Assignment 2: External And Internal Environments Choose And
Assignment 2 External And Internal Environmentschoose An Industry You
Choose an industry you have not yet written about in this course, and one publicly traded corporation within that industry. Research the company on its own website, the public filings on the Securities and Exchange Commission EDGAR database, in the University's online databases, and any other sources you can find. The annual report will often provide insights that can help address some of these questions. Write an eight to ten (6-8) page paper in which you: compare Ford and Toyota; choose the two (2) segments of the general environment that would rank highest in their influence on the corporation you chose; assess how these segments affect the corporation you chose and the industry in which it operates.
Considering the five (5) forces of competition, choose the two (2) that you estimate are the most significant for the corporation you chose. Evaluate how well the company has addressed these two (2) forces in the recent past. With the same two (2) forces in mind, predict what the company might do to improve its ability to address these forces in the near future. Assess the external threats affecting this corporation and the opportunities available to the corporation. Give your opinions on how the corporation should deal with the most serious threat and the greatest opportunity. Justify your answer.
Give your opinion on the corporation's greatest strengths and most significant weaknesses. Choose the strategy or tactic the corporation should select to take maximum advantage of its strengths, and the strategy or tactic the corporation should select to fix its most significant weakness. Justify your choices. Determine the company’s resources, capabilities, and core competencies. Analyze the company’s value chain to determine where they can create value using the resources, capabilities, and core competencies discussed above.
Use at least three (3) quality references. Note: Wikipedia and other websites do not qualify as academic resources. Your assignment must follow these formatting requirements: Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Paper For Above instruction
Introduction
The automotive industry remains one of the most influential sectors in the global economy, characterized by intense competition, rapid technological advancements, and evolving consumer preferences. Among the key players, Toyota and Ford exemplify two distinct strategic approaches within the industry, both significantly influenced by external environmental factors and internal capabilities. This paper aims to compare these two corporations by analyzing their external environments, industry forces, strengths, weaknesses, resources, capabilities, and value chains to recommend strategic directions for sustained competitive advantage.
External Environment Analysis
The external environment encompasses factors beyond a company's control that impact its operations and profitability. In assessing Toyota and Ford, two segments of the general environment—technological advancements and regulatory/political factors—dominate their influence. Technological innovation is pivotal, as electric vehicles, autonomous driving, and manufacturing automation redefine industry standards (Chien et al., 2020). Regulatory and political elements, such as emissions standards and trade policies, impose compliance requirements and influence market access (Wang & Green, 2021).
For Toyota, technological innovation serves as both a challenge and an opportunity. Its pioneering hybrid technology and investments in fuel cell and battery electric vehicles position it favorably but require continuous R&D to stay ahead (Kalghatgi, 2020). Conversely, Ford's strategic focus on smart manufacturing and digital connectivity reflects its response to rapid technological change. Politically, trade tariffs and emission regulations notably impact both firms, affecting supply chains and market strategies (Lee & Lee, 2019).
Industry Forces and Competitive Dynamics
The Porter’s Five Forces framework helps elucidate competitive pressures. Among these, supplier power and competitive rivalry are most impactful for both companies. Supplier power remains significant due to dependency on critical components like semiconductors, especially amidst global shortages (Bailey, 2022). Competitive rivalry is fierce, with numerous automakers vying for market share using innovation and branding (Huang et al., 2021).
Toyota has addressed supplier power through diversified sourcing strategies, including local partnerships to mitigate disruptions. Its focus on cost leadership and quality has enabled it to navigate intense rivalry effectively. Ford, on the other hand, has sought to differentiate through eco-friendly vehicle lines and connectivity services, but still faces challenges from aggressive competitors like Tesla and Volkswagen. To improve, both companies should further develop strategic supplier partnerships and accelerate innovation cycles to better cope with rivalry (Chen & Matsuno, 2020).
External Threats and Opportunities
Major threats include technological disruptions, regulatory changes, and supply chain uncertainties. For instance, the shift toward electric vehicles (EVs) threatens traditional internal combustion engine (ICE) dominance. Opportunities lie in expanding EV offerings, automation, and sustainable mobility solutions. Toyota’s early investments in hybrid and hydrogen technologies offer resilience, while Ford’s aggressive push into EVs, exemplified by the Mustang Mach-E, positions it for upcoming shifts (Nikolaeva & Rousseau, 2021).
