Case Study of FORD MOTOR Company

Submitted To:
Submitted By: Musa Jamil BB17051
Abu Sufyan BB17061
Atif Zaman BB17063
Semester 6TH
Section A Morning
Department of Business Administration
University of the Punjab
Gujranwala Campus
 DEDICATION

To all those who have supported, encourage, challenged, and inspired us. And specially to
our Beloved Parents, honorable teachers and friends for all their guidance love and attention
which has made it possible for us to make it up to this point and as well as the internship
supervisors who bestowed us with the courage, the commitment and the awareness to follow
the best possible route, by their unmatched style and by the best possible training.
 ACKNOWLEGMENT:
Thanks to ALLAH Almighty for giving us such a beautiful opportunity and enabling us to complete
our report without his order nothing is possible. Then to our parents who supported me financially
and encouraged me morally and thanks to our friends who assisted me in this effort.
We present salute to individuals who helped us in shaping this report and all my teachers who
taught us throughout our academic career. we wouldn't be in this position to finish this report
without the help and support of our academics. We must first express our gratitude towards our
advisor some teachers. Their motivation, support, attention to detail, hard work has set an example.
Lastly, We provide my regards and blessings to any or all of those that supported us in the slightest
degree throughout the completion of this project, we could not have imagined having a better
advisor. The preparation of this report was a massive undertaking but the Vision Technology’s highly
qualified and experienced staff helped me and provided me all information, advice and suggestions
which was necessary for this report.
Contents
Introduction...........................................................................................................................................2
Overview of the FORD’s History:...........................................................................................................4
Objective of FORD.................................................................................................................................4
Ford Motor Company PESTEL/PESTLE Analysis.....................................................................................5
Political Factors Affecting Ford Motor Company’s Business..................................................................5
Economic Factors Important to Ford.....................................................................................................6
Social/Sociocultural Factors Influencing Ford’s Environment................................................................6
Technological Factors in Ford’s Business...............................................................................................6
Ecological/Environmental Factors.........................................................................................................7
Legal Factors..........................................................................................................................................7
Ford Motor Company’s PESTEL/PESTLE Analysis – Recommendations.................................................8
Company Vision and Mission.................................................................................................................8
Ford Motor Company’s Mission Statement...........................................................................................9
Ford Motor Company’s Vision Statement.............................................................................................9
Summary & Recommendations – Ford’s Corporate Mission and Corporate Vision.............................10
Product Line........................................................................................................................................10
Ford’s global product lineup........................................................................................................10
Lincoln MKC.................................................................................................................................11
Ford Transit...................................................................................................................................12
Ford Mustang................................................................................................................................12
Ford Motor Company SWOT Analysis..................................................................................................13
Ford Motor Company’s Strengths (Internal Strategic Factors)................................................13
Ford’s Weaknesses (Internal Strategic Factors).........................................................................13
Opportunities for Ford (External Strategic Factors)..................................................................14
Threats Facing Ford (External Strategic Factors)......................................................................14
Ford Motor Company’s SWOT Analysis – Recommendations..............................................................15
Introduction
Ford Motor Company, incorporated on July 9, 1919, is a global automotive and mobility
company. The Company's business includes designing, manufacturing, marketing, and
servicing a line of Ford cars, trucks, and sport utility vehicles (SUVs), as well as Lincoln
luxury vehicles. The Company operates in four segments: Automotive, Financial Services,
Ford Smart Mobility LLC, and Central Treasury Operations. Ford Smart Mobility LLC and
Central Treasury Operations are combined in All Other. The Company's vehicle brands are
Ford and Lincoln. The Company sells its dealerships for retail sale, it also sells vehicles to its
dealerships for sale to fleet customers, including commercial fleet customers, daily rental car
companies, and governments. The Company also sells parts and accessories, primarily to its
dealerships (which in turn sell these products to retail customers) and to authorized parts
distributors (which in turn primarily sell these products to retailers). The Company also offers
extended service contracts.
The Company's Automotive segment primarily includes the sale of Ford and Lincoln brand
vehicles, service parts, and accessories across the world, together with the associated costs to
develop, manufacture, distribute, and service the vehicles, parts and accessories. The
Company's Automotive segment includes various regional business units, such as North
America, South America, Europe, Middle East and Africa, and Asia Pacific. The Central
Treasury Operations segment is primarily engaged in decision making for investments, risk
management activities, and providing financing for the Automotive segment. Interest income
(excluding interest earned on its extended service contract portfolio that is included in its
Automotive segment), interest expense, gains and losses on cash equivalents and marketable
securities, and foreign exchange derivatives associated with intercompany lending are
included in the results of Central Treasury Operations. Ford Smart Mobility LLC is a
subsidiary formed to design, build, grow, and invest in emerging mobility services.
The Company's Financial Services segment primarily includes its vehicle-related financing
and leasing activities at Ford Motor Credit Company LLC (Ford Credit). The Company's
subsidiary, Ford Credit, offers a range of automotive financing products to and through
automotive dealers throughout the world. Ford Credit's business consists of financing its
vehicles and supporting its dealers. Ford Credit has a portfolio of finance receivables and
operating leases, which it classifies into two portfolios: consumer and non-consumer. Finance
receivables and operating leases in the consumer portfolio include products offered to
individuals and businesses that finance the acquisition of its vehicles from dealers for
personal and commercial use. Retail financing includes retail installment sale contracts for
new and used vehicles and direct financing leases for new vehicles to retail and commercial
customers, including leasing companies, government entities, daily rental companies, and
fleet customers. Finance receivables in the non-consumer portfolio include products offered
to automotive dealers.
Ford Credit makes wholesale loans to dealers to finance the purchase of vehicle inventory,
such as floorplan financing, as well as loans to dealers to finance working capital and
improvements to dealership facilities, finance the purchase of dealership real estate, and
finance other dealer vehicle programs. Ford Credit also purchases receivables generated by
the Company and its subsidiaries, primarily related to the sale of parts and accessories to
dealers, Ford-related loans, and certain used vehicles from daily rental fleet companies. Ford
Credit does business in the United States and Canada through business centers. Ford Credit's
European operations are managed through the United Kingdom-based subsidiary, FCE Bank
plc (FCE). The Company routinely sponsors special retail and lease incentives to dealers'
customers choosing to finance or lease its vehicles from Ford Credit.
The Company competes with Fiat Chrysler Automobiles, General Motors Company, Honda
Motor Company, Hyundai-Kia Automotive Group, PSA Peugeot Citroen, Renault-Nissan
B.V., Suzuki Motor Corporation, Toyota Motor Corporation and Volkswagen AG Group.

