Analysis of Existing strategies of Ford Vietnam

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TABLE OF CONTENTS

EXECUTIVE SUMMARY 2
1. FORD VIETNAM INTRODUCTION 3
2. SITUATION, PROBLEM AND ISSUE 4
2.1 PESTEL Analysis 4
2.2 Porter Five Forces 8
2.3 Analysis of Existing strategies of Ford Vietnam 10
3. SWOT ANALYSIS 13
4. KEY SUCCESS FACTOR 14
5. SOLUTION STRATEGY AND SUGGESTION 15
6. POSIBLE ADVISOR AND RECOMMENDATION 16
6.1 Development of market penetration strategy 16
6.2 Strategy of product development 19
7. CONCLUSION 25
REFERENCES 26
Appendix 1. 28

EXECUTIVE SUMMARY

This report analyzes and evaluates current situation, industry and existing strategies of Ford Motor Company in Vietnamese automobile market. Besides, it also recommends strategies for existing cars and a new car (EcoSport) to get higher market share, maximize profits and create a sustainable development in next two years, 2015 and 2016.
In order to analyze exactly and effectively, Ford is analyzed by PESTEL, Five Forces, Key Success Factor and SWOT methods. Ford is recommended based on Ansoff’s matrix, Porter’s Generic Strategies and Marketing Mix.
Result of this analysis revealed all strengths and weaknesses of existing strategies as well as opportunities and threats in Vietnamese automobile industry.
After analyzing PESTEL, Five Forces and SWOT of Ford in Vietnam; there are two recommendations in 2015 and 2016 for Ford that are set up as follows:
- Recommendation for existing strategies for existing cars
- Recommendation for Ford EcoSport, a new SUVs will be launched in 2015
The report also has limitation. For examples, it is not easy hard to find out some information about Ford in Vietnam.

 

1. FORD VIETNAM INTRODUCTION

Ford established in Vietnam in 1995 and it is a joint venture between Song Cong Diesel Company with 25% and Ford Motor Company with 75%. The Ford assembly plant is located in Hai Duong province with ISO 14001, ISO 9001 and QS 9000. In 11/1997, Ford began businesses with plant capacity 14,000 cars/units per year. The total investment was USD 102 million with total numbers of workforce was 580 employees. Ford is contributing to Vietnamese society and community much such as: charity programs, environmental protection, education activities, etc. The firm developed rapidly, from 7th place in 1997 and achieved second place in 2004 with 14% of market share in Vietnamese automobile market. However, the company is now running into problems with its strategies, especially marketing strategies, because it only got market share of 6.8% in 2012. Ford’s existing model in Vietnam is Transit, Ranger, Escape, Mondeo, Everest, Focus and Fiesta.
Nowadays, Ford is facing many problems and issues in Vietnam because there are many competitors in this market. The rivals of Ford in Vietnam are Toyota, KIA, Chevrolet, SUBARU, PMC, JEEP, CITROEN, CHRYSLER, DODGE Brands. Thus, the company needs to develop different business strategies, marketing strategy and human resources in order to develop and compete against its rivals in Vietnamese marke

2. SITUATION, PROBLEM AND ISSUE
In order to find out problems of Ford Vietnam, it is necessary to apply a PESTEL and Five Force Model for analyzing the automobile industry in Vietnam.
2.1 PESTEL Analysis
Political factor: This factor is very important for Ford Motor Company in Vietnam. Viet Nam is Socialist Republic with one-party state. Notably, Vietnamese political environment is under communist system. So, politics is very stable; the risk of military conflicts is very low. Thus, Ford can feel secure to do business in Vietnam.
Moreover, there are tax incentives to encourage manufacturers and businesses. Nowadays, the Viet Nam’s legal system is improving following to international practice appropriately, control the management closely, protect the labor’s rights and aim a sustainable development. Viet Nam also facilitates administrative formalities and customs formalities in order to create favorable conditions for businesses. These things will support Ford and its competitors to penetrate and dominate Vietnam’s automobile industry easier and faster.
Economic factor: Ford Company needs to know Vietnam economy in short-term and long-term exactly before building marketing strategies in Viet Nam.
• The rate of economic growth
• The rate of inflation:
• Interest rate
• Quality of infrastructure
• The labor resource
The rate of economic growth: According to General Statistics Office of Vietnam, between 2009 and 2012, the rate of economic growth have trend of restoration. In 2012, the rate of economic growth was 5.05% in the fourth quarter. The rate increased to 6.07% in the fourth quarter in 2014. The below chart will reveal the rate of GDP growth in Viet Nam from 2012 to 2014. This rate in Vietnam fluctuated year by year. A low rate is not good for Ford’s business in Vietnam.

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