Philippine Christian University-Dasmariñas

Graduate School of Business and Management

STRATEGIC MANAGEMENT

STRATEGIC AUDIT

SAFLOR, JOMINA D.
20101172

DR. SHERRYL LUTERO-CAO, CPA, CMA

26 DECEMBER 2020

STRATEGIC AUDIT – FORD MOTOR COMPANY 1

I - Executive Summary

In conclusion, this strategic audit report has provided an overview and a more in-depth

understanding of Ford Motor Company's strategic business methods. This strategic audit includes

a detailed analysis of Ford Motor's vision statement and the effectiveness of the strategy taken by

the organization. Additionally, this audit details Ford's corporate governance and Board of

Directors that participate in the strategic direction of the organization.

Ford Motor's external environmental factors are analyzed and include both opportunities

and threats. An opportunity that Ford is currently seeing is an increased demand for hybrid and

fuel-efficient vehicles, and a growing demand for more technology incorporated into innovative

cars. Also, with slow and steady growth in autonomous vehicles, Ford has the opportunity to be

one of the most prominent players in the area of the industry. Ford Motor Company has positioned

itself to take full advantage of technological advancements in electric vehicles. With huge

investments into Rivian providing collaborative opportunities to Ford.

Ford's internal environment was analyzed for its strengths and weaknesses, utilizing an IFA

table. The table found that Ford's highest weighted inner strength revealed North American market

position and customer loyalty as its most massive impactor.

Lastly, a TOWS analysis chart utilized to factor information from the SWOT found in the

SFAS table. The TOWS analysis consists of the following: strengths and opportunities (SO),

weaknesses and opportunities (WO) strategies, strengths and threats (ST) strategies, and

weaknesses and threats (WT) strategies. Combining the four strategies creates other strategic

options and helps identify recommendations that Ford Motor Company could incorporate.

STRATEGIC AUDIT – FORD MOTOR COMPANY 2

Introduction

The American mass-production automobile industry started with the production of Henry

Ford’s Model-T in 1908. Henry Ford started the Ford Motor Company in 1890 when he built the

first Quadricycle, fast forward 116 years and it seems like almost every car or pick-up truck driving

in the United States is built by the blue oval. Ford is the second-largest automaker in the U.S. and

the fifth-largest in the world based on annual vehicle sales in 2010 (“Ford Motor Company”,

2011). After the extremely successful Model-T was introduced to the market, demands for the

vehicle were so high Ford had to reinvent new mass-production methods to keep up with demands.

In 1903 he introduced the creation of the world’s first moving assembly line for cars, which made

the vehicles cheaper to assemble and affordable to a great population. Along with reinventing the

method of production he also drastically improved his labor forces productivity by introducing a

$5 daily wage for an eight-hour shift, replacing the industry standard of $2.34 for a nine-hour shift

(The Editors of Encyclopaedia Britannica, 2019). The Ford Company fully supported the United

States when it entered both World Wars, Ford diverted large amounts of resources away from

civilian auto production towards the war effort. During World War II any Ford vehicles built after

1942 were turned over to the military. Henry Ford also ordered the construction of the Willow Run

factory in Detroit that built nearly half of the total 18,000 B-24 Liberators produced (Fisk, 2015).

Today, the Ford Motor Company dominates the full-size pick-up truck market holding

nearly 50 percent of the market with its F-Series. The company has also recently announced its

plan to restructure and begin its shift into the electric market with unveiling its new F-Series Hybrid

models and fully electric pick-up trucks.

STRATEGIC AUDIT – FORD MOTOR COMPANY 3

II – Strategic Posture and Corporate Governance

For the past few years Ford Motor Company has had a bad losing streak in the markets, as

the second largest automaker. Ford has been putting great effort in reducing costs in it’s European

and South American markets in the hopes it would increase future profits. The company is also

planning a new vehicle rollout with 40 new products coming to market in the near future. The

hopes are that this new product line would excite and attract new potential buyers and increase

investor confidence.

During the second quarter of this year total revenue has fallen to $38.85 billion, which was

$38.92 billion this time last year. Most of the company’s profits are coming from its North

American market, led by it’s F-series full size pickup line up.

