Negative effects occur when labor disputes threaten to cripple a company as a result of strikes and walkouts. In order to prevent such potentially disastrous events, Ford could be forced into expensive compromises that could erode profit margins. For this reason, Ford has at its disposal $22 billion in cash in order to limit the threatening power of its unionized employees.Effect of Economic Conditions:One of the economic conditions that Ford faces is interest rate swings. Since the majority of sales are made to consumers on credit, interest rate fluctuations tend to affect individuals’ willingness to spend large amounts of disposable income and are therefore a concern to Ford. In addition, in order to comply with pollution and hazardous waste control standards, Ford will spend $74 million in 2000 and $73 million in 2001. By 2004, Ford expects to have spent $348 million total on these compliances.SWOT Analysis:Being such a well-established company, Ford has come to possess many strengths. Their brand name is recognized and respected worldwide. The immense size of the company gives them economies of scale in all of their production facilities and administration procedures. Additionally, Ford’s three strong subsidiaries make them a well-diversified company. Their ownership interests in numerous other companies complete their diversification status. Ford has product lines whose breadths and depths make it possible to reach all target markets. Their use of in-house suppliers helps reduce inventory costs so they are able to utilize these extra savings elsewhere. Ford’s large size could also be a source of weakness to them. This is because of the possible bureaucracy within the company; “red tape” that may make changes difficult to accomplish. Another implication of their size is that timely reactions to changes in the industry could be hard to come by. A more tangible weakness is that in 1998 sal...
