Table of Content

Executive Summary-------------------------------------------------------------------------------- 2-3

1.0 Introduction------------------------------------------------------------------------------------- 3
1.1 Primary Objective----------------------------------------------------------------------- 3-5
1.2 Secondary Objective-------------------------------------------------------------------- 5-6
1.3 Source of Data--------------------------------------------------------------------------- 6
1.4 Limitation-------------------------------------------------------------------------------- 7

2.0 Company Overview--------------------------------------------------------------------------- 7-9

2.1 Company Mission ---------------------------------------------------------------------- 9-10
2.2 Company Vision------------------------------------------------------------------------ 10-12

3.0 Influence of Ford ------------------------------------------------------------------------------ 12

3.1 Economic Factors----------------------------------------------------------------------- 12
3.2 Social Factors---------------------------------------------------------------------------- 12-13
3.3 Technological Factors------------------------------------------------------------------ 13
3.4 Political Factors------------------------------------------------------------------------- 13-14
3.5 Ecological Factors---------------------------------------------------------------------- 14
3.6 Legal Factors---------------------------------------------------------------------------- 14-15
3.7 Globalization Impact on Ford---------------------------------------------------------- 15-20

4.0 Analysis of Ford------------------------------------------------------------------------------- 20

4.1 SOWT analysis ------------------------------------------------------------------------- 20-24
4.2 Strength----------------------------------------------------------------------------------- 20-21
4.3 Weakness--------------------------------------------------------------------------------- 21-22
4.4 Opportunity ------------------------------------------------------------------------------ 22-23
4.5 Threats------------------------------------------------------------------------------------ 23-24
4.6 Feasibility Analysis -------------------------------------------------------------------- 24
4.7 Cost Benefit Analysis ------------------------------------------------------------------ 24
4.8 Problem findings ------------------------------------------------------------------------ 25

5.0 Recommendation ------------------------------------------------------------------------------ 25-26

6.0 Conclusion -------------------------------------------------------------------------------------- 26

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Executive Summary:
Explains that the assignment focuses on internal analysis of Ford Motor by doing swot
analysis and external analysis by performing pestle analysis. they also analyze porter’s
diamond model, bcg matrix and blue ocean strategy. Opines that the ford family's
market shares and stock prices have declined in recent years. no further steps have been
taken to improve the situation. Explains that as the Japanese and European
manufacturers emerge gradually, the sales of ford motors fell down and they have not
been responding accordingly to the competition. Explains that the political environment
of us today seems to be widening more and more with each election and campaign. ford
maintains its image as a worker’s friendly company and attracts the attention of other
types of social-economic groups. Analyzes how ford company's ability to maintain a
level of business that enabled them to stay above water where others cannot manage it
was an example of ford’s adaptability to changing economic situations. Explains how
ford has increased their advertising to help consumers understand that ford is an
innovative and exciting company with new and significant vehicles that are good in
design and capability. Explains ford's new move in recent years is their technology
which is in their car. the joint venture of ford and Microsoft introduce a smart car that
has an understanding of what type of music the driver prefers. Explains that ford has set
free a new line of economic cars with the emphasis on the environmental safety. ford is
following "going green" concept and changed its focus from fuel consuming vehicle to
fuel efficient vehicle. Explains that ford has taken care of all the necessary safety
measures to make sure that their vehicles pass the inspections of the federal government
of united states. Explains that ford's first innovation was virtual assembly lines with
interchangeable parts, which enhanced its competitive advantages. they also used
acquisition of popular car brands and centralization of supply chain as key business
strategies. Explains that ford always tries to respond to the demand of local economies
wherever they established their operations. they have established knowledge base
market and proactively focused on developing and manufacturing original products for
different markets. Explains that Ford Motor distributed its services and support network
in different regions. they appointed franchisees in every region for sales and marketing.
Explains that ford has experienced HR team which is engaged in acquire, train and
retain skilled employees. they have achieved high level of employee satisfaction by
providing excellent healthcare and retirement benefits for the employees all over the
world. Explains that ford motor's mustang brand has highest growth and high market
share and profit. it remains the top one sport car by an extensive margin with its new
models. Explains that Ford Motor company's brands are profitable and reliable, and
their product development costs are relatively low. they have high market share and low
growth rate. Opines that ford motor's "Ferrari" is a high-priced car for high class people,
so its sales are concentrated to selective people. Explains that ford's brand jaguar and

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land rover faced competition from other competitors' product. they sold the brands to
tata motors to solve financial difficulties. The company was founded by henry ford in
1903. Explains that consumers have shifted to more fuel-efficient cars due to the price
hike of petrol. ford motors have their main manufacturing plant in us and currently us
is facing economic slowdown. Explains that ford is strengthening its bottom-line profit
by consolidating platforms and streamlining production which gives them a strong
margin of profit. ford's retrenchment strategy for the consumers was successful.

Introduction:
In the following content, it was first through PEST analysis, SWOT analysis and
Porter's five forces model to analyze the external and internal status, opportunities,
challenges of Ford at that time, then it carried out a critical analysis on Ford's current
strategies to bring forward recommendations on Ford's strategies in future.
This report is aimed at examining the functioning of Ford Motor Company. In
particular, it is necessary to focus on the external and internal environment of this
corporation. One should show how the company can minimize the impact of negative
factors and how the organization can make use of the available opportunities. Moreover,
one should concentrate on the way in which this corporation can create value by using
its resources. Overall, the management should discuss quality management problems
and intense competition staged by domestic and foreign car-manufacturers. These are
the main risks that a company should manage.
Primary objective:
To know the contribution of Ford Motor company through environmental changes.
Primary objectives of Ford and explain how the company is striving to achieve these
objectives.
Profitability: One of the primary objectives of Ford is profitability. The company aims
to generate sustainable profits by selling high-quality, innovative products and services
that meet the needs and preferences of its customers. Ford's profitability objectives can
be analyzed from the following perspectives:
Product Quality: Ford's primary objective is to provide products of high quality that
meet customer expectations. The company achieves this objective by ensuring that its
products are reliable, durable, and safe.
Cost Efficiency: Ford's primary objective is to improve its cost efficiency by reducing
its operating costs and increasing productivity. The company achieves this objective by
implementing lean manufacturing practices, optimizing its supply chain, and reducing
waste.
Revenue Growth: Ford's primary objective is to increase its revenue by expanding its
customer base and increasing its market share. The company achieves this objective by

