Background
Ford motor company is an automotive corporation which was founded in 1903 with an aim of developing, designing, manufacturing and servicing of trucks and cars all across the six continent. They operated under Lincoln and Ford brand names. The company was as well offering its services and product mainly in areas of collision, maintenance, vehicle accessories and other extended services on the warranties of the Genuine Ford Parts, Motor Craft, and Ford Custom Accessories brand names. The organization operates more than 70 plants worldwide with employees more that 166,000 and its headquartered in Dearborn (Banham & Newman, 2002).
Competitive analysis
Increased demand for sophisticated and modern brand of cars has intensified competition between different automotive companies worldwide. Emerging and the experienced companies such as Ford, GM and Toyota have embarked on competitions strategies targeting at outdoing each other (Schwaller,2011). Companies affiliated to different countries are also involving themselves on country based competition, basically to show superiority in automotive industry in different countries.
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Ford’s SWOT Analysis
Ford has greatly invested in research and development to be able to produce products that serve customers in the desired way. This is a strategy that has enabled the company to be able to earn a competitive edge over other companies in the industry. It has also enabled it to maintain its innovation. Investing in research and development had enabled Ford to manufacture unique automobiles that serve customers in a differentiated way. This has made it maintain high performances since it inception in (Banham & Newman, 2002). The company’s market share has also enabled it to compete well on the market. This is because its products are known to many people around the globe hence it finds it easy to market its products.
The company enjoys stability and predictability due to its stay in the market which has made its brand being recognized globally leading to loyalty. The company has recovering sales and has a track record of paying high dividends.
The saturated nature of the business in which it has presence in every part of the world has left no much to be desired about it. The high exposure to Europe which is a contacting future market is a worry to the company. Finally the company has low exposure to the Asian pacific which is an expanding market.
Opportunities
The company has the opportunity to invest even more in research and development to be able to produce even more superior vehicles as compared to those of its competitors. This can also enable it to produce passenger vehicles that have less effect on the environment in terms of pollution. It can also enter more market to stop relying much on the European and American market (Banham & Newman, 2002). There are many emerging markets that the company can be able to penetrate to ensure its success both currently and in the future.
Ford can also introduce low models of passenger vehicles to target low level income earners in the society. This helps it to diversify its market segments. The demand for fuel efficient vehicles has been increasing over the years which provide an opportunity for production of fuel efficient automobiles. The company should also enhance its production of hybrid cars as their demand has also been increasing over the years. Ford needs to stay ahead of its competition in the production of such cars to be able to enjoy the advantages of being the fast to enter the market
The product innovation, electric automobiles and the emerging market especially in the Asian pacific bring many opportunities to the company.
Threats
Ford has been faced by some threats in the industry that might affect its success in the future. For example, competition has been intensifying in the industry. The main competitor is General Motors, Chevrolet, and other foreign auto motives like Toyota. Most of these companies produce low cost passenger vehicles, that is, vehicles targeted to low income earners in the society. Economic downfall is threat to the company and the debt the company has ($13.1 billion) threatens its future.
Competitors: smart car wars
Ford experiences stiff competition from GM and Toyota. Nonetheless, the company has been able to come up with distinct competitive strategies to be able to counter those employed by the two companies among others. The company has committed itself on various factors including technology design, dynamic product line, and marketing campaigns.
The major competitors for Ford now are GM and Toyota who produces all sizes of automobiles which compete in almost all of Ford’s core markets. For instance Ford and general motors have invited developers to create apps for their automobiles. Though using different tactics they have the same objective to foster technology development in ecosystem which will attract and rope customers (Schwaller,2011). The companies are making software development kits which will be available online and developers can download codes to make their apps work in their cars just like a smartphone. It is a race which will add customer features that will make driving safer, easier and more enjoyable. In terms of technology Ford and GM are leading.
The situation is an opportunity for Ford to strategically enter the smart car market where it will gain a competitive advantage to beat their competitors. It should make the apps easier to use in which they can show the weather conditions depending on the location of the automobile.
Factors affecting the demand and supply in the automobile market
Automobiles have been considered luxuries goods and their demand is affected positively with the economic countries of operation. When the economy is doing good Ford will have to supply more cars as people will have the income to spend on luxurious cars. Demand will be affected by the tastes of people to the cars, price of substitute’s cars from GM, future expectations and the income distribution. The price of complimentary like fuel will also affect the demand for the company’s cars. With many options in the car market, consumer have began to demand cars which have more features and the decision by Ford to come up with apps for cars will be met positively by the consumers. The substitute fore automobiles is the public transport and if the price is law, then demand for cars will have to decrease and vice versa.
The factors that will affect supply are the cost of productions, the aims of the producers, profitability of alternatives, the unpredictable; events and the future expectations. Automobiles supply is said to be an enormous process as there are many car manufactures worldwide. The car companies are fighting for a larger market share and new markets. The producers will have to analyze the demand and respond to any changes in it as soon as possible. The changes in supply do not only respond to demand changes as there are factors which affect the supply and are independent to the demand changes. They are non-price determinants of supply.
The automobile responds to the price elasticity of demand and supply. Any change in price affects the quantity demanded and supplied.
Recommendation
Product
The company needs to focus more in the production of automobiles targeted to the lower class in the society. This will make it able to compete effectively with Japanese automobile companies such as Toyota and the American giant GM which have been able to achieve more success (Montgomery & Porter, 2009). It also needs to produce more technological hybrid vehicles.
Price
It will be virtuous for the enterprise to change its pricing strategies to be able to ensure its success in the near future. Its automobiles are priced higher as compared to other companies in the industry serving the same segments. This is a weakness that needs to be dealt with or else it can lead to the company losing its competitive edge.
Place
The company needs to increase its distribution facilities, production plants, and dealer in other regions around the globe. The above analysis shows that it has great dependence on the European and American markets. This means that it has not exploited many markets in the other continents like the Asian pacific. This is a major weakness as it affects its market share in the industry. The company needs to enter more and more markets to not only enhance its competitive edge but also improve on its sales hence its profitability.
