Ford Company Analysis:

Ford is among the most well-known automotive companies globally.

Overtime the firm has

registered significant growth as well as on the

basis of its global strategy has become hugely popular throughout the
world. Fords growth and success are also based upon its global strategy. If
the brand has achieved significant success then it is because of the
excellent leadership and brilliant focus that its managers and employees
throughout the world have shown. Ford has achieved phenomenal growth
and established itself as one of the most innovative companies in the
automotive industry. However, the most important role was played by the
mission of the Ford Company. Its mission is One Team, One Plan, One
Goal, One Ford (Corporate-Ford, 2014).
This mission was established so as to implement a single strategy
throughout the company globally. This mission is linked to Fords strategy
which was of the implementation of a single plan globally. This plan is
linked to the organizational objectives and direction. The vision of the
company is people working together as a lean global enterprise for
automotive leadership (Corporate-Ford, n.d.). By automotive leadership
the company explains that it means the satisfaction of its customers,
employees, investors, dealers as well as suppliers, dealers and the
communities it serves. These are also the primary stakeholders of the Ford
Company. Ford has focussed on synchronizing its efforts globally and in
this regard the first action that it took was to implement a single strategy
globally that was effective at setting the direction of the entire firm as well

as brought all the important stakeholders under one single umbrella to

work in a single direction. Before it the company lacked a strategic focus
and globally there were critical inconsistencies in terms of strategic focus
as well as in terms of efforts and business philosophy. The main success
that could be achieved b synchronizing the efforts globally was that the
brand image changed as well as the company could earn significant
profits that changed its financial position.
Five Forces Analysis:
-

Competitive rivalry or competition among the firms

Competition in the automotive industry is very high and Ford faces

very high competition from the rival firms. It is mainly because of
the high investment as well as the high exit barriers involved in the
business. Most of the firms would rather compete with Ford than
close their business. There are a number of external forces that
have been contributing to the strong force of competitive rivalry
against the firm. The high aggressiveness of the firms as well as the
high exit barriers represent the strongest forces in the market.
Despite the number of firms being very small in the market the
competitive intensity is very high in the market. Fords competitors
are rather very aggressive players that innovate very aggressively
and in this regard make very good use of technology as well as
marketing. The competition against Ford has continued to rise and
in the coming days too Ford will continue to face stiff competition
from the rival brands like Toyota.

In order to maximize the competitive advantage that Ford has it

should address the external factors that are linked to competition.
Competition is a very factor that none of the brands which aspires to
achieve fast growth in the market can afford to ignore. As
Blitterswijk & Karadzhov note, Ferrier and Smith et al (1999) stated
that companies that pose complacency in their approach tend to
lose

market

shares

to

their

more

aggressive

and

active

counterparts. They observed that some industry leaders tend to

erode their own market shares through new innovations that carry
out a typical Schumpeters creative destruction of their existing
product market shares (Blitterswijk & Karadzhov, 2009).
Bargaining power of the customers:
The customers of Ford are among the most important influences on
its business. Not just the switching costs but the size of the
individual purchases is also moderate. While automobiles are high
price items the customers will still find it easy to switch brands.
Moreover, the size of each purchase is also moderate and each
purchase makes a very small and rather insignificant contribution to
the companys revenue. Customer demand is the most important
influence on the companys business and any significant or
insignificant change in this demand can influence the companys
business to a very large extent. The focus of the company should be
on customer satisfaction and maximizing the size of its customer
base by attracting more and more customers.

Bargaining power of suppliers:

The influence of the suppliers on Fords business is moderate and
they are not in a position to exert any significant influence on the
companys business. The power of the suppliers is significant but
limited in the context of the Ford Company. An important factor is
that most of these suppliers have very low forward integration or in
the other words the suppliers do not have much control over the
sales or distribution of their products. Another important factor that
further weakens the bargaining power of the suppliers is the vertical
backward integration of the Ford organization. This is also the
reason that limits Fords dependence on its suppliers since Ford has
the ability to produce some of the material required to produce its
own vehicles. However, Fords focus must remain on growing more
and more self-dependent since any rise in the influence of suppliers
and their bargaining power might lead to an increase in costs for the
brand.
Threats of Substitute:
The availability of substitutes is a significantly influential force on
the business of the brand and in this regard it is important to note
that there are several substitutes available to the products of the
Ford

brand.

These

substitutes

range

from

pubic

transportation to the private means of transportation.

modes

of

However,

performance is still a very important factor and the performance of

the Ford products to a great extent the threat that is posed by the

substitutes. Moreover, the performance of these substitutes can be

low as compared to the products by the Ford Company in terms of
convenience and safety. It is why the threat of substitutes is
moderate to low.
Threat of the new entrants:
Due to the high barriers to entry the threat of new entrants in the
industry is low.

Not just the capital costs are high but also the

marketing and brand development costs are high which means that
make it difficult to enter the industry. The companies like Ford make
huge investments into the marketing and brand development
efforts. Apart from it the investment into brand development and
customer retention is also very high.

Owing to so many costs

involved in the maintenance of a brand the threat of new entrants

into this sector if industry is quite high. These costs are a major
barrier to the entry of the new players in the market. In this regard
the brands like Ford that have a good brand image and brand
presence do not have to make any significant efforts to overcome
the threat of the new entrants.
Below is a Swot analysis of the Ford motors brand

Strengths

Weaknesses

A strong brand image

Higher production costs

and brand presence.

A global and strong

compared to its rivals.

