Running Head: BMGT
1
Ford Internal Environmental Analysis
OL421
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 2
Ford internal environmental analysis
Founded in 1914, Ford Motor Company is an automobile producer. Ford
automobiles, efficacy automobiles, vans, and cars, as well as Lincoln extravagance
vehicles, are all factory-made, marketed, and examined by the corporation.
Motorized, Agility, and Ford Credit are all divisions of the company. The
Automotive division is responsible for the progress, production, distribution, and
maintenance of Ford and Lincoln vehicles, as well as their parts and accessories.
Argo AI (an inventor of self-driving schemes) is a major component of the
Mobility segment. Ford also has equity interests in a number of other mobility-
related companies. When it comes to financing and leasing for automobiles, much
of the work done by Ford Credit goes into this market. Dealers across the world
may get a variety of auto financing options from Ford Credit.
Ford Motor Company's corporate strategy.
Ford automobile company's future success, it has developed and implemented
The Plan, which will be unveiled in October of this year. Ford is transforming the
way it does business, streamlining its operations, using its assets, seeking out new
possibilities, and putting people and customers first. Although COVID-19 had its
struggles, the company concluded the year in a solid spot, and the additional half
of 2020 will show growth against Ford & Weissbein, 1997). Investments will be
made in "uniquely Ford" rechargeable vehicles and connected resolutions in the next
year.
Enhanced eminence, condensed budgets, and quicker restructuring of its global
manoeuvres are all fragment of the Strategy. Value, client satisfaction, working
fineness, and top-line development are all important to the company. With this
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 3
tactic, Ford design to invest further in its strongest businesses and vehicle
franchises, expand its commercial vehicle business with computer software services
that endorse allegiance and income, and tactical method partnerships to gain a better
consideration of our clients. Ford’s usual locomotive productions will be "disrupted”,
and we will collaborate with others in order to gain acquaintance and effectiveness.
A focus on its core competencies means that we're putting its money where its
mouth is when it comes to the creation, production, distribution, marketing, funding,
and maintenance of automobiles and commercial vehicles. New potential in
electrification, self-driving technologies, and transportation solutions will be
maximized.
The Purposes of the Organization
• Build a Relationship of Confidence
Ford’s goal is to "become the most trusted firm in the world," and it’s
working hard to get there. Ford exemplifies these deeply held principles through
helping people with integrity and skill on a continual basis. Ford’s most valuable
asset will be the trust it builds with its worldwide stakeholders.
• Improving the Quality of Life
Using the Erb Institute at University of Michigan, Ford steered a two-year
training with the goal of "helping construct a better world," and it came up with a
way to quantify human progress. Civil rights, well-being and security, increased
admittance to communal goods (such as agility), and increased common fiscal
success were all considerations in its process.
• Make a Difference
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 4
Ford aim to produce a net beneficial impact on society and the milieu
slightly than reducing the negative impacts of fords actions. Ford wants all their
cars to be more energy efficient and emit less pollution. As a result, its long-term
vision, which includes the creation of a linked transportation network with ever-
more intelligent vehicles that communicate with each other and the biosphere around
them, will improve people's lives for the better.
The market strategy adopted by the Ford business focuses on people. For example,
it lays high emphasis on its workforce so by creating a diverse and inclusive work
culture. Similarly, it gives high priority to the needs of the target market audience
so that they can have the best driving experience without compromising their safety.
The ability of the automobile business to understand the customer and focus on
their needs has helped Ford to create value for them over the years (Hoggan, 2020,
p. 74).
An in-depth SWOT analysis.
Ford's capability to resolve the subjects exposed in this SWOT scrutiny has
donated to the company's capability to persist the planet's fifth largest car maker. A
SWOT analysis reveals a company's strengths and weaknesses, as well as its
opportunities and threats, so that the company may take advantage of them. Ford's
SWOT analysis reveals the most important challenges that need to be addressed in
order for the organization to perform better. The goal is to dominate the worldwide
automobile market. To attain this goal, Ford's SWOT analysis must be included in
its tactical expansion procedure.
It is important to understand Ford Motor Company's core competencies
(Internal Strategic Factors). Ford's product, world-wide manoeuvres, and study &
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 5
expansion are the company's strong point. This segment of the SWOT analysis
emphases on the corporation's internal characteristics (internal tactical elements).
Among the many advantages that Ford Motor Company enjoys is the ability to a
well-defined brand identity and supply chain throughout the world.
Innovative methods that are well-structured
With a reputation as one of the global top car producers, Ford has a strong
product reputation that enhances the automobiles appeal and client satisfaction. It's
also value noticing that Ford depend on a world-wide supply chain to sustain its
worldwide operations. The company's invention procedures have also enhanced since
the Ford ingenuity was implementation. Ford's expanding strong point are
emphasized in this section of the SWOT analysis.
