The external audit is an effective way for Ford to locate areas that their company can improve. These areas are called opportunities and threats. In order to create an external audit, Ford will need to look at several key external forces that play an important role in the company’s future. Ford will need to look for forces that include: Economic Forces, Social, Cultural, and Demographic Forces, Political, Governmental, and Legal Forces, Technological Forces, and Competitive Forces. Once these forces have been located, they will be placed into a category of opportunity, which will help the Ford, or it will be placed in the Threats category, which can hurt Ford.
Companies should always capitalize on opportunities because they are the forces that will help the company obtain more revenue, or increase their industry market share. Opportunities are the positive external forces that Ford will need to develop strategies in order to continue the company’s success. Below are the opportunities Ford needs to capitalize.
Refusing Bailout Money
When the economy took a down turn many companies started having cash flow problems. Several automakers like General Motors and Chrystal, took bailout money in 2008 from the United States government in order to keep their company from financial ruin. These companies took 24.9 billion dollars in bailout money. Ford was the only American automaker that did not take money from the government in order to combat the worst sales downturn in recent years.
Industry Shifts towards Hybrids and Small Vehicles
With gas prices sky rocketing, consumers are looking for more fuel efficient vehicles and cars the run on electric instead of fuel. Ford has heard consumer concerns and has been improving their cars fuel efficiency. Ford now has several hybrid cars, like the Fusion, and SUVs. Along with smaller more fuel efficient cars like the Focus with 28 MPG in the city and 20 MPG on the highway. Toyota’s 4.4 Billion Dollar Loss
One of Ford biggest competitors Toyota seemed unstoppable until the company began having major issues with one of their most popular cars the Prius. The problems with the Prius and the economic downturn caused Toyota to reported their first every net loss of 4.4 billion dollars in 2009. Toyota also warned that might fall deeper into debt in 2010.
Ford and BP Join Forces to Produce Hydrogen
In 2004, BP and Ford joined forces to try and bring the United States closer to having a hydrogen economy. In order to accomplish this task Ford will be building 30 hydrogen-powered Focus Fuel-Cell Vehicles. The vehicles will be split between three cities, and BP will be building hydrogen fueling centers to help evaluate the cars each time they refuel. Ford and BP continue working to improve this technology. There is talk of having hydrogen cars available to consumers in three years.
2010 Fusion Sets Records for the 5th Month
Ford’s Fusion car has been their top selling vehicle since its introduction in 2006. The Fusion continues to improve with options of the hybrid model. The vehicle has received awards like the Most Reliable Family Car –from independent reliability and owner satisfaction survey data, Most Dependable Midsize Car – J.D. Power and Associates, Motor Trend’s 2010 Car of the Year – a highly coveted industry accolade, and the 2010 North American Car of the Year – awarded by a jury of top automotive journalists. Sales of the Fusion continue to be on the rise. Sales have risen to 219,219 for an 11.9 percent share of the industry, giving Ford an increase in sales of 54 percent in 2010, while Toyota Camry has a 27 percent decline in sales and Honda Accord sales dropped 20 percent.
Threats are the negative external forces which could hurt the company. Companies will always need to minimize threats as they are the forces that will hinder a company’s goals and could hurt the company’s bottom line. Below are the threats...