Ford Motors generic and intensive growth strategies

Ford Motors is one of the leading automobiles brands in the world with an extensive global presence. Apart from a large product portfolio, the company is also known for its focus on innovation and customer experience. Ford has also established a strong global manufacturing and sales network which has played a major role in helping the company find global growth faster. The automobile industry has grown highly competitive and for a company to find growth faster, it must focus upon several things apart from product quality, passenger safety, and technological innovation. Supply chain and human resource management have also become critical to finding sustainable growth amid a highly challenging industry environment. Ford’s focus has been on product excellence but it has also optimized its value chain for cost efficiency. It is a popular automobile brand and several of its leading models have acquired global fame and success. This is a discussion of generic and intensive growth strategies employed by Ford to find global growth faster.

Generic Growth Strategies used by Ford Motors:

The generic growth strategy employed by Ford motors mixes elements of cost leadership and differentiation to achieve superior growth. The company targets a large base of middle-class and upper-middle-class consumers around the world. However, it has also successfully differentiated its brand from the competitors leading to higher popularity and business success.

Cost leadership:

The generic growth strategy employed by Ford Motors is not entirely cost leadership because the brand does not really make and sell low cost products. However, through maximizing operational efficiency, it does keep production costs and product prices low which is critical to achieving higher sales in a highly competitive scenario. The company prices its products competitively to retain its market share and leading position in key segments. However, its product range is not limited to regular cars and SUVs but it has also maintained its valuable presence in the luxury automobiles segment through the Lincoln brand.

Differentiation:

Differentiation is a key generic growth strategy employed by almost all the leading automobile brands throughout the world. The main bases of differentiation for automobile producers are technological innovation, product innovation, and marketing. Automobile companies also use marketing to differentiate their products and brand from rival brands. Ford’s branding strategy has played a key role in growing the popularity and reliability of the brand and its products worldwide and helping it differentiate its products from others.

As a leading automobile brand, Ford places a very high level of focus on passenger safety, fuel efficiency and environmental impact of its products. Apart from its exclusive and differentiated car and SUV models, Ford has further differentiated itself from rivals through its presence in the luxury segment. The luxury brand Lincoln owned by Ford makes and sells SUVs, cars, and crossovers in the luxury segment.

Intensive strategies used by Ford Motors

Ford Motors has used a combination of several intensive strategies to grow its market presence and expand its market share. The company has employed product development and market penetration strategies mainly to grow its market share in the automobile industry. Apart from that the company also used the market development strategy to grow its customer base globally during the earlier phases of its market expansions.

Product Development:

The product development strategy is one of the most extensively used intensive strategies in the automobile industry and which most leading automobile brands use to grow sales and market share. It is the strategy of bringing new product innovations to your customers and existing markets to grow sales and market share. While technological innovation has become even crucial due to the growing competition in the automobile industry, it is also important for automobile brands to improve their existing products to grow the customers’ interest in these products.

Ford is an innovative brand of automobiles and invests a large sum in research and development each year. In 2019, the company spent around $7.4 billion on research and development. The main focus of R&D efforts at Ford Motors is higher customer convenience, higher safety, and fuel efficiency as well as reduced environmental impact of vehicles. Moreover, product development has helped Ford grow the popularity of its products and make its product range more attractive to its existing customers.

Market Penetration:

Market penetration is the strategy of selling more to your customers in your existing markets. It is also one of the leading growth strategies employed by the makers of cars and other automobiles which want to find faster growth. To grow their penetration of existing markets, automobile companies including Ford employ various marketing and sales techniques including digital marketing and other customer relationship and engagement techniques like developing their sales and service network.  

The United States is the largest and most penetrated market of Ford Motors. Other leading markets of Ford include Canada, UK, and Germany.

Market Development:

Market Development is the strategy of entering new markets and finding new customers in new regions for your products and brand. Globally, Ford has maintained a strong presence through its manufacturing, distribution and sales network. The company has e eight regional engineering, research, and development centers, and 55 manufacturing and assembly plants (Annual Report 2019). The United States is the largest market of Ford Motors where it sells the highest number of vehicles. In 2019, when the company achieved a net sales of 5.5 million units worldwide and its market share in the global automobile industry was around 6%, the retail sales volume of Ford in the US was 2.4 million units. 

Sales volume in China during the same year reached 0.6 million units. The leading four markets of Ford motors based upon revenue in 2019 were the United States, United Kingdom, Canada, and Germany. The company sells its products in nearly all regions of the world and based on geographic region, its market is divided into the following segments: Asia Pacific, North America, Europe, Central and South America, Africa, and Middle-East. In this way, Ford has maintained an extensive global presence and it utilized the market development strategy mainly during its early stages of growth.

Other Sources: Ford Motors Annual Report 2019.

Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.