The company has also had extensive corporate restructuring in an attempt to streamline

decisions and increase the businesses efficiencies, president of Ford’s automotive operations

explained it as “by flattening the organization … removing layers of bureaucracy (Paul A.

Eisenstein, 2019).” In the race to electrify the automotive industry Ford has taken steps to put itself

ahead of the competition, the company invested $500 million in Rivian a Detroit based battery

electric vehicle company. Along with the Rivian investment Ford also plans to invest another $11

billion by 2022 to begin electrifying its vehicle line up. Ford also began investing $1 billion in self

driving vehicle technology with Argo AI, with this investment Ford’s autonomous program has

been propelled to the most advanced in the industry.

STRATEGIC AUDIT – FORD MOTOR COMPANY 4

Mission and Vision statements

The Ford Motor Company was founded over a 116 years ago and has grown to be a

successful leader in the competitive automobile industry. The Ford Motor Company’s longevity is

evidence to its industrial innovation and ability to adapt to new technologies and changes in the

market faster than their competitors. This ability to adapt to changing times is even evident within

the company’s mission and vision statements which they renamed “Our Belief: & Our Aspiration:

which reflects their desire to be ahead of the times.

Fords belief is that “Freedom of movement drives human progress”. With an increasingly

interconnected world Ford believes in connecting its customers to their vehicles across the internet,

and connecting its vehicles to its surroundings via a “Transportation Mobility Cloud” connected

vehicles that interact with the surrounding infrastructure to create a seamless transportation system.

With over half of the world’s populations concentrated in cities, mobility is getting complicated

with the increase in gridlocks, traffic, pollution, and an ineffective transit system. Ford’s freedom

of movement vision is exploring mobility in areas like autonomous and electric vehicles, or ride

sharing, ride-hailing.

Fords aspiration is “To become the world’s most trusted company, designing smart

vehicles for a smart world”. Ford is investing heavily into research and development of there

autonomous vehicle program, fully autonomy by 2021. Using the Ford Smart Mobility platform,

the company’s aspiration is to become the leader in autonomous, connectivity, and mobility.

Future ford vehicle will operate without a steering wheel as part of its ride sharing or hailing

experience.

STRATEGIC AUDIT – FORD MOTOR COMPANY 5

Board of Directors

- Stephen G. Butler, appointed in 2004. He serves on the Nominating and Governance

Committee and as Chair of the Audit Committee.

- Kimberly A. Casiano, appointed in 2003. She serves on the Audit Committee,

Nominating and Governance Committee and Sustainability and Innovation Committee.

- Anthony F. Earley Jr., appointed in 2009. He serves on the Nominating and Governance

Committee and the Sustainability and Innovation Committee, and as Chair of the

Compensation Committee. Also serves as the Board’s Lead Independent Director.

- Edsel B. Ford II, appointed to the board in 1988. As a consultant to Ford, Mr. Ford is

active in dealer relations, customer advocacy, motor sports, and corporate history.

- William Clay Ford Jr., appointed to the board in 1988 serves as Executive Chairman

since January 1999

- Jim Hackett, appointed to the board in 2013 serves as President and Chief Executive

Officer.

- William W. Helman IV, appointed in 2011 serves on the Finance Committee,

Nominating and Governance Committee, and as Chair of the Sustainability and

Innovation Committee

- William E. Kennard, appointed in 2015 and serves on the Nominating and Governance

Committee.

- John C. Lechleiter, PH.D., appointed in 2018 serves as an Independent Director.

- Beth R Mooney, appointed to the board in 2019 and serves on the Audit and

Nominating and Governance Committees

STRATEGIC AUDIT – FORD MOTOR COMPANY 6

 - John L. Thornton, appointed to the Board in 1996 serves on the Compensation

Committee, Finance Committee and Governance Committee

- John Veihmeyer, appointed to the board in 2017 and serves on the Audit, and

Nominating & Governance Committees.

- Lynn Vokvodich, appoint to the board in 2017 and serves on the Nominating and

Governance, Sustainability and Innovation, and Audit Committees

- John Weinberg, appointed in 2016 and serves on the Nominating and Governance,

Sustainability and Innovation, and Finance Committees (Ford Motor Company, n.d.).