Weaknesses (Internal Strategic Factors)
The shortcomings of Ford can be traced back to the company's inherent
limits when compared to the industry. Organizational limitations or insufficiencies
are internal tactical variables that diminish business budding, as shown in this
SWOT analysis section. Ford's main flaws include the following:
1. The manufacturing network has a limited worldwide extent.
2. Increased prices as compared to rivals
3. The pace of invention is too sluggish.
Likened to Toyota's global system of production locations, the Corporation
has a noteworthy drawback. As a result of this vulnerability, Ford has also recently
shut down some of its European production locations. Although Ford has boosted
its innovation effectiveness, its expenses and prices are higher than those of
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 6
competitors like Toyota, and its innovation processes are slower than those of
Toyota. By comparison with other leading companies, Ford's SWOT analysis shows
that it is comparatively weak.
In comparison to Toyota's extensive global network, Ford Motor Company
has a weakness in its production facility network. In recent years, Ford has also
closed down some of its European production sites, which has exacerbated this
deficit. Even if the company has improved its innovation effectiveness, Ford's
expenses and prices remain higher than those of Toyota's, and the corporation's
invention procedures are slower to respond to new-fangled or emergent trends than
those of Toyota. Thus, Ford's SWOT analysis shows that the corporation is not as
strong as its rivals, particularly Toyota, in this area.
The table presented below captures the strengths and weaknesses of the Ford
company. f The identified elements can play an instrumental role to shape its
strategy at diverse levels.
SW Table
Strengths
Weaknesses
The wide product portfolio of Ford acts
as a major strength that influences its
profitability
The rate of invention of Ford is slow as
compared to its competitors in the automobile
industry.
The well-defined brand identity
strengthens its goodwill in the global
automobile market
The cost that Ford incurs to work on its
automobile offerings is higher as compared to
that of its competitors. It negatively affects its
financial performance.
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 7
The supply chain network of the
business spread across the world which
enable it to procure inventory and raw
materials at an affordable rate f
The production network of the business is
limited which restricts its ability to produce
automobiles in an efficient manner.
The global presence of Ford acts as a
chief strength of the business since it
enables it to target the global audience.
There exist gaps in the research and
development function of Ford which is evident
from its high recalls of vehicles due to issues
such as oil leak (Shepardson, 2022).
The ability to adapt to the evolving
business climate is a chief strength of
Ford which has helped to carry out its
business operations sustainably.
The presence of Ford in emerging markets is
weak as compared to its rivals.
Recommendations from Ford Motor Company's SWOT Analysis
Ford's SWOT examination emphases on the corporation's limitations in
invention, as well as rivalry from existing and fresh participants. Increasing rivalry
and the advent of advanced competitors mean that Ford must enhance its R&D
investments as well as its invention rapidity. Ford must also improve its production
network in order to increase economies of gauge, which can cut budgets and bills
to make Ford automobiles extra actives.
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 8
Internal Factor Evaluation Matrix
The Internal Factor Evaluation (IFE) matrix has been used to capture Ford’s internal
elements such as strengths and weaknesses.
Key Internal Factors - Strengths
Weight
Rating
Weight Score
Well-known brand
20 %
2
40 %
Wide product range
20 %
4
80 %
Vast supply chain network
10 %
3
30 %
Key Internal Factors -
Weaknesses
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 9
Gaps in research and development
leading to product recalls
20 %
2
40 %
Slow pace of innovation
15 %
2
30 %
Restricted presence in emerging
markets
15 %
1
15 %
Total
100 %
235 %
f
Some of the factors that work in favor of Ford brand and act as its chief strengths
are the well-known brand name, availability of a wide product range and the existence
of a vast supply chain network. However, some of the areas that the business entity
needs to work upon include existing gaps in research and development function, slow
pace of innovation of the business and the limited presence of Ford in emerging
markets. These internal variables have a significant implication on the strategic
direction of the business.
Internal Resources/Departments/Processes Play a Strategic Role.
A wide range of customers are in Ford's target market, which is global.
Because of this, the company's marketing strategy is comprehensive. Currently, it is
the fifth largest automaker in the world also the second largest in the United
States. With this spot, an accomplished selling plan is vital to guaranteeing lasting
achievement. To ensure Ford's world-wide attractiveness, the company's selling mix
and related strategies will continue to evolve time after time.
Target Audience and Ford's Product.
Some of the most popular products of Ford are Ford EcoSport, Ford Aspire and Ford
Endeavour. The business entity has integrated unique designs and specifications into
its models in order to target diverse customer groups including young individuals,
businessmen and other customers who are interested to purchase affordable automobiles.
