Faced with an overwhelmingly complex situation, Alan Mulally has been brought in as Ford Motor Company's new president

and CEO. As diverse global dynamics confront the company and competitive pressures continue to build, he has the challenging task of improving Ford's brand image and returning the company to profitability. Mulally has invited your consulting firm to advise his management team on restoring the company's reputation and viability. 1. Define and discuss Ford's business-level strategy. Business-level strategy is an integrated and coordinated set of commitments and actions Ford can use to gain a competitive advantage by exploiting core competencies in specific product markets. The commitment that Ford has promised its customers is called One Ford plan. They intend on using this to transform the business. This is the mission and vision of Ford One Team: People working together as a lean, global enterprise for automotive leadership, as measured by Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction One Plan * Aggressively restructure to operate profitably at the current demand and changing model mix * Accelerate development of new products our customers want and value * Finance our plan and improve our balance sheet * Work together effectively as one team One Goal: An exciting viable Ford delivering profitable growth for all 2. How can the company's value-chain activities be better linked to create value for the company? Value chain analysis allows Ford to understand the parts of the operation that create value and those that do not. With understanding these issues, Ford earns above-average returns when the value it creates is greater than the costs incurred to create that value. The value chain shows how a product moves from the raw-material stage to the final customer.

The activities that can be better linked to create value for the company are that to ensure that the proper steps are being taken from start to finish and there nothing is overlooked. As we have seen from one of the competitors of Ford, Toyota has had some problems that could have been prevented if the proper steps were taken to ensure that each step for each stage was properly completed. 3. How can Ford successfully position itself in terms of the five forces of competition? List the five forces; then discuss each one. Ford can successfully position itself within the terms of the five forces of competition by maintaining the high standards that it currently keeps and that it keeps the promise that it will continue to develop new products that the customers want and value.

Threat of new entrants: New entrants bring additional production capacity. Unless the demand for Ford is increasing, additional capacity holds consumers; costs down, this resulting in less revenue and lower returns for the competition. Bargaining power of suppliers: Increasing prices and reducing the quality of their products are potential means used by suppliers to exert power over firms competing within each industry. If a firm is unable to recover cost increases by its suppliers through its own pricing structure, its profitability is reduced by its suppliers actions. A supplier group is powerful when * It is dominated by few large companies and is more concentrated than the industry to which it sells. * Satisfactory substitute products are not available to industry firms * Industry firms are not a significant customer for the supplier group * Suppliers goods are critical to buyers marketplace success * The effectiveness of suppliers products has created high switching costs for industry firms * It poses a credible threat to integrated forward into the buyers industry. Credibility is enhanced when suppliers have substantial resources and provide a highly differentiated product.

Bargaining power of buyers:

Firms seek to maximize the return on their invested capital. To reduce the costs, buyers bargain for higher quality, greater levels of service, and lower prices. The outcomes of this are achieved by encouraging competitive battles among the industrys firms. Customers are powerful when * They purchase larger portions of the industrys total output. * The sales of the product account for a large portion of the Fords annual revenue. * Able to switch to another product * Products are undifferentiated or standardized, and the buyers pose a credible threat if they were to integrate backwards into the sellers industry. Threat of substitute products: Substitute products are goods or services from outside Ford. This means they perform similar or the same functions as a product that Ford produces. In general, product substitution presents a strong threat to Ford when customers face switching costs and when the substitute products price is lower or its quality and performance capabilities are equal to or greater than those of the competing product. Rivalry among competing firms: Firms are mutually dependent. So, actions taken by one company usually invite the competitors to respond. Typically, firms seek to differentiate their products form competitors offerings in ways that customer value and in which each firm has a competitive advantage. They offer different upgrades and options to each vehicle that would put them apart from the competition. 4. Outline a rough competitor analysis. What can be learned about expected competitor behavior by using the model of competitive rivalry to understand Ford's situation? A rough competitor analysis is the set of data and information the firm gathers to better understand and better anticipate competitors objectives, strategies, assumptions, and capabilities. Fords competitors include but are not limited to the following companies: * DaimlerChrysler * General Motors * Toyota I believe that Ford has been able to stay a step ahead of their competitors not necessarily out compete them. There is always going to be competitive rivalry between Ford and its competitors. There is always going to be an ongoing set of competitive actions and competitive responses that occur among the firms as they maneuver for an advantageous market position. Again, Ford has been the one to come out on top, they have had step up on the others when it came to the first

Hybrid model SUV. Then soon after all of the competitors came out with their model. Fords competition is always going to try to get a better vehicle out on the market. If the competitors happen to get a new model vehicle out to the public before Ford has a chance that will be fine. Ford will come back with a better vehicle soon after, because theirs was already in the works.

5. What role will strategic leadership play in helping Mr. Mulally and the organization meets its strategic objectives? First and foremost, strategic leadership is the ability to anticipate, envision, maintain flexibility, and empower others to create strategic change as necessary. Before Alan Mulally came to for and was named CEO and president of Ford Motor Company in 2006, Fords leadership structure was complex and highly bureaucratic. The company had a six-layer management scheme which is what determined pay. Mulally, is determined to decrease the influence of the finance department, which in the past determined the final product. He believes that the key to future success is not squeezing by with fewer resources than competitors use, but working smarter with what they already have. Now, the focus will be on worldwide market and customers and also by working better to utilize the global assets and capabilities.

References: Ford (2010) Retrieved May 13, 2010, from http://www.ford.com/about-ford/companyinformation/corporate-governance

Michael A. Hitt, R.Duane Ireland, Robert E. Hoskisson (2009). Strategic Management: Competitiveness and Globalization, Concepts and Cases