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Disruption in Detroit Ford Silicon Valley and Beyond A Case Solution
This case is based on the automobile company Ford Motor which discusses how its CEO, Mark Field, and their higher management team responded to the new disruptive technologies because these emergent technologies were forcing automakers to change their present strategies and business model. Moreover, their current strategies will not go hand in hand with these new emerging technologies trends. At the same time, disruptive technologies include autonomous connectivity vehicles, the emergence of subcompact cars, electric vehicles, use and ownership of the car, software, and powertrain. Furthermore, it includes how and what type of challenges Ford Motor CEO and his team will face while responding to the emerging technologies to be profitable and outcome-oriented and how the strategic moves should be taken to increase company performance because, in the market, new competitors were also rising in the automotive landscape. However, a few board members also suggested communicating their strategic moves more vigilantly and successfully.
Following questions are answered in this case study solution:
In what ways are consumer preferences changing in Ford’s different market segments and geographies? Are consumers able to articulate what they will be eager to buy five years from now?
How significant are the new industry entrants and their technologies? Have any of them introduced truly disruptive innovations that are potentially lethal for established automakers?
Which Research & Development initiatives should the company bet on, and how aggressively should it invest to build new capabilities?
What kinds of partnerships should Ford initiate to acquire technologies that it cannot or does not want to build in-house?
Does the concept of “disruption” provide a helpful model for understanding Ford’s current dilemmas? What are the limitations of this model, and are there other ideas that are more useful for understanding Ford’s competitive landscape?
How can a company reinvent itself when it has such a long history, an established business model, and massive legacy infrastructure? Has Mark Fields chosen the right approach?
Case Study Questions Answers
1. In what ways are consumer preferences changing in Ford's different market segments and geographies? Are consumers able to articulate what they will be eager to buy five years from now?
The financial recession turnaround and its impact on the overall industries and the country's economic conditions brought a vast shift in preferences of the people and turned their focus of interest from big cars to small cars also, which ultimately forced the consumers of the automobile industry to change their demands as they are more likely interested in buying good mileage-covering cars as compared to spacious cars. Also, consumers want more upgraded technologies in cars, more updated software, and more stylings and colors at a low price. Whereas Korean and Japanese automakers are making more profits as compared to other automakers by fulfilling all these demands of the consumers. Also, during this financial recession, the price of oil went to a peak, resulting in forcing consumers to change their preferences.
Forecasts also show that in the next ten years, the global market will be comprising a hefty two-thirds of small cars along with good sales in emerging markets, specifically in Asia. In my opinion, consumers will be too sure about their needs and want in the next five years because, according to studies or research, the middle-class size in the rising markets is going to exceed the consumer's total number in the era of the developed world so they will go for pocket-friendly yet more advanced versions of the car within the option of compact cars. Moreover, with the increase in oil prices, everything goes up, and in the next five years, consumers will be more concerned about getting themselves a sufficient car along with all advanced features in it at a good low price compared to well-known automakers. Furthermore, automakers should also start taking the change in the market seriously because automakers' sustainability is based on consumer preferences, and for that, they should disrupt innovations.
2. How significant are the new industry entrants and their technologies? Have any of them introduced truly disruptive innovations that are potentially lethal for established automakers?
The automobile industry's new entrants are Apple, Tesla, and Google, and they can be a huge threat to all the currently established automobile companies in the market because they are working on disruptive innovations. All the new entrants are introducing disruptive innovations in technology to some extent, such as Tesla's all-electric vehicle offering people a better choice option for those who are more concerned about pollution and emissions. Moreover, autonomous driven cars by google are already too advanced as they are known for mapping streets by making people's life easier, and these cars also went into the testing phase. Almost every automotive firm is keen to develop its own programs for autonomous vehicles. However, Google is considered superior among all due to its high research and development budget. Apple also makes a significant entry into the market because of its ability to vastly update its software while upgrading its technology skills more frequently.
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