Industry Forecasting in Ford Motor Company

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Table of Contents

Factors that Impact the Industry
Weaknesses
Strengths
Opportunities
References

Factors that Impact the Industry

This is an analysis evaluating the Ford Motor Company (FMC) for a period of over five years. The company is established on the automotive industry providing services in designing, developing, manufacturing, marketing, and selling motor vehicles.

It brings a lot of revenues, which make it one of the world’s most important economic sectors. According to Finch (2012), the PESTEL analysis is a model used in industry forecasting to scan the external industry environment.

It is an acronym for a set of six comprehensive factors, which include the legal, environmental, social, technological, political, and economic factors often seen as the sources of opportunities or threats in SWOT analysis (Finch, 2012, p. 78).

Political factors are extrinsic environmental variables that demonstrate how the involvement of the government influences the overall competitive market or an individual company through trade restrictions, employment regulations, tax-related policies, and statutory laws on consumer protection which can favor the company, delay its growth over the first few years, or make it collapse at once.

The political stability and government efficiency in providing safe and fair markets vary extensively between countries.

Economic factors entail such characteristics as the condition and health of the prevailing economy in which the market of interest exists.

Some variables with a significant impact at the market-product level in decision making include inflation, interest rates, the unemployment level, consumer confidence, gross domestic product, discretionary income, and the rate of currency exchange.

Interest rates have a particular importance to the companies pursuing growth opportunities since the expense of direct money borrowing affects a company’s ability to expand.

Other economic factors affect the ability of a consumer to afford the product on sale making the economic stability a major determinant of the company’s growth.

Social factors classify customer’s features into two essential classes namely culture and demographics, which present a major concern (Finch, 2012, p. 80).

Culture contains the societal beliefs, attitude, and values whereas the study of population (demographics) gives a statistical description of the community’s characteristics expressed by location, age and employment. The interaction between marketing and culture is reciprocal.

Therefore, the marketing communications utilize cultural meanings by transferring them to their products in order to attract customers who hold these values. As a result, the icons and symbols establish values which are the foundation to the automotive industry.

The marketers would take the opportunity to market their motor vehicles during cultural holidays that revolve around artistic rituals affirming such practices as exchange of gifts.

Demographic characteristics of the market allow marketers to understand how the different segments of the community respond to product marketing as a result of such personal characteristics as age, sex and income.

Assessing consumer attitude enables a person to distinguish how the different demographic segments perceive certain products. This is a guideline showing the motor vehicles to design or sell to specific groups based on their preference, which can lead to acceleration of the company’s growth within five years.

All marketing managers must be conscious of the trends in the technology sector since technological factors affect marketing processes through creation of innovative systems. These systems enable interactions with customers, processing of orders, and distribution of products.

Environmental factors comprise of lifelong ecological concerns that can impact the motor industry at some point.

These concerns can be addressed by designing electrical automobiles that are environmentally conscious, which can be more acceptable than fuel guzzlers, or those contributing to air pollution through release of exhaust fume.

Finch (2012) describes legal factors as those affecting a company’s growth through rules and regulations that seek to control business organizational performance.

These regulations are imposed to govern the pricing of products and natural monopolies, which arms them with a significant influence on the company’s growth (Finch, 2012, p. 81).

Weaknesses

Weaknesses are factors relating to a fortuity in which consumers regard the company unfavorably, or make the company susceptible to competitors leaving the company at a disadvantage compared to competitors.

These are market-related and occur as an effect of liberalization which has globalized national markets increasing the threat of new entrants or competition in traditional.

Furthermore, the increase in the behavior patterns of the consumer demands single products which may not be rewarding.

Low company exposure can mean that few consumers are aware of it which can derail a company’s growth greatly especially within the initial five years. Therefore, this is a significant negative effect in the technological factors.

Strengths

The company’s strengths are either resources or skills which the company possesses in relation to the business opportunity under evaluation, or which may give the company an advantage over the others in the industry (Future Automotive Industry Structure 2015. 2003, p.26).

These include the company’s stability and predictability in a case where it has been known to produce quality automobiles enhancing brand recognition which promotes consumer loyalty.

Establishing a global presence will greatly increase the company’s chances of success as well as ensure the growth of sales within five years due to the establishment of a wide market in the different countries.

Opportunities

Some opportunities can be capitalized to enhance the company’s growth through such strategies as creating a history of product innovation and ensuring that the trend proceeds.

With the invention of electric automobile market, this can be capitalized upon to provide the world with an eco-friendly alternative that operates similarly to the original gas-guzzling vehicles (Growth markets, 2004, p. 24).

Possessing shares in the emerging markets ensures immense growth as the economies of these markets grow, and enable the consumers to afford automobiles.

References

Finch, J. (2012). Managerial Marketing. San Diego, CA: Bridgepoint Education Inc.

Future Automotive Industry Structure 2015. (2003). Web.

Growth markets: future challenges and opportunities in the automotive industry. (2004). Web.

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