Ford Motors Sources of Competitive Advantage

Ford Motors is one of the leading car brands in this world that has brought a large product range of fuel-efficient and secure car and SUV models to the market. The product portfolio of Ford also includes luxury cars, SUVs and crossovers made by the Lincoln brand. The company has always focused on creating a reliable brand image by offering its customers vehicles that are safer and deliver solid performance. It invests a large sum in research and development each year to make its existing portfolio more attractive to consumers and bring new and more attractive models to the market loaded with the latest technologies.

The automobile industry has grown highly competitive and to maintain a large market share and leadership position in the industry, companies have to focus upon several things including marketing, product innovation, and supply chain management as well as sales and distribution strategy. Ford enjoys a strong competitive edge in the automobile market and its core market is the United States. This is discussion of the leading sources of Ford’s competitive advantage which have helped the company retain its strong position and market share in a highly competitive industry.

Leading Sources of competitive advantage for Ford Motors.

Technological innovation:

Technological innovation is a key source of competitive advantage in the automobile industry and for companies that want to grow their market share, it is the method to make their product portfolio more attractive in the eyes of the consumers worldwide. Ford invests a large sum in research and development each year and in 2019 the company invested around $7.4 billion in research and development. Technological innovation is a key source of competitive advantage for the brand since the company relies mainly on product differentiation to grow sales worldwide. Apart from bringing a large range of fuel-efficient and safer cars to the market, the company also brought several attractive SUVs and crossovers to the market. To achieve faster growth and strengthen its competitive advantage, the company also invests in research and innovation in several areas including autonomous driving as well as developing more environment-friendly models.

Product Range:

A large and attractive product range that serves the needs and preferences of various consumer segments worldwide is also a key source of competitive advantage for the brand which enjoys global popularity and is among the best selling brands in the US. The company has brought  a large range of automobile products to the market which include cars, SUVs, crossovers, trucks and hybrids. Its product range also includes commercial vehicles, trucks, and vans as well as electric cars and performance vehicles. Ford offers a large number of choices to its customers and caters to a diverse set of consumers with diverse needs.

HR management:

Human resource management is also a key source of competitive advantage in the automobile industry which employs a very large number of people worldwide. In 2019, the company employed around 190,000 people worldwide. The automobile industry has grown highly competitive and acquiring faster growth requires having talented people onboard. Apart from hiring and retaining talented employees, Ford also invests in their career growth and job satisfaction. 

Production and distribution capabilities:

Ford’s extensive production and distribution capabilities are also a key source of competitive advantage for it. Ford has maintained a strong global presence through its large manufacturing distribution network. The company has eight regional engineering, research, and development centers, and 55 manufacturing and assembly plants worldwide. Apart from that, the company distributes its products worldwide through a large network of nearly 11,000 dealerships.

Brand image and marketing:

Brand image is also an important source of competitive advantage for automobile brands since sales heavily depend on how much consumers trust a particular brand worldwide. As an automobile brand, Ford has maintained the highest focus on its brand image and reputation. It has formed the image of a reliable and customer-centric brand which places the highest focus on customer satisfaction. High brand equity and a strong reputation has led to higher sales in key automobile markets and particularly the us which is its biggest market accounting for the highest revenue of the company.

Apart from that, Ford also regularly runs marketing campaigns and engages its customers through social media. Focus on marketing has helped Ford craft a distinct brand identity and a unique image which differentiates it from the other players in the auto industry. The company is investing in digital marketing to grow customer relationships and worldwide sales and to expand its customer base. Social media is one of the major marketing channels that Ford and other automobile companies utilize for promotions and customer engagement. A higher focus on image and reputation has also helped Ford reduce competitive pressure.

Global presence:

To achieve higher sales, automobile companies need to maintain a strong global presence since by selling in more markets around the world, companies can grow their sales and revenue. Ford has maintained a strong presence in all the leading automobile markets of the world including the US, China and several more European and Asian markets. The United States is the largest market of Ford Motors where the company serves its customers through a large number of dealerships. In 2019, the number of dealerships selling Ford motors throughout the world was 10,921. Apart from its physical locations including regional offices, the company is also investing in digital technology to improve its global reach and customer connection. The company uses various regional websites to reach its customers and grow sales in various market regions.

Supply chain management:

The supply chain is the backbone of any automobile brand’s manufacturing and sales. Any automobile company has to invest in building a strong supply chain to ensure the supply of good quality raw material. Optimizing the supply chain has helped Ford Motors reduce production costs and maintain better product quality. The company sources from a large number of suppliers worldwide and it also focuses on creating long term relationships with its suppliers worldwide. Some of the leading raw materials required for the production of vehicles that Ford sources from numerous suppliers around the world include base metals (e.g., steel and aluminum), precious metals (e.g., palladium), energy (e.g., natural gas), and plastics/resins (e.g., polypropylene).

Other Sources: Ford Motors Annual Report 2019.


Abhijeet Pratap

Abhijeet has been blogging on educational topics and business research since 2016. He graduated with a Hons. in English literature from BRABU and an MBA from the Asia-Pacific Institute of Management, New Delhi. He likes to blog and share his knowledge and research in business management, marketing, literature and other areas with his readers.