Ford Business Analysis Part L
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As an investor, I am going to conduct a SWOT analysis of the Ford Motor Company to determine if it is a good financial move to invest into the automotive company. The Ford Motor Company is a Fortune 500 company that has been strong for over 100 years. Founded in 1899, Henry Ford created a company that today stands as the worlds fifth largest automaker. This companys stake-holders wants and needs will be evaluated to determine if they are being met and satisfied. As the role of a mutual fund manager, I will determine whether or not if I should invest into the Ford Motor Company based off of my SWOT analysis.
The SWOT analysis is a helpful tool to determine the strengths, weaknesses, opportunities, and threats of a company. This tool was created by an American business man to project a business venture and possible issues that may occur. Once a decision has been made on an attainable objective, the SWOT process will begin. As the mutual funds manager every step of the SWOT analysis will be thoroughly evaluated as well as internal and external factors of the Ford Motor Company.
Strengths of the Ford Motor Company which is appealing to myself as a mutual funds manager is that Ford is the only Big Three company that does not seek government aid. This is especially important for investors when seeking to find a company that has a strong financial backing which does not include a government bailout option. Liquidity advantage; in terms of liquidity, Ford is the best positioned among the Detroit Big Three (Scribd, 2009). There are other dominate car makers in the market but none that have had the dramatic turn around like Ford has over the last two years. Ford holds their own hybrid patent technology that has reach demands of the consumers. The rising cost of fuel is driving consumers to more efficient vehicles with better gas mileage.
Opportunities within the Ford Motor Company start with the companys interest in innovation. The company has a focus on developing new innovative features from outstanding fuel economy, to head-turning style and customer-focused technology (“Ford”, 2012). It is always appealing to an investor when a company is making strides to better their product with new features and innovative business plans. The opportunity of fuel efficient technology available within Ford has a concentration research and development activity on fuel-efficient and electric cars. There is a large demand today on fuel efficiency not only to save on fuel costs but to also improve air quality through emissions. There is an increase on Fords portfolio diversity to extend small and medium lineup to better fulfill consumer demands.
The weakness of the SWOT analysis is one that I enjoy looking into. It is sometimes easy to get caught up in all of the great opportunities that a company has lined up for the future but the troubled past and potential should not be taken lightly. Poor financial results from Ford losing $12.7 billion over the course of the year, surpassing the massive $10.6 billion loss in 2005 (The Wall Street Journal, 2012), this is a very concerning and alarming statistic. This is a concern and red flag for any investor. As a mutual funds investor this is one that would be at the top of my concerns that would heavily in thinking twice about investing into this company. The ability for a company to bounce back from this type of fall is not very likely. Fortunate enough for Ford, the company recovered with astounding numbers.
The car industry is a very competitive market which gives consumers many different options when shopping for the right car. Rising oil prices is a threat to the Ford Motor company. Ford is in a position to develop gas