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The automotive industry plays a very crucial role in the transportation system of a country. This industry is responsible for various roles, from manufacturing all parts to a car to assembly, designing, development, marketing, and selling of motor vehicles. It is one of the largest industries in Europe and spends the highest money on its research & development. This report is to analyse the business development of Ford in the European market. In order to strengthen the report, methodology and findings with swot and pestle analysis will be done here. As the research question, what is the current business situation of Ford in the EU?
The methodology is the part of the report, which helps to understand the process as well as concerns of the report. In this portion, report preparation methods are discussed aligned with the data collection method and analysis. This report needs a secondary data collection method to extract the relevant data as well as information regarding business development, Strength, threats, as well as the political, economic, social, legislative conditions of the country. In order to extract the relevant data, several journals, online articles, and websites are used.
Realism research philosophy will be followed as it helps to follow a combination of diverse dimensional approaches, which will influence the subjective report to its success level (Ford et al., 2022). The suitable approach will be deductive to accept multiple statements related to a specific subject to prepare a crystal statement to the objectives. In order to design this research, a descriptive design method will be the best. Moreover, this design method is so popular among all researchers because this design method consists of every single prospect to achieve the surrounding objectives related to the research. In addition, this designing method helps the executives to observe the progression. In this case, descriptive designing methods will help to compact the report by combining all approaches and multiple statements and leads to its success. The major part of report preparation is to collect relevant data to prepare SWOT and PESTLE analysis for the organisation and country. SWOT analysis will help identify the organisation's strategic framework with its weaknesses and threats. On the other hand, PESTLE analysis will help to understand the condition of the operational country and how it may impact the business and find the possible outcomes to mitigate the issues (McLaren, 2020). In this report, two types of risks regarding the sales of ford and supply chain inefficiencies will be discussed more critically with additional threats as well as the way to overcome those.
SWOT analysis means the analysis of the Strength, weaknesses, opportunities and threats of the business. Here the report is based on Ford, an international automotive company.
Global recognition is one of the great strengths of this organisation. Ford is a popular automotive brand because of its success and attractive advertisement. According to Statista, the brand value of Ford is $10.44 billion. Ford motors also operate two brands under it, and the brands are Ford and Lincoln. This brand's research and development is another strength effectively for its branding value, designing of the cars, market analysis (Tomac et al. 2018). R&D teams always focus on improving the performance of their vehicles' performance, including efficiency, safety, fuel consumption, CO2 emissions, and customer satisfaction. The diverse offering of this brand can be considered another strength of Ford. Ford has a vast range of cars based on geographic location, customers' needs, and budgets. This strategy also improves the relationship with their customers and satisfies them. Ford has a huge network of dealers to complete its marketing operation and distribution process, another strength of this brand. They have 10,717 dealers across the world.
Ford has faced huge losses due to its product recall. They recalled approximately 8.3 lakh Ford and Lincoln vehicles to solve and replace the faulty side door latches in 2016. In the previous year, they also recalled 20 thousand Kuga PHEV vehicles in Europe due to their high voltage battery resulting in firebreak in the cars. In addition, Ford also recalled 5.5 lakh SUVs in North America due to issues occurring in the car breaks. Overdependence on trucks and SUVs is another weakness of Ford (Tomac et al., 2018). In recent times Ford has been more focused on manufacturing Trucks and SUVs. Truck manufacturing by Fords makes up 54% of Ford's total number of vehicles they are selling. Per their current report, their car segment is declined by 45%, which is the great weakness of this organisation as they were to be focused on cars and well popular for a vast range of cars. Now they are focusing on producing trucks and SUVs, which may be cause threat to this company in future. Supply chain management is also weak due to severe competition, and the pandemic needs to be observed strictly.
As Ford is already starting working to produce efficient, eco-friendly vehicles, it also attracts the audience as it will increase the cost of fuel and be able to provide environmentally friendly transportation as pollution-free transportation. It is a great opportunity created by Ford to occupy the heart of the automotive market competition (Racz et al., 2018). They are also working on self-driving cars. The cars will be driven through artificial intelligence and maintain all traffic signals and rules. Ford already invested more than $1 billion in their self-driven car project and announced that they would launch the Active 2.0 prep package in March. Expansion of other fields is the great influencing factor of this organisation. The CEO of Ford has announced that Ford is expanding its operation in the field of technology, software, fleet management and electric vehicle charging.
Currently, Ford is facing high competition from other automotive companies such as Tesla, Toyota, Tata and others, causing a great threat for this company. In the cut-throat competition, they are trying hard to maintain their innovation throughout their products. The rate of raw materials is increasing day by day, which causes another threat. These two factors affect a company's profit and margin (Christodoulou & Cullinane, 2019). Regulation and compliance have become another threat factor for all automotive companies as the government takes more precautions to save the environment as well as for environmental improvements. There is a great chance to face lots of ethical issues if Ford is unable to maintain the regulations.
The PESTLE analysis will help to understand the condition of the operational country and how it may impact the business and find the possible outcomes to mitigate the issues. Here PESTLE stands for political, economic, social, technology, legalisation and environment analysis of Europe.
