Ford Motor Company is one of the first American automotive companies that even today successfully manufactures and sells automobiles, trucks, buses and automotive parts. Ford is the second largest US automaker and the fifth largest vehicle seller in Europe and the world. Their headquarters are based in Dearborn Michigan. The company was founded in 1903 by Henry Ford. Ford owns a series of motor vehicle brands which includes Ford, Lincoln, Volvo and Mazda. Ford motor company has subsidiary companies in U.K, Japan and Sweden.
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- One of the early market entrants and oldest car manufacturer
- Offers a wide range of cars to a different set of customers
- Provides exclusive product features taking into consideration the targeted segments 4.
- Invested efforts to go green in order to help the environment
- Has over 160,000 employees globally
- Present across continents and has excellent visibility & marketing
- Adversely affected by the global recession & Euro crisis
- Hasn't completely tapped emerging economies as compared to some other automobile giants
- Expanding automobile sector
- Improving business scenario due to expansion of consumer base
- Capitalizing on the models exclusively designed for different markets e.g. ford Ikon for India
- Competition from major international players
- Increasing usage of public transport and increased fuel costs
- Production problems in local plants due to labor and similar issues
Macro and microanalysis
The macro-environment includes all the external factors affecting the organization.
Political factors affecting ford motor company.
- Economic environment
- Social environment
- Technological environment.
- Legal factor.
- Environmental factor.
Political factors affecting ford motor company:
Ford motor company is a multinational company, which has its operations in many countries so the political environment in these countries is very important to the company's operations. Looking at the current state of the political climate in the world, through globalization many government is forming alliances. This international corporation is a good surety to the company that the world political environment is favorable for its business. This shows that there is increased freedom for the company to penetrate in any growing markets in the globe which is a good opportunity. The political environment of the major Ford Motor Company markets which includes Japan, Australia, America, and U.K are conducive for business operation. These governments are moving toward free economy states hence providing multinationals with good business environment.
The global financial crunch has affected the automobile industry negatively forcing some of the major automobile makers in the world to bankruptcy. The Ford Motor Company has not been spared either. The current economic environment for Ford Motor Company is hard but it is recovering with time. The company needs to adjust to the current economic conditions so as to survive and plan for come back during the boom period. This shows that although the current economic environment is not conducive the company can come up with the strategies that will protect it from bankruptcy.
The factor which is important for the Ford Motor Company on the social environment is the changes in the social classes in the world market. The emerging markets in the developing economies are providing growing demand for automobiles. This is a great opportunity for the motor company to expand market in these countries.
There is the technological trend in the motor vehicle industry in the world to produce safer vehicles and which are economical in fuel usage. Consumers have become sensitive on the fuel consumption of the vehicles they use due to the campaigns on resource conservation. This being the case the Ford Motor Company should continue to technological research that meets these demands.
The major legal factors which the company needs to understand and act accordingly are the labor laws which are ever-changing in many countries in the world. The labor laws are becoming stricter in different countries requiring good compensation to company workers. This may affect the company functioning due to strikes and union pressure. The company should be able to accommodate these changes to avoid operation interruptions.
The current strong environmental factor that is affecting the Ford Motor Company is the increased need to reduce the environmental pollution through clean exhaust from the motor vehicles. This has made some countries to come up with laws that govern the environmental pollution (Campbell Craig, 2008, p, 54). This factor shows the company should make sure than it produces automobiles that meet the required standards so as to avoid problems with authorities and also to show its corporate responsibility.
These are the internal environment that have direct impact on the company's operations, that include:
Ford Company has a great diversity of consumers from different backgrounds. The company has been able to build a good number of royal customers in the world. The company strong brand has enabled it to retain their customer, which has provided the company with a competitive edge.
The Ford Motor Company has been able to develop a strong human resource group that is loyal to the company. The employees of the company are loyal which has enabled the company to increase its productivity in these hard economic times.
The raw materials suppliers of Ford Motor Company are a source of strength for the company, but due to increased prices of law materials the company should engage on cost cutting strategies so as to minimize cost in its operations.
The motor industry in the world is highly competitive where there are very strong competitors to the Ford Motor Company. The other strong competitor of the Ford Motor Company includes the Toyota motor company and the General motors. These companies have strong brands in market that gives the Ford brands stiff competition. The Ford Motor Company has a competitive edge because most of its competitors are currently experiencing financial difficulties and are surviving from government revival packages.
Looking at the above analysis the company needs to come up with a good cost cutting strategy that will be aimed at reducing the cost of the companies operations. This can be achieved by reducing the number of workers in the company operation and utilizing the remaining employees effectively. The company should also engage in restructuring program to reduce the cost of producing motor vehicles.
This can be achieved by restructuring its engineering processes so as to save on the cost spent in the manufacture of the motor vehicles. Through the cost reduction the company will be able to have good financial performance hence good profits. The company should expand its markets in the developing countries and try to build a good customer base. This will provide new market to the company products which will guarantee the company continued profitability.
The company should engage its research and development department in producing automobiles that are cheap and have a low fuel usage. This will enable the company to cope with the changing trends in market, this is because the consumers today are very concerned about their spending on fuel whose cost is going up, and this has made increased demand for motor vehicles that use fuel economically. If this is achieved Ford Motor Company will be able to have sustainable demand for its products.
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