The purpose of this analysis is to intimately review the Strengths, Weaknesses, Opportunities, and Threats of Ford Motor Company. In addition this paper addresses external factors impacting decisions, possible future scenarios, and recommendations for changes in culture, leadership, and/or structure at Ford Motor Company. Overall this paper is a comprehensive SWOT analysis of Ford Motor Company as well as some other factors. Description of Strengths: Ford Motor Company was created back in 1903 and was one of the first companies to create automobiles.
The fact that this is true and Ford Motor Company still exists today is one of its strongest strengths. Ford Motor Company is known worldwide as one of the premier makers of automobiles. In fact, Interbrand rated it as the number 45 Global Brand in the world in 2012. Ford was estimated with a brand value of $7,958 million (Interbrand, 2012). In addition to being one of the oldest automobile companies, Ford Motor Company produces a wide variety of cars in all different classes. This allows them to be competitive globally to a wide range of customers.
Third, Ford Motor Company has developed exclusive features such as Sync and MyFord systems to help them provide consumers with the technological features that they have come to expect in automobiles. Sync was developed in conjunction with Microsoft and has been a success with Ford Motor Company customers. Fourth, Ford Motor Company is dedicated to creating environmentally friendly or “green” automobiles. This can be seen not only by Ford Motor Company’s large line-up of hybrid and electric vehicles, but also I there continued effort to make their gasoline engines more fuel efficient while also maintaining there fun to drive aspect.
Ford recently began producing their Ecoboost line of engines which has incorporated fuel efficient turbo engines in most their vehicles. Fifth, Ford Motor Company has a gigantic global footprint. They have over 160,000 employees worldwide. Sixth, Ford Motor Company vehicles are available on all continents and are well known in all of these continents. This is due to their excellent visibility and marketing. Similarly, on these continents Ford Motor Company has a strong network of distributors and dealerships. Finally, Ford Motor Company participates in many motorsport events such as Formula One, Nascar, and Rally Events.
This helps Ford Motor Company maintain a presence that is relevant to their number one goal, selling automobiles. As you can see from the seven strengths described above that Ford Motor Company is a very strong company that has been around for more than 100 years and will be around for another 100 years to come. Description of Weaknesses: Ford Motor Company like any other global company is not immune to weaknesses. While some of these weaknesses are directly within their control, many of them are not. Lets begin by discussing two weaknesses that are within their control.
First, Ford has been plagued by some large recalls. The most recent being on their newly redesigned Ford Escape, it was suffering form risks of engines overheating resulting in engine fires. (media. ford. com, 2012). Recalls can not only be costly in the expense that is required to fix the vehicles involved, but it also can have a huge effect on the reputation of the organization. This blow to the organization can sometime be permanent and almost detrimental depending on the severity of the recall. Another weakness of Ford Motor Company is the declining operating efficiency and weak returns.
Since the beginning of Ford Motor Company there has been unions to ensure that laborers were treated fairly. But over time these Unions have become almost unnecessary, but most importantly very costly. These Unions hamper Ford Motor Company’s ability to remain profitable and can be the blame to why Ford was not so successful a couple years ago. Recent updates in the Union negotiations has helped right the ship a little, but it is still a huge cost liability. Now lets consider some of the weaknesses that our out of Ford Motor Company’s control. First, as we all know the Global Recession and European Crisis have hit Ford Motor Company hard.
In Europe, which used to be Ford’s most profitable segment for quite some time, they are returning loses. Secondly, Ford Motor Company has not had the same success in tapping some of the developing markets as some of its competitors. Ford needs to develop a better strategy to have better success in these countries. Description of Opportunities: Ford Motor Company as a global organization must continue to focus on new opportunities in order to grow their business effectively. First, they must focus on the fact that the automotive sector is growing worldwide.
