FORD was founded in 1903 by Henry Ford and has since grown to be the fifth-largest automobile manufacturer globally. It produces more than 4 million vehicles annually and sells commercial vehicles under the Ford brand and luxury vehicles under the Lincoln brand. Here is an analysis of the internal and external strategic market position of Ford.
Ford – at a Glance
| Name | Ford Motor Company |
| Website | https://www.ford.com |
| Founders | Henry Ford |
| Chief Executive Officer (C.E.O.) | Jim Farimbley |
| Headquarters | Dearborn, Michigan, United States |
| Year Founded | June 16, 1903 |
| Type of company | Public |
| Revenues (FY 2021) | $52 billion |
| Key Products/Services | Fleet vehicles, Commercial vehicles, Hybrids and EVs, Trucks and Vans, Suv and Crossovers, Cars. |
| Key Competitors | Volkswagen AG Group, Toyota Motor Corporation, PSA Peugeot Citroen, Suzuki Motor Corporation, Honda Motor Company |
Strengths
Global Recognition
FORD has strong global recognition. The brand was recognized as the best automobile company in the JUST 100 corporate ranking in 2022. The brand has been rated severally among the top 100 for strong financial performance in the US, for innovation, and among Fortune 500 companies. Strong brand recognition enables the brand to earn more word-of-mouth marketing, customer loyalty, ease of purchase of its cars, and enhanced credibility, among others.
Strong financial performance
Ford has had impressive financial performance year over year for the last eight years. According to CSI Market, Ford Motor company reported a 50.23% increase year over year in its total revenue in the second quarter of 2022. This was a much higher growth rate compared to that of its competitors, which stood at an average of 13.26% in the same quarter. Strong financial performance is critical for the growth of Ford Motor Company as it attracts creditors and investors. The strong financial position enables the brand to undertake its research and development, take advantage of new market opportunities, and grow the company into new products and new markets.
Massive Production and distribution capabilities
From the very first time in 1908, when Ford introduced the mass-produced Model T that sold millions of cars over the following 20 years, the brand has continued strongly in this regard to be the go-to brand for mass production of motor vehicles. For instance, the brand was contracted by the Soviet Union and the US for mass production of their war vehicles. The brand has since developed extensive production and distribution capabilities which have become key competitive advantages. The brand has a strong global presence; it has 55 manufacturing and assembling plants globally, and in addition, it has 11,000 dealerships that help with the distribution of its cars.
Strong global presence
In order to attain higher sales, vehicle manufacturing companies need to develop a strong global market presence, as by selling in more markets globally, the brand grows its revenues and sales, thereby increasing its income. Ford has continuously maintained a strong market presence in almost all the leading markets in the world, including its primary market in the US, China, Asia, and European markets, among others.
Business strategy
Ford, in the past, has employed cost leadership and differentiation business strategies that have enabled the brand to serve its unique customer bases satisfactorily. This is strengthened customer loyalty and brand equity, among others.
Weaknesses
Limited production and distribution compared to competitors
Lack of manufacturing and distribution capacity to match the five leading car manufacturers’ brands globally. The leading car manufacturers include Toyota, General Motors, Volkswagen, Renault-Nissan, and Hyundai, among others.
Heavy dependence on the US and European markets
Ford earns a huger percentage of its revenues from the US and European markets. This makes it more prone to failure in the event an adverse occurrence happens in the two markets.
Poor American auto-making reputation
German and Japanese cars have a huge reputation in the market as compared to American Cars. Many consumers would therefore pride in owning a German or a Japanese machine. This takes Ford away from position one in the auto market; this is a strategic disadvantage for Ford.
Conservative brand
Ford is perceived by many as being a conservative and staid brand. This poses a challenge in marketing the brand to the young generation and thus limits the brand’s reach to this generation.
Brand switching
The automotive industry has numerous notable brands in the market. All these brands offer credible auto solutions. This waters down loyalty to a particular brand. A customer can easily switch from one brand to another.
Opportunities
Emerging automotive technologies
Emerging technologies are offering brands great leverage in the production of unique car solutions for customers. New technologies like robotics, AI, electric car technologies, hybrid vehicles, eco-friendly cars, and self-driving cars, among others. There is a need for Ford to invest in these technologies and invest much more in innovative ways of differentiating itself even with these new technologies. in order to make new innovative solutions that will give the brand a competitive edge in the market.
Research and development
Continuous research and development are critical for in having Ford ahead of the competition in the marketplace. Research and development help a brand find new solutions and new ideas that are needed to differentiate a brand’s product from similar brands in the market.
Expansion into related fields
Ford has vast expertise that would give the brand an upper hand in fields related to the automotive industry. For instance, Ford could expand into auto software, fleet management, and other related fields that could prove profitable.
Threats
Stiff competition
Ford faces stiff competition from other leading auto brands in the industry. Some of Ford’s strong competitors include Tesla, Toyota, Porsche, General Motors, Mercedez Benz, and Volkswagen, among others. Every effort by competition to gain more market share is a threat to Ford’s existence in the market. To abet this competition and protect its market share, Ford needs to continuously differentiate itself by offering more customer-centered solutions in the industry.
Rising fuel costs
The recent past has seen fuel prices skyrocket globally. This increase in fuel prices has increased the costs of operation for vehicles, with many preferring to use shared transportation and public transport, which have become cheaper transportation means. This only means that many vehicle markets have shrunk. This poses the threat of reducing Ford’s market share. Ford needs to differentiate itself as a provider of cars that are super fuel efficient.
Conclusion
Ford is a market leader, has huge production and distribution capabilities, and has a strong financial base. These strategic advantages, among others, have seen the brand leader in its industry. The brand, however, faces stiff competition from existing major brands. Ford has to continuously differentiate itself if it will continue being a market leader.
