Ford Motors is currently recognized as one of the most innovative automobile manufacturers. Ford Motor Company was founded in the year 1903, and it has its services in over 62 countries. Its main competitors include General Motor Company, Toyota Motor Corporation, and Honda Motor Company. The company which has more than 200,000 workers worldwide, markets, designs, markets and services SUVs, cars, trucks and Lincoln luxury vehicles. The company which has also ventured into financial services is also looking to venture into emerging markets such as autonomy, mobility, and electrification. In 2017 alone, the company sold over 6,607,000 vehicles at wholesale through its various dealers and distributors worldwide (Mao, 2018). The company relies on retail sales, fleet customers, and commercial fleet commercials, but notably, the company does not depend on a single or a group of customers to the extent that the loss of such a customer will result in significant losses to the company.
A SWOT analysis of the company reveals that the company has used its opportunities and strengths to remain highly profitable. The company’s brand value is currently at $19.771 placing it at position 46 in the Brand Finance report. The company also holds the 4th sector rank in the automotive industry. Another of its strengths is the strong R&D to improve the performance of its vehicles through safety, development of new products, customer satisfaction, and fuel efficiency. Consequentially, the company protects the findings of its R&D through patents. Additionally, Ford has invested heavily in new technologies, for example, in fuel efficiency through techniques such as ECOBOOST (Gallego-Álvarez et al., 2015). The company also enjoys a significantly colossal market share along with a broad product portfolio.
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Opportunities for the automotive giant include expansions, global automotive opportunities, and hybrid electric and fuel cell. The company has currently invested over $2.5 billion in new engine transplants in Guanajuato and Chihuahua. The company is also looking to expand its manufacturing operations in Spain and Valencia which are projected to increase the daily production by 40%. Additionally, the automotive sector is expected to maintain a 6% growth through 2019. Also, the market dynamics are shifting away from conventional fuels to alternatives energy to reduce emissions, a factor that is expected to propel growth in the sector and increase the opportunities for automotive companies like Ford (Mao, 2018).
Nonetheless, the company also faces significant threats including environmental regulations, competition, and the global economy. Currently, many laws are targeting environmental protection which has made its business process a bit tougher to accomplish. Secondly, the global economy continues to fluctuate, hence the need to watch prices to avoid making significant losses due to such dynamics (Luo & Lee, 2015). Also, the company continues to experience intense competition from companies such as GM, Honda, Toyota, Volkswagen, ad Suzuki Motor among others (Cavazos, Patterson, & Rutherford, 2018). The company also has its share of weaknesses including product fails and slow progress in emerging markets. The company’s brand image suffered greatly in 2016 when the company had to recall approximately 271,000 vehicle due to insufficient brake master cylinders, and again in 2015 due to failed Takata airbags. Also, besides China, Ford shows slow progress in emerging markets as compared to the competition.
The company has continued to remain profitable because of various competitive advantages that it has over its customers. First, the company has invested heavily in Ford pickups that are more profitable as compared to cars and SUVs. As of 2015, it was estimated that the company makes an average of 10,000 for every F-150. Notably, Ford sold 896,764 units in 2017, hence profits in the range of $ 9 billion. Such gains can then be used in the design and manufacture of other vehicles at subsidized prices. Another competitive advantage is that the company mostly drives its sales in the United States which is the second largest automotive market in the world. Although Ford sold 2566,000 vehicles in the states in 2017, its market share dropped to 14.8% from 14.9% in 2015 with its leading line in the country being the F-series (Mao, 2018). Pickups are also becoming more of a status symbol in the United Status with most people perceiving them as luxury vehicles because of their style, safety, comfort, and usefulness. With the association with such trucks which are a symbolic vehicle in the United States, the company is bound to continue enjoying significant profits.
Additionally, the Ford Company enjoys a significant amount of brand reputation and customer loyalty. Of the three American companies in the United States, the Ford Company is the oldest. Its founder, Henry Ford, revolutionized the automotive industry with the mass production of famous brands such as the Model T and the Model A. Reports by both Interbrand and Forbes list the company as the most valuable automotive company ahead of Chrysler and General Motors. An analysis conducted between 2015 and 2017 targeting new vehicle registrations discovered that Ford has the second largest loyal customer base in the United States (Mao, 2018). Nonetheless, the company has potential room for improvement as it lags behind rival brands such as Honda, Mercedes-Benz, Toyota, and BMW.
Thirdly, Ford has a strong presence in China which is the world’s largest automotive market. The company makes its second largest sales in China after the United States with 18.4% of its sales. Noteworthy, 282 million vehicles were sold in China in 2017 alone with 1215 of them being from Ford (Luo & Lee, 2015). The company has also managed to improve its position in China through partnerships through joint ventures with companies such as Changan Ford Automobile Corporation, Changan Ford Mazda Engine Company, and JMC. Notably, Ford has fostered its growth in foreign markets through such partnerships. These ventures have earned commendable growth in China which is greater as compared to other companies which are still struggling to penetrate the market.
References
Cavazos, D., Patterson, K., & Rutherford, M. (2018). Political market performance and corporate political activity: examining the US automobile industry. International Journal of Law and Management, (just-accepted), 00-00.
Gallego-Álvarez, I., Segura, L., & Martínez-Ferrero, J. (2015). Carbon emission reduction: the impact on the financial and operational performance of international companies. Journal of Cleaner Production, 103, 149-159.
Luo, S. H., & Lee, G. G. (2015). Applying failure mode and effects analysis for successful knowledge management. Total Quality Management & Business Excellence, 26(1-2), 62-75.
Mao, C. (2018). Research on competitive advantages of supply chain based on its time competition: Case analysis of the automobile industry.
