Strategic Analysis of Ford Motor Corporation Essay Example

men worked on each vehicle, assembling it from sections made primarily by supplier firms contracting for Ford. However, a decade later, Ford had grown considerably and was leading the world in expansion and improvement of the concept of the assembly line. Today, Ford, which adopted its founder’s name, sells the most luxurious motor vehicles under the Lincoln brand while commercial vehicles and automobiles under the Ford brand (Jones, 2004). Ford also runs the Ford Performance Vehicles (FPV), which is an Australian performance vehicle manufacturer, and Troller, a Brazilian SUV automaker. Currently, Ford Corporation has stakes in several other motor vehicle companies such as Mazda of Japan, UK’s Aston Martin, and China’s Jiangling. Ford also has several joint ventures such as the Ford Sollers in Russia, Ford Otosan in Turkey, AutoAlliance Thailand, Ford Lio Ho, and Changan Ford Mazda in China (United States Securities Exchange Commission, 2014). Though the Company went public back in 1956, the Ford family still retains 40% voting rights through special Class B shares. Thus, Ford is amongst the biggest family-controlled corporations in the world and has maintained so for over 100 years (Rogers, 2016).

The Ford pioneered technique for large scale manufacturing of automobiles and management of industrial workers using intricately engineered production chains and characterized by moving assembly lines came to be known widely as Fordism (Jones, 2004). In 1922, Henry Ford bought the Lincoln Motor company to compete with brands such as Packard and Cadillac in the luxury domain of the automobile market. In 1939, Ford Corporation created the Mercury brand that became the higher-priced sister car to Ford in a bid to rival the General Motor’s fair-priced Buick, Oldsmobile,

and Pontiac. By 1951, the company had gotten involved in superconductivity research due to the establishment of a scientific lab in Dearborn to carry out unfettered basic research. This involvement led to the invention of the superconducting quantum interference device (SQUID) by the Ford Research Labs in 1964 (Johnson, 2014). Ford also began proffering the Lifeguard safety package from 1956. The package comprised innovations such as an optional padded dash, a standard deep-dish steering, and optional front and rear seatbelts, some of which were featuring in vehicles for the first time. In 1957, Ford inaugurated the first retractable hard top on a six-seater car that was produced in mass (Johnson, 2014).

Ford launched a substantial number of highly successful automobiles all over the world in the 1980s. During this time, the company also started using the marketing slogan, “Have you driven a Ford lately?” (Geyer, 2011, p. 43) to suggest its brand to new customers and make its products to seem more fashionable. Ford also acquired the Jaguar and Aston Martin in 1990 and 1994 and continued to sell huge numbers of automobiles from the mid to late 1990s in the then booming US economy with low oil prices and a booming stock market (Geyer, 2011). However, with the dawning of the 21st century, a faltering economy, higher fuel prices, and legacy health care costs led to declining sales, shrunken profit margins, and plunging market shares. The bulk of the corporate profits were accrued from funding consumer automobile loans via Ford Motor Credit Company (Geyer, 2011). By 2005, Fords corporate bonds had reduced to junk status due to eroding market share, soaring prices for gasoline, high

US health care expenditure on an aging workforce, as well as an over-reliance on diminishing SUV sales amongst other things. The margin of profit on large vehicles decreased because the company increased “incentives” such as low-interest financing and rebates to counterbalance the declining demand (Geyer, 2011).

By the end of 2005, Ford’s management had procured a plan dubbed, “The Way Forward,” which was to see the company return to profitability. “The Way Forward” involved resizing the corporation to match the existing market, dropping some inefficient and unprofitable models, reinforcing production lines, closing down 14 plants, and thus laying off 30,000 workers (Geyer, 2011). Ford reported the greatest annual loss in its history in 2006. The figure was $12.7 billion and was only surpassed in 2008 when the company realized a loss of $14.6 billion. The corporation increased its borrowing capacity to roughly $25 billion in 2006, thus, placing all of its assets substantially as collateral. The then Ford’s CEO William Clay Ford Jr., a great-grandson of Henry Ford stated that bankruptcy was not a choice for the company. Ford sold its UK subsidiaries, the Jaguar and Land Rover, to Tata Motors in March 2008 at a loss of $2 billion. It also scrapped the Mercury brand in 2011, which it had used to market entry-level cars in Canada, the US, Middle East, and Mexico since 1938 (Hoffman, 2013).

