Ford v. Honda Ford\'s SWOT Analysis: Strengths

Ford v. Honda

Ford's SWOT Analysis:

Strengths

Weaknesses

Opportunities

Threats

Brand recognition

Low quality scores (LeBeau, 2011)

Chinese market (Forbes, 2011)

Competitors

Distribution

Management retirements (Muller, 2012)

Hybrids/fuel efficiency

Weak economic conditions

New Products

Pensions/legacy costs

US recovery?

Rising costs

Renewed consumer interest

Distributor issues?

Other BRICS

High gas prices

Mulally is a good leader

No global mfg platform

Smaller vehicles

US competitors are backed by gov't

In order for Ford to address these issues, the following strategic concepts should be implemented. The company needs to improve its innovation pipeline, but it also needs to improve its production practices so that quality is restored. The customers want Ford to succeed, but poor quality reviews are going to hurt the company's turnaround. High gas prices and rising costs elsewhere may wipe out the benefits of a U.S. recovery, so Ford needs to shift its focus to emerging market growth. That said, if it can adapt to new technologies like hybrids, there is room for success. The company's brand, however, does remain strong, especially for market-leading products like the F-150.

Mulally is a good leader for Ford, but in order to ensure that these strategies are implemented effectively, he needs to replace the retiring talent with people just as good. More money needs to go to innovation and less to pensions and other legacy costs, something that will challenge the company's financial management and its union relations. These strategies are broad-based, so market share, revenue and profit are all good measures. New product introductions is another one that should be utilized as well, since that is part of the company's recover strategy.

The SWOT for Honda is as follows:

Strengths

Weaknesses

Opportunities

Threats

Brand recognition

Mature/stagnant?

High growth BRICs, especially China (Yan & Durfee, 2012)

Competition

High quality

Japanese supply chain (earthquakes, tsunamis)

New models (Yan & Durfee, 2012)

Global growth is weak (Forbes, 2011)

Good product lineup

Locked into traditional management style

Toyota has faltered

Rising costs (Forbes, 2011)

Efficient production

Low sales

Luxury cars (Acura) in emerging markets (Yan & Durfee, 2012)

Weak home market

Good global distribution

Stagnant equity growth

US recovery?

Tsunamis and earthquakes disrupt supply chain

For Honda to succeed it needs to focus on growth markets, since the U.S. market is uncertain and the Japanese market is weak. The company needs to diversify its production as well, given how much damage the earthquake/tsunami did to its supply chain. Despite reduced sales and stagnant equity growth, Honda is in a better position than many of its suppliers, something that will help it to recover, if it puts money into improving the product lineup and entering new markets. There is even room for luxury vehicle growth in the emerging markets, something that could finance new product development. These strategies should be measured again with market share, revenue and profit, but also with increased supplier diversity counts, market growth and new product introductions.