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FORD SWOT ANALYSIS
Transcript of FORD SWOT ANALYSIS
Poor environmental record.
Ford has been criticized for poor efforts to decrease environment pollution. University of Massachusetts Amherst have rated Ford as the seventh worst air polluter due to its manufacturing plants.
Ford Motor Company is one of the first American automotive companies that even today successfully manufactures and sells automobiles, trucks, buses and automotive parts. Ford is the second largest US automaker and the fifth largest vehicle seller in Europe and the world, based on 2010 vehicle sales.
Strong position in US market.
Ford is the second largest automaker in US, the second largest vehicle market in the world.
FORD SWOT ANALYSIS
Ford’s ECOnetic initiative is an effort to produce highly fuel-efficient engines by improving existing engines rather than new hybrid engines.
Sound financial performance
. Ford was the only big US car business that didn’t need the government bailout and was the first to get investment status back. The firm’s profit margin is high compared to competitors with the highest liquidity ratio.
‘One Ford’ approach.
Ford has decided to produce single, streamlined global lineup of its models. The carmaker no longer produces customized vehicles for different regions but focus on designing and engineering the car that fits different regional tastes and regulations.
High cost structure.
Although ‘One Ford’ initiative led to substantial cost reduction, Ford still has a high cost structure, compared to other automobiles manufacturers. Ford’s costs are driven by its generous employee compensation and pension plans.
Unprofitable Europe operations.
In 2012, Ford lost $1.75 billion in Europe and plans to experience losses in the region until 2015.
Positive attitude towards “green” vehicles.
Cars that are fuel inefficient and emit large quantities of CO2 heavily pollute air and negatively affect the environment. Consumers are aware of this negative impact and are more likely to buy “green” vehicles that emit much less CO2
Increasing fuel prices.
Ford’s strong emphasis on engineering fuel-efficient vehicles (Ford Fiesta and Ford Focus ECOnetic) with flexible fuel and hybrid engines will pay off due to increasing fuel prices in the world.
New emission standards.
A new wave for stricter regulations on vehicle emission standards would positively affect Ford position in automotive industry. Ford invests large amounts of money to produce fuel-efficient engines
Ford has great experience in creating strategic alliances and partnerships with other automotive companies. Due to current competitive pressure, all companies are more likely to enter into such partnerships to drive R&D costs down, access new markets and gain some new skills.
Decreasing fuel prices.
Some analysts forecast that future fuel prices will drop due to extraction of shale gas. This would negatively affect Ford as it focus on compact fuel-efficient hybrid and flexible fuel cars that are less attractive when the fuel price is low.
Rising raw material prices.
Rising prices for raw metals will lift the costs for auto manufacturers and result in squeezed profits for the companies.
Ford faces more intense competition from other auto manufacturers more than ever, especially in small cars segment with hybrid engines.
Fluctuating exchange rates.
Ford, including other largest automotive companies, may negatively be affected by fluctuating exchange rates as it earns more than half of its profits outside the US. The profits may be lower due appreciating dollar against other currencies.
The main advantages of conducting a SWOT analysis is that it has little or no cost , anyone who understands your business can perform a SWOT analysis.
You can also use a SWOT analysis when you don't have much time to address a complex situation.
Using a SWOT, you can:
1-understand your business better
4-capitalise on opportunities
5-take advantage of your strengths
6-develop business goals and
7-strategies for achieving them.
SWOT analysis only covers issues that can definitely be considered a
strength, weakness, opportunity or threat.
Because of this, it's difficult to address uncertain or two-sided factors, such as factors that could either be a strength or a weakness or both, with a SWOT analysis (e.g. you might have a prominent location, but the lease may be expensive).
A SWOT analysis may be limited because it:
1-doesn't prioritise issues
2-doesn't provide solutions or offer alternative decisions
3-can generate too many ideas but not help you choose which one is best
4-can produce a lot of information, but not all of it is useful.