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Ford Develops a Strategy for Competitive Advantage

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What it did to cope with the difficult time of 2008-2009 is to create the universal brand (Kotler, 2010) with their Ford Fiesta that became recognizable the world over. The years 2008 to 2009 were a tough business year not only to Ford and auto industry, but also to the whole business sector as well (Shah, 2010). It was the time of the financial crisis that sent the economy and the whole world into recession (nearing depression) that the US government has to step in and bail out companies. Ford able to overcome this due to its strategic acumen brought by crisis veteran Man Mullaly whereby it did not suffer government bailout and loss during the financial crisis.

This was due to its strategic thrust dubbed “ The Way Forward which refocused the priorities of the company and implemented very difficult cost-cutting measures. On the cost aspect of the business, Ford has to lay off 30,000 employees, close 16 plants and sold its Volvo subsidiary so as not to strain their revenue by ballooning costs and enable the company to on emerging markets.

On the marketing aspect, its decision to put less priority to the mature market in Europe and focus on emerging markets (such as China and India) proved to be right because it saved the company from bankruptcy. The creation of a universal brand such as its product line Ford Fiesta whereby it associated quality, cost effectiveness and innovation into one brand on a global scale proved to be a success because the company was experiencing growth while the industry’ s sales was declining. Perhaps this can be attributed to experience of its CEO Man Mulally who had experienced the same crisis in Boeing during the aftermath of the 9/11 attack.

Anticipating that there would be financial difficulty during the 2008 crisis, Ford scaled back on markets which is already maturing with high overheads such as the European market. Such, it sold its Volvo subsidiary and instead focused on Ford Figo which gave the company a challenge on how keep up with the demand instead of worrying about a declining sales.

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