Ford SWOT analysis 2016

| March 31, 2016

Company Background

Key Facts
Name Ford Motor Company
Logo
Industries served Automotive and Financial Services
Geographic areas served Worldwide (62 countries)
Headquarters Dearborn, Michigan, U.S.
Current CEO Mark Fields
Revenue US$149.558 billion (2015) 3.8% increase over US$144.077 billion (2014)
Profit US$7.373 billion (2015) 598% increase over US$1.231 billion (2014)
Employees 199,000 (2016)
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:

“We are a global automotive industry leader based in Dearborn, Michigan. We manufacture or distribute automobiles across six continents.

In 2015, we sold approximately 6,635,000 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. We also sell parts and accessories, primarily to our dealerships (which in turn sell these products to retail customers) and to authorized parts distributors (which in turn primarily sell these products to retailers). We also offer extended service contracts.”[1]

Ford SWOT 2016 Factors

Strengths

1. Geographically diversified revenue streams. The majority (65%) of Ford’s revenue comes from the North American region. The key market in that segment is the U.S., where the company sold 2.677 million vehicles units, earning US$78 billion or 55.5% of its total automotive revenue in 2015.[1] Most automotive companies rely on their home markets to generate the majority of their sales, including Ford.

Figure 1. Ford’s largest markets by number of vehicles sold and revenue earned in 2015 (only automotive sector, financial sector not included)

Country Vehicles sold (000’s) % share of total Revenue (US$ billions) % share of total
United States 2,677 40.4 77.99 55.5
China 1,160 17.5 8.48 6.0
United Kingdom 447 6.7 8.24 5.9
Canada 285 4.3 8.52 6.1
Germany 261 3.9 4.81 3.4
Other 1,805 27.2 32.53 23.1
Total 6,635 100 140.566 100

Source: Ford’s financial report[1]

However outside of its home market, Ford has a more diversified revenue stream than its rivals. Overall, Ford receives 76.9% of its revenue from 5 different markets. In comparison, General Motors earns 83.2% of its revenue from 5 different markets, while Toyota derives 77.1% of its revenue from only 3 different markets. Ford’s competitors therefore rely on fewer markets to generate the bulk of their revenues, making them more susceptible than Ford to political, economic, social and demographic changes in those markets.

Figure 2. Ford’s revenue breakdown by country

Ford receives 52.5% of its revenue from the U.S., 6.7% from United Kingdom, 6.1% from China and Canada and 4.5% from Brazil. In total, the company receives 75.9% of its revenue from these 5 countries.

Source: Ford’s financial report[1]

Figure 3. Toyota Motor Corporation’s and General Motors’ revenue breakdown by country

Toyota generates 80.2% of its sales from 4 countries. 41.9% from Japan, 25.1% from the U.S., 10.1% from China and 3.1% from Canada. General Motors receives 82.4% from 5 countries. 57.6% from the U.S., 7.8% from Canada, 7.7% from China, 5.7% from Brazil and 3.6% from United Kingdom.

Source: The respective companies’ financial reports[6][7]