III – External Environment

Natural and physical environments

As an auto manufacturer that employs nearly 164,000 people and creates about 5 million vehicles

a year, the company's effects on the environment are substantial (Carus, 2011). Ford recognizes its

impact on climate change and how the automotive industry has influenced it. The company has

taken steps to green its vehicle fleet, producing more sustainable, environmentally friendly

products. Incorporating features like a recycled aluminum body for its vehicles, and soy-based

seating foams. It has reduced water use-mostly associated with cooling and painting – per vehicle

by 49% from 2000 to 2010 (Carus, 2011). Since 2000, Ford has reduced its global operational

energy use by 30 percent (3 percent improvement from a year ago), CO2 emissions from our

facilities by 39 percent (11 percent improvement from a year ago) and water use by 43 percent (21

percent improvement from a year ago). Ford improved energy efficiency in the U.S. by 4.5 percent,

resulting in a savings of about $18 million (RP news wires, Noria Corporation, 2008).

Ford Motor Company has committed itself to continued sustainability actions for its future. The

company has expanded its efforts to explore the uses of renewable materials for its vehicles, such

STRATEGIC AUDIT – FORD MOTOR COMPANY 7

as the use of agave plants to develop a bioplastic material. Nearly 300 vehicle parts were designed

using green sources such as soybean, cotton, wood, flax, jute, and natural rubber ("Ford Reports

its Environmental Progress Across Business," 2017). As the company reduces waste in the

manufacturing of its vehicles, it has expanded its aluminum recycling system to multiple facilities.

The recycling process turns 20 million pounds of aluminum alloy a month, enough for the

assembly of 37,00 trucks a month ("Ford Reports its Environmental Progress Across Business,"

2017).

Economic, Technological, Political-legal, and Sociocultural forces

a) Economic:

A countries interest rate would affect how much individuals are able to borrow and invest.

Higher interest rates would result in greater investment returns resulting in growth for Ford

Motor Company. A country with a high unemployment level means there's a greater supply

of jobs than demand, and people would be willing to work for lower wages, lowering

employment costs for Ford Motor Company

b) Technological:

If Ford Motor Company encounters a new technology that is gaining popularity in its

industry such as electric vehicles. It is important to consistently innovate and keep up with

technology, either by matching the technology used by other companies or finding an

innovative alternative. Constant investment into the research and development department,

for future technological innovations to further raise the level of profits, ensuring a

competitive edge and sustainable profits in the future.

c) Political-Legal:

STRATEGIC AUDIT – FORD MOTOR COMPANY 8

 A high taxation wouldn’t be attractive to companies like Ford Motor Company trying

maximize profits. At a legal stand point the protection of intellectual property and other

data protections laws are extremely important to businesses. Laws protecting the ideas and

patents of companies like Ford who are increasing investments in new technologies.

d) Sociocultural:

The demographics of a population are extremely important to the success of the product

in certain markets. Such as knowing the ages and genders of a market would help in

knowing how to advertise certain products. The class distribution of a population is

important as well; Ford wouldn’t be able to successfully promote a premium luxury vehicle

to a market comprised predominantly of low income.

External Factor Analysis Summary (EFAS) table –Ford Motor Company

FACTORS WEIGH RATING WGTD COMMENTS

T SCORE
OPPORTUNITIES
O1 Consumers demand .15 5 0.75 Ford plans to entice buyers for
hybrid and fuel- hybrid and electric pickups by
efficient vehicles offering greater capability, rather
than focusing simply on fuel
economy (Ferris, 2019).
O2 Consumers demand .10 4 0.4 The demand for traditional cars is
more innovative beginning to dry up, thanks to the
vehicles evolving tastes of millennials and
baby boomers (Holley, 2018).
O3 Strong North .10 3 0.3 Ford says that in 2018 it sold more
American market than 1.075 million F-150s and F-
for F-Series Series trucks globally. That
cements the F-Series' 42 year run
as America’s best-selling truck.
The Ford F-150 has been
America’s best-selling vehicle for
37 years (Conway, 2019).
O4 Slow and steady .10 3 0.3 Ford says slow and steady will win
growth in self the self-driving car race (Andrew
driving vehicle J. Hawkins, 2018).
O5 EV investments .05 2 0.1 Ford invests $500 Million into
Rivian, the partnership is to deliver
all-new Ford battery electric
vehicles ("Rivian Announces $500
Million Investment from Ford;

STRATEGIC AUDIT – FORD MOTOR COMPANY 9

 Partnership to Deliver All-New
Ford Battery Electric Vehicle,"
2019).

