Price and product differentiation is extremely important in the rivalrous vehicle industry. The number two U.S. automaker, Ford Motor Co., announced their most recent plan to build one-third more vehicles globally by 2017. Their blueprint includes adding more plants in developing markets, advancing into a more unified manufacturing strategy, and running its factories for longer hours. This year alone, Ford aims to build around 2 million more cars and trucks. This opportunity of furthering global expansion with 14 new factories will help maximize capacity and thus cut costs and boost outputs. The automaker hopes to maintain a capacity level equal to the market’s demand which would allow the company to respond quicker to changing consumer tastes.
Ford Motor is one example of a company that falls under the category of cost leadership strategy in Porter’s Generic Strategies. This fifth largest automaker in the world uses the cost leadership strategy to gain competitive advantage in the market. With exploited scales of production and advanced techniques like its new 3D prototype printer, Ford is able to increase its manufacturing efficiency by 98% and lower prices to attract more consumers.