Essay On Chevys Use

Ford Motor Company (NYSE: F) and Chevrolet, which is owned by General Motors Company (NYSE: GM), are the two largest automobile brands in the United States. Both Ford and GM are leaders and fierce competitors in the global automobile industry with portfolios of brands and models that compete in various market segments in the U.S. and abroad. Ford’s largest brand is simply its namesake, Ford, while GM’s largest brand is Chevrolet.

The two large car makers may appear to the casual consumer or observer to have very similar business models. However, potential investors who dive deeper into the details of each company will find some key differences as well as many similarities between the two companies. The following are some significant comparisons between Ford and General Motors’ business models, which are critical to potential investors.

Market Share Comparison – US

General Motors remains the largest market share holder in the U.S, with 17.4% of the industry’s sales as of November 2015. Second in the U.S. is Toyota, at 14.4%, followed closely by Ford at 14.2%.

Market Share Comparison – Global

In terms of worldwide market share, neither Ford nor General Motors leads the way. As of the end of 2014, Toyota held the largest global market share at 10.23%, followed by Volkswagen Group at 10.14%. GM was third globally at 9.92%, while Ford came in sixth at 6.32% behind Renault-Nissan and Hyundai-Kia.

The global market is highly competitive and diversified. As emerging economies with large populations such as India, China and Brazil continue to develop, establishing significant presence globally in these areas is critical for the future growth of both Ford and General Motors.

Company Size and Recent Performance

General Motors is an overall larger company than Ford. GM’s total revenue in 2014 was $156 billion compared to Ford’s $144 billion. Both companies have achieved significant revenue growth since the economic crisis of 2008 and 2009, but neither has returned to its previous total sales volume. Each company experienced serious financial difficulties in the past 10 years.

Ford’s product line fell behind its competition in the early 2000s and it began losing market share. It reported substantial net operating losses in 2006, 2007 and 2008. During this period of time, under the leadership of CEO Alan Mulally, Ford began initiatives to consolidate operations and create more appealing car models. These plans to become more efficient and innovative were already in process when the economic recession hit in 2008. Although the decrease in demand for cars during the recession harmed Ford, it was able to refuse a government bailout offer, avoid bankruptcy and emerge from the economic recession a stronger company.

General Motors became insolvent in 2008 and required government bailout assistance and a Chapter 11 bankruptcy reorganization in 2009 to keep the company operational. The company has since fully repaid its bailout loan and returned positive net income to shareholders each of the past five years. GM is making strategic investments to produce more innovative, efficient and technologically savvy vehicles, which it believes drive future growth. It is also investing significantly in emerging markets such as China.

Brand Strategy

One of the main differences between these two competitors is the volume of brands owned and marketed by each company. Ford’s “One Ford” plan, which was implemented difficult years for the company leading up to the economic crisis of 2008, has led it to reduce the total number of brands it owns and operates worldwide. Ford’s only significant brands on the global market are Ford and Lincoln. Recent divestitures or discontinuations of brands include the following:

* Aston Martin, sold in 2007

* Jaguar, sold in 2008

* Land Rover, sold in 2008

* Volvo, sold in 2010

* Mazda, controlling interest sold in 2010 (minority interest remains)

* Mercury, discontinued in 2011

Ford’s belief is that by reducing the number of brands and consolidating the number of vehicle platforms upon which various models are built, it can become more efficient and more innovative. In 2007, Ford had 27 different vehicle platforms across the world; in 2015, it has 12 with a goal to consolidate down to eight by 2019.

General Motors owns and operates a plethora of automobile brands across the globe. These brands include Chevrolet, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jiefang, Opel, Vauxhall and Wuling. GM also has equity stakes in various Chinese joint ventures. While this may seem like a huge brand lineup, GM, similarly to Ford, has divested or discontinued several brands, including the following:

* Oldsmobile, discontinued in 2004

* Pontiac, discontinued in 2010

* Daewoo, discontinued in 2011

* Saturn, discontinued in 2010

* Hummer, discontinued in 2010

* Saab, sold in 2010

General Motor’s belief is that its different brands are essential to serve different market segments. It has created or purchased brands to compete in certain international markets rather than attempting to market its existing brands in those new markets. Many of its discontinued brands were shut down due to poor performance rather than strategic planning.

