ABSTRACT
Ford Motor Company have been around since 1903, and although in the past they lost
market shares due to production and marketing scandals, they remain robust in 2005. This
paper has been written to thoroughly analysed Ford through PESTEL analysis to
comprehend the macro environment in, Porters Five Forces analysis to determine the
competition and lastly SWOT analysis to depict the micro environmental factors of the
company in question. It has been concluded that due to the fierce competition in the
industry, and due to the changes in the environmental factors, Ford Motor Company needs
to concentrate on improving on its weaknesses in order to avoid and overcome the threats.
COMPANY ANALYSIS: FORD MOTOR COMPANY
Introduction
Ford Motor Company was founded in 1903, in the United States of America, by Henry
Ford and eleven other investors. By 1919, the business began to prosper. Following
disagreements with the other investors, Henry Ford and his son, Edsel Ford bought the
shares of the investors and became the sole owners and decision makers of Ford Motor
Company (Brinkley, 2004).
Today, William Clay Ford Junior is the leader of a company with a well established
product portfolio of cars, trucks, vans and Sport-Utility Vehicles under the following
brands; Ford, Lincoln, Mercury, Mazda, Volvo, Jaguar, Land Rover and Aston Martin
(Ford 2005; BBC, February 2002).
The worlds largest car manufacturer in the world by volume is General Motors
Corporation, followed by Ford which is then followed by DaimlerChrysler (Reuters, 2005;
Yahoo Finance, 2005).
This paper will be thoroughly analysing Ford through the use of various analytical tools,
such as PESTEL analysis to comprehend the macro environment in which Ford operates in
(Campbell et al., 2002), Porters Five Forces analysis to determine the competition (Clegg
et al., 2004) and lastly SWOT analysis to depict the micro environmental factors of the
company in question (Stone, 2003).
PESTEL Analysis
Political Factors
* The September 11th terrorist attack which had occurred in the US reduced the sales of
automobiles in the US, and specifically Fords sales by 10% (Ford Annual Report, 2001).
* The economic recession in Argentina in 2002 adversely affected car sales in Argentina,
production volume fell from 57,200 units to 31,000 units. (BBC, January 2002; Ford,
2005)
* The Iraqi war affected Ford adversely as their US sales declined by 7% (Ford Annual
Report, 2003). The war has had a similar affect on other firms operating in the industry
also.
* The United Nations World Forum for Harmonisation of Vehicle regulations introduced a