With the increase in purchasing power of previously smaller markets that now have the potential to become their biggest market in the future Ford Motor Company must focus on these markets. A prime example of this is China. Not long ago the idea of owning an automobile for the average Chinese citizen was a dream. But with the recent and most importantly quick change of the economic climate in China this dream has not become a reality. This affords automobile companies such as Ford Motor Company the opportunity to capitalize on this and make China one of their largest markets. Auto sales in China, including those of cars and buses, may accelerate this year and surpass 20 million units for the first time, spurred by a rebound in economic growth and urbanization. Wholesale deliveries may gain 7 percent this year to 20. 65 million units, led by demand for passenger vehicles, the state- backed China Association of Automobile Manufacturers said in a statement in Beijing today. SUV sales will remain the fastest- growing segment, while commercial vehicles will post a slight gain, according to the projection” (Bloomberg, 2013)
Another opportunity for Ford Motor Company is to expand consumer base in existing markets. Ford went through a rough patch in the early 2000’s due primarily quality issues in which it lost a great deal of market share. Ford Motor Company must focus on the opportunity to win these customers back now that it has resolved many of its quality issues. Similarly, another opportunity for Ford Motor Company is to continue to expand it hybrid line. Consumers are increasingly interested in the going green initiative and Ford Motor Company must offer these consumer options to satisfy their needs. Description of Threats:
Many different types of threats could potentially plague Ford Motor Company. These threats are mainly out of the control of Ford Motor Company. The first threat is one that has always been there. It is the threat from major competitors both nationally and internationally. This includes the firms that make up the other two spots in the Big Three, Chrysler and GM. Also international companies such as Toyota, Honda, Nissan, Kia, Hyundai, and Volkswagen. The second threat is that of the increasing fuel costs causing people to seek other forms of transportation such as public transportation or even bicycles.
Another threat is that of the risk of production problems. This could be due to union strikes or labor issues. Production issues can cause catastrophic issues to organizations because they hamper their ability to produce their products. Fourth, is the potential of economic slowdown in the US or Eurozone. A slow down causes a critical blow to companies because no matter how good their product is if people do not have the finances to purchase them they are going to suffer lagging sales. From the potential threats compiled above you can see how they mostly are out of the control of Ford Motor Company. Description of External Factors Impacting Decisions: There are two major external factors impacting decisions at Ford Motor Company. The three factors are Consumer Demand and Increase Fuel Cost. “In 1996 consumers were demanding better vehicles for lower prices and Ford Motor Company’s Profits were low. Fords was not meeting these consumer demands. A Rubber and Plastic News article stated that this puts the company under a lot of pressure to cut costs (9,24). Ford Motor Company’s vehicles were not in demand and sales were low.
Ford Motor Company’s profits were affected by this consumer demand” (External Factors Affecting Ford Motor Company, 2012). It is obvious to see how this demand by consumers impacted Ford Motor Company. The effect of increased fuel cost on decisions at Ford Motor Company is almost obvious. The increase in fuel cost has resulted in Ford going back to the drawing board and focusing on producing automobiles that get the best gas mileage by industry standards. This increased fuel cost also spurred the birth of Ford’s new Ecoboost engines.
These engines use turbo chargers to develop power more efficiently resulting in increased fuel economy while not performance. Ford has addressed the external factors that impact decisions and will continue to do so in the future. Description of Possible Future Scenarios: I believe the ideal possible future scenario for Ford Motor Company would be for the company to return to being the premier automobile manufacture in the United States and the World. It once held this position and I think it would be amazing if this could occur again.
Many things would need to happen for this to occur, but Ford Motor Company is definitely headed in the right path. Even if this does not occur, Ford will be a stronger and better automotive company than it has ever been and its customers will receive quality vehicles at a fair price. Recommendations for Changes in Culture, Leadership, and/or Structure: I think that the current culture in place at Ford is the correct one for the organization. The culture was very shaken up when Alan Mulally was brought in to replace William Ford Jr. as President and Chief Executive Officer of Ford Motor Company.
This was a change that was instrumental to Ford’s turn around form the brink of bankruptcy to returning to profitability. Additionally, it will be interesting to see what occurs when Alan Mulally steps aside in the next coming year or so to let Mark Fields take the reins of Ford Motor Company. I am going to predict that this transition is done near seamlessly with a minimum amount of hiccups. Summary/Conclusion: In summary this paper was an in depth analysis of the Strengths, Weaknesses, Opportunities, and Threats of Ford Motor Company.
In addition this paper discussed external factors impacting decisions, possible future scenarios, and recommendations for changes in culture, leadership, and/or structure at Ford Motor Company. While doing this paper it is apparent how far Ford Motor Company has come from when it was on the brink of bankruptcy. Although they are made some amazing progress they are nowhere near where they need to be. Ford Motor Company must continue to work to become the premier automotive company in the United States and the World.