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developing new products and services, exploring new markets, and pursuing strategic
partnerships and collaborations.
Innovation: Another primary objective of Ford is innovation. The company aims to
develop innovative products and services that meet the evolving needs and preferences
of its customers. Ford's innovation objectives can be analyzed from the following
perspectives:
Research and Development: Ford's primary objective is to invest heavily in research
and development. The company achieves this objective by exploring new technologies,
developing new products and services, and improving existing ones.
Sustainability: Ford's primary objective is to promote sustainability by developing
environmentally friendly products and services. The company achieves this objective
by reducing its carbon footprint, using renewable energy sources, and promoting
recycling and waste reduction.
Digital Transformation: Ford's primary objective is to embrace digital transformation
and leverage new technologies to improve its products and services. The company
achieves this objective by investing in connected cars, autonomous driving, and other
emerging technologies.
Customer Satisfaction: Another primary objective of Ford is customer satisfaction.
The company aims to provide high-quality products and services that meet the needs
and preferences of its customers. Ford's customer satisfaction objectives can be
analyzed from the following perspectives.
Product Quality: Ford's primary objective is to provide products of high quality that
meet customer expectations. The company achieves this objective by ensuring that its
products are reliable, durable, and safe.
Customer Service: Ford's primary objective is to provide excellent customer service
to its customers. The company achieves this objective by offering support services such
as technical support, repair, and replacement services.
Customer Experience: Ford's primary objective is to provide a positive customer
experience. The company achieves this objective by creating a seamless and enjoyable
shopping experience, providing easy-to-use products, and offering personalized
services.
Brand Image: Another primary objective of Ford is brand image. The company aims
to maintain a strong brand image that resonates with its target audience. Ford's brand
image objectives can be analyzed from the following perspectives:
Brand Identity: Ford's primary objective is to maintain a strong brand identity that is
easily recognizable and memorable. The company achieves this objective by using
consistent branding across all of its products and services.

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Brand Reputation: Ford's primary objective is to maintain a positive brand reputation.
The company achieves this objective by providing high-quality products and services,
addressing customer concerns promptly, and engaging in responsible business
practices.
Secondary Objective:
I will provide a detailed analysis of the secondary objectives of Ford and explain how
the company is striving to achieve these objectives.
Employee Satisfaction: One of the secondary objectives of Ford is employee
satisfaction. The company recognizes that its success is heavily dependent on the skills
and commitment of its employees, and therefore aims to create a positive work
environment that promotes employee well-being and job satisfaction. Ford's employee
satisfaction objectives can be analyzed from the following perspectives:
Employee Engagement: Ford's primary objective is to engage its employees and
promote a sense of ownership and belonging. The company achieves this objective by
offering training and development opportunities, recognizing employee achievements,
and encouraging employee feedback.
Work-Life Balance: Ford's primary objective is to promote work-life balance among
its employees. The company achieves this objective by offering flexible work
arrangements, promoting health and wellness programs, and providing generous
vacation and leave benefits.
Diversity and Inclusion: Ford's primary objective is to promote diversity and inclusion
among its employees. The company achieves this objective by fostering a culture of
respect and inclusivity, promoting diversity in its hiring and promotion practices, and
supporting employee resource groups.
Social Responsibility: Another secondary objective of Ford is social responsibility.
The company recognizes that it has a responsibility to contribute to the well-being of
society and the environment, and therefore aims to integrate social responsibility into
its business practices. Ford's social responsibility objectives can be analyzed from the
following perspectives:
Environmental Stewardship: Ford's primary objective is to minimize its
environmental impact by reducing its carbon footprint, conserving resources, and
promoting sustainable practices throughout its supply chain.
Community Engagement: Ford's primary objective is to engage with and support the
communities in which it operates. The company achieves this objective by donating to
local charities, sponsoring community events, and encouraging employee volunteerism.
Ethical Business Practices: Ford's primary objective is to maintain high ethical
standards in its business practices. The company achieves this objective by complying

5
with all applicable laws and regulations, promoting ethical behavior among its
employees, and promoting transparency and accountability in its business practices.
Market Expansion: Another secondary objective of Ford is market expansion. The
company recognizes that there are significant growth opportunities in emerging markets
and aims to expand its market presence in these regions. Ford's market expansion
objectives can be analyzed from the following perspectives:
Emerging Markets: Ford's primary objective is to expand its presence in emerging
markets such as China, India, and Latin America. The company achieves this objective
by developing products and services that meet the specific needs and preferences of
these markets, and by establishing strong partnerships and collaborations with local
businesses.
Brand Extension: Ford's primary objective is to extend its brand into new product
categories and markets. The company achieves this objective by developing new
products and services that leverage its existing brand equity and by pursuing strategic
acquisitions and partnerships.
Product Differentiation: Ford's primary objective is to differentiate its products from
those of its competitors. The company achieves this objective by offering unique
features and functionalities, developing innovative designs, and leveraging new
technologies.
Supply Chain Optimization: Another secondary objective of Ford is supplying chain
optimization. The company recognizes that its supply chain is critical to its operations
and aims to optimize it to reduce costs and improve efficiency. Ford's supply.
Sources of Data:
As introduction to our company, we must need information throughout this report. So
information we have to collect from some source. We have just two types of sources.
• Primary sources
• Secondary sources
A primary data source is an original data source, that is, one in which the data are
collected first hand by the researcher for a specific research purpose or project..
Common sources of secondary data for social science include censuses, information
collected by government departments, organizational records and data that was
originally collected for other research purposes.
This are the data sources of the apple as well as for the report. There are many more
sources for this report And we should mention this source at the last of the report.

