Ford Company

Ford Company is a renowned worldwide leader in the auto industry. However, in the past few decades, the company has faced a drastic decline in its market share. This forced it to cut down on the operational costs by closing down three major factories in UK which saw 5,700 people lose their jobs. The political pressure regarding global warming, weak US economy and increase in the fuel prices are the main challenges that Ford Company has to face. It is expected that the auto industry is likely to experience growth. Eighty percent of the projected growth is expected to come from emerging markets. The emerging markets like China and India are likely to be a potential opportunity for Ford. Ford Company needs to have knowledge and expertise in alternative vehicle technologies required to propel company growth. The characteristics of alternative vehicles include low fuel consumption, ability to use more than one tank fuel, electric and hybrid.

Q.1 PESTEL Analysis

PESTEL analysis refers to a framework that explores the macro-environmental factors that affect strategic management. PESTEL analysis is a very critical tool in determining business options, potential of operation, market decline or growth, and direction of operation. This shall explore the macro-environmental factors that are relevant to Ford company. Ford is the world’s fourth largest multinational automaker located in Dearborn, Michigan.

PESTEL analysis of Ford Motor Company would be based on the following factors:

Political Factors

Despite the change in the political landscape of the US, Ford company has been able to maintain its image as a workers truck. Through its expensive and luxurious vehicles, the company has been able to attract the attention of different socio-economic groups. Ford Company has managed to attract employees and customers from all background irrespective of their political affiliations.

Economic Factors

Just like the rest of the auto industry, Ford company was hardly hit by 2008 US economic downturn. Companies like General Motors and Chrysler sough government funding. However, Ford company was able to sail through without government aid. This was achieved by the shutting down of the three major European factories which saw the company record an annual savings of over $500 million. However, it was significantly affected by the changes in the US and global market which saw it records a decline in sales. This forced them to adjust with such changes in the market, hence the birth of ONE Ford. ONE Ford is subdivided into three sections: teamwork, planning, and goal. It is worth noting that the ONE Ford strategy enabled the company to improve its overall productivity.

Social Factors

In the sociocultural arena, Ford Motor Company is acutely aware of the shifting landscape that it navigates. The company has observed a significant transformation in consumer preferences, with a growing inclination towards environmentally friendly and technologically advanced vehicles. This trend is not just a fleeting one; it reflects a deeper societal commitment to sustainability and innovation. As demographics evolve, Ford Company recognizes the need to adapt its strategies to meet the diverse needs of its global customer base. The motor company’s ability to stay attuned to these sociocultural dynamics is not merely beneficial—it’s essential for maintaining its relevance and securing its position in the competitive automotive industry. By embracing these changes, Ford Motor ensures that it remains in step with the times, catering to the values and expectations of modern consumers.

Ford company has intensified advertising so as to inform their clients of the capability and the sleek design of their cars. One of the major strategies that they employ is the need to go green. Much of the advertisements have focused on the new drivers and the parents to the new drivers.

Technological Factors

The recent technological advancements have seen Ford company improve on the quality of their cars. As a company, Ford has taken the lead in terms of technology in the car.

Technological Factors Concerning Ford Motor Company

• Ford Motor Company has invested in the development of electric vehicles (EVs) to meet the growing demand for sustainable transportation solutions.
• The company has pioneered advanced driver-assistance systems (ADAS) to enhance vehicle safety and pave the way for autonomous driving.
• Ford Motor is leveraging big data analytics and artificial intelligence to optimize manufacturing processes and supply chain management.
• The motor company continues to innovate in vehicle connectivity, offering customers integrated digital experiences through its SYNC infotainment system.
• Ford Company has established partnerships with technology firms to co-develop future mobility solutions, including ride-sharing and vehicle-to-everything (V2X) communication.

The venture between Ford Company and Microsoft has seen the former introduce ‘smart cars’ that are able to understand the types of music that appeals to the drivers as well as be able to read text and voice messages. In summary, in 2006, the company restructured its operations to embrace the emergent technology that are fuel efficient as well as environmentally friendly.

Environmental Factors

The new lines of car produced by Ford meets the threshold for environmental safety. Ford enjoys the ability to have cleaner engine emissions. Ford aims at achieving electrical transmission. This is set to be realized by the incorporation of hybrid electric vehicles which has internal electric power to slow or start the vehicle. The growing concern among many people on going green has inspired Ford to change its technology so as to survive in the current market as well as in the future. Ford Company has in turn put in place a science-based strategy so as to reduce greenhouse emissions.

Legal Factors

In the realm of legal considerations, Ford Motor Company operates within a complex web of regulations that span across the globe. The company has to navigate through various legal landscapes, ensuring compliance with trade laws, safety standards, and environmental regulations. Ford  company’s commitment to legal adherence is not just about following rules; it’s about fostering trust and reliability among stakeholders and customers. The motor company’s proactive approach to legal compliance safeguards its operations, fortifies its reputation, and solidifies its position as a leader in the automotive industry. By staying ahead of legal requirements, Ford Company demonstrates its dedication to corporate responsibility and ethical business practices, which are integral to its long-term success.