Additionally, Ford made a contract settlement with the United Auto Workers, who represented roughly 46,000 hourly laborers in North America, in late 2007 to establish an independently run, company-funded Voluntary Employee Beneficiary Association trust to transfer the burden of retiree health care from the books of the company, thus,

enhancing its balance sheet. This plan was effected on the 1st of January 2010. VEBA gave Ford a significant break with regards to its continual retiree health care costs as well as other issues. Ford contributed the whole of its current liability, which was about $5.5 billion as of December 2009, as well as an additional $500 million to VEBA as a sign that it had gained a stronger cash position (Lucas & Furdek, 2011)). The agreement also caused the company to commit to sizable investments in several of its factories, thus, granting job security to the hourly workers (Lucas & Furdek, 2011).
Though Ford was close to bankruptcy during the financial crisis at the start of this century, it has since recovered. Currently, Ford ranks second behind General Motors in terms of the largest US-based automakers. In 2010, the company had become the fifth largest European automaker and was also ranked 8th on the Fortune 500 list based on its 2009 global revenues of $ 118.3 billion (Hoffman, 2013). Ford hired about 213,000 persons and produced 5.532 million automobiles at around 90 facilities and plants worldwide in 2008 even though it saw its heaviest losses in that same year (Hoffman, 2013).

Currently, Ford’s assets include two automotive brands, Lincoln and Ford, the Ford Motor Credit Corporation, and 90 factories. Ford’s revenues, as the company reported in June of 2015, amounted to $141.95 billion. The US is the company’s largest market, and in 2014, it generated revenues amounting to $82.67 billion from this country. Consequently, Ford’s share of the automotive market climbed by 4.8% in the same year (Rogers, 2016).

This paper is dedicated to the strategic analysis

of Ford Motor Corporation. The techniques will involve valuations such as the SWOT analysis and the Porter’s Five Forces Model. The strategic analysis will aid in assessing the company’s viability and tactical potential of the strategy.

Questions: What does strategic analysis reveal about Ford? What is Ford’s future outlook for the company?

Significance of this Effort

Company valuation is useful in safeguarding the interest of investors as well as providing a perspective of the big picture to the internal stakeholders so that they can align their plans in the right direction. This case study would be useful as a reference guide for carrying out analysis of the conceptual framework of company valuation. Additionally, it may also serve as a firsthand guide to researchers to appreciate and understand company valuation methods.

Mission/Vision Analysis

A company’s vision statement defines the desired future condition or situation of the business. Accordingly, Ford’s vision statement, “People working together as a lean, global enterprise for automotive leadership,” (Ford, 2016) drives its global society to reach and surpass this market position. The company further elaborates that, “Automotive leadership is determined by the satisfaction of our clients, investors, employees, suppliers, dealers, and communities” (Ford, 2016). This vision apparently has three major points; global leadership, lean business, and emphasis on stakeholders. The aspect of global leadership in this vision indicates that Ford intends to become the top player in the international automotive market. At present, the company ranks fifth globally and second in the US with regards to size. Thus, Ford has work to do to achieve its vision of becoming the global leader. The vision’s emphasis on stakeholders, on the other hand, is met through Ford’s improved human

rights policies in addition to its corporate social responsibility policy for investors, employees, customers, and others. With regards to lean business operations and present status, Ford needs to work on expanding its sales to attain global leadership (Ford, 2014).

