Ford Motor Company

Ford Motor Company Overview:
Ford Motor Company is a strategically revolutionary and technologically innovative automobile

company founded in the year 1903 and quickly became the first of its kind to use distinctive
techniques such as moving assembly lines and conveyor belts in manufacturing and human
resource management practices by pricing products that can be bought by its workers with fair and
standard wage. Model-T1 is the prime example of this innovation as it set an industry standard
globally for manufacturing of cars. From expanding1 its portfolio by adding different price range
of cars to shrinking its portfolio by selling most of its luxury brands i.e. Premier Automotive
group1, Ford has always changed its strategy because of the highly volatile external environment
in over the last century as well as in current times. Following vision and mission statement
appropriately describe the company’s competencies and core objective.
The Vision Statement of Ford Motor Company- “People working together as a lean, global
enterprise to make people’s lives better through automotive and mobility leadership.”
The Mission Statement of Ford Motor Company- “One team. One plan. One goal.”
SWOT Analysis of Ford Motor Company:

Strengths and Competitive Assets:
 Strong brand reputation
 Global supply chain
 Effective innovation processes
Weakness and Competitive deficiencies:
 Limited global scope of production network
 Higher costs compared to competitors
 Slow innovation processes
Market Opportunities:
 Global expansion through market penetration
 Growth through product development
 Cost reduction through strategic supply chain management
External Threats:
 Aggressive competitive rivalry
 New entry of high-tech firms
 Fluctuating oil prices
Porter’s Five Forces in Relation to Ford’s International Growth Strategies:
In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed five forces
that have significant impact on a firm's profitability in its industry. These five forces analysis today
in business world is also known as -Porter Five Forces Analysis. The Porter Five (5) Forces are-
 Competitive Rivalry
 Bargaining Power of Buyers
 Bargaining Power of Suppliers
 Threat of Substitutes
 The threat of new Entrants.
These five forces will reflect the level of impact on Ford’s business by external factors in the
automobile industry.
Competitive Rivalry: This force is the strongest external factor in case of Ford as automobile
industry has strong competition and very low exits (high exit barriers) due to high investments and
costs of the firms that are already in the automobile industry.
Bargaining Power of Buyers: Ford has a strong cost leadership strategy where their product
offerings are different for different regions, but the segment of low pricing is full of competitors.
This gives a strong bargaining power to the consumers as the car is a big investment. This force is
strong because switching costs are not high and plenty of substitutes such as Tata and Toyota are
available in India.
Bargaining Power of Suppliers: Bargaining power of Ford’s supplier seems to be weak as Ford’s
strategy is to be a cost leader which requires Ford’s suppliers to be exclusively making their
‘supplies’ or ‘parts’ for Ford. For ‘Smart Mobility’ there will be significant change to suppliers
bargaining power, it will be strong in this case as ‘Dynamic Shuttle’ will be truly successful where
there is congestion in transportation system.
Threats of Substitutes: This force can be both moderate and strong for Ford as there are many
substitutes for Ford cars such as ride-sharing applications, taxi, public transportation, Bicycle, etc.
Companies such as General Motors, Toyota, and Tata for their mid-range cars and other luxury
competitors for Ford’s luxury Lincoln brand.
The threat of new Entrants: There are several barriers to entry for new companies to enter the
automobile industry such as achieving economies of scale requires high investments, acquiring
brand recognition requires aggressive marketing and brand development. This force is weak for
Ford, but it is still considered as a threat because there is potential of innovation from new
automobile start-ups that could just enter the market on the opportunity of creating and offering
something new in the market or just imitate it.
Conclusion:
The main issues highlighted in this SWOT analysis of Ford are limitations in speed of innovation
and scope of its production network, as well as competition with existing firms and new entrants.
Ford needs to improve its research and development investments and increase its innovation speed
to address aggressive competition and the entry of high-tech firms in the industry. Also, Ford needs
to expand its production network to increase economies of scale, which can reduce costs and prices
to make Ford automobiles more attractive. Porter Five Forces is a holistic strategy framework that
took strategic decision away from just analyzing the present competition.

Ford Motor Company

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Ford Motor Company Overview:

Ford Motor Company is a strategically revolutionary and technologically innovative automobile

SWOT Analysis of Ford Motor Company:

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