Strengths Case Study

Ford Motor Company endured the financial crisis of 2008/09. The crisis had pushed Chrysler and General Motors into bankruptcy. Additionally, the crisis appeared as a strongly competitive associate of the world’s largest auto producers. Nevertheless, Ford’s ability to withstand its financial performance critically relies on the state of the world’s automobile industry. Ford Motor Company is an American international auto producer based in Deabom, Michigan. The company was started in the year 1900s. Henry Ford was the founder and started his production in the year 1903. Ford is the rank second largest United States based auto producers and ranked fifth largest globally based on 2010 vehicle sales.
Over the past years, the industry followed different development path in distinct parts of the world. Additionally, Ford, and other American automotive industry contributes to enormous effects on the local economy. A clear indication of nation’s economic health is the quantity of the cars sold per annum. There was a dramatic fall in production capacity utilization. The relevant, accurate information on the issue or the decision the company experienced was a result of the collapsing of industry profitability between the year 2007 and 2009, as well as Chrysler and General Motors’ bankruptcies. The company realized that bankruptcies of the automotive companies were not merely as a result of the financial crisis. It was noticed that, the greatest structural problem of the industry was excess capacity, there were too many producing firms that had enough capacity to meet the little demand. The disastrous decrease in company revenues and profit in the year 2008 assured a main industry reformation.
Explanation of significant theories, concepts and applications extracted from the case study, the SWOT analysis can function significantly to generate an efficient resolution for Ford and other companies in the industry.

The company has a strong position in United States market, and it is ranked second largest auto producer. The company has a best image and a recognized reputation in its local market leading to robust commercial vehicle trades that produce maximum revenue. Ford’s ECOnetic initiative is a determination of making extremely fuel-efficient engines by enhancing the existing engines. For example, Ford Fiesta and Ford Focus ECOnetic engines. The company has decide to make single-streamlined world line-up in its models known as ‘ONE Ford’ approach. The main of this model is to have a car that fits different regional tastes and regulations not producing a customized cars. Another strength is the significant growth in China in the 2012 which has resulted in the rise of sales by 46%.

Weaknesses

High-cost structure, even though ONE Ford initiative has led to substantial cost reduction. Ford has high-cost structure due to generous employee pension and compensation pension plans. Unprofitable Europe operations is another weakness, in the year 2012, and Ford lost $1.75 billion. Ford has a low exposure to Asia-Pacific, only 15.82% volume was derived from this region.

Opportunities

Ford Company has a positives attitude towards “go green” vehicles since they are aware, and they have an electrification strategy with an aim of reducing carbon dioxide emissions. Increase fuel prices by producing fuel-efficient cars that have flexible fuel and hybrid engines will lower fuel consumptions.

Threats

Decreasing fuel prices will affect Ford Company and other automotive companies. Rising raw material prices, for instance, metals, will lead to the increase of production costs and lead to squeezed profits. Another threat is intense competition from different automotive companies.