Ford SWOT Analysis [Update 2022] ❤️

Ford SWOT Analysis 2022

Ford SWOT Analysis: Ford Motor Company’s ability to maintain its position of being the 5th largest automaker globally is in part because of its ability to tackle the issues highlighted during the SWOT analysis. 

A SWOT analysis pinpoints the strengths a company can leverage for overcoming its shortcomings, making use of opportunities, and dealing with threats. 

Ford’s SWOT analysis highlights the most important issues the firm must tackle to boost its performance. Ford’s goal is to establish itself as the leading company in the automotive industry globally. 

Ford SWOT Analysis 2021

To accomplish this Ford’s strategic formulating procedure must incorporate the concerns within its SWOT assessment.

A SWOT study for Ford Motor Company illustrates that the company can tackle the external and internal factors in its operation. 

The focus on expansion and innovation can help the company to continue its expansion and improvement in performance.

Background of Ford

Ford Motor Company, is an American automobile company that was created in 1903 by Henry Ford and 11 associate investors 1903. 

The company produces passenger cars as well as tractors, trucks, and other vehicles along with items and components for cars with its headquarters located in Dearborn, Michigan. Ford’s SWOT report will assist us in understanding the present workings of the company.

Henry Ford designed his first experimental vehicle in 1896 at a workshop in Detroit close to his home. 

The first Ford automobile was produced in the Mack Avenue plant in July 1903 following the formation 1903 of the Ford Motor Company. Ford Motor Company.

Key Facts
Name Ford Motor Company
Founded June 16, 1903
Logo Ford logo
Industries served Automotive and Financial Services
Geographic areas served Worldwide (62 countries)
Headquarters Dearborn, Michigan, U.S.
Current CEO James P. Hackett
Revenue (US$) 156.776 billion (2017) 3.3% increase over 151.800 billion (2016)
Profit (US$) 7.628 billion (2017) 66% increase over 4.596 billion (2016)
Employees 202,000 (2018)
Main Competitors Fiat Chrysler Automobiles, General Motors Company, Honda Motor Company, Hyundai-Kia Automotive Group, PSA Peugeot Citroën, Renault-Nissan B.V., Suzuki Motor Corporation, Toyota Motor Corporation, Volkswagen AG Group, and many other automotive companies.

Development Timeline of Ford

The year 1903: Henry Ford and 11 other partners sign the documents of incorporation for the Ford Motor Company, a Michigan-based Ford Motor Company.

1908: Ford launches Model T which is now one of the most well-known automobiles.

The year 1941: Ford begins making general-purpose “jeeps” for the U.S. military and fully transitions to military manufacturing beginning in February 1942. The production of civilian vehicles was not resumed until July 1945.

1988 The total earnings of Ford totaled $5.3 billion, making it the biggest of any automotive company at the time.

1990: Ford launches the sport-utility vehicle Explorer. Although it is true that the Explorer is the most popular model of the SUV market, sales dropped to an all-time low of 15 in November 2005, and then fell by 29 percent during 2005.

2001: Ford Motor voluntarily recalls a further 13 million tires and Bridgestone/Firestone dumps Ford as a client, claiming that Ford used the tire manufacturer as a scapegoat to divert attention from Ford Explorer problems.

2005 Mercury Mariner, Ford’s first hybrid gas-electric Crossover is available for purchase. It’s priced at $4,000 more than the gasoline-only version.

2005 Ford has lost market share, for the 10th time in a row. It is also losing its status as the top-selling Chevrolet company to GM.

Strengths Of Ford

❤️ Global Recognition Ford is an established brand in the auto industry. It is also recognized on the world market due to its accomplishments in the fields of marketing and advertising. It has two brands under the Ford Motor Company i.e. Ford and Lincoln. The value of its brand stands at $10.44 billion according to the report for 2021 of Statista.

❤️ Automotive Sector (Automotive Segment) Ford is at present one of the second-largest automobile manufacturer in the U.S. (behind GM) and the fifth-largest (behind Toyota, Volkswagen, Hyundai, and GM) in the world. Ford Motors sold a total of 4,187,000 vehicles by 2021 globally. 

