Ford Company On The Edge?
Ford Motor Company on the Edge?
External Environment of Ford Motor Company
Exponential Rise in Fuel Cost
Ford Motor Company has recently been hit hardest by the rising price of oil on the world market. The increasing price of oil has led to an astonishing rise in prices at the pump. Currently, the average price at a United States gasoline station, for regular gasoline, is approximately 4.55 per gallon. The increase in oil can be attributed to various factors, such as the current “War on Terrorism” as well as natural disasters such as Katrina in 2005. Ford Consumers are straying away from the large sports utility vehicles and trucks and looking for more fuel efficient vehicles. Ford’s way of thinking, in which “Bigger is Better”, is now being replaced by mottos such as “less is more”. Consumers can no longer afford to drive vehicles that average 14-16 miles per gallon. A Ford F-150, Fords leading truck model, has a 25 gallon tank and costs the average consumer nearly $110 dollars to fill their tank. The average middle-income Ford consumer can no longer afford to pay $110 dollars to get to and from work. They are having to make careful decisions regarding their spending patterns, and are thus look for more fuel efficient alternatives such as hybrids.
Changes in Consumer Demands and Behavior
The “Go Green Movement”, has played a major role in changing consumer behavior. Consumers, specifically those in the United States, are beginning to notice the importance of sound environmental decisions. Major movie productions, news broadcasts, and even political activists have brought the issue of a deteriorating environment to the attention of consumers. Consumers are now looking for vehicles with a lesser impact on the environment. Moreover, the previously discussed rise in fuel is also pushing consumers to go forgo the gas guzzler for the more echo-friendly vehicles. The “Go...
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