Executive Summary the environment in which a company operates might present both
Executive Summary
the environment in which a company operates might present both challenges and possibilities. As CEOs aim to direct their organizations toward profitability, the environment has an impact on their strategic decisions. Due to environmental dynamics, social and economic uncertainties, firms design and implement strategies concentrating on environmental innovation. Failure to design a long-term strategy impedes a company’s long-term success. The focus is on the motor vehicle manufacturing industry, it has been utilized as a case study to analyze environmental influences and how they might affect strategy. The environmental forces were examined using the Ansoff matrix for the three companies; Ford, General Motors and Toyota. Competitive Profile Analysis and Partial SWOT Analysis as well were used while focusing on ford motors and comparing it to its key competitors (GM and Toyota), Porter’s Five Forces and External Factor Evaluation.
Introduction
Strategy is attaining success; it is a collection of concepts that provides direction for an individual’s or company’s activities and achievements. It’s a continuous process for a company to position itself for strategic edge in a dynamic business environment. laying emphasis on the organization’s values and goals, resources and skills, and institutional structure and systems, strategy link the firm and its macroenvironment. It entails competing for tomorrow rather than today. The materials that a business needs to manufacture products and deliver service originate from the natural world. The environment in which a company operates might present both challenges and possibilities. Instances and trends that generate opportunities to improve a company’s overall performance are known as opportunities. Threats are events or patterns that may undermine a company’s efficiency. As CEOs aim to direct their organizations toward profitability, the environment has an impact on their strategic decisions. Strategic decisions entail identifying how a company will utilize its resources within its own environment to meet long-term goals, establishing desired outcome, and deciding how those objectives will be met.
The four factors that contribute to a good company strategy include: • Resource evaluation that is objective • Knowledge of the competitive landscape • Long-term goals that are consistent and • Proper implementation.
Due to environmental dynamics, social and economic uncertainties, firms design and implement strategies concentrating on environmental innovation. Understanding the environment is a critical component and cog driver of an organization’s success. Failure to design a long-term strategy impedes a company’s long-term success. The focus of strategies is on choosing to execute tasks differently than competitors. Strategic positioning and strategic alignment are crucial factors to consider when doing so.
Background
The focus is on the motor vehicle manufacturing industry, it has been utilized as a case study to analyze environmental influences and how they might affect strategy. Ford, General Motors and Toyota are the three manufacturers which are great competitors. Ford Motor Company is a multinational automaker headquartered in Detroit, Michigan, USA. The corporation was founded on June 16th of June, 1903, by Henry Ford. Ford pioneered large-scale vehicle manufacturing and industrial workforce management by employing highly structured manufacturing sequencing defined by moveable assembly lines. Going by 2015 car production statistics, Ford is Considered to be the second U.S. automaker (after General Motors) and the 5th (behind Toyota, Volkswagen, Hyundai, and General Motors). Currently, the company has extended to five out of the seven continents in the world giving it a very competitive edge.
The General Motors Company (GM) is an international car manufacturing company headquartered in Detroit, Michigan, USA. The firm is indeed the largest automaker in the U.s and is one of the biggest in the world. General Motors is placed 22nd on the Fortune 500 list of the top US firms based on total revenue. The corporation owns manufacturing facilities in eight different countries. Buick, GMC, Chevrolet and Cadillac are the company’s four main automotive brands. It also has collaborative partnerships with Chinese firms Wuling Motors and Baojun, as well as DMAX.
Toyota Motor Corporation (abbreviated as “Toyota”) is a Japanese automobile manufacturer headquartered in Toyota City, Aichi, Japan, it was first founded on August 28, 1937, by Kiichiro Toyoda. Toyota is among the world’s biggest automakers, producing about 10 million vehicles each year. Toyota has been a pioneer and sale of much more fuel-efficient electric and hybrid vehicles since the introduction of the Toyota Prius in 1997. Toyota Motor Corporation produces vehicles under a variety of brands, such as Lexus, Ranz, Hino, Daihatsu, and Toyota, to name a few.
ANALYSIS OF THE ENVIRONMENTAL FORCES.
ANSOFF MATRIX (Ford, General Motors and Toyota)
The Ansoff Matrix is a method for evaluating and executing a company’s strategic plan. The matrix depicts four strategies for aiding a future performance, as well as the hazards associated with each. These techniques include; Product Development, Market Development, Market Penetration and Diversification.
Market Penetration
This strategy allows a corporation to market its current items in the already existing markets current markets. In this sense, the three manufactures (Ford, GM and Toyota) employ a variety of tactics. The first method used by the businesses is to promote their motor brands aggressively. Different promotional platforms showcase their features, layouts, and unique characteristics. To advertise their products, the corporations use digital platforms, broadcast, and print media. This raises customer awareness and encourages customers to purchase their vehicles. To launch their vehicles, the companies have formed strategic partnerships with a number of other companies in Europe, Asia and other parts of the world.
Market Development
Market development occurs when current products are brought into emerging markets. The first tactic employed by these businesses is to extend internationally into new markets. Bilateral agreements or direct investment in the form of production units are used to accomplish this. This helps the corporations to expand into new areas with their existing vehicle models. The models are chosen depending on the needs of consumers in various markets. the Companies also use various discounts and installment payment arrangements to sell their vehicles in these new areas. The colors available also meet the needs of consumers in emerging markets.
