Future Trends Report

“Ford”

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 Table of Content

Introduction.............................................................................................................1
Opportunities and challenges analysis....................................................................1
SWOT Analysis.......................................................................................................2
Challenges...............................................................................................................3
Recommendations...................................................................................................4
New Trend for Digital Agility.................................................................................4
Digital Agility Model..............................................................................................5
Hyper awareness...............................................................................................5
Informed decision making................................................................................6
Fast execution...................................................................................................6
The Role of Digital Collaboration Tools.................................................................7
Digital Leadership...................................................................................................8
Digital Value Creator..............................................................................................9
Business Domain Knowledge..........................................................................9
Transformational leadership...........................................................................10
Understanding Disruptive Technology..........................................................10
Conclusion.............................................................................................................11
References.............................................................................................................11

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 Future Trends Report “Ford”

Introduction

Ford, one of the oldest and most recognizable car manufacturers in the world, was
established in 1903. By creating a mass market for vehicles, Henry Ford, the
company's founder, is widely credited with establishing the modern automobile
industry (Britannica, 2019). The Ford Escort was initially standardized by Ford for
international distribution. Ford Motor Company's primary business operations include
designing, manufacturing, marketing, and repairing passenger cars, trucks, SUVs, and
commercial vehicles. The corporation employs over 200,000 people globally across
63 manufacturing plants (Ford Motor Company, 2020).The following research begins
by summarizing the primary opportunities and challenges that leaders in digital
transformation face using a SWOT analysis. The next step is a detailed examination
of Ford's current strategy for developing the ability to recognize changes, form wise
decisions, and respond quickly in highly disruptive situations. To promote an
innovation culture and get ready for the digital age, technology and human aspects are
evaluated. The methods required to form teams and networks are also addressed in
complex and networked digital organizations. Future proposals for Ford's digital
transformation initiatives will benefit from this case study.

Opportunities and challenges analysis

SWOT Analysis

The SWOT analysis in Ford's transformation programme assists the organization in

developing profitable and intelligent business strategy.
Strengths Weaknesses
 Regional presence in a number of  Inability to match the production
cities capacity Inability to match sales
 Brand recognition volume of the top manufacturers
 Strong customer connections  Bad reputation among American
 Capable of making more investments automakers
 Access to vendors with low cost raw  Reliance on the North American and

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 material European car markets whereas it is
 Locational advantage about to rise in developing countries
 Cheaper costs  Hard time selling cars to people with
 Easier accessibility greater degrees of mobility because
 Expertise in car manufacture, of its reputation as a working- or
marketing, and R&D middle-class brand
 Features a wide range of dealers  Primarily reliant on pickup truck
sales
 Not popular among youngsters
 Unable to get more funds from
investors

Opportunities Threats
 Ability to introduce cutting-edge  Developing regulatory environment
automotive technologies  Unforeseen events like Covid-19
 Self-driving cars  Restricted capacity of the business
 Increased public awareness of new body to comply with the legislation
technology  Lack of skilled labour
 Ford's hybrid and electric vehicles  Emergence of competitors
that don't use diesel, such as the  Increase in inflation-related
Fusion and C-Max production expenses
 Expanding automobile markets in  Goods and services are not
developing nations ecologically friendly
 Offer short-term rentals  Lack of cultural intelligence
 App based services like Uber
 E-commerce expansion