Executive Summary:
During Ford’s inception in 1903 they had to manufacture all components required for
assembling a motor vehicle, which meant investing in massive infrastructure development
and was therefore less focused on distribution efficiency and ultimate customer satisfaction.
As the Ford Company’s legacy grew other supplier entered the market which assisted and
pioneered Ford to become more efficient and effective in meeting growing demand. Ford’s
current management style evolved, but lacked innovative perspective to harness new
technologies, which have led to various obstacles within their current supply chain, i.e.
excess suppliers and complex networks, cost-driven selection criteria by the purchasing
department, etc.
Real-time communication within and outside company boundaries, i.e. virtual integration is
key to ensure future sustainability for the Ford Company; globally. Ford’s executive
management needs to evolve from project management (to streamline internal processes) into
programme and portfolio management, focusing on value-add throughout the entire business
model. Not neglecting the intended management functions of monitoring and control
throughout the process.
Recommendations are (but not limited to) having fewer partners, implementing service-level
agreements which focuses on technology and quality leadership within the automobile
industry. The longer the supply chain and complex the networks the longer the lead times,
costs, risks inventory and overall increased variability. Information sharing with suppliers to
reduce time to market, therefore value-add between buyer and seller. And finally real-time
communication with suppliers on needs, market trends and sophisticated data exchange will
assist in streamlining Ford’s operations and ensure future global advantage and compatibility
within the automobile industry.

Overview of the FORD’s History:

Since 1903 the Ford company has put the world on wheels. From the moving assembly line and the
$5 workday, to soy foam seats and aluminium truck bodies. Ford has a long heritage of progress
learn more about the automobiles, innovations and manufacturing that have made the blue oval
known around the world.

Objective of FORD
Ford's corporate mission aims to benefit target customers through mobility.
The company's products are designed to address mobility needs and issues in the
transportation sector. On the other hand, Ford's corporate vision focuses on achieving top
performance in the industry, considering competition and other variables.