Limitation:

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Due to lack of time and enough information, I could not analyze well on following
points.
▪ Supply chain disruptions: This refers to any event or situation that disrupts the
flow of goods or services within a supply chain. This can be caused by various
factors such as natural disasters, pandemics, strikes, transportation disruptions,
or geopolitical instability. In the context of Ford, a supply chain disruption could
impact the availability of raw materials, parts, or finished products needed to
manufacture vehicles, which can impact production schedules, delivery times,
and ultimately sales and profitability.
▪ Position: In this context, "position" refers to Ford's position in the marketplace
relative to its competitors. This can include factors such as market share, brand
recognition, pricing strategy, and product differentiation. Ford has to continually
evaluate its position in the market and adjust its strategy to maintain its
competitive edge.
▪ Sustainability: This refers to the concept of balancing environmental, social,
and economic considerations in business operations. For Ford, sustainability
initiatives could include reducing the environmental impact of its vehicles
through the use of electric or hybrid technologies, improving worker safety and
labor practices, and reducing waste in its manufacturing processes.
Company overview:
Henry Ford and 11 other investors established Ford Motor Company, an American
automaker, in 1903. When the business was reincorporated in 1919, Ford, his wife
Clara, and son Edsel acquired complete ownership. Until January 1956, when the
common stock was first made available for public sale, they, their heirs, and the Ford
Foundation (founded in 1936) held all of the company's shares. The business makes
passenger cars, light trucks, as well as auto accessories and parts. One of the most
lucrative automotive names in marketing history, it has been. Offices are in Dearborn,
Michigan.
Ford Motor Company, American automotive corporation founded in 1903 by Henry
Ford and 11 associate investors. In 1919 the company was reincorporated, with Ford,
his wife, Clara, and his son, Edsel, acquiring full ownership; they, their heirs, and the
Ford Foundation (formed 1936) were sole stockholders until January 1956, when public
sale of the common stock was first offered. The company manufactures passenger cars
and trucks as well as automotive parts and accessories. It has been one of the most
successful automotive brands in marketing history. Headquarters are in Dearborn,
Michigan.
Henry Ford had experienced a grand success especially with the early models like the
T Model. he went on explained his business overseas and by the early 1910’s, with
production facilities in France, Denmark and England, Germany and Austria.

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After the First World War started, Ford produced half of the cars being sold in the US.
During the war, Ford produced many of its cars to serve the army.
1938: The German consul at Cleveland awards Henry Ford the Grand Cross of the
German Eagle, the highest medal Nazi Germany could bestow on a foreigner
By 1941, Ford became the world’s largest assembly plant owner and Ford produced
from standard military vehicles, to B-24 Liberator bombers and tanks during the World
War II
After the WWII, was the period when Ford company developed and evolved very fast.
Ford came out with latest technologies and development for their cars. During the Cold
War they were the most important carmakers in the world. It was during period that the
Ford Motor Company looked for other possible investments and continued to expand
overseas. In 1979 they acquired a one fourth Mazda, the Japanese carmaker in 1987.
Ford added Aston Martin and in 1989 Ford acquired Jaguar under its umbrella brand.
Ford Motor Company omits 100th birthday in 2003 and showcased a series of special
edition of cars, such as the all-new Ford Mustang. Ford faced financial crisis when it
reported losses of over $12 billion for the 2006 fiscal year. It led to the selling of some
of the brands from the Ford group: Aston Martin, Jaguar and Land Rover.
After the third Restructuring process “The Way Forward”, Ford started to Divest its
subsidiary business in order to focus on the core “FORD” brand. It sold its Jaguar and
Land Rover brand to Tata Automobile of India in 2008.

Ford in the 21st century:

In December 2008 U.S. Pres. George W. Bush announced an emergency financial
rescue plan to aid the “Big Three” automakers—Chrysler LLC, General Motors
Corporation, and Ford—to prevent the collapse of the country’s struggling auto
industry. The plan made immediately available $13.4 billion in government loans from
the Troubled Assets Relief Program (TARP), a $700 billion fund approved by Congress
to aid the financial industry following the subprime mortgage crisis. The loans would
allow the auto companies to continue operating through March 2009, when they were
required to demonstrate “financial viability” or return the money. An additional
stipulation required the companies to undergo restructuring. The money was initially
made available to General Motors and Chrysler. Ford purportedly possessed adequate
funds to continue operations and, thus, did not immediately require government relief.
Able to avoid bankruptcy—for which both General Motors and Chrysler filed—Ford
experienced increased sales and market share in 2009. The growth was partially due to
the federal government’s “cash-for-clunkers” plan, which gave consumers up to $4,500
toward trade-ins of older cars for new fuel-efficient models. In addition, Ford adopted
various cost-cutting measures and focused on stronger brands. In 2010 the automaker

8
sold Volvo to the Chinese company Zhejiang Geely Holding. Several months later Ford
announced that it would discontinue its Mercury line. However, as sales became
sluggish, the automaker looked to expand its products. In 2016 Ford Smart Mobility
was created to develop car-sharing ventures and self-driving vehicles, among other
initiatives. The following year the automaker announced that it was increasing its line
of electric cars. However, in 2018 Ford announced that it was phasing out all its
passenger cars, except the Mustang and Ford Focus Active. Instead, the company was
going to focus on pickups (Ford’s F-series of pickups were the best-selling vehicles in
the United States in the late 20th and early 21st centuries), SUVs, and crossover
vehicles.
Ford’s Motor Mission Statement:
The mission and vision statements of Ford Motor Company place a strong emphasis on
product effectiveness and business leadership in the automotive sector. The
accomplishment of the corporate mission and corporate vision is connected to the
company's strategic position as a significant player in the global automobile market.
Ford's corporate mission is to provide mobility for its target customers. The company's
products are made to address issues and needs related to mobility in the transportation
industry. Ford, on the other hand, has a corporate vision that focuses on outperforming
the competition while taking other factors into account. Toyota, General Motors, Tesla,
Volkswagen, Hyundai/Kia, Nissan, Honda, and other automakers are competitors of the
business. According to Ford Motor Company's Porter's Five Forces Analysis, this
market condition imposes fierce competition. Despite the difficulties facing the
automotive industry, the company's corporate vision and mission statements influence
strategic management choices for improving business performance.
Ford's organizational development is guided by its corporate mission and vision
statements. These statements are interpreted in relation to the operational effectiveness
of the automotive industry by policies and strategies for various business sectors. For
instance, Ford's operations management and productivity measures use strategic
management interpretations of the vision and mission statements that are particular to
decision areas of operations, like product design and human resource management.
Ford's company’s goal is to "Our mission is to strengthen communities and help make
people’s lives better. Our purpose is to drive human progress through freedom of
movement. "
This mission statement is focused on moving people, which is a fundamental task that
is required of cars and the transportation industry. Such a focus on mobility reveals the
function of Ford's company in society. The company wants to improve the effectiveness
of people's transportation as one of the major actors on the global scene. Ford's business
mission statement is made up mostly of the following elements:

9
Community Strength: Ford is committed to improving society as a whole and doing
its part to improve the lives of those who live there. To demonstrate this, the business
collaborates with nonprofits to give people access to opportunities and resources that
enable them to realize their full potential.
Improving Lives: Ford is committed to enhancing people's lives locally, nationally,
and internationally through its investments, grants, and programs that promote learning,
safe driving, and community growth.
Positive Impact: Ford focuses on the beneficial effects they can have by putting in
place initiatives that benefit people and their communities. For instance, the company's
social impact investments are designed to support organizations as they grow and
become sustainable.
Corporate Mission Statement:
Ford Motor Company’s corporate mission statement is brief and a general description
of the business. For example, the corporate mission focuses on making accessible and
affordable mobility, inclusive of automobiles. The general term, “mobility,” is
indicative of Ford’s future product development, which could include mobility
technologies other than automobiles. The company could develop personal flying
vehicles, and new mobility products for transporting small parcels. Overall, the
corporate mission statement is descriptive enough to guide strategic management in
terms of what Ford’s business does and should do, and aligns with the corporate vision
statement. A recommendation is to improve the corporate mission by including
information about the company’s target markets, customers, mobility technologies, and
business philosophy and values as an automotive enterprise. It is notable that the
corporate mission statement’s focus on improving people’s lives relates to Ford Motor
Company’s corporate social responsibility strategy and stakeholder management, in
terms of business contributions to societal improvement.
Ford Motor Company’s Vision Statement:
Ford’s corporate vision is “To become the world’s most trusted company, designing
smart vehicles for a smart world.”
This vision statement reflects the multinational company’s strategic goal of becoming
a leader in the automotive industry. Ford’s focus on smart vehicles is pertinent to current
market conditions and customers’ preferences. The company aims to maximize its
profitability and relevance to the market, where more efficient technologies are
preferred. The following are the main components of Ford’s corporate vision statement:
Support Education: Ford understands that education is the key to success for both
organizations and individuals’ livelihoods, and invests over $16 million annually to
support education.

10
Promote Safe Driving: Safety is fundamental to driving. Through its signature
program, Ford has invested more than $50 million to provide free driver education to
more than 1 million people worldwide.
Enrich Community Life: Ford believes in the power of community and has been
investing in communities for over 70 years with programs to assist veterans, feed the
hungry, provide disaster relief, support the arts, and celebrate diversity.
Encourage Employee Volunteering: Active volunteering in the community is an
integral part of Ford’s company culture. Since 2005, employees at Ford have registered
over 1.3 million volunteer hours across the world.
Ford’s dedication to its vision to become the most trusted company in the world is
proved through their pillars of success. Through supporting education, promoting safe
driving, enriching community life, and encouraging employees to volunteer, Ford
builds its company image as one that cares and brings the actions to prove it.
Corporate Vision Statement:
Ford Motor Company’s vision statement is concise, future-oriented, and inspirational,
while describing the business as a developer of smart vehicles. The vision statement’s
specification of smart vehicles complements the corporate mission statement by
providing a more detailed picture of what the company does. Also, Ford’s corporate
vision is challenging and abstract enough to drive the business organization toward high
performance. To achieve this corporate vision’s aim of becoming the world’s most
trusted company, it is essential to strengthen the enterprise through enhancement or
creation of competitive advantages, such as the ones shown in the SWOT analysis of
Ford Motor Company. Also, achieving the corporate vision statement requires strategic
initiatives for making the automotive brand attractive to target customers. Thus, a
recommendation based on the vision statement is to develop Ford’s marketing mix or
4Ps in a way that strengthens customers’ trust in the company. Moreover, it is
recommended that the company include more information about the strategic direction
of the automotive business, to make the corporate vision statement more effective in
guiding management and human resources toward the desired business goals.
Reference:
➢ Bartkus, B., Glassman, M., & McAfee, B. (2006). Mission statement quality and
financial performance. European Management Journal, 24(1), 86-94.
➢ Ford Motor Company – Annual Report 2018.
➢ Ford Motor Company – Company Information.
➢ Ford Motor Company – Form 10-K.
➢ Kirkpatrick, S. A., Wofford, J. C., & Baum, J. R. (2002). Measuring motive
imagery contained in the vision statement. The Leadership Quarterly, 13(2), 139-
150.

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➢ Lucas, J. R. (1998). Anatomy of a vision statement. Management Review, 87(2),
22.
➢ Mullane, J. V. (2002). The mission statement is a strategic tool: When used
properly. Management Decision, 40(5), 448-455.
➢ Pace, S. (2017). Shaping corporate brands: From product features to corporate
mission. International Studies of Management & Organization, 47(2), 197-205.
Influence of Ford Motor company:
I am going to demonstrate the effect of globalization by taking Three instances from
the Ford Motor company. The following essay will try to give an insight of how
political, economic, social and technological factors affected Ford’s strategies under
the changing business environment that helped it stand out from the other rival car
manufacturers in the world. Ford created some of the finest works of automobile
engineering and came out with various eco-friendly innovations making it the only
motor company to secure its place in the list of 100 most ethical companies of the
world.
Economic Factors:
Ford must always keep an eye on changing economic conditions. This component
of the PESTEL/PESTLE analysis identifies the influence of the economy on the
firm’s remote or macro-environment. The following are the economic external
factors significant to Ford:
Growth of U.S. economy (opportunity)
High growth rate of developing markets (opportunity)
Strengthening U.S. dollar (threat)
Ford has the opportunity to grow based on the slow but notable growth of the U.S.
economy, which is the company’s biggest market. Ford also has the opportunity to
grow in high-potential developing countries, where the company still has limited
presence. However, the strengthening U.S. dollar is an external factor that reduces
profit margins and the attractiveness of Ford’s products, considering that many of
the firm’s raw materials and automotive parts are produced in the United States.
Such remote/macro-environment condition indicates that Ford must improve
business efficiencies to maximize the opportunities in foreign markets identified in
this component of the PESTEL/PESTLE analysis.
Social Factors:
Ford Motor Company’s remote or macro-environment is subject to the influence of
social conditions. The impact of sociocultural trends is considered in this component
of the PESTEL/PESTLE analysis. The following are the social external factors most
important to Ford:

