Fords Competitive Market

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Fords Competitive Market
Ford Motor Company deals with automotive products. The company faces stiff competition from companies such as Toyota, Honda, Chrysler and General Motors. The industry is highly competitive as Toyota, Honda and Nissan have continually grown their market shares since they offer their vehicles at lower prices compared to other companies. These competitors offer small vehicles that are fuel efficient and therefore preferred by customers. Honda, Toyota, and Nissan also compete in based on low-cost, specifically on style rather than function. On the one hand, GM competes with Ford based on low-cost as well as function. On the other hand, Ford employs a cost leadership strategy by offering standardized products in the global market. Toyota which is the greatest competitor of Ford was number 1 in selling small cars with Hybrid engines on a list of the highest selling hybrid cars in 2012, compared to Ford which was at number 10. There is a demand for more than generic cars by customers and Ford may need to be creative and innovative to meet the preferences of customers (Fleisher 123).
Competitors have an effect of reducing the sales rate. The competition is likely to affect future cash flows and profitability of the company. Due to increase in the production of vehicles of different types that target specific groups of customers, Ford is likely to struggle making the sales it desires to get its profits. The sales volume is likely to decrease thereby affecting overall profitability.

Declining sales, negative cash flow, slumping profit margins are some of the possible effects competitors will cause to Ford. This situation is likely to reduce its market share, which will affect the company adversely in the long term. There is a need for the company to devise other strategies to deal with the competitors and gain a competitive advantage that will allow it to thrive (“Ford, Regaining Their Competitive Edge” 78)
Works Cited
Fleisher, Craig S, and Babette E. Bensoussan. Business and Competitive Analysis: Effective Application of New and Classic Methods, 2015. Internet resource.
Ford, Regaining Their Competitive Edge: A. Gardners Books, 2007. Print.