Innovation

supply chain.
Innovative brand model

comparatively slow
Limited scope of the
production network in
terms

of

global

market.
Opportunities:
-

Strategic supply chain

management

Threats:

reducing costs.
Hybrid technology.
Global expansion.

Aggressive competition

from the other brands.

New high tech firms

entering the market.

Fluctuation in oil prices

for

Among the major strengths of the Ford brand are its strong brand
image and strong brand presence. Apart from that the brand also
has a global and strong supply chain network. The business model
of the Ford brand is also highly innovative which constitutes a major
strength for the brand.
The high production costs of the Ford Brand is also a major
weakness of the brand. Another important weakness of the brand is
that the pace of innovation of the Ford Brand has remained
comparatively slow as compared to the other innovative brands that
are the competitors of Ford brand. The production network of the
Ford brand is also limited in the context of a global market.

The opportunities of the Ford brand lie in the hybrid technology

segment. The brand can focus on green technology as well as fuel
efficient technology for the growth of its brand as well as to expand
its customer base. Moreover, the brand can focus on new and
emerging markets for expanding its markets and customer base.
The most important threat for the Ford brand is the growing threat
of competition from its rival brands. The brand is facing intense
competition from the rival brands like Toyota. This threat of
competition is very high since these brands invest extensively in
their marketing as well as brand management and technological
innovation. Another important threat is the entry of new high tech
firms in the market. In most of the markets where Ford operates
globally the brand faces significant threat from the presence of so
many rival brands like Toyota and Honda.
Recommendations:
The above SWOT analysis highlights that the process of innovation
at Ford as remained relatively slow and the company must focus on
expanding its global presence and by investing in its production
network. Moreover, the brand should also focus on the competition
and managing it. In this regard the company should also focus on a
marketing strategy that establishes it as an innovative brand. Ford
should also further invest in research and development in order to
better the quality of its products as well as in order to achieve better
pace of growth. By expanding its production network to achieve the

economies of scale the brand can reduce its production costs and
also make its automobiles cheaper and more attractive to its
customers.
The communication plan should focus on the key stakeholders and
try to deliver a consistent message to them. The objective of the
communication is to achieve a unified organization that works
productively and effectively to achieve the key business goals. After
setting the key communication objectives, it is important to
prioritize stakeholders. Then the key messages for each stakeholder
group can be drafted.
Two important corporate governance mechanism used by Ford are a
group of independent directors as well as full and complete access
of the non-employee directors to the senior management. These
strategies have proved effective at maintaining accountability and
transparency across the organization even among the managers
and supervisors. The leadership at Ford has also proved highly
effective in terms of changing the strategic direction of the brand
and giving it a new and unique direction. Particularly, the role of
Alan Mulally as a CEO was highly significant in this regard. Mulally
brought some very important shifts within the organization that
brought it into the ranks of the most innovative brands. As Caldicott
notes, The cultural shifts Mulally put in place impacted how Fords
teams were structured, how collaboration was fostered, and how
innovation itself ultimately came to flourish under his guidance.

From my perspective, Mulally joins top innovation CEOs AG Lafley

(P&G), Jeff Bezos (Amazon), Steve Jobs (Apple) and Howard Schultz
(Starbucks) as the five most significant corporate leaders of the last
decade (Caldicott, 2014).
Ford has also proved itself a highly focussed brand whose focus is
on sustainability and innovation. In this regard the brand has also
proved itself a god corporate citizen that is focussed on improving
the condition of the environment and community as well as other
areas. The brands main focus has remained on environmental
protection as well as on the growth. Apart from product safety and
quality, the brand also focuses on the issues like climate change.
The

Ford

website

notes,

We

are

working

to

reduce

the

environmental impacts of our vehicles across their full life cycle,

including improving fuel-efficiency and emissions and using more
sustainable materials (Corporateford, 2015). The brand has also
taken a rigorous and holistic approach to the reduction of the carbon
footprint of its manufacturing facilities. Ford also works on water and
energy preservation so that the scarce resources on the planet can
be preserved. Ford is a highly responsible company that focuses on
its social responsibilities as well as on the most important issues
concerning society and community.
References:

Our Company (n.d.). In Corporate Ford. Retrieved June 11, 2016, from
https://corporate.ford.com/company.html

Supporting One Ford (2014). In Corporate Ford. Retrieved June 11, 2016,
from http://corporate.ford.com/microsites/sustainability-report-201314/people-workplace-employees-oneford.html

Blitterswijk, M. V., & Karadzhov, R. (2009). Financial and Strategic Analysis

of Ford Motor Company and Tata Motors. In CBS. Retrieved June 11, 2016,
from
http://studenttheses.cbs.dk/bitstream/handle/10417/708/miel_van_blitters
wijk_og_rosen_karadzhov.pdf?sequence=1

Climate Change and Environment (2015). In Corporate Ford. Retrieved

June 11, 2016, from https://corporate.ford.com/microsites/sustainabilityreport-2014-15/environment.html

Corporate Governance Principles (2015). In Corporate Ford. Retrieved June

11, 2016, from https://corporate.ford.com/microsites/sustainability-report2014-15/doc/sr14company_governance_corporate_governance_principles.pdf
Caldicott, S. M. (2014). Why Ford's Alan Mulally Is An Innovation CEO For
The Record Books. In Forbes. Retrieved June 11, 2016, from

http://www.forbes.com/sites/sarahcaldicott/2014/06/25/why-fords-alanmulally-is-an-innovation-ceo-for-the-record-books/#7368427e779b