Vehicle Financing

Revenue and profit generation through vehicle financing and leasing arrangements is critical to both Ford and General Motors’ business models. Ford operates Ford Credit and General Motors wholly owns the General Motors Financial Company. Both financing arms serve to provide purchase and leasing financing to each company's respective customers. In 2014, Ford Credit generated pretax profits attributable to Ford of $1.9 billion; General Motors Financial Company generated pretax profits for General Motors of $0.8 billion.

Fuel Efficiency and New Technologies

Both Ford and General Motors recognize the importance of improving fuel efficiency and utilizing technology to keep their product lines in favor with customers. Many countries, including the U.S., have strict laws requiring improvements in the fuel efficiency and environmental pollution created by vehicles. Both companies have significantly reduced the fuel consumptions of their overall fleets of product offerings.

General Motors embraced the hybrid electric vehicle trend and produced the Chevrolet Volt, which won awards for outstanding efficiency and innovation. Ford has also produced hybrid models of several of its vehicles, such as the Escape and Focus. Both companies have also found additional efficiencies in their gas-powered cars through the use of different engine technologies, lighter materials and reduced overall sizes of the cars produced.

Ford and Chevrolet (Chevy) are in the automotive industry and have been in completion for many years start back in 1908, both companies started in the state of Michigan and have been battling it out for profits, market share and hometown bragging rights. Ford was founded in the suburb of Dearborn, Michigan and Chevy was founded in Flint, Michigan. Ford and Chevy both are good-producing sectors, they both manufacture automobiles that are similar but different. They each have a mission statement, Ford’s mission statement “One Team, One Plan, One Goal.” Ford’s mission statement is defined to each part of the statement, One Team meaning people working together as a lean, global enterprise. One Plan meaning aggressively restructure to operate profitably at the current demand and changing model mix, developing new products our customers want and value, finance our plan and improve our balance sheet, and work together as one team.

One Goal meaning an exciting viable Ford delivering profitable growth for all. Chevy’s mission statement is an unofficial statement “We win when the customer says we win.” Chevy has an unofficial mission statement but uses more of Five Principles to guide its business, Safety and Quality First, create long-life customers, innovate, deliver long-term investment value and make a positive difference. Both Ford and Chevy are oligopoly competition, being that both companies supplies a large portion of the automotive industry. Being in the oligopolistic market these two companies compete with each other on styles of cars and trucks based on factors like price, mileage, and safety factors. Consumers research these factors to find the best fit for them. In the automotive industry, brand loyalty means more than with most retail products. As long as I can remember it’s a “Ford vs Chevy” world, you’re on one side or the other and most often stay true to the brand.

Ford has dominated in brand loyalty, bring back more consumers for their F-series trucks. Ford F-150 and Chevy Silverado have about the same marketing strategy, they both are trying to appeal to the working class man that needs a durable truck. They both offer sales promotions when purchasing their truck. They offer incentives of rebates, 0% financing, and cash back. Ford and Chevy do a lot of advertising for all their vehicles, these advertise on television, internet, newspaper, and magazines. When it comes to the truck series they focus on how tough their trucks are for construction workers, hauling heavy items and pulling large trailers. Ford’s F-150 slogan is “Built Ford Tough” and Chevy Silverado slogan is “Like a Rock,” giving you the impression that they have the best truck for your needs.

