SWOT analysis of Ford Motor Company
This detailed SWOT analysis of Ford Motor Company aims to provide readers with a comprehensive insight into the strengths and the weaknesses of Ford Motor Company. It also aims to examine the opportunities the company should explore and the threats it should keep an eye on. Ford Motor Company is an American multinational automotive company headquartered in Dearborn, Michigan (the USA). It was founded by Henry Ford and incorporated in 1903.
Strengths of Ford Motor Company
Ford Motor Company has operations in over 125 countries and, approximately 166,000 people are working in its plants and offices around the world. It is a legendary car company; however, it also manufactured airplanes, radios, refrigerators, postal machines, and weather satellites (Ford Motor Company, 2019).
There can hardly be any disagreement with the fact that Ford has a very diverse portfolio. Its vehicles are categorised as cars, people mover, SUV, performance cars, and commercial vehicles. KA+, Fiesta, Galaxy, Focus, Tourneo Connect, Tourneo Courier, Edge, Kuga, Focus RS, Ford GT, Transit, Ranger, and Fiesta Van are some of the most famous vehicles manufactured by Ford. These brands enable Ford to cater to all kinds of demographic groups.
Ford is one of the top automakers in the world. It ranked #4 in 2018 with 5.83% global car market share (Wagner, 2019). It also ranks #48 in the world’s most valuable brands in 2019 (Forbes Media LLC, 2019). It has won a number of awards over the years. For instance, Ford Focus won Car of the Year 2019 in Finland and Croatia, Best Lower-Medium Car in the U.K, and some other titles.
Ford has a very strong position in some of its key markets. For instance, its market share was 14.44% in the USA in 2018. This is in fact the 2nd position in the US market with #1 being General Motors. Ford is also one of the leading car brands in the UK. Its market share in December 2018 was 11.44% in the UK (Wagner, 2019).
One of the key strengths of Ford is research and development (R&D) where Ford has shown huge and consistent interest over the years as evidenced with its massive investments. For instance, it spent about $8 billion in R&D in 2017 and $8.2 billion in 2018. It is currently investing heavily on electrical cars and artificial intelligence in vehicles (Wagner, 2019).
Weaknesses of Ford Motor Company
The brand image of Ford suffered gravely when it had announced recalling vehicles in June 2019. It recalled 1.2 million sport utility vehicles in the US over suspension issues costing the company approximately $180 million (£140 million). It was reported that 28,000 vehicles were also affected by the same problem in Canada. It is worth noting that Ford recalled 1.1 million Explorers in North America in 2014 (BBC, 2019).
China represents approximately 30% of global car sales. However, Ford had a late start there. Moreover, it struggled to build a good footprint and has in fact, decided to cut production in the country. Likewise, Ford is heavily dependent on the U.S and European market. However, things are changing, and Europe is becoming a very challenging market. Ford made a profit of $234 million in 2017 in Europe; however, made losses in 2018 (Winton, 2019).
Opportunities for Ford Motor Company
Ford Motor Company should continue using market penetration strategies to grow and expand further in its existing markets. Likewise, developing new vehicles to sell in both the existing and new markets is worth the effort. In fact, Ford has decided to invest more than $1 billion in its Chicago operations to launch three new SUVs in 2019 (Shepardson, 2019). This investment creates 500 job opportunities which should enhance the brand image in the employment markets.
As stated above, China represents approximately 30% of global car sales. Auto market is growing in India as well. This is a very good opportunity for any global automobile company. It is worth noting that Ford plans to launch 30 new Ford and Lincoln vehicles in China over the next three years, a number of which will be electric vehicles. This may turn out be very effective for that company as China has seen rises in the sales of electric vehicles recently (Shane, 2019). Ford is also working on autonomous vehicles which are considered to be the real game changers soon.
Threats to Ford Motor Company
Threat is the last issue to discuss in the SWOT analysis of Ford Motor Company. The automotive industry is one of the most competitive ones in the world and the battle for providing best products with the lowest prices may impact on the profit margins significantly. Ford is vulnerable to fierce competition from big giants such as General Motors (GM), Volkswagen, Toyota, Tata Motors, Hyundai, Tesla, Nissan, PSA Peugeot Citroen, Honda, BMW, Mercedez, Mitsubishi, and Fiat Chrysler Automobiles.
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Last update: 04 August 2019
BBC (2019) Ford recalls 1.2 million vehicles in US over suspension fault, available at: https://www.bbc.co.uk/news/business-48614704 (accessed 30 July 2019)
Ford Motor Company (2019) About us, available at: https://corporate.ford.com/company.html (accessed 02 August 2019)
Forbes Media LLC (2019) The world’s most valuable brands, available at, https://www.forbes.com/powerful-brands/list/#tab:rank (accessed 03 August 2019)
Hancock, T. (2019) Why Ford is stalling in China while Toyota succeeds, available at: https://www.ft.com/content/6fd5a4c4-36c1-11e9-bd3a-8b2a211d90d5 (accessed 04 August 2019)
Shane, D. (2019) Ford will introduce 30 new models in China over 3 years, available at: https://edition.cnn.com/2019/04/03/business/ford-china-electric-vehicles/index.html (accessed 03 August 2019)
Shepardson, D. (2019) Ford investing $1 billion, adding 500 jobs in Chicago, https://www.reuters.com/article/us-ford-motor-investment/ford-investing-1-billion-adding-500-jobs-in-chicago-idUSKCN1PW21C (accessed 04 August 2019)
Wagner, I, (2019) Global car market share of the world’s largest automobile OEMs in 2018, available at: https://www.statista.com/statistics/316786/global-market-share-of-the-leading-automakers/ (accessed 03 August 2019)
Wagner, I. (2019) Ford’s engineering, research, and development expenditures from FY 2013 to FY 2018 (in billion U.S. dollars), available at: https://www.statista.com/statistics/260867/fords-research-development-expenditures/ (accessed 04 August 2019)
Winton, N. (2019) Ford Motor staying in loss-making Europe – for now, available at: https://www.forbes.com/sites/neilwinton/2019/01/10/ford-motor-stays-in-loss-making-europe-for-now/#319fdacb6606 (accessed 01 August 2019)
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Author: Joe David
Joe David has years of experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality and tourism management.