Legal Factors that Ford Motor Company must Consider

• Ford Motor Company must adhere to international trade laws and regulations, which can affect its global operations.
• The company has to comply with vehicle safety standards and regulations, which dictate the design and features of its vehicles.
• Ford company faces legal obligations related to labor laws, including workers’ rights and fair labor practices.
• The motor company is subject to environmental laws that govern emissions, waste management, and the use of sustainable materials.
• Ford Company must protect its intellectual property, such as patents and trademarks, to maintain its competitive edge in technology and design.

These legal factors play a crucial role in shaping the company’s policies and all the regulations and precautions so as to ensure that their vehicles are ratified by federal government of US. They have also ensured compliance with the dynamic regulatory agencies that are constantly being made.

Challenges and Opportunities

Since its inception, Ford has encountered numerous challenges which required capable leadership and critical management. Ford Company has undergone financial distress through huge bottom line losses. Another potential challenge for Ford is the projected decline in the automobile sector. This is based on the need to conserve the environment. As a result, investors are slowly losing interest in the equities of Ford. According to a report from CNN Money, the company has failed to pay cash dividends for three consecutive years, 200, 2008, and 2009.

One potential opportunity that Ford enjoys is the ability to have cleaner engine emissions. Ford aims at achieving electrical transmission. This is set to be realized by the incorporation of hybrid electric vehicles which have internal electric power to slow or start the vehicle. The company has a potential opportunity for the company in the release of vehicles that run on fuels such as gasoline and ethanol. Such vehicles are known as Flex-Fuel vehicles. Another opportunity is on cars that can run on more than one fuel tank. That is, a hybrid car that can run on a combination of propane and gasoline.

Future of Ford Company

The future holds drastic transformation for the auto industry. This is due to the high prices of oil and the increased concern for environmental protection against effects of global warming. This implies that the auto industry must come up with alternative fuelled cars. Ford stands a chance to be successful in the future since it has embraced the need to reduce greenhouse emissions. Despite Ford almost running into bankruptcy, the ONE Ford strategy campaign authored by its CEO has put the company in a better position to recover from losses. The strategy fosters teamwork among suppliers, dealers, employees and customers which in turns breeds loyalty. Nevertheless, Ford still has to develop strategic plans that will allow it to effectively address the projected trends in the auto industry. Once the emerging markets in China and India are fully operational, there will be an acute shortage of fuel. Ford should look at this as an opportunity to expand and increase their market share and eventually become the world leader in the auto industry.

Q.2 The Market Structure of New Car Sales in the UK in Which Ford Operates

The market structure of new car sales in the UK in which Ford operates is oligopoly market structure. In such a market structure sellers are few and buyers are many. In this type of market structure, competition is very high since the sellers are trying to attain monopoly. Oligopoly market structure falls between monopoly and perfect competition. The firms jointly control the market share. In summary, oligopoly is characterized by three main traits; few large firms dominate, products are either identical or differentiated, and there are many entry barriers which gives firms a window of opportunity to exercise market control. In the UK, the major auto companies include Ford, Volkswagen (Including Audi, Skoda), Vauxhall, BMW (Including Mini), Nissan/Renault, and Peugeot/Citroen. Among these companies, Ford has a market share of 13.7 percent which is 4 percent down from the leading company. The implication here is that the market share of the UK auto industry is majorly controlled by Ford, Volkswagen, and Vauxhall.

Oligopoly has major automotive companies to enjoy broad market share. This is because competition is highly minimized. Oligopoly also ensures high economies of scale. Market share in an oligopolistic market structure is particularly prized. This is because the largest producer usually gets a relatively larger share of total industry profits.

However, this market structure is facing a possible face out due to overseas competition. Factors such as increased oil costs and the need for environmental conservation have made oligopoly irrelevant. This means that Ford company has to strategize on how to survive. The emerging markets like China and India are likely to be a potential opportunity for Ford. Ford Company needs to have knowledge and expertise in alternative vehicle technologies required to propel company growth. The characteristics of alternative vehicles include low fuel consumption, ability to use more than one tank fuel, electric and hybrid.

Conclusion

Ford Motor Company, a venerable icon in the automotive industry, has demonstrated remarkable resilience and adaptability in the face of ever-changing global market conditions. The company has consistently shown an ability to evolve with shifting consumer preferences, technological advancements, and regulatory landscapes. Ford Motor’s strategic emphasis on innovation, sustainability, and customer-centricity has been pivotal in maintaining its competitive edge. As the motor company continues to expand its footprint in the realm of electric vehicles and autonomous technology, it reinforces its commitment to shaping the future of mobility.

Looking ahead, the company has a clear vision for its journey forward. Ford Motor Company is not just about manufacturing cars; it’s about creating experiences and values that resonate with customers and communities alike. The company’s dedication to legal compliance, environmental stewardship, and technological leadership positions it to thrive amidst the challenges of the 21st century. As Ford Company charts its course towards a more sustainable and technologically integrated future, it stands as a testament to the enduring legacy and innovative spirit that have long defined the Ford name.

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