Ford Motor Company PESTEL/PESTLE Analysis

A Ford Edge plug-in hydrogen hybrid. Ford Motor Company’s PESTEL/PESTLE analysis
indicates major opportunities for global growth based on various external factors. (Photo:
Public Domain)
Ford Motor Company’s strategies reflect the challenges the firm faces, as identified in this
PESTEL/PESTLE analysis. A PESTEL/PESTLE analysis identifies the most significant
opportunities and threats, based on the external factors in the company’s remote or macro-
environment. Ford’s environment refers to the global automotive industry. Each external
factor presents an opportunity or threat that the business must address through strategic
action. As one of the top five players in the global automotive market, Ford ensures that it
addresses the issues in its PESTEL/PESTLE analysis. These issues are a direct determinant of
the organizational development trajectory of Ford.

Ford  Motor Company’s PESTEL/PESTLE analysis shows that the firm has significant
potential for improvement, based on opportunities in the  remote or macro-environment of the
business.

Ford Motor Company’s Organizational Structure Analysis

A 2011 Ford Edge. The features of Ford Motor Company’s organizational structure support
the firm’s global operations. (Photo: Public Domain)
Ford Motor Company’s organizational structure is based on business needs in
varying market conditions around the world. A firm’s organizational structure defines
the configuration of organizational components and their system of interaction. In
Ford’s case, the organizational structure directly relates to the global automotive
industry condition. The international scope of Ford’s operations also determines the
key organizational structure components needed to withstand competition and
market risks. In this regard, Ford’s position as the second biggest U.S.-based
automobile manufacturer is an indication of its organizational structure’s
effectiveness in supporting the firm for continuing business growth and high
performance.

Ford Motor Company’s organizational structure is divided according to regional

markets. Other characteristics of this corporate structure are based on the global
scope and nature of Ford’s business.

Features of Ford Motor Company’s Organizational Structure

Ford’s organizational structure is based on the need to control operations according
to regional market conditions. Markets belonging to the same region have similarities
 used as basis for regional structuring. The following are the main features of Ford
Motor Company’s organizational structure:

1. Corporate hierarchy
2. Regional geographic divisions
3. Global functional groups

Corporate Hierarchy. Ford has a traditional corporate hierarchy in its organizational

structure. For example, Executive Vice Presidents report to CEO Mark Fields. Middle
managers report to these executive VPs. This characteristic of Ford’s organizational
structure supports traditional business management approaches that aim for
effective top-down control.

Regional Geographic Divisions. Ford has large geographic divisions in its

organizational structure. Typically, global companies divide their operations into
several regions per continent or subcontinent. However, Ford’s organizational
structure is divided into only three regional geographic divisions that cover all its
markets around the world. A potential effect of this feature of the organizational
structure is the relative ease of integration of business strategies. Ford’s main
regional geographic divisions are (a) The Americas, (b) Europe, Middle East, and
Africa, and (c) Asia Pacific. An executive VP heads each division.

Global Functional Groups. Ford Motor Company’s organizational structure also

has functional groups, each of which represents a specific business function. A Vice
President heads each of these groups. The main functional groups in Ford’s
organizational structure are as follows:

 Global Manufacturing and Labor Affairs

 Global Marketing, Sales and Service
 Human Resources and Corporate Services
 Quality and New Model Launch
 Global Product Development
 Government and Community Relations
 Global Purchasing
 Communications
 Finance
 Legal
 Accounting

Ford Motor Company’s Organizational Structure Advantages & Disadvantages

The corporate hierarchy in Ford’s organizational structure has the advantage of
ensuring global direction and control. Also, the global functional groups maintain
such hierarchy through functional support, such as HR management to maintain
Ford’s workforce. On the other hand, the large regional geographic divisions have
the advantage of easily implementing integrated policies and strategies throughout
Ford’s organizational structure. However, these large regional geographic divisions
also simplify the company’s approach to its markets. In this simplification, Ford’s
organizational structure has the disadvantage or risk of disregarding the significant
unique conditions or needs of national markets.
 Political Factors Affecting Ford Motor Company’s Business
Ford’s business must address the political aspect as an external influence. Governmental
impact on firms’ remote or macro-environment is considered in this component of the
PESTEL/PESTLE analysis. The following are the political factors significantly affecting
Ford:

1. Governmental support for technological innovation (opportunity)

2. Increasing international trade agreements (opportunity)
3. Increasing governmental effort for infrastructure in developing countries
(opportunity)

Governments are increasingly supporting technological innovation to enhance economic

conditions. This situation provides opportunity for Ford to use governmental incentives for
innovation, environmentally friendly products and sustainability. Ford also has the
opportunity to expand its operations based on trade agreements, which make it easier for
companies to enter foreign markets. In addition, high-growth developing countries are
improving their infrastructure, including transportation infrastructure. This remote/macro-
environment condition contributes to the increasing demand for vehicles in these countries,
thereby giving Ford Motor Company the opportunity to grow internationally. This component
of the PESTEL/PESTLE analysis shows that the political external factors create significant
opportunities for Ford’s growth and expansion.

