Joe DavidSWOT analysis of Ford Motor Company
This detailed SWOT analysis of Ford Motor Company aims to provide readers with a comprehensive insight into the strengths and the weaknesses of Ford Motor Company. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. Ford Motor Company is an American multinational automotive company headquartered in Dearborn, Michigan (the USA). It was founded by Henry Ford and incorporated in 1903.
Strengths of Ford Motor Company
Ford Motor Company has operations in over 125 countries and, approximately 202,000 people are working in its plants and offices around the world. It is a legendary car company; however, it also manufactured airplanes, radios, refrigerators, postal machines, and weather satellites (Ford Motor Company, 2022).
There can hardly be any disagreement with the fact that Ford has a very diverse portfolio. Its vehicles are categorised as cars, people mover, SUV, performance cars, and commercial vehicles. KA+, Fiesta, Galaxy, Focus, Tourneo Connect, Tourneo Courier, Edge, Kuga, Focus RS, Ford GT, Transit, Ranger, and Fiesta Van are some of the most famous vehicles manufactured by Ford. These brands enable Ford to cater to all kinds of demographic groups.
Ford is one of the top automakers in the world. It has won a number of awards over the years. For instance, Ford Focus won Car of the Year 2019 in Finland and Croatia, Best Lower-Medium Car in the U.K, and some other titles. The company won several awards in 2021 e.g. Best Company for Diversity 2021, Best CEO 2021, Best Company Culture 2021, Best Company Happiness, Best Leadership Teams 2021 etc.
Ford has a very strong position in some of its key markets. For instance, it is always in one of the top motor companies in the USA. Likewise, it is also one of the leading car brands in the UK.
One of the key strengths of Ford is research and development (R&D) where it has shown huge and consistent interest over the years as evidenced by its massive investments. For instance, it spent about $7.1 billion in R&D in 2020 (Carlier, 2021). It is currently investing heavily on electrical cars and artificial intelligence in vehicles.
Weaknesses of Ford Motor Company
Weakness is the next issue to address in this SWOT analysis of Ford Motor Company. The brand image of Ford suffered gravely when it had announced recalling vehicles in June 2019. It recalled 1.2 million sport utility vehicles in the US over suspension issues costing the company approximately $180 million (BBC, 2019). It was reported that 28,000 vehicles were also affected by the same problem in Canada. It is worth noting that Ford issued two recall notices for a total of 63,367 vehicles in Canada in 2020 after issues with some vital parts.
China represents approximately 30% of global car sales. However, Ford had a late start there. Moreover, it struggled to build a good footprint and has in fact, decided to cut production in the country. Likewise, Ford is heavily dependent on the U.S and European market. However, things are changing, and Europe is becoming a very challenging market. Ford made losses in 2018 in Europe; however, the loss narrowed in 2021.
Several reviews demonstrate that many customers are not happy with Ford Motor. For instance, most of the reviewers branded its services as ‘Bad’, while a small number considers it as ‘Great’ (Trustpilot, 2022). The company must work harder on this to address the customers’ concerns.
Opportunities for Ford Motor Company
Ford Motor Company should continue using market penetration strategies to grow and expand further in its existing markets. Likewise, developing new vehicles to sell in both the existing and new markets is worth the effort. In fact, Ford decided to invest a lot of money both in the USA and Canada to produce new, particularly fully battery electric vehicles.
China represents approximately 30% of global car sales. Auto market is growing in India as well. This is a very good opportunity for any global automobile company. It is worth noting that Ford plans to launch several electric vehicles in China. This may turn out be very effective for the company as China has seen rises in the sales of electric vehicles recently. Ford is also working on autonomous vehicles which are considered to be the real game changers soon.
As car ownership increases in North America, more people should buy from Ford. The increased demand for cars has opened up new markets which is good news for the company. One of the ways Ford can capitalize on consumer demands is by tapping into social media advertising campaigns to reach out to new customers.
Threats to Ford Motor Company
Threat is the last issue to discuss in the SWOT analysis of Ford Motor Company. Certainly, there are many threats. The first, and most obvious threat, is new regulation. Many countries are bringing in new rules and regulations with a view to encouraging people to use cars less. Similarly, many people now a days prefer to use public transports out of environmental concerns.
Another threat is competition. The automotive industry is one of the most competitive ones in the world and the battle for providing best products with the lowest prices may impact on the profit margins significantly. Ford is vulnerable to fierce competition from big giants such as General Motors (GM), Volkswagen, Toyota, Tata Motors, Hyundai, Tesla, Nissan, PSA Peugeot Citroen, Honda, BMW, Mercedez, Mitsubishi, and Fiat Chrysler Automobiles.
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Last update: 02 February 2022
References:
BBC (2019) Ford recalls 1.2 million vehicles in US over suspension fault, available at: https://www.bbc.co.uk/news/business-48614704 (accessed 30 July 2019)
Carlier, M. (2021) Leading carmakers worldwide – global brand market share 2020, available at: https://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/ (accessed 01 February 2022)
Ford Motor Company (2022) About us, available at: https://corporate.ford.com/company.html (accessed 02 February 2022)
Trustpilot (2022) Ford Motor Company, available at: https://uk.trustpilot.com/review/ford.com (accessed 01 February 2022)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.
M Rahman