Product Development
The marketing of new items in current markets is known as product development. The first technique the companies in this regard is to introduce new makes and models annually. Consumer benefit from a variety of new creative functions and options available in the new models. Each year, the merchandise shapes change. Another technique Ford, GM and Toyota employs is to introduce new car variants that are radically distinct from the company’s existing models. The shape, power, as well as other functions of these versions vary. Each version is developed targeting specific market segments by satisfying the segment’s customer wants.
Diversification
Diversification occurs when new items are released into emerging markets, however, it is a risky strategy. By introducing hybrid – electric automobiles, the three firms have expanded into the electric motor sector. The corporation may potentially vertically diversify by producing their own spare parts, which presently they get from suppliers. All of these diversification tactics have the potential to help the business develop and become a conglomerate.
COMPETITIVE PROFILE ANALYSIS.
Toyota and General Motors are two motor vehicle brands that compete with Ford Motor Company.
General Motors: General Motors is one of the world’s largest automakers, with outlets on six continents. The company has built a strong brand identity and has produced a diverse range of vehicles. GM places a great focus on expansion, with Cruise functioning as the global division in charge of creating and commercializing autonomous vehicle technologies.
Toyota: For a long time, Toyota has been the most successful manufacturer and seller of automobiles. It broke the bar for most cars sold in history in 1974, and it has remained at the top of the industry ever since.
Strengths
As a competitive analysis tool, CPM offers numerous benefits to the firm. CPM takes into account the company’s KSFs, which help identify the company’s strengths and weaknesses in key areas. This approach to assessing firms is an excellent way to look at a number of competitors in one spot and design strong strategic strategy. K. CPM enables businesses to discover the weaknesses and strengths of their primary competitors, which is critical for developing a strategic plan. The competitive strategy pays special attention to each competitor’s desired goal, resources, and aggressive activities, enabling a company to swiftly identify a competitor’s vulnerabilities and strengths, which may then be used to develop a more efficient strategy.
Weaknesses
Although CPM is a great tool for companies to use for competitive analysis, it does have some disadvantages. CPM is utilized by executives to stress essential success aspects depending on their expectations. There is no empirical method used to determine the relative importance of each KSF for the firm. The method used to calculate the KSFs could be influenced by management’s views, dispositions, or information reliability. Furthermore, while CPM provides information pertaining to the firm’s performance in comparison to its competitors based on a few key performance indicators, evaluating the company’s productivity in relation to those key success factors is difficult because a firm’s competitive edge is not dependent on the specific aspects, and a positive impact in one aspect may offset a drawback in another.
CRITICAL SUCCESS FACTORS
The growth and success of a company are dependent on key successful criteria. They are crucial elements that must be carried out to the highest possible standard. The achievement variables were chosen based on the validity and reliability of the assessment. To select all essential variables, the course curriculum’s Competitive Profile Matrix Demonstrative Example in the Handicraft Business and the Strategic Management Insight article “Do You Know What Your Competitors Are Doing?” were used.
Ford motors
GM
Toyota
Critical success factors
weight
Rating score
Rating score
Rating score
Market share
Quality of the product
Financial position
Consumer loyalty
Brand
Price competition
Global expansion
Advertising
0.10
0.17
0.12
0.20
0.17
0.09
0.05
0.10
2.00 0.20
2.00 0.34
3.00 0.36
3.00 0.60
4.00 0.68
2.00 0.18
1.00 0.05
3.00 0.30
4.00 0.40
3.00 0.51
1.00 0.12
3.00 0.60
2.00 0.34
3.00 0.27
1.00 0.05
2.00 0.20
4.00 0.48
4.00 0.52
1.00 0.12
4.00 0.48
1.00 0.36
3.00 0.30
1.00 0.08
2.00 0.16
Total
1.00
2.71
2.49
2.50
Since GM and Toyota are Ford’s key competitors and have the largest market share, their strengths and flaws were investigated. For brand recognition, Ford Motor Company received a 4-star rating, whereas General Motors received only a 2-star rating. They had excellent brand awareness because they had been in this industry for over a century and had expanded globally in the early years of the firm. Because of the global financial crisis, both companies are striving to avoid risk and unnecessary expenses by expanding into new areas and expanding internationally. Both firms are rated 1 for overseas markets because they are implementing a conservative strategy and are missing out on new market opportunities.
Partial SWOT Analysis
Opportunities
Threats
Efficiency
Alliances
Changing customer groupings and lifestyles
Expansion of market
OEM priorities
High Competition
Stiff market Competition
Volatility in the fuel Prices
Slow Economy
High fixed costs and R&D investments
Opportunities
Efficiency: People are getting greatly concerned regarding levels of efficacy as technology progresses. As a result, in the near future automobiles with great fuel efficiency and low-cost features will be in high demand. This could open up a large market for corporations due to superior technologies. Renewable energy sources have the potential to strengthen the firm’s productivity.
Alliances: Increased Business competition might result in a better orientation to collective success. Corporations can potentially give multiple options to the market by merging diverse unique strategic competencies, resulting in large revenues for participant enterprises. In a congested market, this might help a firm to gain a competitive advantage.