Economic Factors Important to Ford

Ford must always keep an eye on changing economic conditions. This component of the
PESTEL/PESTLE analysis identifies the influence of the economy on the firm’s remote or
macro-environment. The following are the economic external factors significant to Ford:

1. Growth of U.S. economy (opportunity)

2. High growth rate of developing markets (opportunity)
3. Strengthening U.S. dollar (threat)

Ford has the opportunity to grow based on the slow but notable growth of the U.S. economy,
which is the company’s biggest market. Ford also has the opportunity to grow in high-
potential developing countries, where the company still has limited presence. However, the
strengthening U.S. dollar is an external factor that reduces profit margins and the
attractiveness of Ford’s products, considering that many of the firm’s raw materials and
automotive parts are produced in the United States. Such remote/macro-environment
condition indicates that Ford must improve business efficiencies to maximize the
opportunities in foreign markets identified in this component of the PESTEL/PESTLE
analysis.

Social/Sociocultural Factors Influencing Ford’s Environment

Ford Motor Company’s remote or macro-environment is subject to the influence of social
conditions. The impact of sociocultural trends is considered in this component of the
PESTEL/PESTLE analysis. The following are the social external factors most important to
Ford:
1. Increasing demand for hybrid and electric automobiles (opportunity)
2. Moderate attitude about customer service (opportunity)
3. Increasing wealth gap (opportunity & threat)

Ford can grow by providing products that address the increasing demand for hybrid and
electric automobiles. Ford also has the opportunity to improve its services, especially
aftersales services to attract more customers. However the increasing wealth gap is a
remote/macro-economic environment condition that threatens Ford’s Lincoln automobiles,
which are luxury products with high prices. Based on this component of the
PESTEL/PESTLE analysis, Ford’s intensive growth strategies need to emphasize more on
product innovation to satisfy changing customer preferences and address the sociocultural
external factors in its business.

Technological Factors in Ford’s Business

Technologies enable Ford to develop its potential and compete in the remote/macro-
environment. This component of the PESTEL/PESTLE analysis deals with the technological
changes and conditions that affect firms. The most significant technological external factors
in Ford’s business are as follows:

1. Rising use of mobile computing (opportunity)

2. Increasing use of online fulfillment services (opportunity)
3. Limited network of alternative fuel stations (threat)

The rising use of mobile computing is an external factor that creates opportunities for Ford
Motor Company to grow through mobile service support and mobile marketing. Also, the
firm can improve its performance through enhanced online fulfillment services. For example,
Ford parts can be delivered to customers through these fulfillment services. On the other
hand, the company’s potential growth in providing alternative-fuel vehicles may suffer
because of the limited alternative fuel stations. Thus, based on the technological component
of the PESTEL/PESTLE analysis, Ford needs to focus on service improvement and
technological enhancement to ensure competitiveness despite challenges in its remote or
macro-environment.

Ecological/Environmental Factors
Ecological concerns partly determine the conditions of Ford’s remote or macro-environment.
Issues regarding the natural environment are considered in this component of the
PESTEL/PESTLE analysis. The most significant ecological external factors in Ford’s
business are as follows:

1. Climate change (opportunity)

2. Low-carbon trend (opportunity)
3. Declining oil reserves (opportunity)

Climate change is an external factor that creates opportunities for Ford to grow through
products that help in environmental conservation. The same effort could take advantage of
the low-carbon trend. Also, Ford can offer new products that use alternative fuels or
electricity to address the impact of the declining oil reserves on the remote or macro-
environment of auto firms. Thus, based on the ecological component of the
 PESTEL/PESTLE analysis, Ford must emphasize product innovation to improve its business
performance.

