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Q1. Situation Analysis
The activities of an organization are affected by a lot of factors; the external environment is one of the major considerations which do not cast an effect on the immediate environment but the strategic futures are affected by the uncontrollable components of the external Marketing environment. This component in most of the cases affects the firms operations and conditions indirectly. In context to the present factor the organization feel and is powerless to control the effect of these external agent. One classification calls for economic and non economic environment factors and another classifications call for different factors like political, social, technical, legal, economical factors etc. (Thompson Jr. A., Gomble E.J., Jain A.K. - 2006) has highlighted the concept in light of crafting executive strategy with the help of External environment analysis. The macro environment can further be divided into a lot of factors which are mentioned below.
- Political factors – These factors are largely related to the political motives and ideologies, a potential shift in these policies or ideologies can affect the thinking, strategy and action of the government and hence the entire machinery is affected. The political factor can also bring a visible change in the industrial makeup and thinking of the industry and can also direct thinking of the same u to a considerable extent.
- Economic Factors – This factor takes into account the exchange rates, the economic monetary circulation, inflation, and the money deposits. The economic factor affects the purchasing power of the country as well as of people and also is accounted for the credit ratings and finally it affects the money flow and flow of FDI. The future of the country and the concentration of industry largely depend on this factor.
- Social and Cultural Trends – It includes the culture, behavior and norms which are followed as a trend in a nation. The cultural norms of a nation determine the habit and behavior of people up to a greater extent and in turn these habits and behavior determines the success and failure of a business enterprise. A balanced fit between cultures/ social aspects and the product, services and practices of an industry transform the industry into successful one and the misfit is responsible for failure of the organization.
- Legal factors – These factors determine the rules and regulations regime of a nation. The legal rules in the form of licensing procedure, Different acts and policies, legality etc should be taken care of in any case with respect to starting and operation of a nation. Legal factors are the one which determine the success of the organization under legal constraints of a nation. If legality is not taken care of properly then the stability and long term operation and success of the organization is questioned.
- Technological factors – Technological factors determine the success and failure of the organization to a greater extent. The factor is having a direct impact on the product, services and operation of the organization. Pertaining to this factor the rate of innovation, development of technology and the rate of obsolete of the old technology should be taken care of regularly by the organization.
- Demographic Factors – The factors are attributed to the factors like, sex, income, educational background of the people of an aforesaid geographical area. These factors also determine the rate of success of an organization.
Strength and Weaknesses
I would like to select the great iconic company “Ford” to find out the solution of the given answers. I have selected ford because once the company was one of the largest automobile manufacturer of the world and due to its ability to answer the problems of consumer in an innovative way the company has created a niche for itself. The company is a profit making company (7.373 billion USA $ for the financial year 2015) and is currently operation in more than 60 countries around the world. The company is operating through majority of the independent owned individual outlet and above all “Ford” is included in the list of my dream company. Strength and weaknesses are the general parameters against which the success and failure of the company can be measured. Some of the major strengths and weaknesses of the company are mentioned below, (Lawrence G.F. - 2009) has also explained the concept of SWOT analysis in his book.
- Ford is having globally diversified source of revenue, almost about 65% of the revenue has been collected by the company from North American region. The company has received about 76.9% of the company revenue from 5 different market of the world. As the revenue collection regions are diversified accordingly the risk will be diversified and consequently the sales will increase.
- The brand image of “Ford” is strongas a result of which the company enjoy a readymade market. The subsequent expenditure on advertisement is less and the additional expenditure on advertisement strengthens the brand image of the company. (Bootwala S. and Lawrence M. D. - 2007) explained the importance of advertising with respect to this.
- The supply chain and logistic support in case of Ford is good and exemplary. The supply chain is counted as one of the major strengths of the company because it has supported the glo0bal operation of the company and the cost related to transportation has increased up to a greater extent.
- Innovative process and quality management – The innovative approach at Ford has increased the efficiency of the process and employees and has decreased the level of defects and wastage to n exemplifying level. (Derry S. - 2009) has also explained he concept of innovations and its role in his book.
Weaknesses-Weakness are internal to the company, they have to be identified properly and should be removed so that the opportunities present in external environment could be utilized properly and efficiently. Some of the important Weaknesses which I have witnessed in case of “Ford” are mentioned below
- The production cost of Ford is high – As a result of high production cost of ford sometimes its sales is affected especially in those region where the consumers are more price conscious. Especially when compared with its competitors like Toyota Globally and Maruti especially in India the production cost is high as compared.