A mission statement, on the other hand, specifies the kinds of initiatives required to meet organizational goals. In this regard, Ford’s mission statement “One Team. One Plan. One Goal” (Ford, 2015) directs the strategies required to achieve and bypass this market position. It is also termed the “one Ford” mission, and a part of the “One Ford” strategy that had been unveiled in 2008 under Allan Mulally, the then CEO (Ford, 2014). Accordingly, Ford elaborated that the broadened version of the statement reads as follows:

1. One team: “Persons working jointly as a lean, worldwide enterprise for automotive leadership, as determined by Customer, Dealer, Supplier, Community, Employee, Investor, and Union/Council Satisfaction” (Ford, 2014).
2. One Plan: “Assertively restructure to function profitably at the present demand and adjusting model mix; Speed up development of new designs that our clients desire and value; Finance our strategy and better our balance sheet; Work with one another effectively as a team” (Ford, 2014).
3. One Goal: “A thrilling viable Ford affording profitable development for all (Ford, 2014).

This mission statement was structured as a response to the challenges the company experienced, and more so in relation to the American recession and market risks and the global financial crisis that began around 2007. Ford initially had distinct product lines in various markets before effectuating the One Ford mission statement. Thus, presently, the company focuses on building consistency in service and product quality and design globally. The

mission stresses teamwork to achieve unified effort at Ford. The One Goal and One Plan elements also show that the mission statement concentrates and blends the company’s global organizational efforts to enhance business performance and attain the global leadership position as given in Ford’s vision statement (Ford, 2014). Thus, in this instance, Ford Motor Corporation vision and mission statements are determinants of the company’s strategic direction and success in the international automotive industry.

SWOT Analysis of Ford

A SWOT analysis points out the strengths that a company can employ to exploit opportunities, confront threats, and overcome its weaknesses (Pickton & Wright, 1998). Ford’s success in maintaining its rank as the fifth largest automaker in the world is based partly on its ability to address the issues brought up in this SWOT analysis. The corporation’s SWOT analysis reveals the primary issues that the company must tackle to better its performance. As previously mentioned, Ford aims to top the global automotive industry. Therefore, to attain this target, the company’s strategic formulation process must incorporate the concerns in its SWOT analysis.

Ford’s Strengths

Ford’s strengths are connected with its efforts in research and development, global operations, and brand (Rogers, 2016). Strengths represent the internal strategic factors (organizational characteristics) that promote business effectiveness. Ford’s main strengths are as follows; efficient innovation procedures, a strong brand image, and the global supply chain. As a major player in the global automotive market, Ford boasts of a strong brand image that adds to customer loyalty and product attractiveness. Ford’s global supply chain supports its global operations. Additionally, the company has more efficient innovation processes following the inauguration of the 2008, One Ford strategy. Thus, the company’s

evolving strengths support its growth (United States Securities Exchange Commission, 2014).

Other additional strengths include:

• Technological breakthroughs and procedures such as a centralized global risk management body, single supplier design, and virtual assembly lines amongst others.
• Pledge to environmental protection through the production of low emission technologies.
• Reiteration of technologies, which makes it possible to use similar spares in multiple models.
• Competent production and engineering workforce who possess global competencies but can also localize products in the areas where they are based.
• Excellent analytics and knowledge of the global markets that assisted the company to develop into a real global company. For example, Ford’s expertise in the production and sale of light commercial vehicles and especially vans whose demand is comparatively high.
• The capacity to connect to developing nations such as India and Indonesia, and adapt to the local demographic conditions.
• The fact that the company is the proud owner of some of the best car models in the world, e.g. the Ford Raptor.
• Perfect management and leadership strengths.
• Strong entrepreneurship at the local market level as well as global level.
• Excellent retailing abilities in nations that are yet out of reach of several of Ford’s competitors.
• Excellent nexus of supply chain management and suppliers.
• Excellent administration of global workforce and with less fraternization save for the UK where shop floor hostility led to the closure of the Dagenham plant (United States Securities Exchange Commission, 2014).
• Also, Ford’s present financial position gives it an edge in the market. In June 2015, the company reported a free cash flow amounting to $3.477 billion (Rogers, 2016).

