SWOT Analysis of Ford (2019)

Company: Ford Motor Company
CEO : James Hackett
Year founded : 1903
Headquarter : Dearborn, USA
Number of Employees (Dec 2018): 199,000
Public or Private: Public
Ticker Symbol: NYSE: F
Market Cap (March 2019): $33.46 Billion
Annual Revenue (Dec 2018) : $160.33 Billion

Profit |Net income (Dec 2018): $3.67 Billion

Products & Services: Cars| Suv and Crossovers | Trucks and Vans | Hybrids and Evs | Commercial Vehicles | Future Vehicles | Fleet Vehicles

Competitors: General Motors Company | Toyota Motors | Tata Motors | Daimler | Hyundai Motors | Honda Motor Company| Tesla Motors | Volkswagen | Renault Group | Fiat Chrysler Automobiles | Nissan | Group PSA | Geely Group | Maruti

Fun Fact:Did you know that Ford is the second largest family-owned company in the world?

An Overview of Ford

Henry Ford founded Ford in 1903. Its headquartered in Dearborn, Michigan, USA. It is one of the top car brands in the world and sells commercial vehicles under the Ford brand while the luxury vehicles under the Lincoln brand.

It is also one of the best American-based Automobile manufacturers with the most profits earned through the North American Segment. Every year it produces around 1-3 million vehicles. It is the fifth largest automobile manufacturer in the world.

With such massive profits being earned every year and being one of the leading car brands in the world, where does it stand today?

Let’s get to know more about this luxury car brand and discuss Ford SWOT analysis in detail.

SWOT Analysis of Ford

The SWOT analysis of Ford is given below:

Ford’s Strengths – Internal Strategic Factors

1. Global Recognition – Ford is a well-known brand in the automobile industry and is also recognized in the global markets because of its success in marketing and advertising. Its brand value is $12.74 billion according to the 2018 report of Statista.
2. Research and Development – Ford’s research and development is one of its key strengths because the company is committed to make and develop new products. They are continuously trying to improve the performance of their vehicles. The factors that are evaluated include fuel, efficiency, safety, and customer satisfaction.
3. Diverse Offerings – Ford caters to all kinds of demographic groups with their diversified brands and car models. They take care of the needs and wants of their consumers by providing them with more variety of cars and commercial vehicles.
4. Adaptability – Ford has a wide product and services portfolio which gives them strong leverage and less dependency on just one product range. Their commitment to adopting new technologies also gives them a boost in the competitive automobile market. They are also working on light weighting, cabin technology, and powertrain to enhance their product quality.
5. Huge Network – The company is also diverse in its operations and distribution, as they have a manufacturing presence in 62 countries across the world. Ford develops its cars on standardized procedures. They also invest heavily in various fuel sources.

Ford’s Weaknesses

1. Product Recalls – Ford faced a huge loss and their brand image suffered due to the product recalls back in May 2016. They recalled approximately 830,000 Ford and Lincoln vehicles to replace faulty side door latches. It also recalled vehicles in May 2015 because of the safety failures of Takata airbags.
2. Weak Foothold – As Ford’s operations are diversified in many geographical areas, they lack focus in performance and productivity. They do not have a stronghold in emerging markets like India.
3. Poor Reputation – Ford has a poor reputation compared to its European and Japanese rivals. Lincoln, in particular, is considered an inferior brand as compared to English and German luxury car brands.
4. Dependence on U.S Markets – Ford is highly dependent on the U.S and European market. It limits its profits and revenues. Experts predict that the majority of future car sales will come from emerging markets such as China and India.

Ford’s Opportunities – External Strategic Factors

1. Eco- Friendly Vehicles – As Ford is already trying to be technologically adaptive, they have a fantastic opportunity to produce fuel-efficient cars and commercial vehicles. For example, they can build vehicles that run on different forms of energy. In this way, they have more options in designing eco-friendly vehicles. The 2018’s C-Max and Fusion Hybrid car model can be their most significant opportunity, as they have already captured the market with this new model.
2. Increase Customer Base – Ford is already working on penetrating the automobile market in India and China, they have an excellent opportunity to tap into other small countries in the world and grow their customer base.
3. Digital Marketing – Digital marketing is prevailing all over the world these days, so Ford has an opportunity to work on their digital marketing skills to grow its customer and supplier engagements.
4. Self-driving car – In 2017, Ford has invested $1 Billion in Artificial intelligence company, Argo AI, to develop its self-driving technology. In addition, Ford has partnered with Walmart and Postmates to test the future of grocery delivery.

Ford’s Threats

1. High Competition – Ford is already facing cut-throat competition from its rival companies like Toyota, Tesla, and Tata. Ford keeps struggling to maintain its innovative position in the industry.
2. Increased Prices of Raw Materials – The rising raw material prices of steel and steel coil can directly affect the company’s cost and profit margin.
3. Regulations and compliance – The compliance and regulatory threats for automobile brands have increased in the past years because of environmental improvements going around the world. Vehicles are now inspected for public safety and quality issues. Ford can face serious challenges if it fails to comply with the new regulations.

Recommendations

1. As Ford is manufacturing in various countries, they should try to improve their operations department by increasing efficiency and hiring the right employees and labor.
2. Ford should start producing more eco-friendly vehicles because the demand for these kinds of vehicles is growing all around the world.
3. Ford can partner up with Uber and other app-based vehicle services to grow its revenue and customer base.

Final Thoughts

The above Ford SWOT analysis highlights the strengths, weaknesses, opportunities, and threats of this massive automobile manufacturer. The company needs to take quick and practical initiatives to remain competitive and profitable.