Legal Factors
Ford’s business must satisfy legal requirements. The effects of regulations on the remote or
macro-environment are identified in this component of the PESTEL/PESTLE analysis. The
following are the legal external factors notable in Ford’s business:

1. Environmental protection regulation (opportunity)

2. Increasing safety regulations (opportunity)
3. Increasing intellectual property laws worldwide (opportunity)

Ford can improve its business sustainability to address the effect of environmental protection
regulation. Also, Ford can improve product design to take the opportunity based on safety
regulations. Moreover, increasing intellectual property laws are improving the remote/macro-
environment of Ford by creating more protection for their intellectual properties and rights.
This component of the PESTEL/PESTLE analysis shows that Ford can grow based on
changes in the external regulatory landscape.

Ford Motor Company’s PESTEL/PESTLE Analysis –

Recommendations
Ford has major opportunities for growth and improvement, as shown in this
PESTEL/PESTLE analysis. Ford can enhance its product innovation to address various
opportunities linked to climate change, demand for hybrid and electric automobiles, and
related external factors. Ford’s international remote/macro-environment also offers
opportunities for growth through expansion, especially in high-growth developing
economies. Thus, Ford must implement strategies to globally expand based on these
opportunities.
 Company Vision and Mission
A Ford Focus ST-R at the 2011 Washington, D.C. Auto Show. Ford Motor Company’s
corporate mission statement and corporate vision statement depict the company’s drive for
leadership and improved performance in the global automotive industry. (Photo: Public
Domain) Ford Motor Company’s mission statement and vision statement focus on product
effectiveness and business leadership in the automotive industry. The company’s strategic
position as a major player in the global automobile market is linked to the fulfillment of the
corporate mission and corporate vision. Ford’s corporate mission aims to benefit target
customers through mobility. The company’s products are designed to address mobility needs
and issues in the transportation sector. On the other hand, Ford’s corporate vision focuses on
achieving top performance in the industry, considering competition and other variables. The
company competes against Toyota, General Motors, Tesla, Volkswagen, Hyundai/Kia,
Nissan, Honda, and other manufacturers. This market condition imposes strong competitive
rivalry, as shown in the Porter’s Five Forces Analysis of Ford Motor Company. The
company’s corporate vision and mission statements influence strategic management decisions
for enhancing business performance despite the challenges present in the automotive
industry. Ford’s corporate mission statement and corporate vision statement guide the
enterprise’s organizational development. Policies and strategies for various business areas
interpret how these statements apply to automotive operational effectiveness. For
example, Ford’s operations management and productivity measures apply strategic
management interpretations of the vision statement and mission statement, specific to
decision areas of operations, such as product design and human resource management.

Ford Motor Company’s Mission Statement

Ford’s corporate mission is “to make people’s lives better by making mobility accessible and
affordable.” This mission statement focuses on moving people, which is a basic function
expected in automobiles and the transportation sector. Such emphasis on mobility indicates
the purpose of Ford’s business in society. As one of the biggest players in the international
market, the company aims to make people’s transportation more effective. The following are
the main components of Ford’s corporate mission statement:

1. Make people’s lives better

2. Make mobility accessible
3. Make mobility affordable

The mission statement’s first component (make people’s lives better) is a factor in Ford
Motor Company’s value proposition to its target customers. For example, the company’s
goals are directed toward improving people’s lives. To make such improvement specific,
Ford’s corporate mission statement includes the other two components. The company’s
strategic plans address accessibility and affordability of mobility to make people’s lives
better. Thus, accessibility and affordability are variables in assessing Ford’s fulfillment of its
value proposition. With this corporate mission statement, the automotive business sees its
role as a contributor to the improvement of transportation to enhance quality of life.
Considering strategic management objectives, the affordability component of the corporate
mission statement depends on selling prices and production costs, which are linked to Ford’s
generic strategy for competitive advantage and intensive growth strategies.
 Ford Motor Company’s Vision Statement
Ford’s corporate vision is “to become the world’s most trusted company, designing smart
vehicles for a smart world.” This vision statement reflects the multinational company’s
strategic goal of becoming a leader in the automotive industry. Ford’s focus on smart vehicles
is pertinent to current market conditions and customers’ preferences. The company aims to
maximize its profitability and relevance to the market, where more efficient technologies are
preferred. The following are the main components of Ford’s corporate vision statement:

1. Worldwide scale
2. Most trusted company
3. Designing smart vehicles for a smart world

The vision statement’s first component (worldwide scale) is a specification of Ford’s target
market, which is the global market for automobiles. On the other hand, through the second
component, the corporate vision pertains to corporate or brand image, which influences the
attractiveness and profitability of the company’s automobiles. For example, customers’
confidence in and preference for Ford electric cars depend on how these vehicles’ brand
value is perceived. In relation, the corporate vision statement indicates that the corporation is
focused on smart vehicles. This focus implies a strategic response to the industry’s electric
car trend, as discussed in the PESTEL/PESTLE analysis of Ford Motor Company. Thus, the
corporate vision statement ensures that the company is abreast of the latest technologies
suited to current market trends.