Ford’s Weaknesses

Ford’s failings are based on its limitations as opposed to rivals. This

bit of the SWOT analysis portrays the organizational inadequacies or constraints, which constitute the internal strategic factors that curtail business potential. Ford’s primary weaknesses include; a restricted global scope of production web, retarded innovation processes, higher comparative costs. One major weakness of the Ford Motor Corporation is the deficiency of its production network facilities, more so when matched with Toyota’s extensive global network. For instance, both Volkswagen and Toyota produced more than 10 million vehicles in 2014, which were twice as much as Ford’s production. In addition, Ford recently decommissioned some of its production plants in Europe, worsening this drawback further (Hoffman, 2013). Besides this constraint, Ford’s prices and costs are relatively high while its innovation procedures comparatively slow to adjust to emerging or new trends despite the fact that the company has raised its innovation effectiveness (Rogers, 2016).

American auto brands also have a poor reputation when compared to Japanese or European competitors. This case is especially true of the Lincoln brand, which is widely deemed an inferior product to German and British luxury cars even within the confines of the United States. Ford also relies heavily on European and the US auto markets as well as pick-up sales; however, experts anticipate that future growth in vehicle sales will be in upcoming markets such as India and China. Additionally, pick-ups do not appeal as such without the North American market. The company also depends on some regional auto markets, such as Canada, Brazil, and Russia, which are currently in recession due to declining prices for natural resources. Ford is also widely considered as a common or working brand, which makes it difficult to market its

products to the upwardly mobile (Rogers, 2016). Also, its reputation as a staid, old-fashioned brand makes it difficult to promote it to young consumers. As of late 2015, Ford’s stock prices were comparatively low, i.e. going for $15.26 per share. The company also has a bad reputation with investors, and this factor can limit its ability to raise capital. As a matter of fact, Ford’s market capitalization was just $60.55 as of October 2015 (Rogers, 2016).

Ford’s inability to efficiently tap opportunities in medium and small market segments where the largest motor market exists also places the company at a comparative disadvantage. Its apparent lack of diversification of products, i.e. specializing solely in automotive manufacturing and supply save for Ford finance, limits the company’s potential for investment and further expansion (Hoffman, 2013). In essence, this portion of Ford’s SWOT analysis shows that the corporation is comparatively weak as matched with other top players, more so Toyota.

Ford’s Opportunities

Opportunities for Ford are linked to expansion and growth. This section of the SWOT analysis focuses on the industry or market characteristics, which constitute the external strategic factors that promote business growth. Ford’s main opportunities include; Global expansion via market penetration, expansion via product development and cost reduction via tactical supply chain management. For starters, Ford Motor Company has the platform to expand and grow through market penetration. For instance, improved marketing and more dealerships, as well as product development, e.g. creativeness to bring in new products to satisfy concerns about the environment. New automotive technologies such as autonomous or self-driving cars could raise demand for new designs as well as sales. These new technologies that spark publicity could also

raise interests in automobile purchases (Vasilash, 2007).

The Volkswagen diesel scandal also affords Ford an opportunity to acquire some market share by selling to disgruntled Volkswagen clients. This fact is so because Volkswagen will not have the competitive advantage accorded to it by diesel mileage. Ford Corporation’s alternative fuel vehicles, particularly the Fusion hybrid and the C-Max Electric, which do not use diesel, will likely get a market especially with the concerns about air pollution and suspicion sparked by the Volkswagen scandal (Ewing, 2015). The new uses for automobiles, such as short-term rental services e.g. Zipcar, and app-bases services like Lyft and Uber could also build new markets for vehicles and their financing. The risen levels of e-commerce may raise the demand for light commercial vehicles that are employed for delivery and Ford’s Transit Connect work van is amongst the most popular vehicles in this category. There might just be an opportunity for it there (Vasilash, 2007).