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 10
Services related to money
Recognized for its sedans, Ford Motor Company is a domestic name in the
motorized business. Trucks, buses, and tractors are all part of the firm's produce
line. Aside from Ford-specific parts, the company's Motorcraft brand provides
automobile parts that can also be used on automobiles made by other manufacturers,
such as Toyota. Lower Ford Motor Credit Company provides clients with finance
through Ford (Ford et al., 1986). Additionally, the company offers automobile
leasing services mostly to corporations. In this way, Ford's marketing mix
demonstrates the breadth of its product offering.
Ford distributes its products at locations that are typical of the company's
distribution strategy. Clients are gotten and to sold to in these sites, which is the
emphasis of this part of the promotion mix. f The following are the primary
locations where Ford distributes its products:
1. Charters
stores that sell auto parts
3. The Ford Parts site
Grand Strategy Matrix
The grand strategy matrix is a useful instrument that helps in creating alternative and
diverse strategies for an organization. The tool has been used for analysing the
strategic implications at the corporate level and business level.
weak
competitive
position
Quadrant 2 – Weak
competition and rapid
market growth
Quadrant 1 – Strong
competition and rapid
market growth
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 11
Ford
Quadrant 3 – Weak
competition and weak
market growth
Quadrant 4 – Strong
competition and weak
market growth
slow market growth
Source: (Bittner, 2016)
The Ford Company belongs to Quadrant 1 in the grand strategy matrix owing to
strong competition as well as rapid market growth. Thus, some of the strategic
approaches that the business entity needs to adopt in order to sustain in the market
setting include integration of development to develop new products and market
penetration in emerging economies. The strategies are aligned with the current
weaknesses of the company. The company must work on its R&D aspect and leverage
innovation to develop efficient and better automobile products. Similarly, to compete
with other automobile businesses at the global level, it must start targeting the
audience members in emerging economies such as India so that its customer base
can expand. f
Financial Services Division
There are a large number of charters that account for the majority of sales.
It is possible to buy automotive materials and accessories from third-party retailers
in addition to the Ford Parts website. Consumers can acquire banking services from
Ford Motor Credit Company in the company's offices or via members of staff at
showrooms. The portion of the business model displays Ford's strategy for
generating revenue using multiple corporation venues and third-party suppliers.
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 12
Business-level strategy of Ford
The business level strategy of an organization primarily focuses on its policies, goals,
and actions to deliver value for the target market audience while maintaining a
competitive edge. In Ford, the structure and functions play a cardinal role to shape
the strategic approach of the automobile entity. Ford applies intensive growth strategy
to expand its existing dealership and increases its sales turnover in the global market
setting. It lays emphasis on diverse processes such as the sources from where raw
materials are procured, the designing aspects of its vehicles as well as the interaction
with potential and existing customers (Shepardson, 2022, p . 7). By focusing on
intensive growth Ford is able to protect its current market position while expanding
its profitability through better sales.
Structural changes to the company.
Chairman, President, and Executive Vice President are the top three positions
in Ford's organizational structure. With equal authority, all functional leaders report
directly to the executive vice president. Machine bureaucracy is practiced by the
firm to the extent that it relies on economies of scale for its success. Jim Farley,
the CEO of Ford plays an instrumental role to provide direction through his
leadership approach. He has served as the chief change agent who has helped Ford
to undergo restructuring and focus on key growth areas such as autonomous as well
as electric technologies.
Engineers and technicians make up the majority of Ford Motors' staff, which
makes it a professional bureaucracy. With regards to project management, decision-
making is decentralized due to the high level of skill and specialization. Ford
Motors reaps the benefits of both machine and professional bureaucracies by
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 13
integrating them into its organizational structure (Raterman et al., 2019) However,
while the structure is a matrix, it has several features that make it extremely
effective in its management.
Alignment of function-level strategies with Ford’s vision and mission
The vision of Ford is ‘Helping Build a Better World ’ and its mission statement
revolves around making the lives of people better by making mobility accessible as
well as affordable. There elements serve as chief pillars that guide each functional
unit at Ford to contribute towards the business goals. For example, the operations
team, R&D team, HR team, Finance team and Procurement team focus on the vision
and mission of Ford to help the business entity create world-class automobile solutions
that can meet the needs of the target market audience. Some of the chief elements
that act as the foundation for the functional departments within Ford include
sustainability, innovation, and ethical growth (Shepardson, 2022).
Vision vs. strategy for a corporation.
The One Ford initiative, introduced in 2008 under former CEO Mulally's
leadership, defines Ford's corporate culture. With this strategy, the company seeks
for uniformity and synergy through unifying its global organization. Based on this
plan, Ford's organizational culture might be summarized as follows: For example, F:
Foster Functional and Technical Excellence; O: Own Working Together; and R:
Role Model Ford Values.
