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The Ford Motor Company

Abstract

The Ford Motor Company has been one of the global automobile household names for many years already. It was founded in the 1900s. Since the time, the company has positively influenced the world of the motor vehicles with its wide range of reliable, comfort, and fuel-efficient cars. Today, it is one of the most admired brands in the industry. Ford’s main competitors are Toyota and General Motors, who have deprived it of the leadership as the most profitable motor businesses. Nevertheless, the company has implemented some necessary strategies with the view to securing its rightful place by producing environmentally friendly and low-cost vehicles. Moreover, Ford puts its take on the image of a financially stable business. This aim was demonstrated by its rejection of the government funding during the great recession. The company has experienced management that has put the interest of its customers at the heart as Ford aims to reach the highest customer satisfaction. Nevertheless, the corporation has tasted its fair share of the loss with a vivid example being the Pinto that experienced a gas tanks explosion and the Edsel, which was produced between 1958 and 1960. The last one had never earned consumers due to its unusual design. Even though the company has always faced some competition from both internal and external rivals, it has always worked tirelessly with the view to ensuring its continued dominance in the industry.

Keywords: Ford, vehicle, motor company, SWOT analysis, case study

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The Ford Motor Company

Introduction

The motor industry has tremendously grown with the demand for the motor vehicles increasing annually. Today, congestions are a part of the common routing in cities all over the world as the majority of employees prefer riding their personal vehicles to taking public means of transportation. However, even with the expanding market, most automobile companies are pushed out of the monopoly due to the lack of touch with customers. In such a manner, lifestyle to remain relevant in the market, businesses need to deign vehicles that would meet the needs of the modern (Coulter, 2013). This essay aims at examining the Ford Motor Company and its operations in detail. The work discusses the company’s history, its competencies, competitive advantages, and competitors. Its opportunities and threats, strengths and weaknesses, as well as a particular operational environment are considered in the essay, as well.

History of the Ford Motor Company

The Ford Motor Company launched its mass production in the early 1900s, and its first products were Model T of 1908 and, later on, 500hp GT race that was sold at $150,000. Mustang was introduced in 1964; it has proved to be one of the company's best products of all times. In a span of two years only, one million Mustangs had been sold by the corporation. Another product offered by Ford that has amazed consumers is the sports utility vehicle, Ford Explorer. F-Series Truck and the Taurus are among the other successes of the Ford Motor Company. The business has experienced its fair share of failure with the most notable one being the Pinto that experienced a gas tanks explosion and the Edsel. The last one was produced in the period between 1958 and 1960; it had not attracted consumers due to its unusual design. Ford has been on high soaring in both the market and shares until the reign of Jacque Nasser, who supported decisions that prevented the company’s hierarchy from concentrating on the core activities of designing, building, and selling. William Clay Ford Jr. took over after Nasser and was followed by Alan Mulally (Coulter, 2013). 

Competitors of Ford

Toyota, Volkswagen, and General Motors are Ford’s major competitors as they offer some additional features at a relatively lower cost. The Toyota Company has a flexible manufacturing system that allows for the production of multiple models on the same assembly line. This fact enhances the product changeover. Unlike Ford, its foreign competitors have an edge in manufacturing cost and efficiency with Toyota recording 30.37 manufacturing labor hours for every vehicle; GM averaged 32.29 hours while Ford recorded 33.88 hours. According to Coulter (2013), Ford faces some stiff competition from other businesses in terms of the labor cost.

Competitive Advantage of Ford

Ford has produced comfort and efficient vehicles that are more stylish, reliable. and of higher quality than the one offered by its rivals. For instance, Ford C- Max sets itself as a classy comfort and efficient vehicle as compared to its equivalent model, Toyota Prius by the Toyota Company. Its cabin allows much room for more comfort with the driveline that is designed to save more fuel. According to “Ford Compared…” (2016), Ford also has been ahead of its competitors in terms of the style as the company seeks to keep up with the new lifestyle trend. In such a manner, the Ford Escape is more stylish as compared to the Chevrolet Equinox.

