Issues And Case Analysis Essay
Issues and Case Analysis
FORD is an American motor industry and a major player in the motor market all over the world. Since there is a stiff competition for the market control, as a director of strategic planning, there is the need to develop a comprehensive SWOT analysis for the company to keep and expand its share in the market.
Its STRENGTHS includes experience in handling the market’s ups and downs such as the economic crunch given that it was established as early as 1903. Its financial capacity (US$178.35 billion assets) enable FORD to outsource for competitive human resource, effective marketingand product promotion. It also has a large pool of qualified personnel of about 164,000. This enables production of quality vehicles and better policy making (Leontiades, 1987). FORD has also established its market base in almost all the countries in the world giving it a better platform to compete. It’s notable that FORD owns a stake in Mazda of Japan and Aston Martin of UK.
FORD’s WEAKNESSES include the failure to come up with relatively cheaper vehicles in comparison to companies like Hyundai Motor Group. It also becomes difficult for such big a company to produce to its optimum capacity given the size of employees and other resources. Decision making is also slow and cumbersome because of the large size. Given the cost of fossil fuels has been on the rise, there has been a need to source for alternative source of fuel which has not been easy. It has also not been possible to do away with environmental pollution.
Despite these weaknesses, FORD has OPPORTUNITIES such as availability of untapped market potential especially in the third world countries. Demand for more luxurious vehicles also creates a market niche for FORD. There is the need to invest in electric vehicles to cut on fuel cost and conserve the environmental. It should venture in production of sport cars such as GT40 and Ford Mustang.
FORD’s THREATS include stiff competition from other motor industries such as Toyota Motors, General Motors, Hyundai Motor Group and Volkswagen. Some of these motor companies like Hyundai Motor Group are known to produce cheaper vehicles hence narrowing the market base for FORD. The faltering economy in the world has led to a decline in sales and profits. In fact, in 2008, FORD posted a loss of $14.6 billion, the worst in its history. Increased fuel costs have also made the market worse (Kurtz, 2012). It is also notable that the cost of production has also gone higher while the real income for the consumers has remained relatively the same. From 2006, FORD has forced to retrench about 30,000 workers, close 14 factories and do away with production of some models. In early 2000, FORD found itself in financial problems followed by losses.
One of the FORD’s main weaknesses is how to deal with the stiff market competition in such a time of economic meltdown. Therefore, there is to come up with cheaper models and embrace alternative sources of fuel other than fossil fuels.
Toyota Motors was founded in 1937. It has overcome all challenges to become one of the largest automobile manufacturers in the world, coming first in 2010. Its STRENGTHS include a wide range of about 70 models, cutting across all classes. It’s also notable that Toyota has also ventured in other field such as provision of finance services (Kurtz, 2012). Toyota also has a strong market base giving it an upper hand in competition. It has an efficient management hence sound decision making committed to problem solving. It also has a strong human resource team. For example, it provides routine check-up for their clients free of charge. They are known to recall their motors whenever they develop a common problem. It has a strong financial base (US370.3 billion) enabling it to expand continuously. Toyota has been able to embrace technology by production of the hybrid electric vehicle.
Despite all those strengths, Toyota has a share of its WEAKNESSES. These include how to utilize its large resources effectively, maintaining quality (it has been forced to recall its vehicles recently due to failing hydraulic systems) (Morgan, 2006). The need for an affordable source of energy has not been solved comprehensively. In terms of pricing, there is stiff competition from companies such as Hyundai.
The opportunities with Toyota Motors include initial success in their quest to come up with electric vehicles. They have also shown potential in coming up with cheaper models. With introduction of cheaper models such as Toyota Vitz and Toyota Duet it means cheaper models are still within the reach (Kurtz, 2012). There is also a growing market especially in the third world countries. There is also opportunity of growth in sports car.
Like any other motor company, Toyota Motors THREATS include stiff competition from other established motor industries, the urgent need for cheaper and environmentally friendly fuels, dealing with the world economic crisis. Financial crisis has also been a threat, forcing the company to go for a loan from a state-backed lender in 2009. It is also difficult to maintain its market share leave alone expansion. With such a large pool of personnel and resources, it becomes difficult to produce optimumly(Leontiades, 1987).
Toyota’s main challenge is to maintain its market share and the need to come up with cheaper models especially for the developing countries. Therefore, there is the need to come up with cheaper models and accelerating the manufacture of electric vehicles.
Leontiades, J. (1987). Multinational corporate strategy: Planning for world markets. S.l.: Lexington Bks.
Kurtz, D. L. (2012). Boone & Kurtz contemporary marketing / David L. Kurtz. Mason, OH: South-Western Cengage Learning.
Morgan, J. M., & Liker, J. K. (2006). The Toyota product development system: Integrating people, process, and technology. New York, NY: Productivity Press.