Sample Swot Analysis Paper on The Ford Motor Company

Introduction

Since its incorporation on June 16, 1903, the Ford Motor Company has always been a market leader in the automotive industry. As of 2017, the company was ranked ninth in the fortune 500 list by Forbs (Biolos, 2017). Nevertheless, since 2015 the company has been recording record sales with their F series of trucks being an instant success with 2017 sales estimated at about 800,000 units (Hanson et al., 2016). According to Leinwand and Mainardi (2016), Ford is expected to increase their market position in the near future a factor that is well explained in the company’s SWOT analysis.

SWOT Analysis

A SWOT analysis is a diagnostic process that is based on an acronym representing the strengths, weaknesses, opportunities, as well as threats that are bound to face a company in achieving its goals.

Ford Motors SWOT Analysis

 

Ford balanced SWOT analysis

  Strengths Weaknesses Opportunities Threats
Finance  

Wide resource capital base due to years of establishment

 

 

 

 

 

 

Lack of efficient capital investment Increased research and development policies in new markets High costs in operations
Customer  

High brand Loyalty

 

 

 

 

 

 

High brand loyalty on competitors’ products Development of new environmentally friendly products that attract high sales Innovation form established brands such as Toyota’s Prius model
Process  

Operations in 30 countries

 

 

 

 

 

 

Lack of exploitation in new markets such as Africa Ford Motoring global brand presence Increased competition
People  

Brand identification

 

 

 

 

 

 

Lack of product awareness in new markets Increased research and development policy Competition

 

Ford Strength

Strong Brand Image

As aforementioned Ford is a market leader in the automotive industry a factor that has allowed the company compete in the global market; consequently increasing their sales portfolio. When launching a product in a new market a recognizable brand plays a significant part in attracting new clientele. According to Nieuwenhuis and Wells (2015), Ford Motors global presence has allowed the company to break consumer loyalty in areas such as Asia where other companies such as Toyota and Honda had a significant competitive advantage. The company’s slogan of ‘Quality is job 1” has also allowed the company compete in these regions as it offers consumers with the guarantee of quality products.

Large consumer base with high product loyalty

Currently, Ford enjoys the benefits of a global enormous customer base’. As indicated by Leinwand and Mainardi (2016), Ford wide range of products commands a significant consumer base throughout the global market. It is this reason that has seen the number of Ford customers in the Asian countries augment in a short time.

Global Supply Chain

Ford is has a number of factory facilities around the world that produce products that meet specific market demands. According to Leinwand and Mainardi (2016) Ford Motor Company currently manufacturing is conducted in 30 countries, which host about 90 plants. This global supply chain produces products that are specific to the market demands a factor that increases Ford’s competitive advantage.

Global HR policy

Ford has an excellent HRM profile that recruits staff members from the countries they operate; consequently, this increases personnel efficiency and the employer-employee relationships.

Weakness

Limited Network of Production Facilities Compared To Competitors

Ford operates in 30 countries around the world: however, in comparison to a competitor such as Toyota, their global influence is limited. Currently, Toyota operates in 50 Counties globally with over 120 plants (Joint venture, licensed, and contract factories) manufacturing products that are far more market-oriented in comparison to Ford products Wells, 2016). For example, Africa is 9considered as a prime market with the rise in urbanization; Toyota understands this phenomenon a factor that has seen them develop four manufacturing plants in South Africa, Nigeria, Kenya, and Zimbabwe (Hanson et al., 2016). In contrast, Ford only has dealerships in these regions. As of the end of 2017 Toyota was set to complete the construction of a manufacturing plant in Morocco in order to tap into the North African market a policy that will see the company increase their sales values in the region (Biolos, 2017). The policy used by Ford does not guarantee increased sales in a region that promises increased revenue.

Opportunity

Global market expansion

Currently, the Ford Motor Company produces a significant number of low mileage as well as pickup trucks. As the global automotive buyer turns to greener vehicle options Ford stands to benefit as they improve in the already existing fuel efficient and low emissions engines. For example, the 2018 C-MAX HYBRID, 2018 FUSION HYBRID SE, 2018 FUSION ENERGI SE, and 2018 FOCUS ELECTRIC are currently gaining significant reviews highlighting interest from different regions in the global market.