❤️ Research and Development Research and Development Ford’s ability to conduct research and development department is among its strengths since Ford is determined to create and create new products. They continuously strive to enhance the efficiency of automobiles. The criteria used to evaluate include efficiency, fuel security, efficiency, and satisfaction.

❤️ Diverse Selections Diverse Offerings Ford is able to meet the needs of every demographic group by providing a wide range of automobile models and brands. They cater to the requirements and desires of their customers by offering them a wider diverse selection of commercial and car vehicles.

❤️ adaptability Ford has a diverse range of services and products that provides them with a strong advantage and less dependence on one line of products. Their willingness to embrace new technologies will give them an edge in the highly competitive automotive market. They are working on lighter design, weighting, cabin technologies, and powertrains to improve the quality of products. Ford recently revamped its top-selling pickup truck known as the F-150 which is being redesigned to accommodate evolving consumer preferences and demographics. The latest version of the F150 pick-up truck is redesigned to attract the younger market. It’s scheduled to launch by the end of November 2020. Ford plans to create an electric model of the F-150 to launch by the middle of 2022. This will allow Ford to make sure that the F-150 which is its top-selling model can keep up with the shift of consumers away from petrol and towards electricity. 

❤️ Large Network of Dealers- The company is also multi-faceted in its business and distribution since they operate an enormous network of 10,000 dealers around the globe. Ford builds its vehicles on the basis of standard processes. They also make huge investments in various fuel sources.

❤️ Solid Financial Position Ford’s financial strength position is driven by the increasing demand for SUVs and pickups. In 2020, the firm is generating a higher than expected year-end revenue totaling $127 billion. The reality that Ford is thriving even in the midst of turmoil in 2020 demonstrates that the growth of the company in the near future will be much greater. 

Weaknesses Of Ford

❤️ Recalls of Products – Ford was hit with a massive loss, and its image was damaged by the recalls of its products in May of 2016. The recall affected around 830,000 Ford and Lincoln vehicles to fix the defective doors’ latches. They also recall vehicles in May of 2015 because of the security issues of Takata airbags. Ford has recalled 20500 Kuga the PHEV cars in Europe due to its high-voltage battery causing cars to catch fire. Ford also recalls over 558,000 mid-sized vehicles within North America due to issues with brake fluid leaks. 

❤️ A weak foothold within Emerging Markets- As Ford’s operations span various geographical regions, however, they do not have a clear focus on efficiency and performance. They don’t have a solid foothold in emerging markets such as India.

❤️ Poor Reputation Ford is a brand with a bad image when compared to its European and Japanese competitors. Lincoln particularly is seen as an inferior brand when compared to English and German premium automobile brands.

❤️ Reliance on U.S Markets The dependence of the U.S. marketFord is heavily dependent on the U.S in addition to the European market. It reduces its revenues and profits. Experts believe that the majority of the future automobile sales will be via new markets like China or India. The sales of Ford within the US market have been falling every year because of the increasing competition in the market. In 2020, the company sold just 2.04 million vehicles in the US which is a decrease of 15%, compared to 2.4 million vehicles in 2019. The dependence upon America’s US market is now becoming an issue for Ford.  

❤️ Dependence on trucks and SUVs Ford’s diverse range is quickly disappearing as the company’s focus is shifting to SUVs and trucks. At the present, trucks account for over half (54 percent) of Ford’s overall volume of vehicles that are sold within the U.S. market, with plans to increase the number of SUVs in the near future. In 2020, the automobile segment fell by 45 percent (vehicles were sold). Dependence on SUVs and trucks is risky as the majority of consumers are aware of the effects of climate change and are moving away from the big fuel guzzlers.  

Opportunities Of Ford

❤️ Eco-friendly Vehicles Since Ford is currently working to stay technologically agile They have a great chance to create fuel-efficient vehicles as well as commercial automobiles. For instance, they could build vehicles that are powered by different kinds of energy. This way they can have more choices to design eco-friendly vehicles. In 2018, the 2018’s C-Max along with the Fusion Hybrid car model could be their best chance, since they’ve already seized the market with this latest model.

❤️ Expand Customer Base Ford is currently working on getting into the market for cars within India and China and China, which gives them a chance to reach out to other countries that are small in the world and expand the number of customers they serve. Between July and September of 2020, sales for Ford in China were up by 25 percent and reached 164,352 units which is a sign that the company’s customer base is growing in Asia. 