Environmentally Friendly Products

Both environmental and cooperate responsibilities have been the primary source of the company's success. Ford is making sale records by marketing trucks and cars that are designed to achieve high fuel efficiency with lower tailpipe emissions (Roth, 2013). The company also offers competitive prices alongside the true fun to drive. According to Dolan (2010), Ford manufactures electric cars, as well, in a bid to reduce the emission of carbon by the gasoline/diesel-powered engines.

Lower Production Cost

Ford has adopted a strategy that has lowered the production cost by cutting all the excessive operational expenses. Heavy expenditure of raw materials was reduced, and the introduction of online manufacturing allowed for the unifying the process of the car production rather than conducting segment production and engineering (Senna, 2013). This strategy has helped in providing Ford Company with a competitive edge over its competitors with associated lower cost.

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Ford’s Market Position

The company’s market position has benefited it in three primary ways (Senna, 2013).  Firstly, its fight against bankruptcy and rejection of the funding from the government, as opposed to what its competitors did, had considerably increased the consumers trust. Secondly, Ford’s products are accepted by consumers globally. This issue mainstreamed with the first factor has secured the growth of the company's market share. Lastly, its strategy to offer customer-oriented smart cars that give value and generate reasonable profit is going to increase its market share and business volume further.

Competencies of Ford

Ford has able leadership; the current leader is a source of inspiration and team building for the company’s employees. It has enhanced the production of goods based on the needs of customers while reducing the general cost. Also, it has widely inculcated the culture of cooperating with partners in the spirit of advanced integrity and accountability. Ford has worked hard in order to ensure the competitive efficiency and minimize cost while stressing on the need for improved quality in all of its products. Besides quality, it has emphasized the importance of safety in its production; at one time, the company earned itself the title of being the industry’s safety leader (Coulter, 2013). The Ford Motor Company has also valued its customers and has emphasized the customer satisfaction.

Strengths (Internal)

One of Ford’s strengths is the ideology of ‘ONE FORD’ as put forward by Alan Mulally when he took over as the company’s C.E.O. He advocated streamlining the company with the need of operating globally as a team to enhance the same plan and similar goal in the implementation required steps for ensuring the company's growth in terms of profits (Coulter, 2013). The corporation has further consolidated its platforms from 27 to nine and concentrated on the high fuel efficiency, low cost, and high quality of its vehicles. According to Dolan and Stoll (2009), the company also embarked on the bid to cut its debts by 28%; this step aimed at promoting the company’s stability.

Regarding financial obligations, Ford has sharply reduced its debts and pension obligations in the past few years; thus, these steps enabled the company to gain special recognition from credit-rating agencies. Its automotive debts have reduced to $13.8 billion by 2014 from initial $19.1 billion in 2010, and this figure is expected to go down further by 2018. Miller (2015) states that Ford's pension was underfunded by $18.7 billion in 2012; however, by the end of 2014, funds deficit had been reduced to $9 billion.

The Ford brand itself has earned the loyalty of consumers worldwide. The Blue Oval, for example, has won many clients that come back to purchase another Ford model. This development demonstrates that more customers have preferred not to change their vehicle model after they have tasted the brands of Ford. Consequently, in 2014, Ford was awarded the top honor for the customer-manufacturer loyalty for the fifth time in a row (Miller, 2015).

Weaknesses (Internal)

The modern client is attracted to purchase a luxury vehicle; hence, luxury brands from other manufacturers have found high demand among consumers. Today, the success of the motor manufacturers is closely associated with the luxury product lines. On the contrary, Ford's luxury vehicle in the name of the Lincoln brand has long struggled in fitting into the modern luxury demand in comparison to other competitors. Thus far, it seems as if it will take a longer period to make a turnaround in this domain. Over the last five years, the company has halved its unit sales in the United States on the annual basis (Miller 2015).

Ford faces some difficulties in overseas markets just like other manufacturers, especially in South America and Europe. In the 2012-2014 operation period in Europe, Ford lost $4.3 billion. Though the management is optimistic to minimize the loss in the region in the nearest future, the loss in South America is on the rise. Recently, it has skyrocketed from $33 million in 2013 to a staggering $1.1 billion in 2014. Miller (2015), states that this issue means that the region is dragging the company into considerable losses.