Changing customer groupings and lifestyles: As the world’s economy grows increasingly prosperous, lifestyle adjustments are becoming more important. Consumers from developing countries are growing more common. In addition, as the number of nuclear families grows, so does the need for automobiles. Personal automobiles are becoming increasingly popular among growing families for a variety of reasons, including safety and comfort. As a result of these advancements, two-wheelers and small automobiles will become more popular.
Market expansion; Vehicle utilization will increase as more Asian and BRIC economies join and flourish. It’s possible that the trend will extend to other states as well. As more countries open their borders to economic integration and the automobile sector, it will continue to grow and flourish.
Original Equipment Manufacturer (OEM) priorities: Numerous kinds of automobile parts are bought from those other automakers and used in the final assembly of their vehicles. As the use of digital information grows, businesses need find new ways to maximize profits. This will result in more co-investment and a brighter future for everyone on the planet.
Threats
High Competition: Tesla, Tata, and Toyota are already formidable competitors for Ford. Ford continue to battle to maintain its innovative leadership position in the industry.
Stiff market Competition: As more companies operate in the automobile business, the industry is growing at a faster rate. The more rivals there seem to be, therefore more shares of the company’s wealth are available, making it difficult to gain a significant proportion of the wealth.
Volatility in the fuel Prices: For many consumers, the cost of gasoline is a crucial factor. It’s particularly crucial in developing countries, where autos are predominantly used for daily transportation. Various government regulations relating to green technologies may also have an impact on stock prices.
Slow Economy: The automobile business can fail for a variety of reasons, including sudden unemployment and the present Covid-19 crisis. The industry is confronted with problems, such as covid-19’s introduction of vehicles to lower transportation costs.
High fixed costs and R&D investments: Due to the extremely competitive market, companies are trying to invest more in R&D departments. They are building facilities in order to break into the market. This investment, nevertheless, should be profitable, which is a considerable issue. The return on investment (ROI) should be as high as possible. Nevertheless, it may be considered as a potential threat in today’s uncertain world market.
PORTER’S FIVE FORCES
The threat of new entrants-Weak force
New entrants might enter the industry in a number of ways. They can be the start of anything, a multinational firm extending into new region, suppliers joining consumer activities, or buyers entering the process of providers. External factors that signal a minimal threat from new entrant risk, according to the five forces study, include premium price brand creation, significant company costs, and good economies of scale. The Ford Corporation is an external force making it difficult to establish new admissions and evaluation criteria. Another barrier is the high price of automobile manufacture, which makes new entrants challenging even with economies of scale. New rivals enjoy economies of scale by surpassing a manufacturing limit. Given these external considerations, the danger of new entry is regarded as a minor issue by Ford’s strategic planning.
The threat of substitution-Moderate force
Managers must be aware of their key competing brands as well as other industry competitors who might steal their customers. As additional auto makers enter into the market, it has an impact on Ford’s automotive business. The features that distinguish this force as a medium force include lower variable manufacturing overhead, intermediate substitute accessibility, and medium alternative efficacy. Switching costs are lower, making it easier for enterprises to compete. evidence demonstrates that, low fluctuating prices offer for choices. Ford’s business environment is becoming a formidable force as a result of this element. The availability of reasonable substitutes helps to lessen the impact of providers.
Bargaining power of suppliers-Moderate force
According to the five forces analysis of supplier negotiating power, the organization places a high value on the reliability of its suppliers. The firm’s strategic plan prioritize supplier bargaining strength, according to the five forces analysis. Based on the scale, level, and quantity of the supply, the supplier’s negotiating position is rated medium to strong. In the manufacture of cars, the dependability of raw materials used by businesses to make products is critical.
Competitive rivalry-Strong force
The automobile industry’s need to catch up to Ford Motors is the source of severe competition and rivalry. The number of businesses has decreased (direct competitors), Fewer number of companies (direct competitors), increased company assertiveness, and lower switching costs are three factors that combine to create a potent force of competition and rivalry. Since the vehicle industry has a restricted number of manufacturers, the forces analysis reveals that this exterior constraint restricts Ford Motors’ competitive capability. Because the number of businesses is small, a higher focus is placed on design and marketing. Consumers’ reluctance to buy a product Ford Motors focuses on from a rival adds to the competitiveness.
Bargaining power of buyers-Moderate force
The five forces analysis demonstrates the customers’ bargaining strength and the elements that influence it. Lower maintenance costs, intermediate replacement availability, and higher purchase volumes are among the prerequisites. The minor modification reduces the number of issues that restrict customers from purchasing a car from a different manufacturer. This force, as just an externally applied, unleashes a huge force against Ford and other manufacturers. Owing to the low to moderate danger of substitution, consumers’ bargaining power against Ford is restricted.
ANALYSIS OF EXTERNAL FACTOR EVALUATION
External Factor Evaluation is a strategic method for evaluating a company’s external environment. It aids a company in assessing risks and opportunities, as well as providing guidance on how to respond to such threats and opportunities. The approaches are graded on a scale of 0.0 to 1.0, with 0.0 denoting low relevance and 1.0 indicating high relevance. The grades, within the range 1 to 4, help the firm’s strategy in these areas run more smoothly. A substantial weakness is given a score of 1, whereas a significant strength is awarded a score of 4. The weighted score is obtained by multiplying the weight by the rating.
