FORD Motors SWOT 2016

A SWOT ANALYSIS of FORD MOTORS 2016

CHECK OUT FORD MOTORS SWOT ANALYSIS 2018

Ford has retained its 9th rank on the Fortune 500 list this year. The business outlook for the brand globally looks great. The motors giant posted its best US sales in 2015 since 2006. Particularly, its F Series trucks proved to be a huge hit with more than 780,000 of them sold. The market position of Ford is expected to improve fast. It can be expected to continue on its winning spree, thanks mainly to the low gas prices.

The company is quite likely to continue its push into automated driving technology to keep up with the rising competition. However, its talks with Uber and Google remained inconclusive. It decided not to partner either of the two. The main reason behind it was noted to be the company culture.

Ford currently has 199, 000 employees.

CEO: Jim Hackett

Competitors: Toyota, Nissan, Hyundai, Honda, Chevrolet, GMC, Maruti, Volkswagen

KEY FINANCIALS

$ millions

% change

Revenues ($M)

$149,558

3.8%

Profits ($M)

$7,373

131.3%

Assets ($M)

$224,925

Total Stockholder Equity ($M)

$28,642

Market Value — as of March 31, 2016 ($M)

$53,758

Source: Fortune 500 (2016)

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A few words about Ford before we move on to its SWOT:

Ford is an amazing story of revival. Since Mulally joined as CEO, Ford has revived to emerge in its new avatar. His compelling vision and One Ford plan did the magic. Between 1990 and 2006, Ford had lost 25% of its market share. Those were the difficult days for Ford when Mulally joined. It seemed like nothing was possible without fresh credit infusion. High labor costs added to Mulally's woes.

However, Mulally's passion brought some major shifts at Ford. Most of these changes were based on the cultural changes he introduced. His one Ford plan was aimed at aligning all the employees and resources globally. Ford also shifted its focus towards vehicles that people wanted and valued. Since then it has been a story that others are trying to imitate. Mulally made some important changes at Ford. These changes included changing its corporate culture and leveraging the automotive knowledge and technological potential hidden inside Ford. The change in the position of Ford between 2006 and 2014 has been truly outstanding. (Read a porter's five forces analysis of Ford motors)

What is SWOT?

'SWOT' is an acronym for Strengths, weaknesses, opportunities and threats. It is a powerful strategic management tool that can help know one's important strengths and weaknesses. It also helps at planning to exploit the opportunities available to the business and counter its threats. Strengths and weaknesses are internal factors and opportunities and threats external.

So basically, SWOT is a tool designed to help you reduce your weaknesses and counter the threats. This improves the business' chances of success by exploiting available opportunities and increasing its strengths. Companies conduct a SWOT before they embark on a new strategy or before making an important business move like investing in a new project. Below is a SWOT analysis of Ford Motors:

Here is a SWOT analysis of FORD Motors:

Ford Strengths

Ford is a strong brand which is evident from its global presence and its financial performance. The brand has continued to retain its 9th position on the Fortune 500 list. The first major strength of Ford is its brand presence globally. It ranks among the major global automobile companies. The next strength of Ford is related to the first. It is the large and loyal customer base of the brand. The larger a brand’s customer base, the stronger is its position in the market.

Ford currently has a very large customer base globally. The number of Ford customers in the Asian countries is also rising fast. Apart from that, a global supply chain, as well as its innovative approach to engineering count among the major strengths of Ford. Overall, the Ford brand has a significant number of strengths and is positioned well to utilize them to its advantage. The year 2015 has seen the presence of the brand rising very fast globally.

FORD Motors Marketing expenses

Ford Weaknesses

The brand has a few weaknesses too which it may need to overcome. It should first focus on its production networks as well as improve its global supply chain. Currently, its network of production facilities is limited when compared to the competitor brands. Compared to Toyota, the pace of innovation at Ford might also have remained slow. Moreover, the production costs at Ford are also higher as compared to its rivals. While the number of weaknesses is limited, still there is a need for Ford to focus on them specifically in order to remain competitive.

Opportunities

Ford has the opportunity to expand its brand globally into the new and emerging markets. Particularly, the demand in the Asian countries for small and fuel efficient vehicles has kept rising. It has brought a major opportunity for Ford. New product development can also provide new opportunities for the brand. Apart from that the brand can focus on cost reduction throughout its supply chain. Thus, there are several opportunities that Ford might pretty well exploit to its advantage. Low cost vehicles and fuel efficient ones are going to rise in demand in the Asian markets. The overall trends for these vehicle categories are quite encouraging.

Threats

Competition in the automobiles industry has risen and it poses a major threat to the brand too. The brand is facing intense competition from Toyota and other rival brands. Moreover, with the likelihood of hi-tech brands entering the automobiles market increasing, this threat of competition is only expected to rise. The fluctuating oil prices are another major threat to the brand’s sales. Rising oil prices generally lead to a decline in the sales of the automobiles. Added to these threats are the rising costs of the raw materials. These are the major threats that can trouble Ford Motors.

Recommendations

Overall, Ford motors is geared for the next stage of its growth. While the competition from the rival brands poses a major threat, the brand still has several major opportunities open before it. Particularly, it can focus on the new markets. It can also bring new innovative products to the existing markets. Fuel efficiency can provide a major competitive advantage for the Ford vehicles. Particularly it is true for the Asian markets. Things took the right turn at Ford since the implementation of 'Mulally's One Ford' plan. Ford would also need to sustain its growth and profitability by focusing on its supply chain and innovation. Innovation can also be the key against competition. Ford should focus on the low cost and low emissions categories in the Asian markets.

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