Ford Motor Company’s success in maintaining its position as one of the largest automobile manufacturers in the world is partly based on the ability to address the concerns raised in this SWOT analysis. A SWOT analysis identifies the strengths that a firm can use to overcome its weaknesses, exploit opportunities, and address threats. This SWOT analysis of Ford shows the main issues that the company must deal with to improve its performance. The firm’s aim is to become the leader in the global automotive industry. To achieve this goal, Ford’s generic competitive strategies and intensive growth strategies include measures for resolving issues linked to the internal and external factors examined in this SWOT analysis.
This SWOT analysis of Ford Motor Company illustrates that the business is capable of addressing the internal and external factors linked to its organization and industry. Focus on innovation and expansion enables the company’s growth and performance improvement. This business expansion also comes with support from Ford’s marketing mix or 4P for capitalizing on the industry opportunities discussed in this SWOT analysis.
Ford’s Strengths (Internal Factors)
This part of the SWOT analysis presents the organizational characteristics (internal strategic factors) that support competitive advantages and business effectiveness. The strengths of the automotive business are associated with its brand, global operations, and research and development. Ford Motor Company’s main strengths are as follows:
- Strong brand image
- Global supply chain
- Effective innovation processes
As one of the top players in the global automotive industry, Ford has a strong brand image that contributes to product attractiveness and customer loyalty. Also, Ford’s operations involve a global supply chain that supports business competitiveness in the international market. The brand and the global supply chain are strengths that help establish the car company’s engagement with its target customers. Another strength is the set of innovation processes that continue to evolve to enable the attainment of corporate goals based on Ford’s mission statement and vision statement. In this part of the SWOT analysis, evolving strengths support the automotive company’s growth.
Ford’s Weaknesses (Internal Factors)
This part of the SWOT analysis shows the organizational constraints or inadequacies, which are internal strategic factors that reduce business potential. The weaknesses of the car business are based on issues and limitations relative to competitors. Ford’s major weaknesses are as follows:
- Limited global scope of production network
- Higher costs compared to competitors
- Slow innovation processes
One of Ford Motor Company’s weaknesses is the limitation of its network of production facilities, especially when compared to some competitors’ expansive global networks. The closure of some of the company’s automobile production facilities in some regions has also worsened this weakness. In addition, compared to prominent competitors, like Toyota, Ford has relatively higher costs and prices, and its innovation processes are relatively slower to respond to new or emerging trends even though the company has increased its innovation effectiveness through the years. Thus, this part of the SWOT analysis indicates that Ford is relatively weak when compared to other top players, especially Toyota.
Opportunities (External Factors)
In this part of the SWOT analysis, the focus is on market or industry characteristics (external strategic factors) that support business growth. The automotive company’s opportunities are linked to growth and expansion in the international market. The following are Ford’s main opportunities:
- Global expansion through market penetration
- Growth through product development
- Cost reduction through strategic supply chain management
Ford Motor Company has the opportunity to grow and expand through market penetration (e.g., more dealerships and improved marketing) and product development (e.g., innovation to introduce new products to satisfy environmental concerns). The company also has the opportunity to improve its financial standing by expanding its supply chain to achieve better economies of scale and to reduce vehicle production costs. In this part of the SWOT analysis, Ford has opportunities for growth through operational expansion and innovation.
Threats (External Factors)
This part of the SWOT analysis presents the external strategic factors that limit or reduce business performance. The threats to the automobile business are connected to competition and global oil prices. The following are the threats against Ford:
- Aggressive competitive rivalry
- New entry of high-tech firms
- Fluctuating or unstable oil prices
Ford experiences the external pressure of the threat of competitors, such as General Motors, Toyota, Tesla, Volkswagen, and Mercedes-Benz, along with Honda, Nissan, and Hyundai. These automakers engage in aggressive marketing and innovation. There is also the threat of competition involving driverless or autonomous driving technologies from Apple, Google (Alphabet), and other firms. The Five Forces analysis of Ford Motor Company shows that this industry environment exerts strong competitive pressure, which affects the company’s strategies for limiting the effects of the threats shown in this SWOT analysis. Moreover, oil price instability threatens the sales performance of Ford products, many of which have internal combustion engines. Overall, this part of the SWOT analysis shows that the car company must innovate to maintain a competitive advantage.
Key Considerations – Ford SWOT Analysis
The main issues highlighted in this SWOT analysis of Ford are limitations in the speed of innovation and the scope of the company’s production network, as well as competition with existing firms and new entrants. The company needs to improve its research and development investments and increase its innovation speed to address aggressive competition and the possible entry of technology firms into the industry. Also, Ford needs to expand its production network to optimize economies of scale, which can reduce costs and prices to make the company’s automobiles more profitable.
References
- Benzaghta, M. A., Elwalda, A., Mousa, M. M., Erkan, I., & Rahman, M. (2021). SWOT analysis applications: An integrative literature review. Journal of Global Business Insights, 6(1), 55-73.
- Ford Bringing Together Worldwide Industrial Capabilities, Completing Sequence of Steps to Ramp Up Ford+ Growth.
- Ford Motor Company – Form 10-K.
- Ford Motor Company – Locations.
- Ford+ Again Attracts New Customers, Drives Growth in Q3; Company Changing How It Works to Improve Quality, Costs.
- Taherdoost, H., & Madanchian, M. (2021). Determination of business strategies using SWOT analysis; Planning and managing the organizational resources to enhance growth and profitability. Macro Management & Public Policies, 3(1), 19-22.
- U.S. Department of Commerce – International Trade Administration – Automotive Industry.