The company also has the chance to better its financial standing by broadening its supply chain to attain better economies of scale and minimize production costs. The existence of growing auto markets in expanding economies such as Mexico, India, and China offer excellent opportunities, which is also true of third world markets where there is a growing motor market in medium and small segments (Vasilash, 2007). There are also opportunities for collaboration with Asian manufacturers such as the Tata Motors and localization of workforce and production at much lower costs. Coupled with collaboration is the opportunity for developing pseudo brands in Asian markets by merging names, i.e. Ford with the local name, e.g. Ford-Tata, etc. (Vasilash, 2007). Thus, in this

segment of SWOT analysis, Ford has growth opportunities through innovation and operational expansion.

Threats to Ford Motor Corporation

The threats facing Ford are based on the global oil prices and competition. The section of the SWOT analysis gives the external strategic factors that could reduce or limit business performance. Ford’s threats include; aggressive competitive rivalry, fluctuating prices of oil, and new entry of high-tech companies into the industry. Ford faces the threat of rivals such Toyota and the General Motors, which engage in innovation and aggressive marketing. Especially is the presence of Toyota and Volkswagen in the vital North American auto market a menace to Ford. Currently, Toyota is competing with Ford directly in the pick-up truck market. Nissan and Mercedes are also competing with Ford directly in the commercial van market. Also, Honda and Toyota are already ahead in the production of alternative fuel vehicles (Hoffman, 2013). Firms such as Apple and Google also pose a significant threat in their efforts to create driverless vehicles that could rival Ford’s products. If electric vehicles are widely adopted, there will be a need for expensive changes to dealerships and costly upgrades to plants, which could diminish Ford’s profits (Rogers, 2016).

Additionally, the instability in oil prices threatens Ford’s products sales performance for most of these products have internal combustion engines. The Volkswagen scandal could also adversely affect the demand for diesel powered vehicles inclusive of the Ford Raptor (Ewing, 2015). Besides these factors, the speculation that young folks are driving less could mean that there will be a drop car sales at some future point. Some experts also forecast that new technologies such as the self-driving cars and Uber

could lead to similar ends (Hoffman, 2013). Thus, this section of the SWOT analysis indicates that Ford must innovate to retain a competitive edge.
Ford, like all auto companies, is confronting a radically shifting auto industry. New technologies are forging opportunities and threats that, in the years ahead, will redefine the automotive market.

Ford’s Five Forces Analysis

Michael Porter designed the Five Forces analysis model to investigate the external factors that surround firms within the industry environment. The Five Forces analysis of Ford points out the most significant external factors as well as how they impact the enterprise, thus, affording input for managerial decision-making as well (Dobbs, 2014).

Competitive Rivalry (Strong Force)

This bit of the Five Forces analysis alludes to competing companies that affect the industry environment. Some of the factors that lead to the strong competitive force against Ford against Ford include the highly aggressive nature of the firms (which is a strong force), high exit barriers (which is a strong force), and the moderate number of companies (a moderate force) (Hull & Avey, 2007).
The Automotive industry is presently in its mature stage of its life i.e. industry life cycle. Since there is a slow growth in the revenue, rivalry tends to be quite high, and indeed, the competition within the automotive industry is extremely fierce, and Ford Corporation has a tough lot to meet. The industry’s biggest players by volume are the Toyota, Volkswagen, General Motors, DaimlerChrysler and Ford itself. Each of these companies provides unique incentives to pull customers. Ford thrived in the past as it was comparatively big, and anticipations about it leading the industry were high. However, the inappropriate promotion of Baby Jag as

well as the tire scandal tainted its image at a time when GM’s new incentives such as the “GM military” were swaying the markets. Additionally, the sleek designs and price incentives offered by the Japanese automakers have been causing US car sales to drop (Hoffman, 2013).