The European Union is maintaining an economic and political contribution across 27 countries, which includes. When the United Kingdom leaves the block, it creates so many implications for both the EU and UK. The EU also became a global actor as well as also influencing the global economic and political systems (Vallati & Grassi, 2019). After the second war, the EU worked with other powerful countries to influence democracy, freedom, and peace at an international level. The EU also maintains a good as well as a peaceful relationship with the US. The rate of political stability of the EU is 0.7%. Twenty-seven countries have different political stability rates, which affects the business of Ford to maintain diverse rules and regulations. Due to diverse rules and regulations lies a negative pressure on the organisation.
The GDP growth rate of the EU is 13.80%. The inflation rate is also increased up to 3.4%, which lies a negative impact on the organisation. Due to this fact, the price of raw materials is increasing day by day and Ford has to decrease their rate of profit and margin. The unemployment rate also shows an increment rate of 7.4%, which is a negative impact on the country's economy, but Ford can use it to their advantage. They can recruit effective people to enhance their business as well as to get more innovative and productive ideas to beat the current market competition.
The EU always shows a rich cultural heritage. The population growth rate is 6.5%, which means the rate of unemployment will increase in the future (Wong, 2019). The social inflation rate is also increasing in the EU countries. This will also have a negative impact on the country as well as the organisation unable to provide their products at a low price. This will unsatisfying the citizens. Moreover, existing cultural barriers can be mitigated by the government which lies a positive impact with the perspectives of socialisation.
65% of work is conducted through digitisation, which shows usages of technology is increasing, which reflects a positive impact on the EU and Ford can also use modern technology to improve their innovations (Nyakairu & Pratisti, 2022). Technological awareness is also increased. People are more aware of technologies, which means new employment will arise to handle the technology, therefore the rate of unemployment will be reduced.
Discrimination possibilities are under control, several copyright laws have been upgraded to provide more facilities to the general people, safety and health laws are revised to ensure a quality of life led by the citizens, which reflect that government of the countries also effectively work for their city as well as to improve their lifestyle and also ensure that they are leading a quality life.
Climate is getting dirtier by utilising numerous expendable materials, pressure from NGO increases which affects the overall environment, continuously increasing temperature leads to greenhouse effects, revision of environmental laws also warn Ford to maintain all environmental guidelines which create additional pressure to the organisation and lies negative effect.
The report is focused on the business perspective as well as the development of the famous automotive brand, Ford. Ford is a popular automotive brand because of its success and attractive advertisement. The major part of report preparation is to collect relevant data to prepare SWOT and PESTLE analysis for the organisation and country. SWOT analysis is done to identify the strategic framework of the organisation with its weaknesses and threats. On the other hand, PESTLE analysis will help to understand the condition of the operational country and how it may impact the business and find the possible outcomes to mitigate the issues. The methodology section it is also discussed the data collection methods, research design, approach as well as philosophy. In this report, two types of risks regarding the sales of ford and supply chain inefficiencies will be discussed more critically with additional threats as well as the way to overcome those.
Ford, J., Leinhauser, J., Sarkar, I., Schroepfer, C., & Bullough, A. (2022). John Deere in Sub-Saharan Africa: Success or Failure?. SAGE Publications: SAGE Business Cases Originals.
McLaren, P. G. (2020). Strengthening capitalism through philanthropy: The Ford Foundation, managerialism and American business schools. Management Learning, 51(2), 187-206. Retrieved from: https://journals.sagepub.com/doi/abs/10.1177/1350507619890094 On 10th March
Nyakairu, M. K., & Pratisti, C. (2020, December). Ugandans Intention to Buy Ford Range Raptor during The Corona Viruses pandemic 2020. In International Conference on Information Technology and Business (ICITB) (pp. 171-177). Retrieved from: https://jurnal.darmajaya.ac.id/index.php/icitb/article/viewFile/2553/1324 On 10th March
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Christodoulou, A., & Cullinane, K. (2019). Identifying the main opportunities and challenges from the implementation of a port energy management system: A SWOT/PESTLE analysis. Sustainability, 11(21), 6046. Retrieved from: https://www.mdpi.com/2071-1050/11/21/6046/pdf On 10th March
Racz, L., Fozer, D., Nagy, T., Toth, A. J., Haaz, E., Tarjani, J. A., ... & Mizsey, P. (2018). Extensive comparison of biodiesel production alternatives with life cycle, PESTLE and multi-criteria decision analyses. Clean Technologies and Environmental Policy, 20(9), 2013-2024. Retrieved from: https://link.springer.com/article/10.1007/s10098-018-1527-1 On 10th March
Vallati, M., & Grassi, A. (2019, July). AI to Facilitate Legal Analysis in the PESTLE Context. In Emerging Technology Conference (pp. 66-68). The Emerging Technology (EMiT) Conference. Retrieved from: https://www.researchgate.net/profile/Alessia-Grassi/publication/337186405_AI_to_Facilitate_Legal_Analysis_in_the_PESTLE_Context/links/5dca8d20a6fdcc57504122bd/AI-to-Facilitate-Legal-Analysis-in-the-PESTLE-Context.pdf On 10th March
Wong, M. K. (2019). An Analysis of the Effects of Operating Margin and Beta for Performance on Ford Motor Company. Retrieved from: https://mpra.ub.uni-muenchen.de/97251/1/MPRA_paper_97251.pdf On 10th March
Tomac, N., Radonja, R., & Bonato, J. (2019). Analysis of Henry Ford’s contribution to production and management. Pomorstvo, 33(1), 33-45. Retrieved from: https://hrcak.srce.hr/clanak/323216.html/ On 10th March
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