Risk Identification Case Study

Risk Identification Case Study

Value-Based ERM

Fall 2016

Group 6

Jingshu Cai

Erica Chao

Hanmin Jin

Yayi Luo

Xingyuan Shou

Summary

Ford Motor Company is an American multinational automaker, which was founded in 1903.The company’s market position as the fifth biggest automobile manufacturer in the

world and the second largest U.S.-based automobile manufacturer is supported through the firm’s intensive growth strategies aligned to its generic strategy for competitive advantage.

• Generic strategy

Ford’s generic strategy has changed over time. Initially, Ford’s generic strategy was cost leadership. In the 1900s, this strategy helps them attract huge amount customers as their automobiles are affordable for most working-class Americans. During the time, Ford developed extremely fast. However, this strategy did not protect the business from competition with General Motors. GM overtook Ford to become the largest American automobile manufacturer for its wider array of production since 1972. Nowadays, Ford still remains the cost leadership strategy, meanwhile, moving toward to a broad differentiation generic strategy. Thus, their goal is to gain stronger competitive advantage by production innovation.

• Intensive growth strategy:

Ford’s primary intensive growth strategy is market penetration. “Ford applies this intensive growth strategy by increasing the number of its dealerships and increasing sales volume.” Second strategy is product development. “Ford applies this intensive strategy through R&D investments for new products, such as the all-electric Ford Focus. “

Another strategy is market development. This intensive growth strategy involves providing entirely new products or entering new markets or market segments. “Ford has already built their global operations so that they have made the market development at the early years. Recent years, Ford has not taken any significant action to enter an entirely new area.”(Meyer)

Ford Motor’s mission statement is “One Team. One Plan. One Goal.” This echoes the

company strategy. With the tne Ford mission statement, the company now focuses on

creating consistency in product and service design and quality globally. According to Ford Motor Form 10-Q ended June 30,2016, company will encounter more challenges in the next year on market share and sales volume in particularly Europe, United states and China. Whether Ford Motor’s current strategy is effective or not will be tested soon.