External factors have effects on many companies operations inside the United States and in other countries. These factors are usually out of the companya€™s control which are managed as well as the companya€™s ability can handle. The environmental factors influencing Ford Motor Companya€™s marketing strategies and decisions are discussed in this paper. Domestic and global environmental issues in culture, demographics, technology, and the physical infrastructure will be covered and discussed. Economic global interdependence, trade practices and agreements are analyzed and identified affecting the marketing decisions of Ford Motor Company.
The impact of technology affects Ford Motor Companya€™s strategies in marketing. Social responsibility and ethics are an important factor Ford believes is important regarding the companya€™s marketing decisions. These issues compose of many environmental factors Ford had to attack and overcome from the beginning. A global leader in the automobile industry, Ford needed to consider major environmental issues that included technological, political, trade practices, and agreement, etc. As Ford moved through its growth stage, overcoming environmental factors were common battle.
When Ford decided to take the company global, it had external issues to deal with when it came to creating a marketing strategy to move in that direction. It had to consider its competitors prices and strategies, target customers demands, the global economy, and actions of each countrya€™s governments, also known as environmental factors (Armstrong & Kotler, 2009). The decision-makers in charge of marketing at a company should recognize threats and opportunities. The demographics of Forda€™s target customer are the middle-class in every country.
Global marketing is a challenging concept. Russia, China, and India are in the middle of a very large economic growth period. With this growth, Ford saw these global markets and wanted to take advantage of them. All these markets have very different cultures and behaviors in buying. Just in India, the country has 15 different languages spoken by its residents numbering 25 million or more (Lionbridge, 2009). It currently does business on seven continents and has 90 manufacturing plants around the world. Ford has what it calls its PEST Analysis.
PEST stands for political factors, economic factors, social factors, and technical factors of the company (Chandrakanth, 2010). Political factors covers taxation, internal trade regulations, employment laws, and competitor trade regulations. Economic factors covers influence of exchange rates, economic growth by industry, inflation, and policy toward, unemployment. Social factors are living conditions, income distribution, attitude toward work, labor, welfare, lifestyle changes, and health. Technical factors are new inventions, technological efficiency, and rate of spending in research and development, and energy use costs.
Compared to its competitors, Forda€™s technological factors are for more advanced than its competitors are. Because Ford is doing business in more than 30 countries, its operations are very efficient in providing quality automobiles. In England, a customer can customize his or her from the inside to the outside. Delivery of the customera€™s car is a minimum of one-month and a maximum of two months. It is possible that Ford will deliver within a two-week timeframe. In each country, Ford understands the travel habits of each driver in a particular country.
The price of a Ford automobile in each country is affordable for its middle-class target customer. Ford designs cars based on these known travel habits and provides facilities to accommodate the whole family. Global economic interdependence of factors can threaten Ford and can provide more opportunities for the company. Creating cars that can run on renewable energy such as bio fuels and electric batteries are now more in demand by consumers worldwide because of the global green movement. Hybrid vehicles have a very low maintenance requirement and run on gas and electricity.
The India and China markets are growing with huge populations. Ford understands these markets and successfully provides many cars to the people in each country. Threats to Ford Motor Company are the rising costs of raw materials such as steel. Higher steel prices affect the profit margin of the production. Its competitors gain in growth is another major threat to Ford. Ford is continuing to perform well in the recession. Ford gives credit to its performance to keeping its cars at low prices compared to its competitors, such as General Motors and Toyota.
Ford never had to accept any bailout money from the United States federal government. Trades and practices of Ford are to do business under the countrya€™s laws it is doing business in as closely as possible. New laws introduced by a countrya€™s government forces Ford to change the companya€™s rules and regulations when necessary in producing a high quality automobile. Labor unions play a major role in automobile production at every manufacturing plant. The labor unions are required to stay within the rules and regulations the laws stand for. Investors must work in an environment which legal and fair.
Ford Motor Company does not accept unfair investing by any of its investors. The Foreign Corrupt Practices Act of 1977, an American law, known for focusing on accounting transparency requirements of a company under the Securities Exchange Act of 1934. It also addresses bribery of foreign officials. The law does not allow giving a foreign official money or something of value for the main purpose of securing or obtaining business for or with. Ford does not go into a country and promise anything of value can gain an unfair advantage over its competitors.
Companies are required to meet accounting their accounting provisions by keeping books and records that reflect the business and transactions in an accurate and fair way. Systems of controls of accounting internally are required. Ford maintains a clean record under this Act. Social responsibility and ethics play a major role with Ford. Creating a safe, affordable car for consumers is Fords top priority. Meeting demand for consumera€™s tastes and needs are met in each country Ford does business in. If a car is not safe enough for a consumera€™s family to travel in, Ford knows the consumer has choices of other automobiles.
Ford has established Greenhouse Gas Reduction Plan decreasing greenhouse emissions in each of its cars. A goal of 30% in decrease in emissions from its new automobile fleet is the goal by the year 2020. As members of the U. S. Climate Action Partnership, Ford has agreed to cut CO2 emissions by 60-80% by 2050 (Odel, 2008). In conclusion, Ford Motor Credit Company is a company that has been around for years with a solid reputation. Every country does business with Ford. Ford is an active partner in lowering emissions from its cars.
Not accepting any stimulus money from the federal government, Ford prides itself in doing business the right way. References Armstrong, G. , & Kotler, P. (2009). Marketing: An introduction (9th ed. ). Upper Saddle River, NJ: Pearson Education. Chandrakanth, D. (2010). Macro Environment and PESTL Analysis of Ford Car Manufacturing, Ltd. Ford Motor Company. Odel, A. M. (2008, April 2008). Ford Establishes Greenhouse Gas Reduction Plan . Retrieved February 28, 2011, from Sustainability Investment News : http://www. socialfunds. com/news/article. cgi/2497. html