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Challenges

Modern technical innovations present unique obstacles to economic research when

previous, pre-digital era theoretical concepts become invalid. In 2014, the company
had high expectations of becoming a personal mobility corporation, and CEO Mark
Fields gave innovation first priority (Muller, 2015). Hundreds of miles from the Ford
headquarters, Mr. Fields chose to build brand-new, digitally connected cars and
cutting-edge mobility solutions for a new market sector called Ford Smart Mobility
(Fields, 2016) . Despite the more than 40% decline in Ford's stock price, the distinct
Smart Mobility spin-off failed to achieve digital transformation. In the first quarter,
Ford's Smart Mobility segment lost $102 million (Gaudet, 2021). In a January
presentation to analysts, the company stated that its industry lost more than $300
million last year. Ford will do this if it decides to quit inefficient industries like small
and medium-sized automobile manufacture in North America and instead stay in
South America or Europe (Gardner, 2022). Due to the digital transformation, a
platform-networking business model has emerged that significantly differs from the
conventional linear business model (Zhao et al., 2019). The main driving force behind
this strategy was the changing cost structure in the digital economy. A new class of
economic organizations that possessed crucial organizational hierarchical structures as
well as market-platform traits emerged as a result of these developments (Zaremba,
2021). Certain economic rules are no longer applicable in the digital era due to
advancements in technology. The theoretical underpinnings of the growth and
operation patterns of industrial, capital-intensive, linear business organizations are at
the heart of the entire theoretical foundation of economics and management, which
was developed in the previous century as a result of the previous technological
revolution (Qureshi, 2020). The problem of managing economic entities in the event
of crises is crucial in the context of the economy's digitization. The operations of both
pre-digital industrial firms are on the verge of collapse due to problems (Kochetkov,
2020).

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Recommendations

1. Ford may invest money in pay-per-click, social media, and display advertising.
2. Public relations is a profitable strategy for enhancing Ford's brand image. The use
of data analytics and digital media by stakeholders, consumers, and staff members
might aid in public relations.
3. Data-driven solutions help to enhance cross-departmental connections. As a result,
operations become more efficient and free of bottlenecks. This is due to increased
data availability and communication.
4. Linking the digital and analogue worlds establish a setting that functions
effectively across channels.
5. In order to speed up manufacturing and delivery and to the greatest extent feasible,
Ford must concentrate on enhancing client experiences.

New Trend for Digital Agility

Ford uses artificial intelligence to automate car quality control. It also uses neural
networks to regulate its supply chain (Roose, 2017). The AI all-wheel drive system in
the Ford Edge was added by the company in 2019. It can easily switch from two-
wheel drive to four-wheel drive (Reyes, 2018). Automobiles with machine learning
capabilities help to deliver the extra features, personal care, and product
improvements to meet customer needs (Schroer, 2018). To increase fuel efficiency,
certain AI technologies communicate directly with drivers. In 2016, Ford and AgroAI
formed a joint venture. Thanks to Ford's investment, Agro AI has been able to rapidly
extend its self-driving car technology. Ford invested more than $1 billion in Argo AI,
increasing its financial commitment to technology (Biggs, 2017). Ford employs Argo
AI technology in its cars despite being independent, and its advancements will help
other automakers as well. The partnership is also investigating the potential impact of
self-driving vehicles on the distribution and transportation sectors. Walmart already
uses Ford vehicles outfitted with Argo AI for its delivery service. The pace of AI
innovation in the company is brisk. Companies such as Ford that are proactive with
investments, research, and product development will be the ones that enable their
continued success. Ford expects that self-driving technology will improve to the point
that it will be able to move from door to door completely autonomously in any
circumstance (Nast, 2017).

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 Passanger
Supply Chain
Experience

Design and Driver

Manufacturing Assitance

Application
Quality s of AI in Automotive
Assurance Automotive Insurance
industry

Figure 1 Application of AI in automotive industry

Digital Agility Model

The three things that a company needs in order to be agile are hyperawareness,
informed decision making, and fast execution (Neubauer, Tarling and Wade, 2017).

Hyper awareness

Companies with high levels of awareness are always aware of what is going on
around them, particularly when changes reveal brand-new opportunities or threats
(Stonehouse and Konina, 2020). Ford is well-versed in current technologies and
competitor product lines. Ford is anticipated to surpass its rivals in market share.
Ford wants to construct one-third of all of its vehicles worldwide, therefore it seeks to
expand its production facilities in developing nations with cheap production costs and
rising automotive demand (Nag, Banerjee and Chatterjee, 2007). As it continues to
disrupt the global automotive industry, it is advancing the development and scaling of
ground-breaking electric, connected vehicles while using its recognizable nameplates
to improve operational performance and fully use technological and industrial
capabilities (Trainer, 2022).