Weight
Rating
Weighted score
Opportunities
Efficiency
Alliances
Changing customer groupings and lifestyles Expansion of market
OEM priorities
0.08
0.15
0.08
0.15
0.05
4.00
3.00
2.00
2.00
2.00
0.32
o.45
0.16
0.20
0.10
Threats
High Competition
Stiff market Competition
Volatility in the fuel Prices
Slow Economy
High fixed costs and R&D investments
0.10
0.20
0,08
0.05
0.11
1.00
3.00
3.00
3.00
4.00
0.10
0.60
0.24
0.15
0.44
Conclusion
This paper examines a number of factors affecting an organization and these factors influence its strategies. it critical to assess the external environment that CEOs must monitor in order to properly manage their firms by developing strategic plans. Directors should be aware of new trends and changes in both the larger environment and their specific industry because both can change dramatically over time.
The Porter Five Forces Analysis is a methodology for evaluating the external environment in which Ford Motors operates as well it key competitors (General Motors and Toyota). The evaluation enables the companies to assess and analyze their competitors’ abilities as well as their own sources of strength. It also provides a quantitative assessment of the impact of capabilities on the company’s objectives. Competitive organizations gain from learning more about competitors who have a greater impact on the firm than other industry players. When CEOs use these tools to keep a tight check on their company’s surroundings and make strategic plans, their chances of success skyrocket.
References
Siddiqui, K. A., & Ahmad, S. (2022). Brand equity trend analysis for top auto brands on Interbrand’s 20-year longitudinal data. Journal of Brand Strategy, 10(4), 358-376.
Bruijl, G. H. T. (2018). The relevance of Porter’s five forces in today’s innovative and changing business environment. Available at SSRN 3192207
Parreira, F. M. F. (2020). Equity Research-Ford Motor Company (Doctoral dissertation, Universidade de Lisboa (Portugal)
Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6(1), 55-73.
Strategy is attaining success; it is a collection of concepts that provides
Hello, for this assignment you must create an annotated bibliography using each of the sources given in the instructions Essay Business Assignment Help Strategy is attaining success; it is a collection of concepts that provides direction for an individual’s or company’s activities and achievements. It’s a continuous process for a company to position itself for strategic edge in a dynamic business environment. laying emphasis on the organization’s values and goals, resources and skills, and institutional structure and systems, strategy link the firm and its macroenvironment. It entails competing for tomorrow rather than today. The materials that a company requires to make products and provide services come from the environment. The environment in which a company operates might present both challenges and possibilities. Opportunity are occurrences and patterns that create possibilities to enhance a company’s overall performance. Threats are events or patterns that may undermine a company’s efficiency. As CEOs aim to direct their organizations toward profitability, the environment has an impact on their strategic decisions. Strategic decisions entail identifying how a company will utilize its resources within its own environment to meet long-term goals, establishing desired outcome, and deciding how those objectives will be met.
The four factors that contribute to a good company strategy include: • Resource evaluation that is objective • Knowledge of the competitive landscape • Long-term goals that are consistent and • Proper implementation.
Due to environmental dynamics, social and economic uncertainties, firms design and implement strategies concentrating on environmental innovation. Understanding the environment is a critical component and cog driver of an organization’s success. Failure to design a long-term strategy impedes a company’s long-term success. The focus of strategies is on choosing to execute tasks differently than competitors. Strategic positioning and strategic alignment are crucial factors to consider when doing so.
Background
The focus is on the motor vehicle manufacturing industry, it has been utilized as a case study to analyze environmental influences and how they might affect strategy.
ANALYSIS OF THE ENVIRONMENTAL FORCES
Competitive Profile Analysis.
Toyota and General Motors are two motor vehicle brands that compete with Ford Motor Company.
General Motors: General Motors is one of the world’s largest automakers, with outlets on six continents. The company has built a strong brand identity and has produced a diverse range of vehicles. GM places a great focus on expansion, with Cruise functioning as the global division in charge of creating and commercializing autonomous vehicle technologies.
Toyota: For a long time, Toyota has been the most successful manufacturer and seller of automobiles. It broke the bar for most cars sold in history in 1974, and it has remained at the top of the industry ever since.
Strengths
As a competitive analysis tool, CPM offers numerous benefits to the firm. CPM takes into account the company’s KSFs, which help identify the company’s strengths and weaknesses in key areas. This approach to assessing firms is an excellent way to look at a number of competitors in one spot and design strong strategic strategy. K. CPM enables businesses to discover the weaknesses and strengths of their primary competitors, which is critical for developing a strategic plan. The competitive strategy pays special attention to each competitor’s desired goal, resources, and aggressive activities, enabling a company to swiftly identify a competitor’s vulnerabilities and strengths, which may then be used to develop a more efficient strategy.
Weaknesses
Although CPM is a great tool for companies to use for competitive analysis, it does have some disadvantages. CPM is utilized by executives to stress essential success aspects depending on their expectations. There is no empirical method used to determine the relative importance of each KSF for the firm. The method used to calculate the KSFs could be influenced by management’s views, dispositions, or information reliability. Furthermore, while CPM provides information pertaining to the firm’s performance in comparison to its competitors based on a few key performance indicators, evaluating the company’s productivity in relation to those key success factors is difficult because a firm’s competitive edge is not dependent on the specific aspects, and a positive impact in one aspect may offset a drawback in another.
