International Political Economy

Given your responses to questions 1 and 2, compare and contrast the strategies and implementation (of strategy) of Ford and GM.  In five years, which firm will have stronger financial performance and why?  (10 points)

1. Discuss the key success factors of the automobile industry (see Figure 3.5 on p. 84 and Table 3.2 on p. 84 in the Grant text). Identify three ratios for measuring the key success factors, provide their formula, and explain why they measure key success factors. Evaluate the performance of GM and Ford in 2018, 2019, and 2020 on these key success factors. (10 points)

Some of the key success factors of the automobile industry may differ depending on the sector of the industry that the company functions in. For example, the analysis of demand of what customers want from a luxury car manufacturer will most likely differ from an affordable car manufacturer. Customers who are seeking an affordable car may prioritize affordability and low costs over luxury inputs and the most modern technology in their cars. Overall though, I do believe that the average customer of the automobile industry does want an affordable, high quality, and dependable car. As far as analysis of competition goes, the automotive industry is highly competitive and increasingly difficult to survive in, with no one car company staking claim to more than 20% of the market share in the United States.

2. Recognizing that the automobile industry is undergoing a once-in-a-lifetime transformation, do an environmental analysis (see Figure 3.1, p. 65) to develop an opinion on whether, and how quickly, electric vehicles will replace gas combustion-powered vehicles. (10 points)

The National/international economy-

Technology- Due to these vehicles being electric, technology is a big factor in this transformation. With this change to the automotive industry, companies have to understand their tech suppliers and the process of making these cars, and the software that comes along with it. Also, technological advances are made constantly, so these companies need to keep up with technological updates and everyday changes.

Government & Political Forces– In regards to environmental factors, the policies implemented by the government can influence this transformation in the auto industry. Policies such as carbon taxes and environmental regulations have a huge effect on the automobile industry due to the production of gas combustion-powered vehicles. If these policies get stricter, it will help drive the shift from normal cars to powered vehicles quickly.

The Natural Environment- There has been an increase in concerns about climate change and other environmental dangers that gas combustion-powered vehicles bring. This can affect the automobile industry because consumers might want to make the switch to electric vehicles for a greener alternative. For more information on International Political Economy check on this: https://en.wikipedia.org/wiki/International_political_economy