- Slow innovation process as compared to market – Though the company is known for its innovative strategy but the rate of innovation is a bit slow as compared to that of market. The rate of innovation is also not quite balanced between all the production facilities of the company. (Panda T K.- 2013) has also explained the concept of diversification as a response to change with respect to innovations.
- The production network of Ford is limited – Very recently the company has forced some of its manufacturing facility to close down its operation in Europe. As compared to its competitor Toyota the rate of innovation is bit slow, which can be regarded as one of the major limitation.
- In some of the manufacturing facility the paper work is more as compared to its counterpart especially in Asian country.
- The company is over dependent of European and North American Market, This part is one of the major weaknesses related to the company. The company should try to concentrate on strengthening its market in Asian and other African country.
Some of the major competitors of “Ford” are Toyota, General Motors, Nissan, and Volkswagen
Q2. SWOT Analysis
SWOTanalysis is sum total of internal and external environment where the internal environment analysis is related to identification of strength and weaknesses and external environmental analysis is related to identification of opportunities and threats in the external environment. SWOT analysis is a part of strategic planning process and with the help of this analysis technique the organization can get information which can finally be used to formulate strategy and long term plan for the organizational success. (Snelling J.- 2013) has also explained the concept of SWOT in his book.
Strength –Strength are the points which demarks the positive aspects of the organization. These points elaborate the success of the organization. Following points can be related to the strength of the company.
- Ford is having globally diversified source of revenue
- The brand image of “Ford” is strong
- The supply chain and logistic support in case of Ford is good and exemplary
- Innovative process and quality management
Weakness –Weakness highlight the points which are needed to be reviewed. These points may hinder the path of success and may cost to organization. Following are some points which highlight the weakness of “Ford”
- The production cost of Ford is high
- Slow innovation process as compared to market
- The production network of Ford is limited
- In some of the manufacturing facility the paper work is more as compared to its counterpart especially in Asian country
- The company is over dependent of European and North American Market
Opportunity –Opportunities are always present in external environment which can effectively and efficiently be utilized to ensure the success of the firm and can be tapped easily. Some of the important opportunities which are lying ahead of Ford are as below.
- New Technological development
- Scandal of other company related to Pollution and emission norms
- Platform of e commerce
- Increasing purchasing power of consumer
- Different variant/ Fuel car
Threats –Threats are the points the effect of which is against success of the organization. Some of the possible threats which Ford is facing are mentioned below
- Growing influence of Japanese car market
- Strict evolving environmental norms
- Adoption of electrical variant vehicle
- Increasing app based taxi services
- Increasing fuel prices especially in Asian countries
Q3. Main Problem and Opportunity from TOWS
The main problems and opportunity identified from TOWS in context to the study conducted are mentioned below
Main Problem identified -Growing Influence of app based taxi services- The mobile and internet based taxi services can be considered as the main threat to the company in my views because as a result of increasing trend of the application based taxi services the automobile market round the globe id poor affected and even the consumer want to get rid of the maintenance, parking problem etc. On one hand the trend of app based taxi services in increasing and on other hand the escalating price of Ford cars poses a threat to the entire Ford Market.
Main opportunity identified - Increasing Purchasing power of consumer Increasing purchasing power is the major opportunity for the Ford because to purchase a car of Ford the purchasing capacity should be sufficient and once the consumer have ample amount of money they will be going for a better quality automotive and amongst all Ford has respected brand name and brand value.
- Panda T K. (2013), “Diversification and Response to Change”, “Marketing Management Text and Cases”, Pp – 326, Excel Publications- New Delhi, ISBN – 978-81-7446-548-1
- Snelling J. (2013), “The SWOT analysis; Diagrams and Presentation”,. “The influence of SWOT analysis on organizational development”, Pp – 3, Northcentral university Publications
- Derry S., (2009), “An Integrated Approach to Managing Innovations”, “Management Beyond New Product Development”, Volume – 1, Pp-3- 11
- Lawrence G.F. (2009), “How to use strength- Strategies and Prospects”, “The SWOT Analysis; Using Your strength to overcome weaknesses”, Pp- 106 Create Space Independent Publishing , ISBN - 9781449546755
- Bootwala S. and Lawrence M. D.(2007), “ Internet Advertising”, “Advertisement and Sales Promotion” , Pp- 2.1, Nirali Publication – Pune
- Thompson Jr. A., Gomble E.J., Jain A.K. (2006),“Corporate Culture and Leadership: Key to Good Strategy Executive”, “Crafting and Executive Strategy: The Quest for Competitive Advantage”, Pp – 368, Tata Mc- Grawhill Publishing House – New Delhi, ISBN – 0-07-060089- 9