Using a SWOT Analysis of Ford Motor Company - Essay Example

Full topic and Section # of Ford Motor Company Ford Motor Company is one of the biggest automobile manufacturers working in this world. The company has the distinction of bringing new types of production processes to the world of automobile manufacturing. In 2007, it has become the third biggest manufacturer of automobiles in the world; this drop from the second position was the first time in 56 years. Ford has diversified into many products over the years, penetrated markets all over the world, and has its share in almost one third on the world. Due to its performance, it was in the Fortune 500 list in 2007, showing its glowing future for the years to come. The company has sold some of its brands and brand names, to many other automobile manufacturing companies for mass penetration of markets all over the world, which resulted in the third position of the company in manufacturing vehicles sales. History Ford was launched as a company by Henry Ford and incorporated in 1913. Two of its main investors were John and Horace Dodge who went on later to build their own company of motor cars. The company was the first one to start using assembly lines for the manufacturing of cars. This method of large scale engineering and management of industrial human resource were introduced by the Founder of the company. These practices later were adopted by everyone in the world for the manufacturing of cars as well as other commodities. Today, all cars are manufactured in the ways Henry Ford devised more than 80 years ago. It is one of the largest family controlled organizations in the world, continuing over a span of 100 years. The headquarters of this gigantic corporation are in Detroit, Michigan (Mike, 2003). Objectives and Strategies Ford motor company, has been surviving over the years through their dynamic objective policies. It is because of their strong leadership and focused vision that they were able to survive the great depression which termed as something dreadful for the whole world. Therefore, the objectives that they have, and the goals that they follow, are very dynamic and suiting to the changing environmental and socio-economic era of this world. The company aims to become the principal consumer company in automotive industry. For this purpose, they have diversified into many consumer products. From hybrid SUVs, to Jaguar and Land Rover; not to forget Ford itself; they have been able to cater to all kinds of markets present in this world. They have even penetrated sports car racing and bus products; which completely reinforces their plan to become the leading manufacturer of consumer automotive cars. Over the past years, they have been sustaining huge losses with the biggest loss being reported in 2006. Their leadership has also been fluctuating as the company is going through tough financial problems this time around. To overcome some of these losses, the company has given up some of its brands and divisions to other companies. The latest venture in this aspect is the selling of Jaguar and Land Rovers to Tata Motors India in 2008. The selling of their subsidiaries has helped the company overcome some of its losses (Isabel, 2003). Another objective that the company is pursuing these days is shifting from the dependence of oil and fuel to other forms of energy. For this purpose, the company has launched various programs since the 1990s in order to build hybrid SUVs and has been able to remove a huge amount of smog from the US cars by designing them according to environmental standards which can be considered a huge contribution to environment. However, this aspect of their objectives has had positive and negative outcomes. They have now designed cars which are working electronic batteries to CNG; limiting hazardous emissions and unwanted usage of fuel in the world. SWOT Analysis SWOT analysis is conducted in order to strategically understand the condition of an organization at a certain point in time. With the help of this analysis, one is able to identify the strengths of the organization, the weaknesses it possesses, the opportunities that are present in the environment for the organization to bank on and the threats it has in achieving its goals. In other words, it is a thorough analysis of the organization inside and out. Strengths of the Ford Motor Company The company is facing hard times these days. The losses that they have incurred over the years have disabled to organization to achieve profitability till 2009. However, there are many areas which are still ruled by this company. One of the biggest strength of this company is the huge product base that is has and the amount of revenue it generates. The cars that are manufactured by this organization are known for their quality and sustainability. Recently, in an interview, the CEO of the company Bill Ford said that he wants to provide transportation to the world which is affordable and sustainable, both economically and environmentally. Since they are the pioneers in the engineering methods of large scale development, they can bank on this strength of theirs to produce cars which better serve the consumer class rather than focusing on luxury cars. The infrastructure that is present helps the organization achieve cost-cutting due to which they are able to make the product at a much cheaper price then their competitors. Their technique of offering new sales offers make sure most of their products are bought, and now as they have ventured into environmental protection with the help of cars, their cars are gaining widespread popularity among masses(Charles, 2006). Weaknesses of the Company One of the biggest weaknesses of the company from popularity point of view is their outsourcing which results in fewer jobs in America and using cheap labor from the West. However, this is somehow helping the company keep their expenses low otherwise the losses would be more than what they are right now. Another weakness that is costing the company these days is their excessive reliability on their consultants and vendors. Without proper analyzing the situation, they rely too much on the other units in the supply chain. Also, they enjoy a corporate culture that relies heavily on making mistakes and pushing the decision too high to the management. They need a stronger corporate culture that works in cognition with the goals they want to achieve. Another weakness that the company is facing right now is over capacity of production for the world. They have higher production capacity then required by the industry which is increasing their losses. Opportunities in the Environment The company has realized that they have to change their management practices in order to cut down costs and return to profitability again. In order to do so, they have launched a plan by the name of ‘Way Forward’ which calls for giving up around 25000 employees all over the world and shutting down of 14 plants in order to return to profitability (Ford.com, 2008). This would be taken in a negative manner for the workers of the organization; however, it is definitely going to help the organization achieve profitability in the years to come. Their decision of giving up many of their divisions has been fruitful in maintaining their quality and decreasing their losses. Also, the company is expected to announce early retirement packages for their employees and sell out of many facilities till 2012(Mike, 2006). Threats The changing environment and the depression that is luring over the economy of America is one of the biggest threats that Ford is facing right now. As the time approaches where the American experts are anticipating another depression in the world economy; it was be time to see if this gigantic corporation is able to handle the depression and march out victorious this time around as well. Also, the media these days is against the Giant American corporations and they would make you believe that the best cars are not from America and the Japanese cars are much better than them. Also, the major revenue that Ford enjoys is through its SUVs and the decline in their demand and uprising of the CAFÉ culture deescalate the problem further. PEST Analysis The PEST analysis shows that the company is under extreme pressure from the American Economy and the environmental point of view as they are approaching a depression and to maintain their vision and profitability of the organization would be really a test for them. They have adopted the best technologies in automobile manufacturing as their founder has been the pioneer of some of the best industrial practices. The political environment is a little destabilizing for the company especially overseas where the people are against the government and all its related organization of America. This can be a threat to the popularity of the organization and this may be the reason for the declining sales in the Europe sector. Conclusion Ford has all the power to become the leading manufacturer of consumer goods in the automotive industry. The company has the potential to overcome the losses they have been sustaining over a couple of years and their new programs of cutting the workforce and venturing into environmental friendly automobiles will certainly help the company reach its desired goal. Bibliography 1. Charles E Sorenson. (2006) My forty years with Ford. Wayne State University Press. 2. Isabel Studer-Norguez. (2003) Ford and the Global Strategies for Multinationals. Routledge. 3. Mike Spinelli (2006) Ford’s Way Forward Plan. Available from website http://jalopnik.com/cars/news/fords-way-forward-plan-layoffs-plant-closures-150070.php?mail2=true [Accessed 13 July 2008] 4. Ford Company Vehicle Brands, Available from website http://www.ford.com/about-ford/company-information/ford-brands [Accessed 13 July 2008] 5. Ford Motor Company funds and community service, Available from website http://www.ford.com/our-values/ford-fund-community-service [Accessed 13 July 2008] 6. Mike Davis (2003) A history of Ford Motor Co. Available from http://wardsautoworld.com/ar/auto_history_ford_motor/ [Accessed 13 July 2008] Read More