Ford Motor Company and the Changing Market
Ford Motor Company and the Changing Market
Past analysis on Ford explored financial statements; identified strengths, weaknesses, opportunities, and threats; explored trends within the global market; and benchmarked Ford against other automotive industry leaders. Building on these findings it is necessary to discover the influence that the local, national, and worldwide economy has on the business. Many fluctuations occur outside the company, which determine decisions made by Ford management, and the company must keep close watch on the effects these changes have on its people. The following paragraphs will summarize past findings, outline economic trends and the influence they have on business decisions, explain Ford’s strategies to combat change with goals, and explore the role of human resources within Ford’s organization, and provide investment opinions centered on these discoveries. Past Analysis Overview
As the automotive industry is still recovering from the blows it took in the downfall of the economy in 2008, it is critical that Ford focus on its tradition of being an innovative leader in the industry. A SWOT analysis performed revealed that the strengths noted for Ford Motor Company are engineering capabilities, diversification, and market position. Ford has to push its global presence while continuing to advance in the areas of technology, safety, and consumer satisfaction. Weaknesses for Ford are product recalls and cash flow. Continuing to invest in technology, emerging markets, and focusing on safety controls will help to lessen the impact of these weaknesses. Ford’s opportunities lie in expansion of its Asian market, development of hybrid and electric vehicles, and investments. The fact that many of Ford’s efforts seem to be hooked into the Asian market can be good and bad. Although China and other Asian countries are booming this investment will continue to reflect well on the company’s financial statements; however, the adverse is a possibility as well. On the other hand, because of Ford’s ability to reflect sound financials, the company has been able to secure Department of Energy loans to improve and expand the scope of several of their manufacturing plants. Price competition, supplier distress, and regulations over the industry continue to threaten Ford as well as other automobile manufacturers. The company will need to diligently pursue technological advances, improve green build efforts, and focus on consumer satisfaction through product enhancements and safety. According to the recent article titled New Cars Industry Profile: North America (2011), “The performance of the market is forecast to accelerate for the five-year period of 2010-2015, which will drive the market value.” Ford has a bright future with already possessing a good portion of the market segment and being able to obtain loans from the government to finance the revamping of several plants. Ford is in better shape financially than competitors in the marketplace reflecting above average liquidity and increasing profit margin as well as a capacity to cover short-term debts. This speaks volumes for Ford’s ability to fund future investments without borrowing, thus avoiding interest and dividend charges for the borrowed funds. Continuing to improve technology and manufacturing through the use of electric and hybrid engines while consolidating engineering efforts in plants to accommodate more models with less downtime will pave the way to their future as a major stakeholder in the automotive industry. Recent Economic Trends
Economic ups and downs play a considerable role in business. First it is necessary to look at the economy of the country. The recession and ultimate spiral of the banking and mortgage crisis in 2008 caused severe stress in the automotive industry. The major players in the market were struggling with little to no cash flow to carry...
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