MGT680-1303A-01: Strategic Management
American Intercontinental University
Professor Jacob Ashkenazi
Accomplishing a SWOT analysis has several purposes and the function of the analysis is completely dependent on the entity doing the study. A competitor may do a SWOT to find the exploitable weakness in competitor or to determine what they are doing right. When a company performs one on itself it is posturing itself for improvement for the long term. Strategic planning cannot be accomplished unless the company understands the strength and weaknesses in itself, its market and its environment. This paper analyzes two competitors in the auto manufacturing industry that have entirely different approaches to production and management.
Ford Motor Company SWOT analysis
Ford Motor Company is a manufacturer of automobile, trucks and several other motorized devices. They are a global corporation that is headquartered in Dearborn, Michigan. The current CEO is Alan Mulally. They generated $134.3 Billion in revenue in 2012 with a profit of $5.67 Billion in net income. They have 164,000 employees, worldwide. Their main competitors are BMW, Chrysler, Daimler, GM, Honda, Nissan, Tata, Toyota, and Volkswagen (Jurevicius, 2013).
Strengths * Strong position in the U.S. market
It ranked 7th in the world and 2nd in the US. It also holds the distinction of being 9th on the Fortune 500 list (Fortune Magazine, 2013). They sold 2.2 million units in the US in 2012 ( the first to break 2 million since 2007 and the first to do so 2 years in a row) and have 3 vehicles in the global top 10 – Focus at number 1, F-Series pickups at number 4 and the Fiesta at number 5 (Ross, 2012).
* Econetic initiative
Technology that is customer driven that brings together vehicle features targeting increased fuel economy, lowered emissions and lower ownership costs without compromising attractive designs and driving characteristics.
* Sound financial performance
Ford is the only company that did not require a government bailout and the first to return to an investment status. They have the highest Profit Margin with the highest Liquidity Ratio, making Ford able to easily address its short term debt.
* Single model “One Ford” approach
They have reduced costs by not customizing models for different regions of the world. They have done this by engineering into each model features that fit different tastes and regulations.
* Large operation
Ford operates nearly 70 production plants, more than 40 distribution centers and warehouses, nearly 60 ERD centers, and nearly 12,000 dealerships, including those in China, South America, Europe, and SE Asia. In 2012, Ford grew its sales in China by 46%.
* Poor environmental track record
In the past Ford has been negligent in the disposal of tons of toxic materials. The EPA has identified a large number of Superfund toxic waste dump sites that Ford is being forced to clean up at their own expense (EPA, n.d.). Although they have improved and make great strides toward sound environmental practices, they are still paying for the sins of the past. There are also OSHA issues related to asbestos exposure experienced by workers (OSHA, 2013). Finally, the EPA has cited Ford for falsifying the fuel economy of the C-Max Hybrid Crossover, forcing them to refund 17.6 million dollars to purchasers and leasers (DiLallo, 2013).
* Unprofitable European Operations
While growing substantially in the global market, Ford is losing money in the European market. In 2012 they lost $1.75 Billion and sees loses continuing through 2015. Europe’s financial problems are impacting the sales of new autos, but the losses are offset by sales in Asia (Wall Street Journal, 2013).
* Product recalls
Ford is dealing with recalls of the Focus Electric, Focus ST for lighting defects (Kane, 2013). They are also recalling 465 thousand