Ford Motor Company and Honda Motors, Research Paper Example

Abstract

This study conducts a SWOT analysis of Ford Motor Company and Honda Motors and concludes by analyzing Honda’s competitive position and notes strategic options for the company.

Ford Motor Company – SWOT

The Ford Motor Company is an American multinational corporation. The company was founded in 1903 by Henry Ford in 1903 and is a producer of both cars and trucks operating under two segments: (1) Automotive; and (2) Financial Services. Ford Motor Company is a manufacturer and distributors of automobiles on six continents employing approximately 160,000 with 70 plants worldwide.

Strengths

• Ford has today (25 November) announced the results of conversion offers that will reduce the company’s outstanding automotive debt by more than US$1.9bn billion and lower its annualized interest costs by around US$180m.
• Ford vehicle sales in Turkey and Russia increased significantly in October, highlighting improving customer confidence says the US automaker.
• Ford pioneered methods of large-scale industrial workforce management and large-scale manufacturing of cars through use of manufacturing chains characterized by moving assembly lines. (MBA Lectures,     )
• Presently the Ford Motor Company is the second largest U.S. automaker and globally is the fourth-largest.
• Ford Motors has a strong presence globally manufacturing and distributing vehicles across six continents.
• Ford Motor Company is one of the largest investors in research and development in the automobile industry.
• The distribution network of Ford is one of the largest worldwide being geographically distributed and the most diverse network in the automobile industry claiming 45 center of distribution and 9,500 dealerships worldwide.

Weaknesses

• Ford Motors market has declined over the past few years in the U.S.
• Ford Motors has lacked a suitable response to European and Japanese automobile manufacturers.
• Ford Motors has been typified by a weak financial position.

Opportunities

• Ford is planning to set up a second India plant.
• Ford has announced eight new models for India by 2015.
• Ford plans to open 66 new dealerships in China by years’ end which will mean a total of 100 dealerships and 340 outlets in China.
• Production of smaller more fuel-efficient and higher quality models.
• Ford Motors has the opportunities for establishing or equipping facilities for the manufacture of vehicles of advanced technological capabilities that would meet fuel economy and emission standards.
• Ford Motors has the opportunities to shift its manufacturing operations to other countries characterized by low costs for both labor and materials.
• Opportunities exist for diversification and for shifting manufacturing operations to hybrid vehicle engines.

Threats

• Ford of Europe’s chairman and CEO Stephen Odell tells just-auto that he is relishing his return to Europe, happy with Ford’s prospects, but concerned with industry overcapacity in the region.
• The automotive industry crisis of 2008-2010 was the big downturn. Now it is challenge for industry players to recover. (MBA Lectures, 2010)
• The financial crisis of 2007-10 caused by a liquidity deficit in the U.S banking system resulted decrease in consumer wealth. (MBA Lectures, 2010)
• Environmental politics and allied anxiety concerning carbon emissions have sharp sensitivity to environmental protection worldwide and gas mileage standards. (MBA Lectures, 2010)

Honda – SWOT

Honda is reported to be one of the best and leading manufacturers of automobiles in the market. Honda is reported as the first Japanese producer of automobiles.

Strengths

• Honda is generating effective outcomes
• Honda is reported to have “high and powerful research and development R&D”
• Innovativeness
• Best market share leadership
• Strong brand
• Products are differentiated and unique
• Honda’s revolutionary engine technology.
• Popularity of the company’s product line. (Dyck and Neubert, 2008)

Weaknesses

• The cost structure of Honda is high in comparison to other automobile manufacturers.
• Honda requires privileged purchase deposit.
• Honda’s focus is on international deposits as compared to domestic deposits.
• The Civil model is stated to be one of Honda’s major weaknesses.
• Non-luxury vehicles prices are high when compared to the completion.
• Honda is not offering a strong truck line. (Dyck and Neubert, 2008)

 Opportunities

• Honda’s opportunity for use of its R&D in car production as per the needs and demands of customers is high.
• The emerging market is a primary opportunity for Honda.
• Honda produces various models catering to the lower market segment.
• Fuel efficiency.
• Increase of production by sales and research focus. (Dyck and Neubert, 2008)

Threats

• Threats include external changes to taxes and changes in government.
• Lower cost competition.
• Price wars.
• Oil prices are a threat for this company.• Second movers are the major threat for Hondacompany
• Second movers.
• Substitute products. (Dyck and Neubert, 2008)

Honda Proposed Strategy

The Honda Company must overcome the weakness of its fuel cell vehicle which is the limited availability of this vehicle in the United States. In addition, Honda has very few refueling stations. IN addition, its fuel cell vehicle is very small and can only accommodate four passengers. Finally, the cost of Honda’s FCX Clarity fuel cell vehicle is quite high. Posing the largest threat to Honda are Toyota and GM. Chevrolet is also a threat to Honda with its new fuel cell technology. Honda must necessarily work toward the creation of more refueling stations and must address the competition’s larger more comfortable fuel cell vehicles through design and development of a fuel cell vehicle with a larger carrying capacity with added features.

References

India: Ford Eyes Second Plant (2010) Just-Auto. 25 Nov 2010. Retrieved from: http://www.just-auto.com/news/ford-eyes-second-plant_id107414.aspx

China: Ford Adding 66 dealers by Year End (2010) Just-Auto 25 Nov 2010. Retrieved from: http://www.just-auto.com/news/ford-adding-66-dealers-by-year-end_id107396.aspx

US: Billion Dollar Debt Reduction to See Ford Net Cash Positive by Year End (2010) Just-Auto. 25 Nov 2010. Retrieved from: http://www.just-auto.com/news/billion-dollar-debt-reduction-to-see-ford-net-cash-positive-by-year-end_id107395.aspx

Interview: Ford of Europe’s Stephen Odell (2010) Just-Auto. 15 Nov 2010. Retrieved from: http://www.just-auto.com/interview/ford-of-europes-stephen-odell_id107126.aspx

US: Ford Says Turkey/Russia Sales Significantly Up in October (2010) Just-Auto 15 Nov 2010. Retrieved from: http://www.just-auto.com/news/ford-says-turkeyrussia-sales-significantly-up-in-october_id107135.aspx

Ford Motor Company SWOT Analysis (2010) MBA Lectures. 31 Oct 2010. Retrieved from: http://mba-lectures.com/marketing/principles-of-marketing/1073/ford-motor-company-swot-analysis.html

McGinnis, Richelle (2010) SWOT Analysis of the New Honda Fuel Cell Vehicle. Ezine Articles. Retrieved from: http://ezinearticles.com/?SWOT-Analysis-of-the-New-Honda-Fuel-Cell-Vehicle&id=1352255

Bruno Dyck, Mitchell Neubert, (2008), Management: Current Practices and New Directions, Cengage Learning, page 624