The BCG Growth-Share market
The solution Ford came up for this problem was it decided to use less inflated tires so that it might create some kind of cushion. That decision led to Firestone’s faulty tires and ended up attracting the government attention for the second time, the first one being when a consumer advocate activist wrote a book about unsafe sports car manufactured by GM. The two companies were fighting each other in spite of the fact there were abundant evidence that the tires were exploding or the tread was pealing causing injuries and death, although SUVs, whether they were using Firestone tires or not had the tendency to rollover.
The outcome of the fight between the two companies was both had to call millions of tires that cost both a lot of money. Here it is possible to see the Porter’s Generic Strategy at work because, in spite of the loss they would suffer, in order to keep their competitive edge and reputation, both companies had decided to incur a sizeable cost that had eaten into what they generated.
The blame here lies on technological defect that takes time to correct once it is spotted and will become the focus in order to take the business into the next phase. It is also possible to see how a horizontal integration could be affected by a technological glitch that could originate from both parties involved, as the future relationship of Ford and Firestone cannot continue as Ford will be forced to use another brand, unless it is convinced what Firestond would avail would solve the problem.
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Looking at Ansoff Matrix would reveal that Ford had chosen its optimal strategy because quietly, without admitting the reason is to correct the defecate everyone was talking about, when the time is right and new brand of SUV was going to be rolled out, it added the two inch width and that had made a big difference and is the reason why SUVs are still on the road. The BCG Growth-Share market is at work here too because, the auto industry did not shelve the SUV even if it was dogged with a lot of problems, instead it was allowed to continue with the required improvement to be the cash cow and the star performer.
The GE/Mckinsey Matrix had been addressed here too because the USV manufacturing unit had been sought as a very profitable source that contributes to make the industry very attractive, because people are still buying SUVs and the number of carmakers that are coming up with their own brand of SUVs had surpassed 12 and all of them are prone to rollover, demonstrating that the rollover could be caused by a combination of factors that have to do with the size of the vehicles and the way people are driving them, because since they resemble normal cars, they might treat as small cars although their weight and technology might require otherwise.
The core competencies of companies such as Ford that is in the center of this problem had passed the test successfully because, the problem had been corrected exactly the way the management wanted it. They were not willing to introduce the change at the wrong time when $500,000 and a new model were at stake. After they introduced the sought after correction they had no reason to admit that the technology they were using has any defect, although they had introduced the change recommended that will serve two purposes.
It will correct the defect if it is there and at the same time, the recommendation that originated from government sources had taken place and that would satisfy the authorities. When looking at a global market from strategic management perspective the carmakers are selling their SUVs around the world and are still making them 40% profit that is unheard of in any industry making SUVs rare cash cows that have the ability to penetrate any market.
The rest of the requirement will not be new to the US auto industry that had been a global player for many years. Conclusion It is possible to say that car manufacturing might be the best business sector to observe while strategic management is at work, because it had been applied according to what the textbooks are suggesting.
The success rate the sector attained over the years that is dampened by the recent recession that forced at least two of them, GM and Chrysler to seek government bailout to avoid bankruptcy was the outcome of a very effective strategic management that had been applied and experimented to fit and to deal with what the macro-environment was requiring. There is abundant evidence that the industry puts the tools that are part of strategic management to good use because of the need it has to come up with new and updated products on a yearly basis.
In order to do that the industry players have to have a good knowledge of the environment they are operating in. To accomplish that there has to be a systematic way of doing things that adheres to certain discipline which is exactly what strategic management is equipping those that are implementing it effectively.
All Business, “What Is Strategic Management”, www. allbusiness. com/management/2975129-1. html, Retrieved on March 28, 2009 Business Week, “Ford vs. Firestone: A Corporate Whodunit”, http://www.csuchico.edu/