A unique selling point really affects the appeal of buying a car as the table shows. (Fig. 1) A unique selling point is; A product which no one else has, which helps a product to sell.
To back up these results, which strongly go Fords way, I will be using how many employees each company employ in the UK. How many assets and how much the assets are worth. Assets refer to everything owned by a firm that has a money value. I will also be using ROCE, which uses net profit divided by capital employed times by a hundred to give a percentage. This gives an idea of how successful each business has been on spending its money on equipment and factories. Net profit is the amount of profit earned from producing and selling a product or service once all the input costs have been deducted. Capital employed is the value of all the buildings, machinery and equipment used in producing the goods or services made by the business. I will also be using the profit change in percentage over a period of 2 years to see if any big improvements have been made to the companies. (I.e. a fall in car sales or a reduction in cost of the resources.) Also be using the vehicle sales over 2 years, which will determine how much popular each company has become with the public. Also I will include the share price, which reflects what investors think their prospect for the future. Share Price is the price at which the ordinary shares of a company are brought and sold.
Employees: Ford employ over 200,000 people worldwide with an average annual wage of £30,000, were Vauxhall employ fewer than 150,000 with an average annual wage bill of £35,000, this can total up on the expenditure list and could put a huge pressure for car models to sell. If the Expenditure price exceeds the income price some employees may be made redundant.
Assets: Fords have number assets, which are divided, into sections, Automotive and Financial Services. The Automotive total assets equal $88.319 million (£58.879 million), and the Financial Service assets equal $188,244million (£125.496 million), so Fords Total assets equal $276.543 million (£184.362 million). Where Vauxhalls also have a number of assets, which are also divided, into sections, Fixed and Current assets. Vauxhall total assets equal £689.2 million, which is £504.838 million more than Fords. This shows that if Ford and Vauxhall both start getting in debt, Vauxhall have more chance of getting back on there feet than Ford.
Share Price: Fords share price is 7.22p. Where Vauxhalls is 6.54p. This shows that the public have more faith in Ford to succeed more in the future.
ROCE: ROCE uses net profit divided by capital employed. Fords net profit value is 65.8 million and there capital employed value is 91.3 million. So Fords ROCE is:
£65.8 million x 100
91.3 million = 72.07%
Vauxhalls net profit is £48.9 million and their capital employed is £81.9 million. So
Vauxhalls ROCE is:
£48.9million x 100
£81.9 million = 59.7%
With Ford, with a ROCE of 72.07%, and with Vauxhall with a ROCE of 59.7%, this shows that Ford have been more successful on spending their money on equipment and factories.
Profit change: I will be using Net Profit after Taxes to work out the profit change over two years. Fords profit in 1998 was 65.8 million and their profit in 1997 was 43.85 million, so percentage change equals: 65.8 million x100
43.85 million =150.05% increase.
Vauxhalls profit in 1998 was 48.9 million and their profit in 1997 was 24.2 million, so percentage change equals: 48.9 million x100
24.2 million = 202.06% increase.
These results show that Vauxhall have either sold more cars over the two years (which I will be looking at next), or have found a cheaper ways of using materials.
Vehicle Sales: Fords total vehicle sales for 1997 were 537,366, and for 1998 were 504,141. Vauxhalls total vehicle sales in 1997 were 475,035, and for 1998 were 444,099. Both results show a drop in cars sold which tells you that more people are buying cars from different companies, resulting in competition with different companies.
Conclusion