THREATS
T1 Slowing US .20 5 1.0 Ford Motor Co has a cash buffer of
economy $20 billion for a potential
downturn event (REUTERS,
2019).
T2 Increase in steal and .05 3 0.15 Steel and aluminum tariffs
aluminum prices imposed by the Trump
(trade war) administration have cost Ford
about $1 billion in profits (Carey &
Shepardson, 2018).
T3 Strict C02 emission .10 3 0.3 Companies without fully-electric
standards vehicles in Europe such as Ford
could expect heavy fines. Ford
2.56B in fines (Dawson &
Sachgau, 2019).
T4 Foreign Markets .05 3 0.15 Ford’s global market share fell
from 11.1% in 2005 to ~7% in
2015 (Parashar, 2016).
T5 EV competition .10 4 0.4 Elon Musk of Tesla has promised
to challenge Ford in one of its
strongest markets, the F150 pickup
arena (Stern, 2019).

TOTAL SCORES 1.00 5.4

IV. Internal Environment

The Ford Motor Company takes great pride in how it presents itself to the world, and even

greater pride in the quality of its vehicles. The high standard that Ford holds itself accountable to

has resulted into it being the reputable automotive company in the industry. Ford’s mission

statement has changed over the years, the company refers to its mission statement as its vision,

“People working together as a lean, global enterprise to make people’s lives better through

automotive and mobility leadership.” Accomplishing this vision and maintaining a competitive

advantage over their competition has proven to be extremely difficult. Ford must identify and

address several factors that impede their ability to meet these goals.

STRATEGIC AUDIT – FORD MOTOR COMPANY 10

 Ford takes safety extremely seriously, it’s at the core at everything they do. Ford takes

great pride in following stringent safety precautions which are necessary in its vehicles and

facilities, and the many inspections conducted when building the automobiles. Placing the

customer’s safety first is a top priority and taking the necessary steps to ensure all safety measures

are set in place. Failure in meeting the safety standards poses an ethical dilemma that Ford does

not tolerate.

A powerful advantage Ford has is the ability to leverage its status as part of the global

markets and fully utilize the various resources at its disposal. Ford continues to seek opportunity

to further improve its technological prowess in a highly competitive automotive market. Ford

Smart Mobility was set in place with the objective of sustaining their status as leader in

connectivity, mobility, customer satisfaction, data and analytics, as well as autonomous vehicles

(Smithson, 2017). Ford has had great success in producing vehicles with improved fuel economy,

and reduced weight of vehicle with the aluminum body and investments in electric vehicles.

STRATEGIC AUDIT – FORD MOTOR COMPANY 11

INTERNAL FACTOR ANALYSIS SUMMARY (IFAS)

FACTORS WEIGHT RATING WGTD COMMENTS

SCORE
STRENGHTS
S1 North American .15 4.5 .675 Strong performance in North
Market Position America to strong truck and
sport utility vehicle sales,
particularly its F-Series and
Ranger pickups.
S2 (Partnership for A .15 5 .75 Ford supply chain pace
Cleaner program could potentially
Environment positively affect almost 1,100
PACE) Global supplier sites
Supply Chain
S3 Large investments .10 4.5 .45 $11 billion
in Electric EV investment, Ford already
Vehicles has confirmed two key
fully electric vehicles
S4 Customer Loyalty .05 4.5 .225 Ford holds a streak of eight
years for customer loyalty to a
specific make.

