Ford Motors Case Study

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Ford Motors is currently facing many challenges to stay at the top of the automobile market, both in and outside the US. Two of the most imminent dangers facing the company currently are high labor costs relative to the company’s total revenue and the challenge of maintaining a sustainable competitive advantage over its primary competitors GM and Toyota. Henry Ford was the first to institute a policy of $5 a day labor in 1910. This $5 was part wage and part profit sharing with its hard-working employees. This relatively high labor cost has only increased over the decades, and Ford is still the high labor cost leader within the auto industry. Its top competitors, GM and Toyota, both have lower labor costs, despite the fact that GM is also a…show more content…
Technology is becoming one of the leading driving forces of change affecting the industry. Car and technology companies are teaming up and racing to be on top of this technological forefront. The government will continue to push and pass legislation, expediting the adjustment process. Car companies that fail to research and innovate will be pushed out of the industry soon enough. In Ford’s case, the company is currently investing in new technologies. In 2015, the company announced that it would invest $4.5 billion to increase innovation towards electrified vehicle solutions. By 2020 the company hopes to have introduced a mixture of 13 both hybrids and pure electric cars, making 40% of their product line electric vehicles. Through innovation, the company hopes to overcome their primary competitors and become a leader in their…show more content…
These forces of competition within the industry create a highly competitive environment, requiring all participating companies to continually innovate and develop new products. For a company to succeed within the industry, the need to have a strong position among their other competitors. When comparing Ford’s position to its competitors, the company has a strong position in the industry being in the top three, but the company comes short of it’s primary rival GM. Because Ford didn’t take the government buyout, the company’s main setback is the debt the company obtained from the recession in 2008. From 2008 to 2010, the company’s financial health suffered making it hard for the company to compete with GM. Over the last five years, the company’s gross profit margin has increased signifying stability in the company’s environment as well the recovery of the company’s financial

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