12
Increasing demand for hybrid and electric automobiles (opportunity)
Moderate attitude about customer service (opportunity)
Increasing wealth gap (opportunity & threat)
Ford can grow by providing products that address the increasing demand for hybrid
and electric automobiles. Ford also has the opportunity to improve its services,
especially aftersales services to attract more customers. However, the increasing
wealth gap is a remote/macro-economic environment condition that threatens Ford’s
Lincoln automobiles, which are luxury products with high prices. Based on this
component of the PESTEL/PESTLE analysis, Ford’s intensive growth strategies
need to emphasize more on product innovation to satisfy changing customer
preferences and address the sociocultural external factors in its business.
Technological Factors:
Technologies enable Ford to develop its potential and compete in the remote/macro-
environment. This component of the PESTEL/PESTLE analysis deals with the
technological changes and conditions that affect firms. The most significant
technological external factors in Ford’s business are as follows:
Rising use of mobile computing (opportunity)
Increasing use of online fulfillment services (opportunity)
Limited network of alternative fuel stations (threat)
The rising use of mobile computing is an external factor that creates opportunities
for Ford Motor Company to grow through mobile service support and mobile
marketing. Also, the firm can improve its performance through enhanced online
fulfillment services. For example, Ford parts can be delivered to customers through
these fulfillment services. On the other hand, the company’s potential growth in
providing alternative-fuel vehicles may suffer because of the limited alternative fuel
stations. Thus, based on the technological component of the PESTEL/PESTLE
analysis, Ford needs to focus on service improvement and technological
enhancement to ensure competitiveness despite challenges in its remote or macro-
environment.
Political Factors:
Ford’s business must address the political aspect as an external influence.
Governmental impact on firms’ remote or macro-environment is considered in this
component of the PESTEL/PESTLE analysis. The following are the political factors
significantly affecting Ford:
Governmental support for technological innovation (opportunity)

13
Increasing international trade agreements (opportunity)
Increasing governmental effort for infrastructure in developing countries
(opportunity)
Governments are increasingly supporting technological innovation to enhance
economic conditions. This situation provides opportunity for Ford to use
governmental incentives for innovation, environmentally friendly products and
sustainability. Ford also has the opportunity to expand its operations based on trade
agreements, which make it easier for companies to enter foreign markets. In
addition, high-growth developing countries are improving their infrastructure,
including transportation infrastructure. This remote/macro-environment condition
contributes to the increasing demand for vehicles in these countries, thereby giving
Ford Motor Company the opportunity to grow internationally. This component of
the PESTEL/PESTLE analysis shows that the political external factors create
significant opportunities for Ford’s growth and expansion.
Ecological Factors:
Ecological concerns partly determine the conditions of Ford’s remote or macro-
environment. Issues regarding the natural environment are considered in this
component of the PESTEL/PESTLE analysis. The most significant ecological
external factors in Ford’s business are as follows:
Climate change (opportunity)
Low-carbon trend (opportunity)
Declining oil reserves (opportunity)
Climate change is an external factor that creates opportunities for Ford to grow
through products that help in environmental conservation. The same effort could
take advantage of the low-carbon trend. Also, Ford can offer new products that use
alternative fuels or electricity to address the impact of the declining oil reserves on
the remote or macro-environment of auto firms. Thus, based on the ecological
component of the PESTEL/PESTLE analysis, Ford must emphasize product
innovation to improve its business performance.
Legal Factors:
Ford’s business must satisfy legal requirements. The effects of regulations on the
remote or macro-environment are identified in this component of the
PESTEL/PESTLE analysis. The following are the legal external factors notable in
Ford’s business:
Environmental protection regulation (opportunity)
Increasing safety regulations (opportunity)

14
Increasing intellectual property laws worldwide (opportunity)
Ford can improve its business sustainability to address the effect of environmental
protection regulation. Also, Ford can improve product design to take the opportunity
based on safety regulations. Moreover, increasing intellectual property laws are
improving the remote/macro-environment of Ford by creating more protection for
their intellectual properties and rights. This component of the PESTEL/PESTLE
analysis shows that Ford can grow based on changes in the external regulatory
landscape.
Globalization impacted FORD:
Globalization effected ford’s strategies from the time it was setup till date. They
were able to maintain their competitive advantage over the other companies either
by innovating new technologies likes the assembly lines, approaching to new
international standards or by focusing on the core “Ford” brand. By adapting such
processes, FORD Motor company contributed toward Corporate social
responsibility and created remote social value in the eyes of the customers. Although
there is some probability of window dressing and a quest for better profits.
These can be understood by strategic behavior theories like market imperfections
(Stephen Hymer (market imperfections, 1960s) and role of oligopolies (Market
Imperfections, 1960s).
The Ford company explored new horizons of business across cross border market
either by value crating or value capturing activities (lecture 6 slide 31). Expanding
overseas specially towards emerging economies may not only increase corporate
profits and shareholder’s returns but also provide employment to host countries and
develop these economies at the base of the “pyramid “all of which have noble CSR
dimensions. Ford quickly merged and acquired some of the big brand under its
umbrella and came out come with some best of the cars leaving a long-lasting
impression on the consumers.
1914: Ford introduced $5 workday minimum wage – double the existing rate.
In 1914 ford innovated the 5-dollar workday. 5 dollar was just twice the wages being
paid at that time. The interesting thing about this was it was far more than the balance
between demand and supply. The number of worker willing to work exceeded the
required. The ford company came to be associated with “good wages” in 1914. This
policy of high wages and mass production gave rise to a new term “Fordism” .

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Factors affecting decision:
Political: Henry Ford was a strict anti-union, and believed in authoritative way of
government system.
Economical: In the 1913 the availability of labors must have increased as the
national economy and Detroit hinterland suffered a significant downturn. This is
evident from the following table 1 which shows the number of people receiving the
special unemployment relief in the country including Detroit increased about two
third between the period of July 1912 – June 1913.
Ford’s high wage policy is in by the “efficient wage theory”. There are various
theories for these changes like the Dual labour market theory. Although the same
“efficient wage theory also says the in a competitive market some people must be
stuck in bad, low paid jobs or unemployed (Gintis, 1998). The alternative to the
Ford’s offer of 5-dollar wage was unemployment or very low paid job hence can be
the reason why workers showed up.
Social: In 1913 Ford’s worker turnover rate increased to 380 percentage. High
turnover rate during the twentieth century was a common problem faced by many
manufacturers. The reason for dissatisfaction of labors according to ford
management repost
• Too long hours
• Low wages
• Bad housing conditions
Undesirable shop conditions.
Ford’s method of 5-dollar wage made workers motivated, punctual. This although
should have been a costly affair turned out to be profitable step for the business.
The higher the wage rate offered by firms, the more effort will be supplied by the
employees, with other things being the same
Technological: Dramatic evolution in production technology by Fords assembly
line technique. The high efficiently of this system raised the importance of High
worker turn over, high worker effort, and high worker quality.
By 1910 two third of the ford’s workforce were either workmen or mechanics who
were over rated as “highly skilled’ or “skilled” this was because ford was not a
manufacturing company rather assembling company. This problem was suppressed
by

