porter's Value Chain

The five main primary activities are inbound logistics, operations, outbound logistics, marketing and sales, and after-sales service, while the secondary activities comprise procurement, human resource management, technological development and infrastructure. It has been observed that Ford Motor Company (Ford) being a foremost player in the global automobile industry, its business activities have extensive influence on almost all aspects of its environment. Figure 2: Value Chain of Ford

(Source: Ford-website-a, n.d.)
The figure appended above represents the interconnectivity of the main phases of Ford’s value chain. The management of Ford has recognised the fact that “these issues are interconnected at each stage and that positive and negative effects in one part of the chain can reverberate in the other parts” (Ford-website-a, n.d.), and hence, is trying to infuse the different phases with sustainability issues. Ford is aiming at improving its manufacturing efficiency and simultaneously reducing emissions. Moreover the company is also using recycled materials and is trying to enhance the reusability of its vehicles as part of its environment-friendly operations. The automobile behemoth is augmenting its activities related to corporate social responsibilities (CSR) in order to improve its relationships all through its value chain. Keeping in mind the fact that all business operations boil down to profitability, the company is trying to enhance its capacity so that it may respond spontaneously to the challenges as well as opportunities meet the changing trends of customers’ requirements and fulfil the expectations of its stakeholders. According to Gary Gereffi (1999) “a commodity chain refers to the whole range of activities involved in the design, production, and marketing of a product” (Gereffi, 1999, P.1). Commodity chains can generally be classified into two groups, viz. producer-driven and buyer-driven. In producer-driven chains large, multinational manufacturers play pivotal roles in the coordination of complex production networks. Such commodity chains can be observed in capital as well as technology intensive industries. The automobile industry, on account of compliance with both these parameters, serves as a typical example of producer-driven chain that is characterised by multifaceted production systems and the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • BUSI690 Rothaermel Ex 2 Essay
  • Aldi Australia Strategy Case Study Essay
  • Customer Focused Low Cost Leadership Strategy Essay
  • Strategic Management and Strategy Essay
  • Essay on Porters Generic Strategy
  • Porters 5 Generic Strategies Essay
  • Essay about Porter's Generic Strategies
  • Porter's Generic Strategies and Limitations Essay

Become a StudyMode Member

Sign Up - It's Free