To counter threats, Toyota should accelerate its transition to fully electric models and enhance battery sourcing strategies. Ford should leverage its existing manufacturing infrastructure to increase EV production capacity and forge strategic partnerships to reduce costs. The greatest opportunity lies in developing autonomous vehicle technology and MaaS (Mobility as a Service), which promises new revenue streams and market expansion (Fagnant & Kockelman, 2018).
Company Strengths and Weaknesses
Toyota’s core strengths include its robust R&D capability, extensive global supply chain, and a strong reputation for quality and durability. Its early move into hybrid technology provides a competitive advantage. Weaknesses involve slower adaptation to fully electric vehicles and high R&D costs associated with hydrogen fuel cells. Ford’s primary strengths are its brand recognition, versatile product portfolio, and aggressive innovation in electric and connected vehicles. Significant weaknesses include less global reach compared to Toyota and reliance on traditional truck sales in North America, which may slow diversification efforts.
Strategic Recommendations
Given Toyota’s strengths in R&D and supply chain, it should pursue a strategy to accelerate its EV and battery development, aiming for cost leadership and technological superiority. To address weaknesses, it needs to broaden its EV model lineup and further localize supply chains to reduce dependency on foreign parts. Ford, leveraging its brand strength and innovation capabilities, should focus on expanding its EV portfolio and establishing strategic alliances with battery and tech firms to reduce costs and enhance technological capabilities.
Resources, Capabilities, and Core Competencies
Both firms possess significant resources and capabilities. Toyota's core competencies include its lean manufacturing system (Toyota Production System), extensive supplier network, and pioneering hybrid technology. Ford’s core competencies revolve around its brand strength, manufacturing flexibility, and a broad product range aligned with diverse customer needs. These assets underpin their competitive positions and strategic options.
Value Chain Analysis
Analyzing the value chains reveals opportunities for creating additional value. Toyota’s manufacturing excellence and supplier relationships allow cost-effective production and innovation, especially in hybrid and hydrogen fuel cells. Ford’s value chain emphasizes flexible manufacturing and strong marketing capabilities, which can be leveraged to accelerate EV adoption. Both companies should enhance activities like inbound logistics and technology development to maximize value creation, especially in battery technology and autonomous driving systems.
Conclusion
In conclusion, Toyota and Ford exemplify different strategic approaches within the competitive automotive industry, both influenced by external environmental factors and internal resources. Adapting to technological disruptions, regulatory landscapes, and competitive rivalry requires continuous innovation and strategic agility. Toyota’s focus on R&D and supply chain resilience positions it favorably for future challenges, while Ford’s emphasis on electric mobility and brand differentiation offers promising growth avenues. Strategic alignment along these lines will enable both firms to sustain competitiveness and capitalize on emerging opportunities.
References
- Bailey, S. (2022). Semiconductor shortages and automaker supply chains. Journal of Supply Chain Management, 58(1), 45-58.
- Chen, L., & Matsuno, K. (2020). Innovation strategies in the automotive industry: A comparative analysis. Strategic Management Journal, 41(2), 239-261.
- Fagnant, D., & Kockelman, K. (2018). Preparing a nation for autonomous vehicles: Opportunities, barriers, and policy recommendations. Transportation Research Record, 2672(1), 1-11.
- Huang, Y., Wu, W., & Liu, Z. (2021). Competition and innovation in the global automotive industry. International Journal of Automotive Technology, 22(4), 673-685.
- Kalghatgi, G. (2020). Future energy sources for the automotive industry. Energy Policy, 144, 111545.
- Lee, S., & Lee, H. (2019). Trade policy impacts on the automotive sector. Journal of International Business, 34(3), 345-362.
- Nikolaeva, A., & Rousseau, S. (2021). Electric vehicle market development and strategic marketing. Journal of Business Research, 125, 509-517.
- Wang, M., & Green, R. (2021). Regulatory policies and sustainable mobility. Environmental Science & Policy, 127, 169-179.