Critical success factors
The growth and success of a company are dependent on key successful criteria. They are crucial elements that must be carried out to the highest possible standard. The achievement variables were chosen based on the validity and reliability of the assessment. To select all essential variables, the course curriculum’s Competitive Profile Matrix Demonstrative Example in the Handicraft Business and the Strategic Management Insight article “Do You Know What Your Competitors Are Doing?” were used.
Ford motors
GM
Toyota
Critical success factors
weight
Rating score
Rating score
Rating score
Market share
Quality of the product
Financial position
Consumer loyalty
Brand
Price competition
Global expansion
Advertising
0.10
0.17
0.12
0.20
0.17
0.09
0.05
0.10
2.00 0.20
2.00 0.34
3.00 0.36
3.00 0.60
4.00 0.68
2.00 0.18
1.00 0.05
3.00 0.30
4.00 0.40
3.00 0.51
1.00 0.12
3.00 0.60
2.00 0.34
3.00 0.27
1.00 0.05
2.00 0.20
4.00 0.48
4.00 0.52
1.00 0.12
4.00 0.48
1.00 0.36
3.00 0.30
1.00 0.08
2.00 0.16
Total
1.00
2.71
2.49
2.50
Since GM and Toyota are Ford’s key competitors and have the largest market share, their strengths and flaws were investigated. For brand recognition, Ford Motor Company received a 4-star rating, whereas General Motors received only a 2-star rating. They had excellent brand awareness because they had been in this industry for over a century and had expanded globally in the early years of the firm. Because of the global financial crisis, both companies are striving to avoid risk and unnecessary expenses by expanding into new areas and expanding internationally. Both firms are rated 1 for overseas markets because they are implementing a conservative strategy and are missing out on new market opportunities.
Partial SWOT Analysis
Opportunities
Threats
Efficiency
Alliances
Changing customer groupings and lifestyles
Expansion of market
OEM priorities
High Competition
Stiff market Competition
Volatility in the fuel Prices
Slow Economy
High fixed costs and R&D investments
Opportunities
Efficiency: People are getting greatly concerned regarding levels of efficacy as technology progresses. As a result, in the near future automobiles with great fuel efficiency and low-cost features will be in high demand. This could open up a large market for corporations due to superior technologies. Renewable energy sources have the potential to strengthen the firm’s productivity.
Alliances: Increased Business competition might result in a better orientation to collective success. Corporations can potentially give multiple options to the market by merging diverse unique strategic competencies, resulting in large revenues for participant enterprises. In a congested market, this might help a firm to gain a competitive advantage.
Changing customer groupings and lifestyles: As the world’s economy grows increasingly prosperous, lifestyle adjustments are becoming more important. Consumers from developing countries are growing more common. In addition, as the number of nuclear families grows, so does the need for automobiles. Personal automobiles are becoming increasingly popular among growing families for a variety of reasons, including safety and comfort. As a result of these advancements, two-wheelers and small automobiles will become more popular.
Market expansion; Vehicle utilization will increase as more Asian and BRIC economies join and flourish. It’s possible that the trend will extend to other states as well. As more countries open their borders to economic integration and the automobile sector, it will continue to grow and flourish.
Original Equipment Manufacturer (OEM) priorities: Numerous kinds of automobile parts are bought from those other automakers and used in the final assembly of their vehicles. As the use of digital information grows, businesses need find new ways to maximize profits. This will result in more co-investment and a brighter future for everyone on the planet.
Threats
High Competition: Tesla, Tata, and Toyota are already formidable competitors for Ford. Ford continue to battle to maintain its innovative leadership position in the industry.
Stiff market Competition: As more companies operate in the automobile business, the industry is growing at a faster rate. The more rivals there seem to be, therefore more shares of the company’s wealth are available, making it difficult to gain a significant proportion of the wealth.
Volatility in the fuel Prices: For many consumers, the cost of gasoline is a crucial factor. It’s particularly crucial in developing countries, where autos are predominantly used for daily transportation. Various government regulations relating to green technologies may also have an impact on stock prices.
Slow Economy: The automobile business can fail for a variety of reasons, including sudden unemployment and the present Covid-19 crisis. The industry is confronted with problems, such as covid-19’s introduction of vehicles to lower transportation costs.
High fixed costs and R&D investments: Due to the extremely competitive market, companies are trying to invest more in R&D departments. They are building facilities in order to break into the market. This investment, nevertheless, should be profitable, which is a considerable issue. The return on investment (ROI) should be as high as possible. Nevertheless, it may be considered as a potential threat in today’s uncertain world market.
Porter’s Five Forces
The threat of new entrants-Weak force
New entrants might enter the industry in a number of ways. They can be the start of anything, a multinational firm extending into new region, suppliers joining consumer activities, or buyers entering the process of providers. External factors that signal a minimal threat from new entrant risk, according to the five forces study, include premium price brand creation, significant company costs, and good economies of scale. The Ford Corporation is an external force making it difficult to establish new admissions and evaluation criteria. Another barrier is the high price of automobile manufacture, which makes new entrants challenging even with economies of scale. New rivals enjoy economies of scale by surpassing a manufacturing limit. Given these external considerations, the danger of new entry is regarded as a minor issue by Ford’s strategic planning.