Ford must compete with big guns such the Toyota that innovates and markets its products quite aggressively. The fact that the automotive industry has high exit barriers implies that firms would rather keep up the competition with Ford than terminate their business due to the high investment and costs. A condition of this nature exerts a strong competitive force against Ford. Additionally, Ford must also grapple with a moderate number if firms, and more so a few massive corporations such as the General Motors. Concerning this aspect of the Five Forces analysis, Ford must expand its competitive advantage to tackle the external factors associated with competition (Hoffman, 2013).
Ford’s Buyers/Customer’s Bargaining Power (Moderate Force)

Buyer power is highly influenced by interest rates and inflation, and the impact on these two is further amplified by fluctuation in oil prices. In the automotive industry, however, the buyer power tends to remain fairly high, thus enhancing competition. With similar products that have only minor differences, automakers are increasingly switching to new incentives to pull clients to their brands, for instance, Ford offered free upgrades amounting to $2200 at some point in the early to mid-2000s. In essence, the preferences of consumes determine the kind of vehicles sold. With the rising inflation rates and interests, consumers tend to prefer vehicles are least costly to maintain in the long run. Therefore, firms increasing use aggressive marketing strategies

such as price incentives, extra benefits, and add-ons to draw customers (Hull & Avey, 2007).

Ford’s clients sway the business considerably. This facet of the Five Forces analysis concerns the effects of buyers on the industry environment and business. The external factors that add to the moderate bargaining power of Ford’s clients include moderate switching costs (a moderate force), moderate size of personal purchases (a moderate force), as well as the moderate availability of substitutes (a moderate force) (Hull & Avey, 2007). Ford’s customers meet moderate switching costs, which are the repercussions of shifting from one firm to next. For this reason, clients can move to other firms easily, though rarely since automobiles are big ticket items. Additionally, every purchase of Ford’s products is moderate with respect to its price and contribution to the revenue of the company. Therefore, even a minute change in a client’s demand could elicit substantial consequences on the Corporation (Hoffman, 2013). The moderate availability of alternative choices also presents customers the option of shifting from Ford. In this regard, Ford must maximize client satisfaction to tackle the external factors in this facet of the Five Forces analysis (Hoffman, 2013).

Ford’s Suppliers Bargaining Power (Moderate Force)

Suppliers have a moderate sway on Ford. This facet of the Five Forces analysis considers the impact of suppliers together with their demands on firms. In the case of Ford, the external factors that add to the moderate bargaining power of suppliers include a moderate overall supply (which is a moderate force), moderate number of suppliers (which is a moderate force), as well as low forward vertical integration (which is a weak force) (Hull & Avey, 2007). The

moderate supplier population and overall supply quantity accord suppliers critical but constrained bargaining power on firms such as Ford. The majority of these suppliers also have little forward vertical integration, implying that they neither own nor manage the dissemination and sale of their products to Ford. Ford’s backward vertical integration via the Ford River Rouge Complex further weakens suppliers’ bargaining power. Ford manufactures some of the materials it employs to build vehicles and related finished products through this complex (Hull & Avey, 2007). Thus, this facet of the Five Forces analysis demonstrates that Ford must take into consideration the vital but constrained external factors connected to the effect of suppliers on the business.

Large supplier numbers often lead to low power in the industry. To profit from economies of scale firms are minimize their suppliers and increase their orders on prioritized suppliers. This initiative provokes rivalry amongst suppliers. They offer financial incentives to automakers, which is mutually beneficial in the long run as the suppliers win long-lasting contracts while automakers benefit from lower costs of procuring components (Hoffman, 2013).