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Informed decision making

Informed decision making refers to an organization's capacity to pick the best course
of action in a given situation (Kaluza et al., 2016). A comprehensive data analytics
solution is needed to support human judgement in order for businesses like Ford excel
at making well-informed judgement. Ford is extremely lucrative as a result of the
success of its truck and SUV models (Stobierski, 2019). The company wants to make
changes to improve decision-making and shift the company's attention to the future.

Fast execution

Fast execution enables the company to quickly implement decisions using available
resources and routinely assess options and goal progress (Blenko, Mankins and
Rogers, 2010). Ford (2022) is making an effort to make a name for itself in the most
recent technical field. Its main objective is to benefit the rapidly expanding auto
sector. It changes its focus to digital solutions and electrification by operating more
rapidly and creatively across its several business segments. It employs a range of
techniques to accomplish business goals.

Figure 2 Digital Agility Model

The Role of Digital Collaboration Tools

In order to gain a competitive edge in the future, Ford must go through a fundamental
transformation that involves a conceptual shift that will speed up digitization
throughout the whole value chain, from connected supplier networks to mobility
solutions (Trevor, 2017). To start, teams with an agile digital emphasis should be
established to find gaps in present practices and develop systemic solutions. It will be

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challenging in the short term to invest in these new technologies at a time when the
primary source of revenue is the development of ever-better automobiles (Julian,
Noble and Anslow, 2019). Original Equipment Manufacturers (OEMs) encounter a
variety of challenges in this fresh, dynamic market environment. Because of
continually changing customer expectations, the automotive industry is becoming
more and more burdened. Agile techniques are more iterative and enable smaller
batch delivery compared to conventional waterfall-based approaches. The major
objectives are to consistently provide customers with value and to react quicker to
changing circumstances(Dinnie Muslihat, 2018). Therefore, it shouldn't be surprising
that Agile is being used more and more in the auto industry in the new era of vehicle
manufacture, including Ford. As cars become a complex integration of AI,
mechanical, software, and cutting-edge design, collaboration across functional areas is
a useful strategy for managing complexity (Krigsman, 2017). Bringing together
experts from other sectors may also lead to innovation and better utilization of
features that have already been developed, assuring further competitive advantages
(Paunov, 2017). The majority of organizations are concentrating on company
mergers, which has made agile transformation possible. Ford can succeed in the sector
by putting fast digital transformation into practise. In terms of ongoing feedback,
responsibility sharing, and consistent stakeholder management, it will promote
transparency (Nadkarni and Prügl, 2020). It will lead to better trust and
communication, which will result in more efficient teamwork. Rapid releases are
prioritized by agile teams in order to shorten network outage, maximize uptime, and
enhance client experience (Afshar, 2022). Rapid software development will be
guaranteed given the turbulent market conditions and client demands. Ford will be
able to concentrate on shortening the manufacturing cycle and enabling a quicker time
to market with this strategy(Dignan, 2017). Ford will be able to lower overall output
due to the swift adoption of digital transformation and ongoing developments. By
implementing an Agile digital transformation method, Ford will be able to develop
products based on market demands by involving customers more often throughout the
project's life cycle. Use iterative product development and a quicker feedback loop to
improve product quality. Cross-collaboration teams may be used to manage
complexity, reduce handoffs, develop teamwork, and enhance overall operational
capabilities to minimize time to market.