The threat of substitution-Moderate force
Managers must be aware of their key competing brands as well as other industry competitors who might steal their customers. As additional auto makers enter into the market, it has an impact on Ford’s automotive business. The features that distinguish this force as a medium force include lower variable manufacturing overhead, intermediate substitute accessibility, and medium alternative efficacy. Switching costs are lower, making it easier for enterprises to compete. evidence demonstrates that, low fluctuating prices offer for choices. Ford’s business environment is becoming a formidable force as a result of this element. The availability of reasonable substitutes helps to lessen the impact of providers.
Bargaining power of suppliers-Moderate force
According to the five forces analysis of supplier negotiating power, the organization places a high value on the reliability of its suppliers. The firm’s strategic plan prioritize supplier bargaining strength, according to the five forces analysis. Based on the scale, level, and quantity of the supply, the supplier’s negotiating position is rated medium to strong. In the manufacture of cars, the dependability of raw materials used by businesses to make products is critical.
Competitive rivalry-Strong force
The automobile industry’s need to catch up to Ford Motors is the source of severe competition and rivalry. The number of businesses has decreased (direct competitors), Fewer number of companies (direct competitors), increased company assertiveness, and lower switching costs are three factors that combine to create a potent force of competition and rivalry. Since the vehicle industry has a restricted number of manufacturers, the forces analysis reveals that this exterior constraint restricts Ford Motors’ competitive capability. Because the number of businesses is small, a higher focus is placed on design and marketing. Consumers’ reluctance to buy a product Ford Motors focuses on from a rival adds to the competitiveness.
Bargaining power of buyers-Moderate force
The five forces analysis demonstrates the customers’ bargaining strength and the elements that influence it. Lower maintenance costs, intermediate replacement availability, and higher purchase volumes are among the prerequisites. The minor modification reduces the number of issues that restrict customers from purchasing a car from a different manufacturer. This force, as just an externally applied, unleashes a huge force against Ford and other manufacturers. Owing to the low to moderate danger of substitution, consumers’ bargaining power against Ford is restricted.
Analysis of External Factor Evaluation
External Factor Evaluation is a strategic method for evaluating a company’s external environment. It aids a company in assessing risks and opportunities, as well as providing guidance on how to respond to such threats and opportunities. The approaches are graded on a scale of 0.0 to 1.0, with 0.0 denoting low relevance and 1.0 indicating high relevance. The grades, within the range 1 to 4, help the firm’s strategy in these areas run more smoothly. A substantial weakness is given a score of 1, whereas a significant strength is awarded a score of 4. The weighted score is obtained by multiplying the weight by the rating.
Weight
Rating
Weighted score
Opportunities
Efficiency
Alliances
Changing customer groupings and lifestyles Expansion of market
OEM priorities
0.08
0.15
0.08
0.15
0.05
4.00
3.00
2.00
2.00
2.00
0.32
o.45
0.16
0.20
0.10
Threats
High Competition
Stiff market Competition
Volatility in the fuel Prices
Slow Economy
High fixed costs and R&D investments
0.10
0.20
0,08
0.05
0.11
1.00
3.00
3.00
3.00
4.00
0.10
0.60
0.24
0.15
0.44
4 Capital Budgeting Student’s Name Institution’s Affiliation Professor’s Name Date Capital Budgeting
4
Capital Budgeting
Student’s Name
Institution’s Affiliation
Professor’s Name
Date
Capital Budgeting
Capital budgeting is a method of predicting a capital investment’s financial feasibility across its life cycle. Organizations use capital budgeting to assess big projects and investments, such as new products or equipment. The procedure examines a project’s cash inflows and outflows to see if the predicted return matches a predetermined threshold. The purchase of real estate necessitates either debt or equity finance to cover the cost of the purchase. The bed’s value would determine the type of financing. The correctional center can either build the beds themselves or contract them out to a private prison corporation under the scenario presented.
The cost difference is the reason behind the disparity. Due to the correctional center will be building the beds, the cost will cover all of the necessary materials and labor. On the other hand, contracting entails the business paying the private prison corporation regularly. This implies that the correctional center would make payments regularly, such as every quarter. The State Department of Corrections oversees the management of Custodial and Non-Custodial Offenders.
After analyzing option 1, which involves constructing one thousand new prison beds in an additional wing of the state facility, and option 2, which involves a contract with a private prison company to rent 1000 beds and considering their capital budget, a better option was identified and recommendations made (Michelon et al., 2020). Giving a short-term view of the costs, adopting the choice of hiring would be the best as the sum will be paid in infrequent premiums. The building will necessitate the use of center firms, which will impact the project’s liquidity. Construction would be the greatest option in the long run because the correctional center would have the prison beds, which they could sell if they wanted to rid of them later.
