Ford Motor is one of the globally recognized names in the automotive industry. Founded by Henry Ford in 1903, the company has successfully occupied a top position for decades as a manufacturer of commercial as well as luxury vehicles.
Headquartered in the United States at Dearborn, Michigan, the company operates two brands under the names of Ford (for commercial vehicles) and Lincoln (for luxury automobiles). The company has also made inroads into financial services with Ford Motor Credit.
With a glorious history and a promising future, the Ford Motor company looks set to remain one of the key players in the automobile industry globally. This Ford SWOT analysis aims to assess the company internal strategic environment (strengths and weaknesses) and external strategic environment (opportunities and threats).
Ford SWOT Analysis
Following the detailed SWOT Analysis of Ford Motor Company.
A valuable brand is one of the greatest assets of any organization, and Ford scores big in this respect. The Ford brand is globally recognized for its product line and futuristic innovations that set the company apart. With a brand value of $11.21 billion as of 2019 (source: statista.com), a global dealership network, and loyal customer following, the Ford brand is one of the most valuable on the planet.
Ford has a huge global footprint with manufacturing presence in 62 countries and an ever growing and strengthening sales and distribution network. Ford has been able to cement its foothold across borders. The company has over 18000 dealerships in the United States alone. Ford also continually focuses on expanding through strategic partnerships and dynamic business models.
Strong US Market Share
North America remains the most profitable region for Ford Motor in terms of sales. Generating over $160 billion in revenue in 2019 (source:statista.com) the company stands with a 14.4% share of the total number of automobile sales in the United States.
Focus On R&D
With a futuristic outlook, Ford invests heavily in research and development. In 2018 the company invested $8.2 billion for technological research and innovation.
The Ford Greenfields Labs at Palo Alto, California stands as one of the biggest automotive research centers of Silicon Valley. Home to over 300 researchers, engineers, designers and scientists working dedicatedly for exploring new frontiers in automobile technology, the facility is still expanding. The campus has added two new buildings and 182,000 square feet of workspace, including laboratories. The facility is focused on developing new insights and breakthroughs in the automobile industry, including autonomous driving technology and energy-efficient vehicles.
Wide Product Range
One of the core strengths of Ford lies in its varied range of products that cater to all demographics. The company manufactures and sells vehicles in diverse categories such as SUVs, trucks as well as luxury vehicles. With a focus on energy efficiency, Ford has also brought out several hybrid models such as the Ford Explorer, due outf in 2020. In order to cut down on emissions the company intends to push forward with fuel-efficient vehicles.
Ford has a poor reputation as compared to its peers. Ford cars, especially the luxury brand Lincoln, are considered to be of a lower quality than for example, General Motors or Toyota cars.
United States Dependency
As the largest share of Ford’s sales come from the U.S. alone, this limits the market share and hence profitability of the brand.
Frequent Product Recalls
Ford has been plagued by frequent complaints of faulty products and associated recalls. In February 2019, the company had to recall over 1.5 million vehicles across the Ford and Lincoln brands (source: cnbc.com) on account of a faulty gear shift and related safety concerns.
Lack of Foothold in Emerging Markets
Till date, Ford has failed to gain significant foothold in emerging markets in Asia, such as India and China. As these markets are expected to generate significant demands in vehicle sales, this bodes ill for the company.
Scope for Global Expansion
Due to the high demand for vehicles in emerging markets, Ford has opportunities for growing in these locations. Asia is expected to contribute in large numbers to the demand for consumer vehicles, and Ford can utilize this opportunity for expanding its operations.
Autonomous Driving Technology
Ford has already invested heavily in developing driverless cars. As such cars are expected to reduce the number of road accidents and improve traffic conditions, most auto manufacturers such as Volkswagen and Tesla Motors are racing to adapt this technology to their vehicles. Ford intends to have fully autonomous vehicles road-ready by 2021.
Focus on Environment Friendly Vehicles
Ford has already made significant inroads in the energy-efficient vehicle segment with its Ford Explorer Hybrid. There remains significant scope for further innovation in this sector, and Ford should leverage its existing capabilities to establish itself as a market leader for environment-friendly vehicles.
Partnering with other major automotive brands can significantly improve Ford’s performance in the market. This can help the company to gain a foothold in the Asian markets and also expand its existing network of operations. With this view in mind the company has already decided to enter into an alliance with Volkswagen.
As more and more players enter the global automotive market, Ford may find itself struggling to maintain a steady customer base. With cut-throat competition among automakers only expected to increase Ford must be ready to face off with other global brands.
Increased government regulations also play a key factor that threatens to hamper the profitability of Ford Motor. Both in the US and globally, trade wars between countries and an increasing level of regulatory inconveniences are also contributing to the performance decline of Ford.
Global economic sluggishness and currency fluctuations have also played a part in hampering Ford’s performance in the global automotive market.With car sales declining worldwide, the company has to face decreasing demands from a nearly saturated playing field.
Ford is a global brand with a large and strong network in many countries. In spite of recent setbacks such as declining sales in China and product recalls, the company should focus on technological innovation and expansion into emerging markets to cement its future and remain a force to reckon with.