Over the last three years, ford has been making noteworthy changes in their Asian market policies a factor that guarantees increased sales. According to Nieuwenhuis and Wells, (2015) India and China are the two countries with large geographical markets in addition to high populations; consequently, making positive regional policies guarantee increased unit sales. A study by (Leinwand and Mainardi (2016) indicated that most of the Indian and Chinese driving populous are interested in owning a four-wheeler vehicle for their family. Ford has a wide portfolio of four-wheeler dedicated to this region such as the Figo Aspire model, the new Fiesta, and Ford Endeavor.

Hybrid vehicle development (low emission vehicle options)

As indicated, the Ford Motor Company has lined up new low emissions products for 2018; however, unlike other automotive manufacturers who are venturing into hybrid and electric engine options Ford has years of experience. According to Biolos (2017), Ford has a unique position in developing new products from the performance profiles of already existing models a factor that guarantees improved quality that improved the company’s competitive advantage.

Increased Investment Capital

According to Wells (2016) Ford have been significantly profitable over the last three years due to increased resources on research. This policy has proved to work and the company ca apply the same formula to other new markets such as Africa. This will see the company increase its global presence and profitability.

Threats

Increased Costs of Raw Material

Over the years, there has been an increase in raw material in particular hard still and roll coil prices. Consequently, this has affected the car sales profit margins in particular ford brands like the Fiesta that attracts mass sales. Decreasing profit margins area a danger in the automotive industry as it is significantly competitive and the 2008 financial meltdown highlighted how an increase in raw materials can be a detrimental shift for car manufacturers who depend on mass sales and not customized limited units.

Intense Competition

The Automotive global market has seen an increase in the number of competitors a factor that threatens brand loyalty. The North American automotive market has favored American brands; nonetheless, this trend has been broken with the increase of European brands such as BMW, VW, and Range Rovers. According to Nieuwenhuis and Wells (2015), the North American market has always been threatened with the presence of Japanese brands such as Honda and Toyota; however, the Introduction of European brands introduce a different dynamic of competition based on the quality of products. A study by Leinwand and  Mainardi (2016), indicate a decrease in total market share by about 20% in 2018 due to the introduction of European Cars in the US.

Increased Costs on New Technology Research and Development

As aforementioned Ford Motors investment on manufacturing, operations, as well as research and development investments are significantly low compared to the company’s competition. This trend is expected to affect the sales of units in new markets. India, China, and the continent of Africa are specific markets that are attracted to particular vehicles. A lack of research and development, as well as distribution or operations infrastructure, guarantees poor sales performance.

Alternative Low Emissions Policies

Granting global warning turning out to be the biggest threat to the environment since the turn of the century; additionally, individual use of automobile vehicle increases the risk of further carbon effect. Nevertheless, cars have remained a primary aspect of the society. Ford, as well as other automotive organizations, have developed low emissions engines to reduce the negative effects of carbon emission; nonetheless, these technologies have a variety of drawbacks. According to Biolos (2017), the electronically powered vehicles are a significant alternative to the combustion engine vehicles; conversely, the range has remained an issue that has drawn people from getting these cars. Additionally, cities such as London and Amsterdam are encouraging other modes of transport such as bicycles, public transport’s as well as sharing mobility a factor that affects care sales in this region.

 

 

 

 

References

Biolos, J. (2017). Strategy That Works: How Winning Companies Close the Strategy-to-Execution Gap. People & Strategy, 40(2), 68-69.

Hanson, D. J., Dowling, P. J., Hitt, M. A., Ireland, R. D., & Hoskinson, R. E. (2016). Strategic management: Competitiveness and globalisation.

Leinwand, P., & Mainardi, C. R. (2016). Strategy that works: How winning companies close the strategy-to-execution gap. Harvard Business Review Press.

Nieuwenhuis, P., & Wells, P. (Eds.). (2015). The global automotive industry. John Wiley & Sons.

Wells, P. E. (2016). The Automotive Industry in an Era of Eco-Austerity. Books.