The use of the equity in finance, which indicates that the business will not have to pay monthly loan repayment fees, is one of the advantages of contracting. The correctional center would also save money on taxes that would otherwise be paid due to the building, another advantage of contracting. Additionally, when considering the total capital required, contracting is cheaper than building, requiring less labor and time. The only disadvantage is the number of premiums paid if insurance is purchased.
The advantage of construction is that once the construction is completed, the correctional institution will keep the beds; this adds to the institution’s assets. When it comes to ensuring the beds, the correctional center will save money (Mubashar & Tariq, 2018). The disadvantage of conducting the construction is that it would require debt financing, which means the correctional center would be stuck with a loan that they would have to repay. Due to the obvious bureaucracy involved in making a choice, political issues would arise. There would be fewer bureaucrats involved in the construction process.
In conclusion, capital budgeting is critical because it establishes accountability and quantifiability. Any company that invests in a project without truly realizing the risks and rewards will be viewed as thoughtless by its owners or shareholders. Since the correction facilities are nonprofit organizations, they need to save their resources. Therefore, it would be advisable for a short-term solution for the facility to contract 1000 beds. However, suppose the facility is looking for a long-term and permanent solution. In that case, it should look forward to constructing one thousand new prison beds in an additional wing of the state facility.
References
Michelon, P. D. S., Lunkes, R. J., & Bornia, A. C. (2020). Capital budgeting: a systematic review of the literature. Production, 30.
Mubashar, A., & Tariq, Y. B. (2018). Capital budgeting decision-making practices: evidence from Pakistan. Journal of Advances in Management Research.
A treatise on reparations. Name Institution Course Professor Date The issue of
A treatise on reparations.
Name
Institution
Course
Professor
Date
The issue of reparations for slavery has, for many long years, been a hotly contested topic. However, according to Allen (1998), the issues became a part of political rhetoric and mainstream press after the 2001 United Nations Summit on Race. The initial formally prepared reparations program was created and ratified by the US Congress in 1946 in a bid to redress a variety of claims brought up by Native American tribes. Such issues included lost ancestral land due to agreements that the tribes were forced to sign, and blatant treaty violations which were expressly denied judicial remedy (Newton, 1993). The enslavement of the African American community in the years preceding 1865 saw a reparations-seeking movement spring up in the late 1960s. This movement faded but according to Lewin (2001), resurged in the late 1990s. However, it was not until 2000 that a bill to study reparations that was sitting in Congress for over a decade was heavily supported by the Black Caucus at their annual meeting (Michelson, 2002).
In order to fully grasp the importance of reparations and why they are necessary, it is critical to gain a historical perspective on the plight of the oppressed communities. This is to establish the gender disparity (if any) in sentiments about reparations, a racial perspective, and an age perspective. This research is important for a multitude of reasons. The US has had an institutionalized system that has been marginalizing and oppressing black people since they arrived at the shores of the Americas, after being forcibly taken from their homes in Africa. White violence against black people has persisted for literal centuries, till date. This has sparked protests in response, some of which have borne fruit in the pursuit of social change. However, most of these have been symbolic victories. Research into the plight of black people and why restitution for their enslavement is necessary now more than ever in these politically charged times in order to instill a political conscience in the young. The young from all races must learn their histories; new generations of white people must learn about the atrocities that their ancestors committed against their black counterparts. It is equally important that young black people are taught on their true history. Spreading awareness, through research such as this, will ensure that people learn from history; that the atrocity never resurfaces. This research is important as it highlights the past, showing from evidence what to embrace in the building of an equitable society. According to research, little progress has been made in the way of compensating the African American community. Access to resources and opportunities is still heavily biased. It took a century after the abolition of slavery for civil rights equality to be implemented. Even then, it took the deaths of high-profile black rights activists such as Martin Luther King Jr., Malcolm X, Medgar Evers and others for real change to be implemented. Even now, racial bias still persists, which can be said to propagate from the distant past. Black people do not have socioeconomic equity, in spite of their ancestors’ free labor, which basically built the nation. It is for reasons such as these that reparations, both symbolic and material, are important in forging an equitable society.
On the path to reparations, as mentioned earlier, the black community has had some symbolic victories, starting from the desegregation laws enacted after the civil rights movement. Today, black rights are fought for by the Black Lives Matter movement. Monuments erected in honor of enslavers and known racially biased people have been defaced and destroyed by multiracial protest groups. The multiracial nature of today’s protests shows that most races besides the victimized race stand in solidarity with the need for reparations and policies enhancing social equity. Honorific plaques to confederate soldiers are being removed, and buildings named after white supremacists and enslavers are being renamed. These further paint a picture of how solidarity and national unification requires resolution and atonement for past atrocities, catharsis and closure. Research into these issues informs more strategies to correct historical wrongs. In recent times, due to increased public awareness resulting from research such as this, protests for racial equality have transcended race and generation, with people of all ages from all generations standing in solidarity with oppressed groups.
