Ford Motor Company
Ford Motor Company markets itself under the brand Ford. Ford is a multinational organization based in the United States. Ford specializes in commercial vehicles and automobiles. Ford also specializes in automotive components and tractors. Ford is a public company listed in the New York Stock Exchange (NYSE). This paper focuses at the major external threats and major outside opportunities.
Threats facing Ford
The major threats affecting Ford identify with decreasing fuel prices, intense competition, rising costs of the raw materials and fluctuating exchange rates. According to surveys conducted by analysts in the industry, it is argued that the future of the fuel prices will significantly drop with the shale gas extraction (Geyer, 2011). Decreasing fuel prices will affect the sales of Ford since the organization has currently focused at hybrid vehicles that are fuel efficient. The flexible cars in relation to the fuel consumption will be less attractive to the target market once the prices of the fuel will be low (Kreipke, 2014).
Shale gas is part of the natural gas that is trapped within the formations of shale. In the United States, shale gas is becoming increasingly vital in the region, and the same importance is spreading to the other parts of the world. In 2000, the production of shale gas constituted one percent of the American natural gas production (Kreipke, 2014)
In 2010, the production shot up by twenty percent (Kreipke, 2014). There has been increasing demand for shale gas which will hurt the production of energy saving automobiles by Ford (Kreipke, 2014). It is expected that, by 2035, shale gas production will hit forty six percent of the natural gas in the United States; this is according to statistics conducted by Energy Information Administration in the United States government (Kreipke, 2014).
China has huge deposits of the shale gas, and it is expected that the world in the future will widely depend on shale gas. Exploitation of the shale gas will reduce the price fluctuations of oil in Persian Gulf and Russia (Kreipke, 2014). Shale gas production will be influential in controlling greenhouse effect.
Rising prices of the raw materials is another external threat experienced by Ford. Raw metals in the recent past are fetching high prices, which result to high prices of the automobiles. Rising prices of the raw materials has squeezed the profits of Ford, hence affecting the company negatively as competition of the automobiles become stiff (Banham, 2002).
Intense competition is another external threat. Main competitors of Ford Motor Company identify with Volkswagen AG, Bayerische Motoren Werke AG, Chrysler Group LLC, Daimler AG, Honda Motor Company, Tata Motors Limited, General Motors Company, Toyota Motor Corporation and Nissan Motor among others (Geyer, 2011). Ford is one of the oldest brands in the United States; the brand is number two among the companies dealing with automobiles in the United States and placed at number five among the similar companies in European market (Kreipke, 2014).
Ford faces intense competition in the automobile industry originating from other automobile makers in the world. The highest competition is among the small cars, particularly cars with hybrid engines. The competition is not to stop in the near future, and more and more automobile companies are venturing into the market, making the already saturated market complex (Kreipke, 2014).
The United States dollar has been fluctuating with time due to the global economies. Fluctuating exchange rates are affecting Ford negatively (Banham, 2002). More than half of the Ford sales originate outside the United States. If the dollar appreciates against other global currencies, this results to reduced profits in Ford.
Opportunities of Ford
The opportunities of Ford are connected to a positive attitude directed at ‘green’ automobiles, adjustment to the new emissions standards, increasing fuel prices and growth through acquisitions. Ford is committed to ‘green’ environment by producing automobiles that are fuel efficient emitting minimized amount of carbon dioxide in the air. Automobiles produced by Ford in the contemporary are conserving the environment to some degrees (Kreipke, 2014). Consumer trends are moving towards ‘green’ automobiles as a way of conserving the environment.
The prices of fuel are ever increasing straining the purchasing power of the consumers; Ford is producing hybrid automobiles that are fuel efficient. Examples of the cars are Ford Focus ECOnetic and Ford Fiesta. The automobiles are engineered at offering the best consumption of fuel as possible (Geyer, 2011).
Ford is responding to new emission standards. The world is concerned with the global climate changes by enforcing stricter regulations on the emissions of the vehicles. Emission standards are affecting Ford positively since the company has fully complied with the restrictions. This is common with Ford Focus ECOnetic and Ford Fiesta which are environmentally friendly (Banham, 2002).
Ford has many strategic partnerships and alliances that are encouraging local and international business. The alliances and partnerships are with the other automotive companies along the globe. This is significant in alleviating competition pleasure. The alliances have encouraged reduced costs of research and design, strategic entry into the new markets and in gaining new knowledge in the industry. Ford has shares in Mazda of Japan, Aston Martin of Britain and Jiagling of China among others (Kreipke, 2014). Luxury cars produced by Ford are marketed under the brand Lincoln. Ford also controls FPV, which is a performance car manufacturer, Brazilian SUV manufacturers and Troller (Kreipke, 2014).
External analysis on Ford Motor Company is critical for the organization to hold the success. Ford has a better future as expressed by the current threats and opportunities shaped by the external environment.
Banham, R. (2002). The Ford Century: Ford Motor Company and the Innovations that Shaped the World. Leicester : Artisan.
Geyer, G. (2011). Ford Motor Company: The Greatest Corporate Turnaround In U.S. History. New York: CreateSpace Independent Publishing Platform.
Kreipke, R. C. (2014). Ford Motor Company: The First 100 Years. Evansville: M.T. Publishing Company, Inc.
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