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1996: Ford certifies all plants in 26 countries to ISO 9000 quality and ISO 14001
environmental standards
World War II gave birth to the idea of quality assurance. The first formal quality
control programs in the world were instituted by the United States Defense
department, in order to deal problems related to manufacturing of defense equipment
as quality was the main consideration. Industry standards then became popular and
reached the other parts of the world. They formed the basis for a set of quality
assurance standards which was adopted by the North Atlantic Treaty Organization
(NATO) members. Those standards were called the Allied Quality Assurance
Publication (AQAP).
Finally at the close of World War II, the International Organization for
Standardization (ISO) was created in 1947, with headquarters in Geneva,
Switzerland.
ISO 9000 & ISO 14001: In December 1996, Ford became the largest automotive
organization in the world to receive ISO 9001 quality certification, for quality
management and quality assurance. On Sept. 9, 1999, Ford Motor Co. became the
first U.S. automotive company to require all of its production and nonproduction
suppliers to become certified to ISO 14001 international standards for
environmental considerations.
Factors affecting decision:
Political: Governments may have actively promoted ISO 14001 if their economies
relied on exporting to countries with high levels of ISO 14001 adoption rates. United
States formed the Registrar Accreditation Board (RAB) to standardize procedure for
certification. The US Congress adopted the National Technology Transfer and
Advancement Act requiring federal agencies to adopt International Standards where
they exist, instead of creating their own.
Intergovernmental networks played limited role in diffusion of ISO as it was
nongovernmental regime.
Adversarial legalism approach was practiced in the U.S. In this system, the parties
to a controversy develop and present their arguments, gather and submit evidence,
call and question witnesses, and, within the confines of certain rules, control the
process. The fact finder, usually a judge or jury, remains neutral and passive
throughout the proceeding. This was slow and cumbersome.
Relations between environmental groups, government regulators and industry were
characterized by varying levels of hostility and high levels of mistrust.

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Economic: International standards were important trends in business practice.
During the Early 20th century, quality was viewed as an additional cost of
production for the business. But, the quest for quality became their major
consideration, as companies realized that high quality leads to more efficient and
less expensive production processes. Both ISO 9000 and ISO 14001 helped
companies to increase their market share. Encouragement by World Trade
Organization for creation of supranational standards helped cut down barriers on
trade and investment. As a consequence of which Foreign Direct Investment from
international Market started pouring in.
Changes were also happening at domestic levels which led to Rise in intercompany
(trade within value the value chains of the company) trade
Because of presence of dual trade linkage there might be a Possibility of “California
effect” which means that if country A absorbs a significant proportion of country
B’s exports, then country B can be expected to mimic or respond to the policies of
country A
Sociological: Employee morale improved as they felt part of the process. Managers
and employees accepted responsibility for quality. This created better co-operation
and communication among workers to do a better job and increased companies’
efficiency. This in turn led to improved customer satisfaction and trust. It helped
reduce the need for customer audits (This can result in major savings).
However, many citizen and activist groups were wary of EMS standards and viewed
them as ‘private regimes’ that were outside public scrutiny and claimed that
adopting ISO 14001 will become a de facto condition of doing business: firms that
outsource their operations sometimes require that their suppliers adopt ISO 14001.
Technological: Development of pollution-prevention techniques and company-
specific EMSs to reduce waste production as well as disposal costs. Presence of new
form of Information and technology and greater interaction among people of
different countries led to the diffusion.
Ford was perceived as “good corporate citizens” producing higher quality products.
Hence, they gained goodwill that helped retain old customers while attract new ones.
Legal: There was NO legal implication were there on the companies to adopt such
standard but since EMS had become a “gold standard” for CSR conscious firms
therefore most of the MNC’s adopted them.
Environmental: In the 1980s, environmental regulations on hazardous waste
disposal at both the local and national levels became more stringent. This forced
companies to change their method for hazardous waste disposal from placement in
landfills to treatment and recycling.

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2008: Ford sells Jaguar and Land Rover to Tata Motors:
After facing a loss of North American market share to Asian rivals like Toyota, Ford
CEO Bill Ford declared to cut 25,000 to 30,000 jobs and idle 14 facilities by 2012
thus declaring the resurgence of Ford Motor company. Bill Ford had instituted a
“Revitalization Plan” in 2002, after the automaker lost $5 billion a year earlier. But
the plan failed to meet the goals set for 2005.
Later in 2006 the new CEO Allan R. Mulally announced the Third restructuring plan
known as “The Way Forward”. The targeted areas of improvement were marketing
and sales, Technology development and Human resource.

Factors affecting decision:

Political: Allan R. Mulally succeeded Bill Ford as the new president CEO of Ford
Motor Company on September 5, 2006. on September 5, 2006. One of Mulally’s
first decisions at Ford was to bring back the Taurus nameplate.

Economical: Ford reported a loss of 1.2 billion Dollar with a decrease in the market
share from 23.7% to 15.5% since the year 2000.It faced tough competition from
Asian manufacturer such as Toyota which had manufacturing capacity of over 1.5
million vehicles in North America alone. High prices of oil posed a threat that global
economy might slip into recession and would create high uncertainty for the
business as customers were switching over from sport utility vehicles to smaller,
more fuel-efficient cars.
Because of high increase in labour and material costs, United States parts
manufacturing company like Delphi declared bankruptcy in 2005. Ford did not want
to sell its jaguar and land rover brand to similar automaker company which had wide
range of product in order to avoid competitive pressures on ford’s other auto lines.
Social: Stringent relationship between united auto workers and American car maker
as the domestic car manufacturers bore the burden of heavy pension and health care
costs. This was the scenario for both for current and retired workers, as stipulated in
contracts with the UAW. This was not the case with Japanese manufacturers.
UAW member at fords allowed nonunion workers to perform certain tasks and did
not pay them even for overtime some of which fell on weekends and furthermore
6000 salaried jobs were cut in September, 2006 and additional 30,000 jobs
scheduled for 2012.
Customer purchases are driven by ‘perceived” value derived from brand reputation
and an individuals’ personality and living standards, lack of differentiation between
Ford, Lincoln and mercury brands resulted in cannibalization of sales.