As mentioned before, the need for reparations is adequately informed by a basic foray into history. About 150 years ago, plantation owners installed slave patrols. Caucasian citizens were deputized and given a carte blanche to subdue every African American they came across. The laws also stipulated that a white citizen acting in the capacity of the best interests of the plantation owners would not receive legal repercussions for the killing of a black individual, even on suspicions of a minor offence. Towards the end of the American civil war, not having a job was criminalized in the confederate south. Research into multiple variants of factors contributing to and affecting racial inequality is important in highlighting how different generations of people feel about it. How non-black races feel about now has been highlighted previously in the paper. White citizens, who lived in the segregation era, can be expected to have more conservative views, since it was only a few generations before them that kept slaves. Some of their family wealth can be traced back to slave labor. Conversely, they may be more attuned to possessing sympathetic views on the issue of reparations, since they witnessed first-hand the atrocities committed against black people. Historically speaking, black lives have always mattered less. Research into how and why the need for reparations to atone for prior mistreatment exists is necessary to expose the plight of the black community. In recent times, black men, women and children have met their ends at the hands of white police officers, in incidences fueled by race-based police brutality. The names of black victims of police brutality are all too familiar: Trayvon Martin, Tamir Rice, Breonna Taylor, and more recently, George Floyd. All these were young people whose lives were dramatically cut short during police interactions. Lynching of African Americans has been rampant throughout American history, even after the emancipation proclamation. Law enforcement seems to be passive towards this issue. The captured footage of George Floyd’s execution as officer Derek Chauvin presses his knee on the young black gentleman’s neck shows a nonchalant expression, the nonchalance being a true testament to the unchecked normalization of white violence against black folk. It is for reasons such as these that a progressive reform like reparations is important to foster national cohesion.
The civil society’s feelings towards reparations have since shown a paradigm shift. Support for the opinion that the US government is responsible for devising a means of compensating slave descendants has risen up from 14 % in 2002 to 29% in 2019. Since 2019, the discourse on reparations has dominated political debate amongst academics, presidential aspirants and other politicians. The debate has been on how exactly the government should go about granting restitution to the communities that were directly harmed by the enslavement of African Americans and its legacy. A Pew research effort in 2019 concluded that more than 45% of American adults feel like the government has not done enough in granting racial equality. Comparatively, 15% feel like racial equality has actually gone too far (Horowitz et al., 2021). 39% say it has been about right. About 78 percent of black adults say that the country has not nearly progressed sufficiently in this regard, as compared to 48% of the Latino population, and 37% of the Caucasian population.
An important resource that is useful in making the case for reparations is Raoul Peck’s critically acclaimed 2016 documentary titled ‘I Am Not Your Negro’. The documentary is directed through the perspective and lens of James Baldwin, an American activist, author, playwright and poet who wrote extensively on the racial divide in the US. The documentary lets the audience see the history of racial bias in the US, brilliantly capturing the plight of black people throughout the slavery era, before, during and after the civil rights movement, which was characterized by icons such as Malcolm X, and even up to today long after Baldwin’s death, when the Black Lives Matter movement is in full swing. In the documentary, James Baldwin, as he narrates, reminisces on his interactions with and the lives of civil rights leaders and activists Malcolm X, Dr. Martin Luther King Jr. and Medgar Evers.
Barbara Jeanne Fields provides a unique perspective into the plight of black people in her 1990 article titled ‘Slavery, Race and Ideology in the United States of America.’ In line with Baldwin’s sentiments in the documentary, she reiterates the difference between a presidential candidate and a black presidential candidate. The etymological difference also applies while referring to scholars and black scholars. Fields (1990) argues that it is possible that people rallied around black icons and living legends such as Malcolm X and Martin Luther King Jr. due to racial identification. They did not necessarily agree with their methods to achieve civil equity, but since they were men of their race, they rallied behind them. This creates a case of argument by definition. According to Fields, racial bias arose historically, took root and gained a life of its own. Race is not genetic; thus, one cannot be born with a natural predisposition to racial prejudice. Bias cannot be genetic, which makes it an ideology, a purely human creation. Fields (1990) argues that slavery was borne of convenience, not necessarily out of racial grounds. Slaves became easy to purchase with a guaranteed lifetime of servitude, along with all their offspring. Maintaining then freeing indentured servants, most of whom received similar treatment to slaves, had proven costly. Her argument somehow contravenes the documentary’s message by somewhat invalidating the atrocious nature of slavery by adding a deterministic element to it. She also poses the argument that oppression precedes inferiority. People are likely to be seen as inferior when they are already under the yoke of oppression. This is why racial bias exists to this day. Racial inferiority, as seen in the documentary, only occurred after the black community was successfully subjugated.
References
Allen, Robert. (1998). Past Due. The African American Quest for Reparations. The Black Scholar. 28. 2-17. https://doi.org/10.1080/00064246.1998.11430911.
Fields, B.J. (1990). Slavery, Race and Ideology in the United States of America. New Left Review.
Horowitz, J. M., Brown, A., & Cox, K. (2021, September 22). Race in America 2019. Pew Research Center’s Social & Demographic Trends Project. https://www.pewresearch.org/social-trends/2019/04/09/race-in-america-2019/
Lewin, T. (2001). Calls for Slavery Restitution Getting Louder, N.Y. Times.
Michelson, Melissa. (2002). The reparations Movement: Public Opinion and Congressional Policy Making. Journal of Black Studies – J BLACK STUD. 32. 574-587. https://doi.org/10.1177/002193470203200505.
Newton, N.J. (1993).Compensation, Reparations, & Restitution: Indian Property Claims in the United States, 28 Ga. L. Rev. 453, 468.