❤️ Digital Marketing The concept of digital marketing has become the norm across the globe nowadays, which means that Ford has the chance to develop its digital marketing capabilities to increase its supplier and customer engagement.

❤️ Self-driving vehicle in 2017 Ford is investing $1 billion in the Artificial Intelligence company, Argo AI, to develop its self-driving tech. Additionally, Ford has partnered with Walmart and Postmates to examine the technology that will allow grocery delivery to the. Ford announced it will unveil”Active 2.0 Prep Package ” Active 2.0 Prep Package” in Mach-E models that allow the hands-free driving of certain conditions. The semi-autonomous vehicles will be available on the market in the second half of 2021. 

❤️ Expand into related Fields The company Ford has vast experience in various sectors that are related to the automotive industry. The new CEO of the company, Jim Farley, recently announced that the company will expand operations into fleet management, software, electric vehicle charging as well as other relevant fields of technology. 

Threats Of Ford

❤️ High Competition Ford is currently facing intense competition from rival companies such as Toyota, Tesla, and Tata. Ford continues to struggle to keep its competitive position in the marketplace.

❤️ Price Increases for Raw Materials Increased Prices of Raw Materials The increasing prices for raw materials like steel and steel coil could directly impact the cost of a company or profit margin.

❤️ Compliance and regulations Compliance and regulatory risks for car manufacturers have grown over the last years due to environmental changes taking place all over the globe. Automobiles are being scrutinized for safety and quality concerns. Ford could face significant challenges when it fails to conform to the new rules. Ford is currently facing an unsolved civil case before the US Supreme Court after it was sued by two victims that were injured in accidents that involved vehicles that were used Ford vehicles. 

❤️ Market uncertainty in the beginning period of the year 2020, volatility worldwide affected Ford particularly brutally, resulting in an increase in sales to 516,330 vehicles that fell by 12.5 percent compared to the same period in the year prior. It was impacted more than its competition General Motors and Fiat Chrysler. Market volatility has also caused Ford’s German branch to seek a 582-million credit from the German government to offset the effects of the drop in sales. 

❤️ Solid Labor Unions Strong Labor Unions Canadian autoworkers’ union is becoming stronger and gaining influence against automakers operating within the country, such as Ford. In the year 2020, they threatened to strike in the event that Ford did not make investments to protect its workforce over the long term. To prevent a strike, Ford was required to spend $1.4 billion on its Oakville and Windsor manufacturing facilities in Canada in the bargaining agreement that it struck with unions. 

❤️ Ford closes manufacturing factories in India and Brazil in Brazil and India Ford has halted its automobile manufacturing activities in India. This means that Ford will no longer sell Figo, Aspire, Freestyle, Ecosport, and Endeavor in India. But, Ford will continue to manage its business solutions engineering, and customer service operation in India. Similar to that, Ford closed 3 manufacturing facilities in Brazil in 2021. Ford is currently undergoing the process of restructuring to improve its profit margins and the pandemic that has hit the world caused the company to take this step.

Limitations of SWOT Analysis for Ford

While it is true that the SWOT analysis is extensively used to plan strategic strategies, however, it does have some limitations.

  • Certain aspects or capabilities of an organization could be both a strength as well as a weak point at the same. This is among the most important limitations that SWOT analysis has. For instance, changing environmental regulations can be a risk to the business. It could also be an opportunity in the sense that it can allow the company to compete on the same level or even gain an advantage over competitors when it is could develop its product more quickly than its competitors.
  • SWOT doesn’t provide a way to get a competitive edge It is not a strategy to gain a competitive advantage, therefore it should not be considered a solution in and of itself.
  • The matrix is merely an idea to begin discussions on how suggested strategies can be implemented. It was a window for evaluating but not a plan for implementation built on Ford’s strategic competitiveness. Ford
  • It is a static analysis that analyzes the current conditions with only a few potential modifications. When circumstances, capabilities threats, strategies, and circumstances evolve, the dynamics of the competitive landscape cannot be analyzed in one matrix.
  • SWOT analysis could make a firm overemphasize the importance of a single external or internal aspect when formulating strategies. There are interrelations among important external and internal aspects that SWOT cannot reveal that could be crucial in determining strategies.