Opportunities for Ford (External)

While being one of the largest markets for the automobile industry in the world, China has not yet reached the saturation as in the case of Japan or Europe. This fact leaves room for the further growth. According to the survey, the country has around 100 cars per 1000 people on the road as compared to Japan and Europe where there are 600 cars per 1000 people (Miller. 2015). Ford was late to enter the Chinese market but had quickly gained the ground. It is evident that shortly, the company is bound to register double digits in terms of sales.

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Another emerging Ford market is India, which is an important location in the company’s market strategy. Ford hopes that India will play a crucial role in enabling its export targets since the Indian market is a hub that is connected to over 50 markets; thus, it is a vital location for Ford's strategy (Miller, 2015).

Threats to Ford (External)

The Union of Automobile Workers is a significant threat to the company's profitability. Despite the sacrifice by the organization in a bid to save the company from bankruptcy at the time of the great recession, it has come back to haunt Ford since the union possesses a leverage bargain in demanding higher payment and bonus due to the booming in the industry and the fact that Ford is making profits once again (Miller, 2015). In this case, the company expects increased expenditure besides potential strikes that will affect the production.

The Ford Motor Company also faces competition for the home market from the Chinese businesses that are anticipating having a share of the American market (Jurevicius, 2016). Despite the fact that the Chinese competition on the quality and design is way off, the Guangzhou Automobile Group strives to begin exporting vehicles to the United Stated by 2017 (Miller, 2015).

Specific Environment

Today, Ford faces stiff competition from other automobiles manufacturers. Despite offering quality products, the company lags behind of the likes of Toyota and Volkswagen due to the low-cost vehicle they offer consumers. Potential threats also lie in the emergence of Chinese automobile manufacturers, who have gained ground in the African and Asian markets as they threaten to sell their vehicles to the United States by 2017(Miller, 2015). Consumers feel more comfortable with buying other brands as they are cheaper as compared to the high-quality Ford vehicles. The suppliers bargaining power is enhanced, as well, since the company thrives in the innovative economy; thus, a selection of convenient and less expensive providers is evident. In addition, with the campaign against the green gas emissions, more people are going to prefer the use of the public means of transportation to a private vehicle. Probably, this trend will push away Ford from the market as it has specialized in small vehicles that aim to provide consumers with comfort.

General Environment

Ford exists in a highly competitive environment, in which it has to fight with other main brands such as General Motors, for example, who have already overtaken it in the global ranking (Strider, 2015). The company also operates in the environment that boasts of the national patriotism; thus, customers are likely to prefer home-made products. The US has a real political atmosphere with no civil strives, in which the technological advancement is at the peak due to a large number of highly talented innovators.

Evaluation of Ford’s Strategies

The policy of cutting on the excessive cost, as well as mainstreaming Ford’s operations to a similar plan for the realization of the same goal, is a welcoming strategy that is going to influence the company in this competitive industry positively. It has also adopted the low-cost production of cost-efficient cars, which is a great strategy to lure the customers. However, it is going to be short-lived since the likes of Toyota will adopt these technologies at a relatively lower cost. The company’s late entry into the Chinese market is an indication of the poor marketing strategy, and it can prove catastrophic in the nearest future. Ford’s financial capability is a crucial aspect of its prestige and competitiveness over the rivals though employees could spoil the merry by seeking high pay as the compensation for the sacrifice made for the sake of the company during the great recession.

Conclusion

In conclusion, Ford has been one of the automobile giants in the world; thus, its lack of dynamism regarding customer's demand has seen it falling back to the likes of Toyota and General Motors. It has been financially stable in the recent years; the company has never accepted the government funding during the great recession. Currently, the corporation faces high competition from Toyota in the global market as Toyota offers its consumers some lower cost alternatives. The strategies employed by the company are promising especially the ‘ONE FORD' one. It seeks to make the business work in cohesion; thus, it strives to achieve high profitability. In spite of it being a leading giant in the United States, it needs to lower own production cost and offer less expensive cars in order to compete with the anticipated Chinese manufacturers in the country.

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