S5 Strong Brand .05 3.5 .175 Benefits from 116 years of

brand recognition
WEAKNESSES
W1 Product Recalls .15 2.5 .375 Ford is recalling 482,520
vehicles in the U.S. (Linkov,
2019)
W2 Foreign Markets .10 2.5 .25 Ford’s global market share
has fallen significantly in the
past decade due to the
intensified competition
(PARASHAR, 2016)
W3 High cost .10 2 .2 Prices for the most popular
vehicle in America, the Ford
F-150, range from $28,155 to
more than $70,000 (Vincent,
2019).
W4 Slow Innovation .10 3 .3 Ford has a problem: The 110-
year-old company has a
reputation for being slow to
innovate (Reader, 2018).
W5 Dependence on .05 2.5 .125 Ford is highly dependent on
U.S Markets the U.S and European market.
It limits its profits and
revenues (Bloomberg, 2017).
TOTAL SCORES 1.00 3.525

STRATEGIC AUDIT – FORD MOTOR COMPANY 12

 U.S. Securities Exchange Commission (SEC) Form 10-K Report

PART I - COMPANY INFORMATION

Company Name > Ford Motor Company
Primary Business Classification > Automotive
State Incorporated > MI
Year Established > 1903
Ticker Symbol > NYSE:F
Analyst (i.e., Student Name) > Henry Ford
PART II - FINANCIAL COMPONENT
SEC Form 10-K Data 2018 2017 2016 2015
INCOME STATEMENT
Total Revenues > $160,338,000 $156,776,000 $151,800,000 $149,558,000
Net Income before taxes (or Loss) $5,573,000 $9,349,000 $7,735,000 $11,025,000
>
BALANCE SHEET
Total Assets > $256.540.000 $258,496,000 $237,951,000 $224,925,000
Total Liabilities > $220,608,000 $222,918,000 $208,781,000 $196,283,000
Equity (Assets - Liabilities) = $35,932,000 $35,578,000 $29,170,000 $28,642,000

Operations and Logistics

Ford Motor Company is one of the United States largest automotive companies and is also a global

manufacturer of motor vehicles. Ford provides a full line of cars from family sedans to commercial

utility vehicles, cars, trucks, SUVs, as well as it's Lincoln luxury vehicles. The company operates

in four sectors; the automotive branch, financial services (Ford Credit), Ford Smart Mobility LLC,

and Central Treasury Operations. The automotive sector primarily consists of Ford and Lincoln

vehicle sales, parts, and accessory services. The financial services area consists of vehicle-related

financing and leasing through the Ford Credit Company LLC. The newly established Ford Smart

Mobility LLC is a subsidiary created to design, build, grow, and invest in the emerging mobility

services area. Lastly, the Central Treasury Operations segment is responsible for the decision

making for investments, risk management, and providing financing for the automotive sector. Ford

Motor Company based out of Dearborn, MI, internally manufactures and distributes automobiles

STRATEGIC AUDIT – FORD MOTOR COMPANY 13

across six continents with about 175,000 employees working at more than 65 plants worldwide.

Ford builds vehicle all around the world, with a well-developed market shares in Europe, Asia,

South America, Africa and North America. Ford is focused on building a strong business that

delivers great products leading in quality, fuel efficiency, safety, smart design, value, and that

contribute to a better world (Auto Alliance, n.d.). Ford Motor Company's supply chain is rolling

out an amplified Partnership for A Cleaner Environment (PACE) program, a recent company press

release reported. With a membership of more than 40 suppliers in 40 countries, PACE could

potentially positively affect almost 1,100 supplier sites (McKevitt, 2017). The PACE program will

support suppliers trying to reduce carbon emissions and waste, while improving water usage and

energy consumption. Suppliers will be better equipped to track and meet their sustainability goals,

and then share those improvements methods with Ford. The Ethisphere Institute included Ford on

its annual list of the World’s Most Ethical Companies for the eighth time for its efforts to reduce

its global carbon emissions by a possible 500,000 metric tons by 2022 (McKevitt, 2017).

STRATEGIC AUDIT – FORD MOTOR COMPANY 14

Human Resource Management

Ford Motor Company has a people and culture centered focus when it comes to human resources

since its founding 1907. Throughout the century Ford has proven its model of being a people

centered culture is one of reasons for the power behind its business. The company has been

flourishing in recent years under the leadership of Jim Hackett, who is known for his fondness of

great technology and great people. Ford aims to become the mobility leader of the future, with the

technological capabilities and modern supply chain network. As competition in the automobile

industry continues to intensify, competition to attract and retain talented people has also become

competitive. With more than 175,000 employees working at more than 65 locations worldwide,

Ford must compete for talent which is why the company offers an extensive benefit plan to its

employees. Ford Motor Company offers vision, health, and dental plans, insurance plans that

provides death benefits, group life insurance, disability insurance for accidents. Ford also offers

an employer-sponsored pension plans which ensures a reliable flow of cash in retirement. Ford

Motor Company provides defined benefit pension plans and defined contribution pension plans

(PayScale, n.d.). Ford takes the health and safety of its employees very seriously and therefore the

brand has enacted policies and procedures that ensure a safe working environment (Pratap, 2018).