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Technological: U.S government’s new rule in august, 2005 brought a change in the
existing fuel efficiency standards. Though ford lacked innovation in mid-sized and
small cars it projected that by 2015 one half of the vehicles on road would have a
six-speed automatic transmission, which would result in increased mileage.
Environmental: Pressure from environmentalist on car and truck manufacturers to
clean up emissions by adopting to fuels like bio diesel, electric motors, compressed
natural gas and solar energy.

Analysis of Ford:
The SWOT analysis of Ford is given below:
Ford’s Strengths – Internal Strategic Factors
1. Global Recognition – Ford is a well-known brand in the automobile industry
and is also recognized in the global markets because of its success in marketing
and advertising. It operates two brands under Ford Motor Company i.e. Ford and
Lincoln. Its brand value is $10.44 billion according to the 2021 report of Statista.

2. Automotive Segment – Ford is currently the second-largest automaker in the

U.S. (behind GM) and fifth largest (behind Toyota, Volkswagen, Hyundai, GM)
in the world. Ford Motors sold a total of 4,187,000 vehicles in 2021 worldwide.

3. Research and Development – Ford’s research and development is one of its

key strengths because the company is committed to make and develop new
products. They are continuously trying to improve the performance of their
vehicles. The factors that are evaluated include fuel, efficiency, safety, and
customer satisfaction.

4. Diverse Offerings – Ford caters to all kinds of demographic groups with their
diversified brands and car models. They take care of the needs and wants of their
consumers by providing them with more variety of cars and commercial
vehicles.

5. Adaptability – Ford has a wide product and services portfolio which gives them
strong leverage and less dependency on just one product range. Their
commitment to adopting new technologies also gives them a boost in the
competitive automobile market. They are also working on light weighting, cabin
technology, and powertrain to enhance their product quality.

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 Ford recently redesigned its best-selling pick-up truck, the F-150, to adapt to
changing consumer preferences and demographics. The new generation F-150
pickup truck has been redesigned to entice the younger target market and is
scheduled to be released in November 2020. Ford is also planning to build an electric
version of the F-150 to be released by mid-2022. This enables the company to ensure
that its best-selling model keeps up with consumers’ migration away from petrol to
electric.

6. Huge Network of Dealers- The company is also diverse in its operations and
distribution, as they have a huge network of about 10,717 dealers across the
world. Ford develops its cars on standardized procedures. They also invest
heavily in various fuel sources.

7. Strong Financial Position – Ford’s strong financial position driven by the

demand for pickups and SUVs. In 2020, the company has posted a better-than-
expected annual revenue of $127 Billion. The fact that Ford is going strong
despite the turmoil in 2020 highlights the company’s growth in the future will be
even bigger.

Ford’s Weaknesses – Internal Strategic Factors:

1. Product Recalls – Ford faced a huge loss and their brand image suffered due to
the product recalls back in May 2016. They recalled approximately 830,000 Ford
and Lincoln vehicles to replace faulty side door latches. It also recalled vehicles
in May 2015 because of the safety failures of Takata airbags. Ford recalled
20,500 Kuga PHEV vehicles in Europe after its high voltage battery causes the
cars to ignite. The company also recalled more than 558,000 midsize SUVs in
North America due to issues with the brakes.

2. Weak Foothold in Emerging Markets- As Ford’s operations are diversified in

many geographical areas, they lack focus in performance and productivity. They
do not have a stronghold in emerging markets like India.

3. Poor Reputation – Ford has a poor reputation compared to its European and
Japanese rivals. Lincoln, in particular, is considered an inferior brand as
compared to English and German luxury car brands.

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4. Dependence on U.S Markets – Ford is highly dependent on the U.S and
European market. It limits its profits and revenues. Experts predict that the
majority of future car sales will come from emerging markets such as China and
India. Ford’s sales in the US market have been declining year after year due to
saturation of the market. In 2020, it sold just over 2.04 million vehicles in the
US, representing a decline of 15% compared to 2.4 million vehicles in 2019.
Dependence on the US market is becoming a major disadvantage for Ford.

5. Overdependence on Trucks and SUVs – Ford’s diversified variety is

disappearing quickly as the company focuses more on trucks and SUVs.
Currently, trucks make up for more than half (54%) of Ford’s total number of
vehicles sold in the U.S. market, with plans to increase SUVs in the future. In
2020, its car segment declined by 45% (vehicles sold). Depending too much on
trucks and SUVs is risky since most consumers are aware of climate change and
moving away from big gas-guzzlers.

Ford’s Opportunities – External Strategic Factors

1. Eco-Friendly Vehicles – As Ford is already trying to be technologically
adaptive, they have a fantastic opportunity to produce fuel-efficient cars and
commercial vehicles. For example, they can build vehicles that run on different
forms of energy. In this way, they have more options in designing eco-friendly
vehicles. The 2018’s C-Max and Fusion Hybrid car model can be their most
significant opportunity, as they have already captured the market with this new
model.

2. Increase Customer Base – Ford is already working on penetrating the

automobile market in India and China, they have an excellent opportunity to tap
into other small countries in the world and grow their customer base. From July
to September 2020, Ford’s sales in China rose by 25% to 164,352 units, which
indicates the company’s growing customer base in Asia.
3. Digital Marketing – Digital marketing is prevailing all over the world these
days, so Ford has an opportunity to work on their digital marketing skills to grow
its customer and supplier engagements.

4. Self-driving car – In 2017, Ford has invested $1 Billion in Artificial intelligence

company, Argo AI, to develop its self-driving technology. In addition, Ford has
partnered with Walmart and Postmates to test the future of grocery delivery. Ford
announced that it would introduce the “Active 2.0 Prep Package” in its Mach-E

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 model that allows for hands-free driving in certain situations. Cars with this
semi-self-driving technology will be available in the market by the second half
of 2021.

5. Expand into Related Fields – Ford has extensive experience in different sectors
related to the auto industry. The company’s new CEO, Jim Farley, recently
announced that it would be expanding operations into software, fleet
management, electric vehicle charging, and other related technology fields.