Summary & Recommendations – Ford’s Corporate Mission and

Corporate Vision
Corporate Mission Statement. Ford Motor Company’s corporate mission statement is brief
and a general description of the business. For example, the corporate mission focuses on
making accessible and affordable mobility, inclusive of automobiles. The general term,
“mobility,” is indicative of Ford’s future product development, which could include mobility
technologies other than automobiles. The company could develop personal flying vehicles,
and new mobility products for transporting small parcels. Overall, the corporate mission
statement is descriptive enough to guide strategic management in terms of what Ford’s
business does and should do, and aligns with the corporate vision statement. A
recommendation is to improve the corporate mission by including information about the
company’s target markets, customers, mobility technologies, and business philosophy and
values as an automotive enterprise. It is notable that the corporate mission statement’s focus
on improving people’s lives relates to Ford Motor Company’s corporate social responsibility
strategy and stakeholder management, in terms of business contributions to societal
improvement.

Corporate Vision Statement. Ford Motor Company’s vision statement is concise, future-
oriented, and inspirational, while describing the business as a developer of smart vehicles.
The vision statement’s specification of smart vehicles complements the corporate mission
statement by providing a more detailed picture of what the company does. Also, Ford’s
corporate vision is challenging and abstract enough to drive the business organization toward
high performance. To achieve this corporate vision’s aim of becoming the world’s most
trusted company, it is essential to strengthen the enterprise through enhancement or creation
of competitive advantages, such as the ones shown in the SWOT analysis of Ford Motor
Company. Also, achieving the corporate vision statement requires strategic initiatives for
making the automotive brand attractive to target customers. Thus, a recommendation based
on the vision statement is to develop Ford’s marketing mix or 4Ps in a way that strengthens
customers’ trust in the company. Moreover, it is recommended that the company include
more information about the strategic direction of the automotive business, to make the
corporate vision statement more effective in guiding management and human resources
toward the desired business goals.

Product Line

Ford’s global product lineup

In 2014 and 2015, Ford Motor Company (F) launched 40 new or upgraded vehicle variants
globally. This was done under the One Ford plan discussed in the previous article of this
series.

The company plans to continue making its vehicle range global in the coming years as well.
These vehicle categories include small, medium, and large vehicles. This move has allowed
the company to save market-specific vehicle development costs.
As noted in the previous article, Ford is consolidating its vehicle platforms to produce a
higher number of vehicles. This move is also helping the company to minimize its fixed
costs. At the same time, the company’s product lineup is becoming well known globally.
Let’s look at some of Ford’s key vehicle models.

Lincoln MKC

Ford launched its Lincoln MKC sports utility vehicle model in 2013. The vehicle began
selling in 2014. This model has a 240 horsepower engine with four-cylinder EcoBoost
technology.

Ford Transit

Ford Transit is a light commercial vehicle produced by Ford. The vehicle has been a part of
Ford’s product portfolio since 1965. Since then, the company has made several upgrades in
the vehicle. It launched its refreshed version globally in 2014.
Ford Mustang

Ford Mustang is a powerful luxury car model. Ford began the production of this model in
1964. Just like any other model, Ford is continuously making changes to this car model to
improve it further. This model comes in four engine variants, with horsepowers ranging from
300 to 526. With this car, Ford also offers customization options to its customers.

Despite the importance of these vehicle models in Ford’s global product lineup, the
company’s real strength lies in its F-series pickup trucks. The success of the F-series gives
Ford an edge over other automakers (XLY), including Toyota (TM), General Motors (GM),
and Fiat Chrysler Automobiles (FCAU).