Information Technology (IT)

Ford Motor Company uses many information system technologies such as, SCM and CRM,

to enhanced its customer and supplier interactions. Ford developed its own Supply Chain

Management (SCM) information system to achieve a closer relationship with suppliers which

focuses on improving the process that warehouses and dealerships receives OEM parts. With this

system in place Ford could tell suppliers exactly when and where certain components are needed

STRATEGIC AUDIT – FORD MOTOR COMPANY 15

days in advance, and buffer inventories improving the overall systems efficiency and reducing

shortages of parts.

Ford uses a customer relations management (CRM) system to better understand the needs

of its customer base, working together with dealerships in collecting more data from its customers

to create marketing strategies that help improve company sales. This system has proven to be the

primary basis for the consumer perceived values and has been of tremendous value to Ford.

V and VI. Analyze and Recommend Strategies

Strategic Factor Analysis Summary (SFAS) Worksheet

FORD MOTOR COMPANY

SWOT FACTORS WEIGHT RATING WGTD COMMENTS

# SCORE
S1 Global 0.15 4.8 0.72 Ford is a well-known brand in
Recognition the automobile industry and is
also recognized in the global
markets because of its success
in marketing and advertising.
Its brand value is $12.74
billion according to the 2018
report of Statista.
S2 Research and 0.10 4.6 0.46 Ford’s research and
Development 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.
S3 Huge Network 0.10 4 0.40 The company is also diverse
in its operations and
distribution, as they have a
manufacturing presence in 62
countries across the world.
Ford develops its cars on
standardized procedures.

STRATEGIC AUDIT – FORD MOTOR COMPANY 16

 They also invest heavily in
various fuel sources.

W1 Product Recalls 0.10 3.5 0.35 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.
W2 Dependence on 0.05 3 0.15 Ford is highly dependent on
U.S Markets 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.
O1 Eco- Friendly 0.10 3.5 0.35 As Ford is already trying to be
Vehicles 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.
O2 Self-driving car 0.10 3 0.30 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.
T1 High 0.15 4 0.60 Ford is already facing cut-
Competition throat competition from its
rival companies like Toyota,
Tesla, and Tata. Ford keeps

STRATEGIC AUDIT – FORD MOTOR COMPANY 17

 struggling to maintain its
innovative position in the
industry.
T2 Increased Prices 0.10 4 0.40 The rising raw material prices
of Raw of steel and steel coil can
Materials directly affect the company’s
cost and profit margin.
T4 Regulations and 0.05 3 0.15 The compliance and
compliance 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.

TOTAL SCORES 1.00 3.88

STRATEGIC AUDIT – FORD MOTOR COMPANY 18

Threats, Opportunities, Weaknesses, and Strengths (TOWS) Analysis

FORD MOTOR COMPANY TOWS ANALYSIS

Internal Factors Strengths (S) Weaknesses (W)

S1: Global Recognition W1: Product Recalls

External Factors S2: Research & Development W2: Dependence on U.S Markets
Opportunities (O) SO Strategies WO Strategies

O1: Eco- Friendly S1/O1- Ford is a well-known W1/O1- Ford faced a huge loss and their
Vehicles brand in the automobile brand image suffered due to the product
O2: Self-driving car industry and is also recognized recalls with a new line-up of electric
in the global markets and they vehicles Ford might be able to repair its
have already taken steps to reputation with the new technology.
electrify it’s fleet, they have a
fantastic opportunity to
produce fuel-efficient cars and
the infrastructure to
manufacture eco-friendly cars
Threats (T) ST Strategies
around the world. WT Strategies

T1: High Competition S2/T1- Ford is already facing
T2: Increased Prices of cut-throat competition from its
Raw Materials rival companies like Toyota,
Tesla, and Tata. Ford’s
research and development is
one of its key strengths
because the company is
committed to make and
develop new products.
W2/T1- The rising raw material prices
of steel and steel coil due to the trade
war with china, the tariffs can directly
affect the company’s cost and profit
margin. Due to Fords is high
dependence on the U.S market. The
company predicts that profits will be
down for the foreseeable future.

