Ford Motor Company, together with its subsidiaries, designs, manufactures, markets, and services automobiles in North America, South America, Europe, the Middle East and Africa, and the Asia Pacific. The company's Automotive segment develops, manufactures, distributes, and services cars, trucks, SUVs, and electrified vehicles under the Ford name; and luxury vehicles under the Lincoln name, as well as service parts and accessories. This segment markets its products through distributors and dealers, as well as through dealerships to fleet customers, including commercial fleet customers, daily rental car companies, and governments. Its Financial Services segment offers various automotive financing products to and through automotive dealers. Its financing products comprise retail installment sale contracts for new and used vehicles; and direct financing leases for new vehicles to retail and commercial customers, such as leasing companies, government entities, daily rental car companies, and fleet customers. This segment also offers wholesale loans to dealers to finance the purchase of vehicle inventory; and loans to dealers to finance working capital and improvement of dealership facilities, purchase dealership real estate, and other dealer vehicle programs. The company was founded in 1903 and is based in Dearborn, Michigan.
Business Analysis of Ford Motor
The Automobiles and Parts Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Ford Motor compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Ford Motor to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Ford Motor with an interactive chart.
- Revenue Growth: Ford Motor reported a revenue growth of 1.5% year-on-year during 2016. Automobiles Industry grew at 4.4% in the same period
- COGS share of Revenues: As a percentage of revenue, Ford Motor spent 89.3% of its total revenues on COGS. Automobiles industry average (COGS share of revenue) in the same period was 86.6%
- R&D share of Revenues: Ford Motor R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Ford Motor spent 8.0% of its total revenues on Sales, Marketing, and General Administration (SG&A). Automobiles industry average SG&A spending in the same period was 8.0%
- Inventory share of Revenues: As a percentage of revenue, Ford Motor spent 5.9% of its total revenues on Inventories. Automobiles industry average Inventory spending in the same period was 8.0%
- Accounts Payable share of Revenues: As a percentage of revenue, Ford Motor invested 14.0% of its total revenues on Accounts Payable (A/P) Automobiles industry average Accounts Payable investment in the same period was 14.6%
- Accounts Receivable share of Revenues: As a percentage of revenue, Ford Motor invested 70.7% of its total revenues on Accounts Receivable (A/R). Automobiles industry average Accounts Receivable investment in the same period was 47.5%
- PP&E share of Revenues: As a percentage of revenue, Ford Motor invested 21.1% of its total revenues on Property, Plants, and Equipments (PP&E). Automobiles industry average PPE investment in the same period was 34.0%
- Intangibles share of Revenues: Ford Motor Intangibles share of Revenues details are not available because either company does not share the data or we do not have it
- Net Margins: Ford Motor Net Margins in the year 2016 were 3.0%. Automobiles industry average Net Margins in the same period were 4.1%
Sector and Industry Association of Ford Motor
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Ford Motor is associated with Industrials Sector Group, Automobiles and Parts Sector, and Automobiles Industry.
Automobiles and Parts sector is comprised of the following industries: Automobiles; Auto Parts. The definitions for each of the industries is as follows:
- Automobiles industry includes manufacturers of passenger vehicle that includes Cars, SUVs etc. and recreational vehicles including motorcycles like Harley Davidson. Companies making boats and other recreational vehicles are also part of Automobiles industry.
- Auto Parts industry includes manufacturers and distributors of automobile parts including engines, batteries and also tires.
Industry Ranking of Ford Motor
With $151.8 billion revenues, Ford Motor ranked number 2 of all the companies in the US Automobiles industry. There were a total of 18 public companies in the US Automobiles industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Automobiles industry by revenues during 2016 were:
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.