What Is Ford's Competitive Advantage?

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There are numerous strategic analysis tools that can be utilized when scanning an organization’s internal and external environment. Such tools include, but are not limited to the VRIO framework, PESTEL and stakeholder analysis as well as Porter’s Five Forces and Competitive Advantage models. PESTEL analysis is used to analyze the economic, technological, environmental, social, political, and legal factors affecting an organization or a project. In this case, examining the economic, technological, and social factors that affected Ford could have prevented the loss of competitive advantage. From the information presented by the case, the political, legal, and environmental factors are not applicable.
Ford could have been forewarned if it recognized
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Such an intangible resource gave Ford a competitive advantage; the resource is valuable and rare. Another intangible resource is Ford’s innovative process of utilizing interchangeable parts. Ford engineers designed and built the first prototype of most new machine tools, then sent the designs out to vendors for replication (Shih, 2013, A). Such innovation was valuable and rare as the rest of the automobile producers of the industry failed to adopt the …show more content…
According to the model, competitive advantage can be gained through either cost leadership or differentiation; each one narrowed down to a focus. One way Ford was able to maintain a cost advantage was by introducing the moving assembly line to the automobile industry. The finely tuned system yielded declining labor content and costs, enabling Ford to sell its car for the masses at a steadily declining costs (Shih, 2013, A). Increasing the productivity of the workers by having the assembly line come to them significantly reduced the length of the work day. Moreover, Ford was able to maintain a cost advantage by aiming to make some of every part so that they wouldn’t be caught in any market emergency or crippled by some outside manufacturer being unable to fill their orders (Shih, 2013, A). The combination of the two aided in the firm’s ability in sustaining overall cost leadership in the

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