Ford’s Threats – External Strategic Factors

1. High Competition – Ford is already facing cut-throat competition from its rival
companies like Toyota, Tesla, and Tata. Ford keeps struggling to maintain its
innovative position in the industry.

2. Increased Prices of Raw Materials – The rising raw material prices of steel
and steel coil can directly affect the company’s cost and profit margin.

3. Regulations and compliance – The compliance and regulatory threats for

automobile brands have increased in the past years because of environmental
improvements going around the world. Vehicles are now inspected for public
safety and quality issues. Ford can face serious challenges if it fails to comply
with the new regulations. Ford is facing a civil lawsuit in the US Supreme Court
after it was sued by two people who were injured in crashes involving second-
hand Ford vehicles.

4. Market uncertainties – In the first quarter of 2020, market uncertainties

globally hammered Ford very hard, leading to a decline in sales to 516,330 total
vehicles, which lower by 12.5% compared to the same period in 2019. It has
been affected more adversely than its rivals General Motors and Fiat Chrysler.
Market uncertainties also forced Ford’s German branch to apply for a $582
million loan from the German government to cushion the impact of the decline
in sales.

5. Strong Labor Unions – Canadian autoworkers union is growing stronger and

using its influence against automakers operating in the country like Ford. In
2020, the union threatened to strike if Ford did not invest to safeguard its

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 employment in the long-term. To avoid the strike, Ford was forced to invest $1.4
billion in its Oakville and Windsor plants in Canada as part of the deal with the
union.

6. Ford shuts down manufacturing plants in India & Brazil – Ford has stopped
its automotive manufacturing operations in India. It means that Ford will stop
selling Figo, Aspire, Freestyle, EcoSport, and Endeavor in India. However, Ford
will continue to run its business solution, engineering, and customer support
operations in India. Similarly, Ford has closed 3 manufacturing plants in Brazil
in 2021.
Ford is going through a restructuring program to raise its profitability, and the global
pandemic accelerated this decision.

• Feasibility analysis:
In terms of pure research, hybrid technology is fairly well understood and is
already utilized by the Ford Motor Company. Focus must be placed on
improving hybrid efficiency, performance, and reliability, as well as maintaining
affordable costs to consumers. Furthermore, Ford’s R&D facilities are top-notch
and already working to develop Ford’s hybrid program. As of 2007, Ford had
the second-largest research and development budget in the world at
approximately $8 billion annually (Vijayenthiran). Additionally, Ford was the
first auto-manufacturer to offer a U.S.-made hybrid vehicle (in the year 2000)
(Carr-Ruffino and Acheson). Based on this information, it is entirely feasible
that Ford can produce additional landmark models in the near future provided
that adequate resources and proper strategies are applied towards revamping its
current hybrid R&D program.
• Cost-Benefit Analysis:
There are a number of initial costs that Ford must account for in order to properly
execute this course of action. Costs must be covered immediately and will rely
on the success of several preliminary budget-saving steps. That said, the total
price of developing hybrid models for all vehicle classes is intended to be
accounted for through internal budget recoveries; reductions in production costs
are meant to reduce the need for increased net spending.
The potential benefits of these investments far outweigh initial costs, but are long-term
and may not bring significant returns until the entirety of the plan is completed. And
while this proposal is financially risky, the current problems facing the Ford Motor
Company – its potential inability to respond to the challenges and opportunities of a
changing marketplace – are dire enough that the competitiveness of the company itself
is at risk. In this sense, these costs should not only be considered investments, but
preventative measures.

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Problem Findings:
• Limited global scope of production network
• Higher costs compared to competitors
• Slow innovation processes
• Aggressive competitive rivalry
• New entry of high-tech firms
• Fluctuating oil prices
• Poor reputation of American auto brands compared to European and Japanese
competitors. Lincoln in particular is widely considered an inferior product to
British and Germany luxury cars, even in the United States.
• Heavy dependence on U.S. and European auto markets. Most experts believe
future growth in car sales will be in emerging markets such as China and India.
• Large operations in Europe, where car sales have been stagnant in recent years.
• Ford’s reputation as a working- or middle-class brand, which makes it hard to
market vehicles to the upwardly mobile.
• Heavy reliance on pickup truck sales. Pickups have limited appeal outside the
North American market.
• Dependence on some national auto markets that are in recession because of
falling prices for natural resources, such as Russia, Brazil and Canada.
• Ford’s reputation as a staid, conservative brand, which makes it harder to market
to younger consumers.
• Poor reputation with investors, which can limit the company’s ability to raise
capital.
• Weak Reputation.
• Weak Reputation.
• Frequent Product Recalls.
• Lack of Foothold in Emerging Markets.

Recommendation:
• As Ford is manufacturing in various countries, they should try to improve their
operations department by increasing efficiency and hiring the right employees
and labor.
• Ford should start producing more eco-friendly vehicles because the demand for
these kinds of vehicles is growing all around the world.
• Ford can partner up with Uber and other app-based vehicle services to grow its
revenue and customer base.

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 • Ford should to improve its research and development investments and increase
its innovation speed to address aggressive competition and the entry of high-tech
firms in the industry.
• Ford should to expand its production network to increase economies of scale,
which can reduce costs and prices to make Ford automobiles more attractive.

Conclusion:
In this report indicate that Ford Motor Company is resilient enough to address the
challenges that it currently encounters. Admittedly, this organization faces considerable
difficulties related to external competition and the increase of product recalls.
Nevertheless, there are important competencies that should be considered. In particular,
the company has the capacity to introduce innovative products which can appeal to a
great number of clients. Ford is one of the largest and most successful car manufacturers
in the world, but in 2014, its economic benefits fell 56%, this report was through PEST
analysis, SWOT analysis and external Porter's Five Forces Model to explore the
external and internal status quo, opportunities, challenges that Ford faced in 2014. The
author concluded that it was proper for Ford in the adoption of differentiation strategy,
but Ford's differentiation strategy in future must match the needs of consumers to make
the difference valuable. Ford has taken a more mature system and experience in
adopting the vertical integration strategy; however, it needs part or component
producers of different links to make timely adjustments to meet the diverse needs of
consumers. Ford's attention to the views of consumers is desirable, which needs further
increasing the effective communication between the various departments within the
company. Ford’s adoption of high-quality, low-price strategy requires its ability to
understand and meet what customer needs and control product cost better.

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