May 25, 2011
Business Analysis Part I - Ford Motor Company
Henry Ford and a group of investors founded what is known as the Ford Motor Company in 1903 based out in Dearborn, Michigan. The entrepreneur began manufacturing all of the automotive parts used in production and started the innovation of a moving assembly line to mass produce vehicles that are affordable to the public. Although the company changed names and investors a few times, it remained strong enough to survive through the great depression and become one of the largest auto manufacturers in the world today. The following analysis covers the company’s strengths, weaknesses, opportunities, and threats to obtain a better understanding of the successes and downfalls of Ford Motor Company. Strengths
Despite of the recent downturn in the economy, Ford remains a competitive force in automobile manufacturing market. Certain factors exist that strengthen the company’s brand and product. For example, Ford Motor Company is the top 4th largest car manufacturing entity in the world (Ford, 2011). The company has 90 manufacturing plants worldwide, 7,000 supplier facilities that distribute vehicles in six continents, and all 50 U.S. states (Ford, 2011). Ford has a strong presence in the market and is easily recognized worldwide with the slogan “Built Ford Tough” as the company motto (Ford, 2011). The company keeps a competitive advantage by following innovative trends that attract the attention of more consumers. One of these trends focuses on fuel efficiency, brought on by the current deteriorating economic state. Ford’s fuel-efficient lineup increased sales by 19% since the launch in 2009 (Ford, 2011). Even the less economic models are still in demand because of their design, durability, and versatility. The Ford-F150, Ford’s most popular vehicle, is the current top seller on the market for this year (Ford, 2011). Ford is comfortably sitting at #10 on the Fortune 500 list and has made an astonishing $6.6 billion in net income for the first quarter of 2011, which is the most the company has made in the last 10 years (Ford Motor Company, 2011). Ford established Ford Motor Credit Company to offer the public a more accessible way to finance vehicles and survived through the failing economy. The company made it without any government bailout funds because the owner made a wise move and obtained $24 billion in financing a short time before the economy took a turn for the worse (Ford Motor Company, 2001). That money helped the company stay afloat until they could make profit again. Another strength the company has is its reputation and their corporate social responsibility with the public and the environment. Ford Motor Company provides support to many causes such as disaster relief efforts in the United States, invests in education for children, promotes safe driving programs for teens, and helps American farmers strive (Ford Motor Company, 2011). Ford is also a proud supporter of NASCAR and started the Performance Racing Parts segment of the business. The company is following the trend of environmentally friendly products by researching solar powered and electric vehicles that reduce emissions and harm the environment. The company plans to invest $14 billion in Research and Development in 2011 to improve fuel efficiency in Ford models by over 25% (Mulally, 2010). Because of the constant contribution and involvement in the community, the public is aware that Ford is not in it just for the money; ultimately Ford contributes and makes a difference in society and embraces the earth’s environmental health. Weaknesses
Despite all the strengths mentioned above, there are weaknesses that can hinder Ford’s success. The most obvious weakness is the troubling economy. The economic downfall affected everyone including all car manufacturers. Consumers lost...