Weighted SWOT Analysis of Ford

Due to the previously identified weaknesses of the SWOT analysis/ matrix, the corporate management has decided to assign an appropriate amount of weightage for every internal strength and weakness of the company. 

Companies also evaluate the probability of happenings in the near future and the impact they can be on the performance of the company.

This technique is known as the Weighted SWOT analysis. It’s better than a simple SWOT analysis since using weighted SWOT analysis Ford managers can concentrate on the most important aspects and eliminate the less important ones. 

This also helps solve the problem of a long list which is when organizations make lengthy lists but do not address any of the elements that are considered to be important.

Recommendations

Ford’s SWOT assessment offers us the insight that the automaker has survived for more than 100 years and is one of the first companies in the field. In order to continue expanding market share and boost profits, Ford has to be able to increase its profits.

  • To fend off intense competition and the entry of high-tech firms into the market, Ford needs to boost its research and development investment and accelerate its pace of innovation.
  • Ford operates in numerous countries, and they’ll be required to grow their operation department by attracting the best staff and employees.
  • To make Ford automobiles more attractive, Ford has to expand its manufacturing capabilities and enhance economies of scale. This will lower costs and increase prices.

References

  • Ford Motor Company (2015). Supporting One Ford.
  • Ford Motor Company Form 10-K, 2014.
  • Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and organizational diversity: SWOT analysis and implications. Journal of Management, 29(6), 801-830.
  • Jacobs, T., Shepherd, J., & Johnson, G. (1998). Strengths, weaknesses, opportunities, and threats (SWOT) analysis. Exploring Techniques of Analysis and Evaluation in Strategic Management. London: Prentice-Hall, 122-133.
  • Pickton, D. W., & Wright, S. (1998). What’s SWOT in strategic analysis? Strategic Change, 7(2), 101-109.
  • Piercy, N., & Giles, W. (1989). Making SWOT analysis work. Marketing Intelligence & Planning, 7(5/6), 5-7.
  • Valentin, E. K. (2001). SWOT analysis from a resource-based view. Journal of Marketing Theory and Practice, 54-69.

FAQ

What is Ford SWOT analysis?

SWOT analysis from Ford analyzes the brand’s strengths and weaknesses, as well as opportunities and threats. For Ford’s SWOT Analysis, the strengths and weaknesses are internal factors, while opportunities and threats are external elements.

What are Ford Motor Company’s strengths?

Research and Development Ford’s R&D department is one of its major strengths as Ford is determined to develop and create new products. They continuously strive to enhance the efficiency of the automobiles. The elements that are evaluated include efficiency, fuel efficiency as well as safety, and satisfaction.

What is Ford Advantage?

Ford’s competitive edge is built on solid and steady sales branding, the image of the brand, customer loyalty, and ingenuity. Additionally, Ford’s strategy which is based on price leadership as well as differentiation is the best to react to changes in the market today.

Who is Ford’s biggest competitor?

Ford Motor’s major competitors in the market of consumer discretionary include General Motors Company (GM), Toyota Motor (TM), Daimler (DDAIF), Honda Motor Company (HMC), Tesla Motors (TSLA), Navistar International (NAV) as well as Spartan Motors (SPAR).

What is Ford’s slogan?

The ” Built Ford Tough” slogan was first introduced in 1979 and has been around since then. Ford has no reason to let go of a promotional gimmick that has made it possible for them to sell thousands of vehicles.

What is Ford’s brand value?

It is believed that the Ford brand is among the most valuable automotive brands around the globe, especially in comparison to its American rivals. It is valued at 10.4 billion U.S. dollars, Ford was ranked as sixth among the top brands in the auto industry globally in 2021.

Conclusions

Overall the SWOT analysis of Ford shows that the business is always looking to improve. But, the company’s ability to embrace change is not happening in the manner anticipated by the industry to remain in the top spot. 

This is why Ford is losing market share. But, the success of the electric vehicle Mustang Mach- E might have the potential to change the fortunes of the firm. 

Rapid reaction to changes in the macro-environment is recommended, as is an active approach to developing new products and a more innovative approach.

A reduced number of product recalls will help preserve the brand’s name and its value which is declining at the moment.

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