SWOT analysis of Ford (5 Key Strengths in 2018)

Ovidijus Jurevicius | June 5, 2018

SWOT analysis of Ford Motor Company

This Ford SWOT analysis reveals how a pioneering automobile company used its competitive advantages to become one of the most innovative automotive manufacturers in the world.

It identifies all the key strengths, weaknesses, opportunities and threats that affect the company the most. If you want to find out more about the SWOT of Ford, you’re in the right place.

For more information on how to do a SWOT analysis please refer to our article.

Keep reading.

Company Background

Key Facts
Name Ford Motor Company
Founded June 16, 1903
Logo
Industries served Automotive and Financial Services
Geographic areas served Worldwide (62 countries)
Headquarters Dearborn, Michigan, U.S.
Current CEO James P. Hackett
Revenue (US$) 156.776 billion (2017) 3.3% increase over 151.800 billion (2016)
Profit (US$) 7.628 billion (2017) 66% increase over 4.596 billion (2016)
Employees 202,000 (2018)
Main Competitors Fiat Chrysler Automobiles, General Motors Company, Honda Motor Company, Hyundai-Kia Automotive Group, PSA Peugeot Citroën, Renault-Nissan B.V., Suzuki Motor Corporation, Toyota Motor Corporation, Volkswagen AG Group and many other automotive companies.

Ford Motor Company business overview from the company’s financial report:

“With about 202,000 employees worldwide, the Company designs, manufactures, markets, and services a full line of Ford cars, trucks, and SUVs, as well as Lincoln luxury vehicles. To expand our business model, we are aggressively pursuing emerging opportunities with investments in electrification, autonomy, and mobility.

In 2017, we sold approximately 6,607,000 vehicles at wholesale throughout the world. Substantially, all of our vehicles, parts and accessories are sold through distributors and dealers, the substantial majority of which are independently owned. We do not depend on any single customer or a few customers to the extent that the loss of such customers would have a material adverse effect on our business.

In addition to the products we sell to our dealerships for retail sale, we also sell vehicles to our dealerships for sale to fleet customers, including commercial fleet customers, daily rental car companies, and governments.”[1]

You can find more information about the business in Ford's official website or Wikipedia’s article.

Ford SWOT analysis

1. Ford’s F-Series pickup truck line

Ford has produced the best-selling pickup truck in the U.S. market for a record 41 years in a row, via its F-Series pickup trucks (a lifestyle/light commercial vehicle with an enclosed cab and an open rear cargo area with low sides and tailgates).[1]

The company’s F-Series pickups outsold nearest competitor in this segment by more than 200,000 vehicles in 2017, taking a 31.8% share of the pickup vehicles market.

Figure 1. Best-selling pickup trucks in the U.S. 2015-2017
Rank Brand 2017 2016 2015 2-year growth
1. Ford F-Series 896,764 820,799 780,354 14.9%
2. Chevrolet Silverado 585,864 574,876 600,544 -2.4%
3. RAM P/U 500,723 489,418 451,116 11%
4. GMC Sierra 217,943 221,680 224,139 -2.8%
5. Toyota Tacoma 198,124 191,631 179,562 10.3%
- Total 2,822,838 2,692,540 2,543,595 11%

Source: Good Car Bad Car[2]

The company heavily invests in its F-Series product line, owning more than 100 patents related to pickups. Ford renews its F-150 models every few years and expects to introduce its first diesel engine in 2018 as well as enhanced connectivity features. A hybrid F-Series model will be available for sale in 2020.

The F-150 is the most profitable and the most successful model for Ford to date, so the company makes every effort to provide the best quality vehicles with the most innovative technologies to assist drivers accordingly.

Why do the F-Series pickups give Ford an edge over its competitors?

  • Profitability. Pickups are more profitable vehicles than compact cars or SUVs. In 2015, Nick Bunkley from Auto News[3] calculated that on average Ford was making at least US$10,000 in profit from a single F-150 sold.

    Considering that Ford sold 896,764 units of these pickups in 2017, Ford’s F-150 profits should have totaled around US$9 billion from these vehicles alone. By making so much profit from one line of vehicles the company can invest more in its other models and subsidize them in order to increase their market share.

  • It drives their sales growth in the U.S. The U.S. is the second largest automotive market in the world and is Ford’s main market. The company sold 2,566,000 vehicles in the U.S. in 2017, of which over a third were pickup trucks.

    However, Ford’s market share in the U.S. declined from 14.9% in 2015 to 14.8% in 2017, despite the significant growth of pickup trucks. The company’s market share in its largest market therefore currently significantly depends on the F-Series’ success.

  • Pickup trucks are becoming a status symbol. According to a study done by MaritzCX[4], Ford’s F-150 pickup trucks are the most often purchased vehicle by people earning US$200,000-US$500,000 a year.

    That’s because pickup trucks are now seen as luxury vehicles, having many of the same features inside as luxury cars. In addition, their style, safety, usefulness and comfort have elevated their status.

    Ford is the leader in the pickup trucks market in the U.S. and its brand association with such a symbolic vehicle strengthens its overall brand image and reputation.

2. Brand reputation combined with the second most loyal customer base

Ford is the oldest of the three American companies, with its founder Henry Ford being famous for pioneering the revolutionary assembly line technique of mass production in the early 20th century. The company became famous for its mass produced vehicles such as the Model T and the Model A.

Interbrand ranks Ford’s brand as the 33rd most valuable in the world, valuing it at US$13.643 billion.[5] Forbes lists the brand as the 39th most valuable in the world valuing it at US$13.8 billion.[6] Both of these rankings make Ford the most valuable brand among the traditional “big three” American automotive companies - General Motors, Ford and Chrysler.

In the U.S. market, according to a 2015- 2017 analysis of new vehicle registrations, Ford had the second most loyal customer base in the U.S. vehicle market.[7] Ford’s F-Series, Lincoln’s MKC, MKX and MKZ brands were also named in their respective segments as having the most loyal customer base.

However, although Ford has a strong brand reputation globally with a presence in 62 countries, there is room for improvement. Both Forbes and Interbrand currently rank the Ford brand behind its international rivals Toyota, BMW, Mercedes-Benz and Honda.

Access the full analysis... more Ford strengths, weaknesses, opportunities and threats

Published: June 5, 2018
Format: PDF + PowerPoint
Pages: 25
Words: 5,300
Charts/tables: 11

Price: US$19

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Table of contents

  • Company Overview
  • SWOT Analysis
  • Strengths
  • Weaknesses
  • Opportunities
  • Threats
  • Summary
  • Sources

Sources

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About Ovidijus Jurevicius

Ovidijus is the founder of SM Insight and the lead writer since 2013. His interest and studies in strategic management turned into SM Insight project, the No.1 source on the subject online.

He's been using his knowledge on strategic management and swot analysis to analyze the businesses for the last 5 years. His work is published in many publications, including three books.