In recent years, there has been a positive change in the US auto demand pattern. This could
prove to be an opportunity for Ford, which we’ll discuss in the next article of this series.
 Ford Motor Company SWOT Analysis
A 2015 Ford EcoSport (BK) Trend. Ford Motor Company’s SWOT analysis highlights the
need for innovation and expansion to grow the business. (Photo: Public Domain)
Ford Motor Company’s success in maintaining its position as the fifth largest automobile
manufacturer in the world is partly based on its ability to address the concerns raised in this
SWOT analysis. A SWOT analysis identifies the strengths that a firm can use to overcome its
weaknesses, exploit opportunities, and address threats. Ford’s SWOT analysis shows the
main issues that the company must deal with to improve its performance. The firm’s aim is to
become the leader in the global automotive industry. To achieve this goal, Ford’s strategic
formulation process must include the issues in its SWOT analysis. This SWOT analysis of
Ford Motor Company illustrates that the firm is capable of addressing the internal and
external factors in its business. Focus on innovation and expansion can support the
company’s continued growth and performance improvement.

Ford Motor Company’s Strengths (Internal Strategic Factors)

Ford’s strengths are associated with its brand, global operations, and research and
development. This part of the SWOT analysis presents the organizational characteristics
(internal strategic factors) that support business effectiveness. Ford Motor Company’s main
strengths are as follows:

1. Strong brand image

2. Global supply chain
3. Effective innovation processes

As one of the top players in the global automotive industry, Ford has a strong brand image
that contributes to product attractiveness and customer loyalty. Also, Ford has a global supply
chain that supports its operations around the world. Another strength is the company’s
innovation processes that are now more effective following the launch of the One Ford
plan in 2008. In this part of the SWOT analysis of Ford, evolving strengths support the
company’s growth.

Ford’s Weaknesses (Internal Strategic Factors)

Ford’s weaknesses are based on the company’s limitations compared to competitors. This
part of the SWOT analysis shows the organizational constraints or inadequacies, which are
internal strategic factors that reduce business potential. Ford’s major weaknesses are as
follows:

1. Limited global scope of production network

2. Higher costs compared to competitors
3. Slow innovation processes

One of Ford Motor Company’s weaknesses is the limitation of its network of production
facilities, especially when compared to Toyota’s expansive global network. Ford also closed
down some of its production facilities in Europe in recent years, further worsening this
weakness. In addition, compared to competitors like Toyota, Ford’s costs and prices are
relatively higher, and its innovation processes are relatively slower to respond to new or
 emerging trends even though the company has increased its innovation effectiveness. Thus,
this part of Ford’s SWOT analysis indicates that the company is relatively weak compared to
other top players, especially Toyota.

Opportunities for Ford (External Strategic Factors)

Ford’s opportunities are linked to growth and expansion. In this part of the SWOT analysis,
the focus is on market or industry characteristics (external strategic factors) that support
business growth. The following are Ford’s main opportunities:

1. Global expansion through market penetration

2. Growth through product development
3. Cost reduction through strategic supply chain management

Ford Motor Company has the opportunity to grow and expand through market penetration
(e.g. more dealerships and improved marketing) and product development (e.g. innovation to
introduce new products to satisfy environmental concerns). Ford also has the opportunity to
improve its financial standing by expanding its supply chain to achieve better economies of
scale and reduce production costs. In this part of the SWOT analysis, Ford has opportunities
for growth through operational expansion and innovation.

Threats Facing Ford (External Strategic Factors)

The threats against Ford are based on competition and global oil prices. This part of the
SWOT analysis presents the external strategic factors that could limit or reduce business
performance. The following are the threats against Ford:

1. Aggressive competitive rivalry

2. New entry of high-tech firms
3. Fluctuating oil prices

Ford experiences the threat of competitors like General Motors and Toyota, which engage in
aggressive marketing and innovation. There is also the threat of technology firms like Google
and Apple in their efforts to make driverless cars that could compete against Ford’s products.
Moreover, oil price instability threatens the sales performance of Ford products, the majority
of which have internal combustion engines. Thus, this part of the SWOT analysis shows that
Ford must innovate to maintain competitive advantage.

Ford Motor Company’s SWOT Analysis – Recommendations

The main issues highlighted in this SWOT analysis of Ford are limitations in speed of
innovation and scope of its production network, as well as competition with existing firms
and new entrants. Ford needs to improve its research and development investments and
increase its innovation speed to address aggressive competition and the entry of high-tech
firms in the industry. Also, Ford needs to expand its production network to increase
economies of scale, which can reduce costs and prices to make Ford automobiles more
attractive