Ford Motor Company Herein Referred to as SWOT
- Length: 6 pages
- Sources: 4
- Subject: Transportation
- Type: SWOT
- Paper: #18642056
Excerpt from SWOT :
Ford Motor Company (herein referred to as Ford) has grown from a somewhat obscure automaker to one of the world's most recognized motor vehicle brands. Founded in the year 1919 by Henry Ford, the company's main business remains the production of trucks and cars. However, through some of its subsidiaries, the company also concerns itself with motor vehicle financing.
The Ford Motor Company: A Brief Overview of its Vision, Mission and Primary Stakeholders
Ford's mission according to Lewis et al. (2006) is outlined as:
We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We anticipate consumer need and deliver outstanding products and services that improve people's lives.
I am convinced that the statement above successfully captures the company's purpose. In so doing, it also succeeds in outlining the firm's overall goals going forward. On the other hand, the company's vision according to Lewis et al. (2006) is given as "to become the world's leading consumer company for automotive products and services." In this case, the automaker's vision is well written and in addition to effectively highlighting where Ford is headed, it is also well designed to serve as a source of inspiration for the company's employees.
Some of the Ford's primary stakeholders include its employees, stockholders, suppliers and customers. Creditors too can be considered important stakeholders of Ford. It is important to note that those I consider Ford's stakeholders include the various parties who can be affected by the company's actions or whose actions can affect the firm in one way or the other. The firm's employees include all those individuals engaged by Ford to perform a specific duty or task. For their services, the company pays such individuals salaries or wages. On the other hand, Ford's stockholders are all those individuals owning the company's stock or shares. Suppliers include the entities supplying Ford with all the parts and items it needs to assemble its products. Customers in this case are those who purchase the company's products (i.e. motor vehicles) and/or its services (motor vehicle financing). Lastly, creditors include all those who lend to the company so that it can meet its various goals and objectives i.e. In terms of production, quality or wealth maximization for shareholders.
The Impact of the Five Forces of Competition on Ford
Porter's five forces framework in the opinion of Henry (2008) remain "a tool of analysis to assess the attractiveness of an industry based on the strengths of five competitive forces." An examination of these five forces according to the author enables a given firm to come up with an assessment of its ability to effectively compete in the marketplace. In this section, I highlight the impact of these five forces of competition on the Ford Motor Company.
According to Henry (2008), this has got to do with the likelihood of new firms gaining entry into a certain industry in which case they could effectively impact negatively on the profit level or the bottom line of incumbent entities. In the case of Ford, it is important to note that significant entry barriers exist in the Auto Manufacturers industry. Here, the main entry barriers include but are not limited to the influence motor vehicle brand names have on sales as well as significant startup costs. Further, accessing dealership space can be viewed as yet another entry barrier as new entrants seek to gain access to the market. With that in mind, it can be noted that it is unlikely that new competitors will gain entry into the market going forward. Thus Ford's profitability as well as market share cannot be said to be under any immediate threat from new entrants. On the other hand, it can be noted in passing that protectionist measures including but not limited to subsidies as well as tariffs for entities regarded indigenous may hinder or frustrate Ford's entry into developing markets.
Buyer Bargaining Power
In the opinion of Henry (2008), it is possible for clients to impact on a given industry as amongst other things, they possess the ability to demand for goods at a lower price. Further, buyers also have the ability to purchase goods and seek services from a variety of sellers. In our case, it can be noted that when it comes to automobiles, the bargaining power of retail buyers is taken to be relatively limited. Thus in retail circumstances, buyer power is significantly curtailed. However, it is important to note that a significant portion of Ford's sales emanate from fleet sales. Such sales are made up of purchases by corporate bodies as well as state governments and non-governmental organizations. Thus in the case of Ford, buyer power is essentially brought out in terms of a specific buyer's contribution to the company's overall sales. Thus in this case, corporate bodies as well as state governments and non-governmental organizations are in a better bargaining position that retail buyers.
Suppliers Bargaining Power
In some instances, the bargaining power of suppliers emanates from their ability to significantly impact on the operations of market participants by either increasing the prices of goods and services or lowering the quality of the same (Henry, 2008). In the Auto Manufacturers industry in which Ford is a major player, supplier power is in one way or the other considered a substantial threat mainly because of the existence of few substitutes. Further, most of the raw materials as well as parts suppliers supply to motor vehicle manufacturers like Ford are considered important inputs for such manufacturers. Hence viewed from this angle, the bargaining power of suppliers of motor vehicle parts (especially specialist components) is considered to be rather high. Given that most of Ford's parts and components are differentiated from those of other motor vehicle manufacturers, switching costs could also end up being rather high.
Threat of Substitute Products
In this case, competition does not emanate from new entrants but rather from those whose products have the ability of satisfying needs which are more or less similar. When it comes to Auto Manufacturers, public transport is seen as the closest substitute posing a significant level of threat. This is more so the case given the dwindling supply of oil as well as increasing prices of the same. Further, air travel remains the most cost effective transport method when it comes to long distance travel. In my opinion, Ford's long-term viability in this case will be determined by its ability to develop fuel efficient models.
This remains one of the main determinants of both an industry's profitability as well as competitive state. In basic terms, the Auto Manufacturers industry is regarded as highly competitive. Some of the main competitors of Ford include but are not in any way limited to Chrysler, General Motors and Toyota. In can be noted that in this market, the main competitors are relatively few in number. This explains the intense competition existing in the industry. However, the ability of a company like Ford to remain relevant in such a competitive environment is largely hinged on how well its models are differentiated from those of other automakers in terms of performance, durability and fuel consumption.
Ford's SWOT Analysis
In the opinion of Dyck and Neubert (2008), "SWOT analysis examines an organization's internal strengths and weaknesses in light of external opportunities and threats." In this section, I seek to come up with a SWOT analysis of Ford.
1. Apart from possessing a rich history, Ford remains a hugely popular automobile brand.
2. Ford is among the largest automobile entities globally.
3. The entity has an enviable global presence.
4. The company has a respected research and development unit and it continues to be one of the industry's heaviest investors in the same.
1. The company experienced a dip in profitability in the year 2011 in comparison to the year 2010.
2. Ford lacks deep market penetration in some crucial markets including but not limited to India and China.
3. The automaker has not been able to compete effectively with a number of manufacturers most specifically from Japan and Europe.
1. There is an existing need for fuel efficient motor vehicle models in the market.
2. There is huge potential in emerging economies including China and India.
3. The global market is recovering from the recent downturn in economic activity.
1. It is not yet clear how long the recovery of the global economy will take. Thus there is no telling exactly when consumer power will be fully restored.
2. Soaring prices of gasoline
3. Huge competition exists in the Auto Manufacturers industry. Ford faces significant competition from cheaper models of Toyota and Nissan.
4. It is possible that Ford might encounter some protectionist measures as it seeks to explore other markets.
Recommendations Based on SWOT
So as to capitalize on its strengths as well as opportunities, Ford could seek to use its strong R&D unit to develop fuel efficient models. The automaker should also…