The Benefits and Drawbacks of Ford's Business Culture
Ford's organizational culture places a focus on cooperation among its
employees. A number of distinct cultures and product lines existed across Ford's
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 14
global network prior to the One Ford strategy being implemented. Today, the
company's organizational culture is centred on synergy and togetherness, which
improves the company's business skills. However, there is a downside to the firm's
lack of flexibility. Ford's corporate culture should be flexible to foster resilience and
efficient problem-solving, according to the theory.
Financial analysis.
Ford Motor Co.
Financial Leverage
Dec 31, 2021
Selected Financial Data (US$ in millions)
Total assets
257,035
Equity attributable to Ford Motor Company
48,519
Solvency Ratio
Financial leverage
5.30
Benchmarks
Financial Leverage, Competitors
General Motors Co.
4.10
Tesla Inc.
2.06
Financial Leverage, Sector
Automobiles & Components
4.07
Financial Leverage, Industry
Consumer Discretionary
4.28
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 15
2021 Calculation
Financial leverage = Total assets ÷ Equity attributable to Ford Motor Company
= 257,035 ÷ 48,519 = 5.30
Financial leverage at Ford Motor Company for the years ended in 2017 to
2021 was on average 7.2 times higher than the industry average of 7.2. Ford
Motor's economic power from financial year ending 2017 to 2021 averaged 7.3x.
The company's f financial leverage culminated at 8.7x in 2020 when looking back
over the previous five years.
Ford Motor Co.
Gross Profit Margin
Dec 31, 2021
Selected Financial Data (US$ in millions)
Gross profit
11,499
Automotive revenues
126,150
Profitability Ratio
Gross profit margin
9.12%
Benchmarks
Gross Profit Margin, Competitors
General Motors Co.
11.49%
Tesla Inc.
25.28%
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 16
2021 Calculation
Gross profit margin = 100 × Gross profit ÷ Automotive revenues
= 100 × 11,499 ÷ 126,150 = 9.12%
The current ratio, often known as the liquidity ratio, is a measure of a
firm's capacity to meet its short-term financial commitments. During the three-month
quarter ended December 31, 2021, the company's current ratio was 1.20, according
to the company. f Ford Motor Company's fast ratio increased from 2019 to 2020,
but then somewhat declined from 2020 to 2021 because of a combination of
factors.
The financial evaluation of Ford shows that the business has succeeded to
showcase consistent performance in the market which has positively influenced its
financial health and position. For example, the gross profit margin (2021) of Ford
has revealed that the financial health of Ford is strong. However, while comparing
Ford’s gross profit margin with that of its industry rivals such as General Motors
and Tesla, Ford seems to be lagging. The performance of its rivals is far better, and
they are in a much stable financial position. The financial leverage ratio of Ford has
revealed that the company relies on debt, and it forms a significant part of its capital
structure as compared to its competitors.
Conclusion f
An in-depth internal environmental analysis of the Ford business has been carried out.
The strengths and weaknesses of the automobile company have been identified since
these internal variables have a direct and significant influence on the strategic
performance and strategic direction of the business. The corporate-level strategies as
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 17
well as the business-level strategies of Ford have been identified. The strategic
approach that is adopted by a business plays a key role to influence its sustainable
market performance. f The financial evaluation of the business has revealed that even
though Ford is in a stable condition financially, the financial position of its industry
rivals such as Tesla and General Motors is much better. Thus, it is necessary for
Ford to capitalize on its strengths so that it can gain an edge over its rivals in the
evolving automobile business landscape.
References.
Bittner, B. (2016). Problem analysis of the Hungarian tobacco sector. Applied Studies
in Agribusiness And Commerce. 10. 161-166. 10.19041/APSTRACT/2016/4-5/21.
Ford, J. K., & Weissbein, D. A. (1997). Transfer of training: An updated review and
analysis. Performance improvement quarterly, 10(2), 22-41.
Ford, J. K., MacCallum, R. C., & Tait, M. (1986). The application of exploratory
factor analysis in applied psychology: A critical review and analysis. Personnel
psychology, 39(2), 291-314.
Hoggan, C. (2020). Editor’s Preface: Striving to Build a Better World. Journal of
Transformative Education, 18(3), 187-189.
Raterman*, K. T., Liu, Y., & Warren, L. (2019, October). Analysis of a drained rock
volume: An Eagle Ford example. In Unconventional Resources Technology
Conference, Denver, Colorado, 22-24 July 2019 (pp. 4106-4125). Unconventional
Resources Technology Conference (URTeC); Society of Exploration Geophysicists.
BMGT f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f f
f 18
Shepardson, D. (2022, April 4). Ford recalls 737,000 U.S. vehicles over software and
fire-risk issues. Reuters. Retrieved May 17, 2022, from
https://www.reuters.com/business/autos-transportation/ford-recalls-737000-us-vehicles-
over-software-fire-risk-issues-2022-04-
01/#:~:text=The%20automaker%20is%20recalling%20345%2C451,might%20cause%2
0an%20engine%20fire.