Recommended Strategy

Ford Motor Company is currently in the process of restructuring itself from the industry

standard model of an automobile company, into a future technological company. It’s current shift

away from the conventional automobile business model will be extremely difficult with the

competitive nature of the industry. As Ford has manufacturing capabilities in various countries

around the world, they should try to improve their operations department by increasing efficiency

and hiring the right employees and labor. They should also start producing more eco-friendly

STRATEGIC AUDIT – FORD MOTOR COMPANY 19

vehicles and leverage there global manufacturing capabilities because the demand for these kinds

of vehicles is growing all around the world. Ford can also partner up with industry established

companies like Uber, Lyft and other app-based vehicle services to grow its revenue by entering

untapped markets using autonomous vehicles.

Ford Motor Company is the most innovative automotive company in the industry with a

global brand. With its brand and customer loyalty performing consistently well for the past several

years, its revenues and net income have also been on the rise. Now that Ford is focusing on the

future of automation and mobility with the acquisition of ARGO it has entered the autonomous

vehicle market far ahead of its competition. Ford has been investing heavily in the electrification

of its fleet and is spends large sums on research and development. With its strong manufacturing

capabilities, Ford is in a position to transition into the new era of mobility. The main challenges

that are making the task tough for the automotive giant is the competition and the high level of

legal and regulatory barriers. The future of Ford is bright and full of possibilities.

VII. Evaluation and Control

The implementation of evaluation and control procedures is important to companies, as

they test the effectiveness of a business strategy. Evaluation and control processes give

organizations the ability to ensure that the current strategic approach is producing the desired

outcomes (Grunert, 2019). Fords main strategy is to lower greenhouse gases in the coming years.

Ford has created many new hybrid cars and SUV’s to cope with the GHG emissions. Ford is

continuing its R&D on these products with one goal in mind, lower as much GHG as possible and

maybe on year develop a vehicle that is total GHG emission free. Ford Motor Company uses

several different ways to evaluate and control the procedures they have in place. For example, Ford

analyzes and measures their value chain by using internal cost analysis, internal differentiation

analysis, vertical linkage analysis and the sustainability report. The preferred measure for

STRATEGIC AUDIT – FORD MOTOR COMPANY 20

evaluation of its supply chains is the vertical linkage analysis (Ford calls it “materiality analysis”

which prioritizes the most significant issues in their value chain) because it’s the costs among

external suppliers and value evaluated and delivered to customers using surveys and repeat

purchasing data.

Ford also values its sustainability reports highly as well, these reports show where Ford

stands in meeting its goal of being the eco-friendliest auto manufacturer in the world. If they

continue to reduce the companies carbon foot print at the current rate, Ford is due to completely

carbon free by 2035 (Ford Motor Company, n.d.). With the data from the sustainability report

representing that outcome. Since 2000, Ford has published its Sustainability Report to track its

comprehensive approach to managing the issues related to climate change, air quality and

conservation, and identifying opportunities that have significant impacts across the business, from

water stewardship to supplier training and education. Ford has collaborated with several other

leading organizations throughout the years to increase the company’s transparency and depth of

environmental initiatives. A good example of this is Ford’s recent pledge to the Business Alliance

for Water and Climate’s “Improve Water Security” initiative in June – the first automaker to do so

(Sustainable Brands, 2017). One recommended change or improvement I’d suggest is that Ford

change or improve its mission statement aka vision statements. There current vision statement is

vague and isn’t focused on its goals.

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 Ford needs to continue to focus on make quality vehicles with the customer’s needs as the

main selling point. Also, ford has to keep up the advertising and research and development because

these are the main aspect’s that must be engrossed within the company. If ford continues its process

it should maintain great growth and continue to be a major player in the automotive industry.

STRATEGIC AUDIT – FORD MOTOR COMPANY 22

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