Threat of Substitutes (Moderate Force)

The Ford Corporation experiences the impacts of the substitution of its products. This facet of the Five Forces analysis alludes to the degree to which substitution jeopardizes the industry environment and firms. Some of the external factors that add to Ford’s moderate threat of substitution include; moderate availability of substitutes (a moderate force), moderate costs of switching (a moderate force), and low performance of substitutes (a weak force) (Hull & Avey, 2007). Ford’s products have a substantial number of substitutes including bicycles and public transportation. Nonetheless, these substitutes are often absent and inappropriate in

certain situations. The shifting costs are moderate for even if Ford’s clients can alternate to these substitutes, they cannot do so easily while they are paying their car loans. Additionally, in most cases, these substitutes cannot outperform Ford’s products with regards to convenience and safety (Hoffman, 2013). With regards to this facet of the Five Forces analysis, Ford should tackle suppliers as the second-priority outside threat.

The Threat of New Entrants (Weak Force)

Ford can feel the impact of new entrants in its industry environment. This facet of the Five Forces analysis takes into consideration the impacts of new corporations. The external factors that lead to the mild threat against Ford include high capital costs (which is a weak force), high costs of doing business (which is a weak force), as well as a high cost for the development of brand (which too is a weak force) (Hull & Avey, 2007). Corporations of the likes of Ford are set to spend vast amounts of resources to establish and maintain their businesses and plants. These costs are a hindrance to entry, thus, causing the threat of new entrants to be weak. Additionally, it is expensive to develop a strong brand that can compare to Ford, thus, making it tough for new entrants to compete effectively against industry giants (Hull & Avey, 2007). From this facet of the Five Forces analysis, external factors constitute a minor threat to Ford.

Net Assessment and Critique of the Viability and Strategic Potential of the Ford’s Present Strategy

At present, Ford’s globalization strategy, which is in line with Germany’s top three in the automotive industry, i.e. Volkswagen, Mercedes-Benz, and BMW, comprises:

• Tactical decisions centralized at
  

the company level.

The primary concerns highlighted by Ford’s SWOT analysis are constraints in the speed of innovation and extent of its production network, as well as rivalry from new entrants and existing firms. Ford needs to boost its research and development investment and increase its speed of innovation to confront the aggressive competition as well as the entry of high-tech companies into the industry. Additionally, Ford needs to broaden its network of production to raise economies of scale, which can cut down prices and costs to make Ford automobiles more alluring.

Accordingly, competitive rivalry emerges as the most critical external force in the automotive industry environment with regards to the Five Forces analysis. The five forces influence Ford’s business as follows:

• Competitive rivalry – strong force
• Customers/buyers’ bargaining power – moderate force
• Suppliers’ bargaining power – moderate force
• Threat of substitutes – moderate force
• Threat of new entrants – weak force

Since competition happens to be the most notable issue for the company, Ford has to prioritize strategic solutions to be at

a competitive edge for its long-term survival in the industry. For instance, innovative sales could improve the performance of the company with regards to sales. As such, Ford has to concentrate on R & D investment to build on innovative processes (Hoffman, 2013).
Ford’s current strategy, as pointed out in this paper, is indeed viable and can enable the company to achieve its vision. Coupled with the few adjustments highlighted by the SWOT and Five Forces analyses, the firm has the potential to top the automotive industry.

Conclusion

The goal of this investigation was to evaluate different strategic analyses techniques and then apply them to the case study of Ford Motor Company. The analysis began with an overview of the firm including mission and vision analysis, and thereafter the strategic analysis based on SWOT and the Five Forces analyses. The strategic framework served to reveal at depth the strategic and management framework of Ford. It helped gain a broad perspective of the external and internal factors in the company. Ford Corporation is renowned globally for its global innovations capability with expertise in fabricating local products compatible with environments of every region on this planet. Additionally, the company has been the champion of innovations in the industry. Ford R & D with its proven innovation of interchangeable sections in mobile assembly lines saw the company expand phenomenally throughout the world. Today, it constitutes the old heritage that once dominated the global automobile markets. As a matter of fact, Ford has owned some of the most cherished motor brands on earth. The company has seen the best and worst times of profitability and revenues. The financial crisis that marked the

first decade of this century took a toll on the corporation, but it has since broken even and is looking forward to some innovative future.

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