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 1. Evaluation
of process and
current
structure of
company

2. Suggestion
for
5. Evaluation
improvement
and monitoring
and process
optimization
Agile methodology for
digital transformation

4. Application
3.Application
construction
design with
and
clients
implementation

Figure 3 Agile methodology for digital transformation

Digital Leadership

The relationship between the consumer and the car is fast shifting from a physical to a
digital state, placing the automotive industry at a crossroads. The Fourth industrial
revolution is supported by modern technologies like big data, cloud computing,
analytics, networked devices, and industry 4.0 (Ritter, 2015). Ford needs to take in
account that digitization has the potential to be the next frontier for margin
improvements, novel business strategies, and profit pools, particularly when lean
lacks cultural intelligence reaches maturity and starts to generate declining returns.

Digital Value Creator

Leaders that thrive in building and maintaining digital DNA, demonstrating strong
leadership, and establishing the proper culture from the top down are known as digital
value creators (Hevizi, 2022).

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 Figure 4 Three Dimensions of Digital Value Creators

Business Domain Knowledge

Leaders in any field are frequently subject matter experts. Someone with extensive
business domain expertise will be able to keep companies like Ford functioning
smoothly and developing sustainability in a world that is changing faster than ever
(Lukang, 2022). Because of their business expertise, they are continuously examining
the difficulties, opportunities, and accomplishments both within and outside of their
own organization. Digital value creators differ from other executives with business
domain knowledge in their ability to discover opportunities for value creation
throughout the organization with a focus on digitalization. When a threat from a
competitor appears, they determine how to use digital to control the problem. When it
comes to creating new possibilities, they look to digital in particular to develop new
markets, new services, and, eventually, money. In today's fully digital world, the
ability to develop a holistic business domain perspective that takes into account
present and future business models, value propositions, organizational capabilities,
business processes, operational effectiveness, and end users is required to leverage
new revenue streams for Ford.

Transformational leadership

The most difficult to measure but most important component of creating and
maintaining digital DNA and achieving quick outcomes is transformational leadership
(Cherry, 2022). Ford has assisted innumerable CEOs in developing successful
business strategies, and it have seen that those who understand that real change must

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start at the cultural foundations of a company are the most successful in this process.
The most crucial element of a successful transition is culture, yet it is also the most
challenging to change. While persistent changes may appear to be unique on the
surface, they have five essential characteristics:
1. They strengthen the organization's larger role in society.
2. They help the organization better manage the complexity of its environment
3. They encourage employee creativity, they strengthen employee emotional
commitment
4. They develop leaders and a leadership structure to lead the organization into the
future.

Understanding Disruptive Technology

One of the sectors most impacted by emerging technology is manufacturing. Entire

processes that had been honed over decades have now undergone a complete
transformation as a result of the enormous increase in data volumes and computing
power, the emergence of deeper analytic and business intelligence capabilities, new
human-machine interaction applications like augmented reality, and the transfer of
digital knowledge to the physical world in applications like advanced robotics and 3D
printing (Larson, 2016). It's possible that many workers in the industrial sector lack
the advanced levels of skill that these new technologies need. A digital value creator
in Ford will be knowledgeable about the complex new technology ecosystems that are
developing all the time and will also be skilled and knowledgeable about emerging
technologies. Most of these Digital Value Creators have a technical DNA at their
core, which enables them to comprehend both the disruptive technologies being
utilized in new industrial processes and the leading networks of like-minded engineers
that develop and push the boundaries. They possess the technical know-how to
identify a technology that will change the game for Ford.

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Conclusion

The digital revolution of the economy poses issues for economic research and
management in particular due to considerable changes in social and economic
situations. Economic technological improvements have caused changes in business
practices. Ford deserves credit for being transparent about its significant expenditures
in shuttle services, driverless vehicles, ride-sharing, intelligent roadways, and multi-
mode mobility. Automobile manufacturers face a difficult capital market when
compared to technology partners and competitors, especially as the current product
cycle nears its end. As we work to construct the world of tomorrow, it is critical that
Ford bases all of their business choices on what will make the future a better place to
live rather than just what is technologically viable or commercially successful.

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