Ford & Toyota Motors

Ford & Toyota Motors

Introduction

This paper discusses two giants of Automobile Industry i.e. Toyota and Ford Motors. The companies are firstly discussed according to their strengths, weaknesses, opportunities and threats, then future strategies for both the companies are mentioned.

Ford Motors

Ford (Ford motor company) is one the leading auto manufactures in the world. The company distributes and manufactures in around six continents. The most famous brands of the company include Volvo, mercury, Lincoln and Ford. The prime operations of the company are located in the US and Europe. The headquarters of the company is located in Dearborn Michigan and the company employees around 165,000 people. At the end of fiscal year 2010, the company recorded sales of USD 128,955 million, which is an increase of 11% over the preceding year.

SWOT Analysis

Strengths

High Market Share and Strong Brand Image

The company has strong brands. Lincoln and Ford are considered strongest brands in the auto industry. According to Brands Top 100 survey, Ford brand was ranked eighth strongest brand in the world. This strong brand image provides company a competitive advantage in the industry (Dornbach & Thorpe, 2009).

Widespread Operational Network

Ford motors have a diverse and strong operational network. The company operates a large network of assembly and manufacturing facilities, engineering centres, administrative offices, warehouses and distribution centres. At the end of year 2010, Ford was operating 106 sales offices, 57 research and development, engineering centres, 15 distribution centres and 73 manufacturing plants.

Strong R&D and Engineering Capability

The company has 57 research and development, engineering facilities around the world. The company incurred R&D cost of USD 5 billion, 0.3 billion more than the last year costs.

Weaknesses

Product Recalls

Due to some design and manufacturing problems, Ford had to recall units. The company recalled 1.2 million Ford F-150 pickups due to defect in air bags. Similarly, the company recalled 25,000 Ranger light pickups in March this year(Reed & Winner, 1999).

Legal Proceedings

There were few legal cases which caused some concern in the company. In a case, court awarded damages of USD 4.5 million to a dealer. The case was based on a class action in Ohio state court. The allegation was that the company breached its service agreement with truck dealers. The company failed in publishing price concessions for dealers.

Under-Funded Pension Liabilities

It was found out that Ford's defined benefits pension plans were underfunded (by USD 6.8 billion). The company provides defined benefit retirement plans to its salaried and hourly employees(Reed & Winner, 1999).

Opportunities

Growth in Indian and Chinese Automotive Industries India and China are two of the fastest growing economies in the world, and automotive industry is also picking quickly in these countries. The CAGR of Chinese auto industry was recorded to be 25% during period 2005-10. The automotive industry in India grew at CAGR 23%.

Growth in Global Truck Market

The analysts are expecting an accelerating growth in global truck market in next four years. The production is expected to grow to 26.5 million in 2015 from 17.2 million units in FY 2010.

Hybrid Electric Vehicles

The global climate change has fostered ...