The Ford trademark has changed over the years, the current logo was updated in 2003 for the 100th anniversary. The trademark for Chevy have been the same since it as introduced in 1913. Each logo is easy to spot wherever you travel. Both Ford and Chevrolet/GM have a Board of Directors that are dedicated to serving the interests of the shareholders. Board of directors are elected by the shareholders. Ford stock closed at 15.78 on April 25, 2014 which is a 3.30% decrease. Chevy stock closed at 33.72, which also was a decrease of .45%. These stocks have ups and downs, when to two companies were in financial trouble, Chevy stocks were potentially worthless, Fords stock dropped by about .50 but still held some value. In 2013 SWOT analysis Ford and Chevy both had some strengths and weaknesses. They both have different strengths but common weaknesses.

Ford StrengthsFord Weaknesses
Strong position in US marketPoor environmental record
ECOnetic initiativeHigh cost structure
Sound financial performanceUnprofitable Europe operations
“One Ford” approach
Significant growth in China

Chevy Strengths Chevy Weaknesses
Global presenceHigh cost structure
New vision and strategyBrand dilution
Strong brand portfolioBureaucratic culture
Knowledge of home marketCar recalls
4 well performing brands

Socio-cultural Factors

Ford

Ford in recent months has increased their advertising to help consumers understand that Ford is an innovative and exciting company with new and pertinent vehicles that are sleek in design and capability. Ford has
increased their advertising to new drivers or parents of new drivers explaining why their new models are some of the best cars available for new drivers to use.

Chevy

Today’s society judges people on the type of car you drive. Society does not like to admit to this but it is very true. Manufactures know this happens and targets their markets by these thoughts. Anyone who drives a nice vehicle is thought to be wealthy. No one wants to be seen driving an unattractive piece of junk because of what other people will think of him or her. Consumers also just feel better when they are driving a nice or new car, if makes them feel better about themselves.

Technological

Ford

Ford’s major move in recent years is that of the technology that is in their cars. With Ford’s venture with Microsoft to introduce a “smart car” that has an understanding of what types of music the driver prefers to read text messages aloud and voice commands; Ford has definitely taken the lead in terms of technology inside the car.

Chevy

The internet has affected just about every industry in the world and has also had a huge impact on the automobile industry. The buyers referred to the internet before making their purchases and went to the auto websites before going and taking a test drive. Business-to-business marketplaces have given the industry many opportunities because of the internet, such as more efficiency and lower cost.

Economic
Ford

Ford Motor Company has suffered just as the rest of the auto industry in the past years. Their ability to maintain a level of business that enabled them to stay afloat when others were taking handouts was an example of their ability to adapt to changing economic circumstances. Not only was the auto industry hammered during the recession of 2008, Ford Motor Company’s ability to stay above water with their financing capabilities was impressive as well.

Chevy

The automobile industry has a huge impact on every country’s economy. This industry is the major user of computer chips, textiles, aluminum, copper, steel, iron, lead, plastics, vinyl, and rubber. The study also showed that for every autoworker there are seven other jobs created in other industries. These industries include anything from the aluminums to lead to vinyl.

Political

Ford

Ford has taken a stand and not taken government handouts that most car companies did, they reconstructed the company by closing plants and selling other automotive companies they owned.

Chevy

Chevy is committed to being a responsible corporate citizen, to ensuring compliance with the letter and spirit of the law, and to promoting disclosure and accountability regarding political contributions and expenditures.

Legal/regulatory
Ford

Ford has taken care of all the necessary precautions to make sure that their vehicles pass the inspections of the Federal Government of the United States. With all of the safety regulations, financial regulations, and any other regulations, Ford continues to maintain compliance with the ever-changing regulatory agencies that are continually being made.

Chevy

Laws and government regulations have affected this industry since the 1960s. Almost all of the regulations come from consumers increasing concerns for the environment and the concern for safer automobiles.

Competition

Ford and Chevy are in competition with each other in the automotive industry. They both make similar cars and trucks. They continue to compete in every way possible to get the consumer believe their vehicle is better than the other. As I stated earlier, in most cases you are a “Ford guy” or a “Chevy guy.” I myself, was a “Chevy girl” until I continued to have bad luck with their vehicles, now I’m a “Ford girl.”

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