•Timely acquisition of capital makes Ford more financially sound than the other Big Three carmakers. •Product line is respected by industry experts and is qualitatively seen to be a step above many of its competitors. Recent surveys place Ford in a tie with Toyota for greatest customer satisfaction, a significant improvement from five years ago. •Have a global market presence, with worldwide brand recognition and a particularly strong presence in Europe. •Is perceived to be a thoroughly “American” brand, which helps Ford among certain groups of consumers.
•U. S. market share, after years of decline, has stabilized in recent years. •The Ford F-series pickup remains the most respected commercial truck available; despite demand shifts, profitability on this line should remain high. •Ford has had great success, particularly when compared to its competitors, at renegotiating labor contracts with the UAW. Weaknesses •Poor Profitability: Ford still loses money on many automobile lines, particularly within the United States. •Importance of single components source (Visteon).
•The automotive market is highly competitive with large fixed costs. In addition, the market demands continual long term planning and research and development. •Very little market penetration within China and India. •Global excess capacity for the automobile industry is estimated to average 30. 5 million vehicles per year from 2009-2011. 9 •Ford is selling a durable good during the most severe economic downturn in recent history. Opportunities •Ford has recognized the importance of small, fuel efficient vehicles and is actively transitioning into this market.
Of particular interest is Ford’s ‘EcoBoost’ technology, which the company claims will result in 20% greater fuel efficiency and 15% fewer CO2 emissions. •The ‘One Ford’ vision has the chance to generate significant margin increases for Ford’s smaller line of vehicles. Of particular importance is the Ford Fiesta, which was recently released in Europe and China and is slated for an early 2010 release in North America. The ‘One Ford’ vision appears to be a coherent strategy for Ford to adopt given its changed role within the industry.
•Ford is perceived to be the most stable ‘American’ car manufacturer because it has not been forced to take bailout money, leading to slight increases in market share. •GM and Chrysler flexibility is limited by government involvement in their debt situation, putting Ford as a competitive advantage. •In the event of a GM or Chrysler bankruptcy, Ford has placed itself in a position to steal market share—at least in the short term. Threats •While not in need of a government bailout, poor financial results are straining Ford’s capital.
Cash burn continues unabated, and estimates indicate Ford may be forced to seek government financing by early 2010 unless sales stabilize. •While Ford is readjusting production, truck sales are falling rapidly and Ford may not be able to shift production quickly enough to meet changing demand. •Bankruptcy of Visteon or other parts supplier could cause severe disruption of supply chain. •While Ford has too many dealers at this time, it should remain wary of too many closures. In addition, because Ford Credit provides financing for most dealers it must be careful to avoid holding the bag when dealerships close.