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Case Study
American multinational corporation based in Dearborn, Michigan, a suburb of Detroit.

Distributes automobiles across six continents.

About 213,000 employees and about 90 plants


Wide variety of product line

The Dream Becomes a Business
Ford Motor Company entered the business world on June 16,
1903, when Henry Ford and 11 business associates signed the
company's articles of incorporation.

With $28,000 in cash, the pioneering industrialists gave birth to

what was to become one of the world's largest corporations.

Ford Motor Company's beginnings were modest. The earliest

record of a shipment is July 20, 1903, approximately one month
after incorporation, to a Detroit physician. With the company's
first sale came hope young Ford Motor Company had taken its
first steps.
Ford Motor Company offers a wealth of
variety to the automotive consumer. As
they start their second century of
business, they are in a position to
appeal to the widest range of potential
customers. Each of their automotive
brands has a unique personality and
holds a distinct place in the Ford Motor
Company family.
Our Vision to become the world's
leading Consumer Company for
automotive products and services.

c a s e s t u d y a n a ly s is 11 1/ 14 / 10
We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We anticipate consumer need
and deliver outstanding products and services that improve people's lives. Our business is driven by our consumer focus, creativity, resourcefulness, and
entrepreneurial spirit. We are an inspired, diverse team. We respect and value everyone's contribution. The health and safety of our people are paramount. We
are a leader in environmental responsibility. Our integrity is never compromised and we make a positive contribution to society. We constantly strive to improve
in everything we do. Guided by these values, we provide superior returns to our shareholders.

Automobile Industry
• Market Structure: Perfect Competition

• Largest auto market: U.S.

• 16 million vehicle in year, 22 firms

• Big Five: GM, Ford, Toyota, Chrysler and Honda

What is The Ford’s Competitors
Maximum Profit
Market share growth
Technological leadership
Service leadership
U.S. Market Share - 2008
Other 15%
17 Co. 25%

11% 22%


8 Brands (Ford, Lincoln, Mercury, Mazda, Volvo, Jaguar, Land
Rover, Aston Martin)

13 Brands (Buick, Cadillac, Chevrolet, GM Daewoo, GMC,

Holden, Hummer, Pontiac, Opel, Saab, Saturn, Vauxhall, and

5 Brands (Toyota, Lexus, scion, Daihatsu, Hino)

4 Brands (Chrysler, Dodge, Jeep, Mopar)

2 Brand (Honda, Acura)

Leave Blank Strengths S Weaknesses
1. Customer Loyalty 1. In efficient
2. Diversities marketing in US
3. Total sales have 2. Closing 14 MF in
remain strong, over North America
$150 billion 3. Weak org structure
4. European Market (only white in top
share mgt)
5. Operate in 6 4. Limited warranty of
continents 30000 miles
6. Hybrid Mariner (competitors
2007 100000)
5. Reported year end
7. Targeting all
2009 (Loss of $14
income classes
8. Supportive to Us
Govt. 6. Operating with
$154 billion
9. Ranked 7 in fortune debt(2009) GM $42
500 billion
7. Cut 30,000 jobs
8. Poor operation
Opportunities O SO WO

1. Ford is American 1. Continue R&D for 1. Focus on social

Company, results in Cx hybrid automobile, marketing that will
trustworthiness pure battery electric cause more support
2. Progressive in motors from the Govt.
2. Open new 2. Restructure to
3. Forces Cx to return to
dealer for services production facility in reduce cost of labor
eastern Europe and and raw material
4. European division
Expected to become china
more profitable
5. Sluggish global
economy (lower prices
of fuel)
6. Cx desires for hybrid
and fuel efficient
7. By 2011 electronics are
expected to account for
40% of an average
vehicle value
8. China as vibrant market
Threats T ST WT

1. $ devalues against 1. Focus 1. E.E.O, should

many major development on encourage black
currencies cutting edge. Fuel people and
2. GM and Toyota efficient
offers great position them in
discounts than ford top management
2. They should focus
Most Americans
on more customer 2. Should offer at
prefer foreign brands least 100,000
oriented approach
4. United Auto Workers miles warranty
(Powerful union) rather than other
on all new
5. Competing in US
automobile market vehicles (0
6. New Toyota meter)
plants all over
7. High Inventory cost
8. Global recession
Problems associated
 Transmission failure
 Cracked rare panel
 Key wont turn in the ignition
 Manufacturing faults (rare cases)
 Ford Focus problems
 Incurred huge costs from its planned series of job cuts and
plant closures.
 Ford is cutting 30,000 jobs and closing 14 plants by 2012 to
reduce its costs.
 High Fuel Consumption vehicle brands
 Decrease in sales from the past few months

Return on Asset (ROA) 1 Rate of Inflation -4

Leverage 1 Technological Changes -3

Net Income 2 Price Elasticity of Demand -3

Net Asset 2 Competitive Pressure -6

Return on Equity 1 Barrier to entry into the Market -2

Financial Strengths (FS) 1.4 Environmental Stability (ES) -3.6


Market Share -3 Growth Potential 5

Product Quality -2 Financial Stability 3

Customer Loyalty -2 Ease of entry into the market 6

Technological know-how -1 Resources Utilization 3

Control over supplier & Distributors -2 Profit Potential 4

Competitive Advantage (CA) -2 Industry Strength (IS) 4.2

X-axis: -2 + 4.2 = 2.2

Y-axis: 1.4+ -3.6 =- 2.2

Financial Strength rating is 1 (worst) to 6 (best)     Rating
1 Operating revenue 5.0
2 Operating income 5.0
3 Net income 5.0
4 Debt-asset ratio 4.0
5 Cash flows 5.0
ES average -3.57
Industry Strength rating is 1 (worst) to 6 (best)     24.0
CA average -1.67
1 Growth Potential 5.0
IS average 4.00
2 International expansion 5.0
FS average 4.80
3 Wages 3.0
4 Insurances and benefits 3.0 X Coordinate 2.33
Environmental Stability rating is -1 (best) to -6 (worst)     16.0 Y Coordinate 1.23
1 Competitive Pressure -5.0
2 Increase in Fuel Prices -5.0
3 Rate of Inflation -3.0
Strategy ->>>>
4 Exchange rates -3.0 Aggressive
5 Antitrust -3.0
6 Increased regulation of working hours for truck drivers -3.0
7 Increase in the number of toll road and rates on existing ones -3.0
8 Technological advance -2.0
Competitive advantage rating is -1 (best) to -6 (worst)     -27.0
1 Large scale of operation -2.0
2 #3 ground transport provider -2.0
3 #1 single LTL (less-than-truckload) provider -1.0
4 Ranked #1 “America’s Most Admired Companies” by Fortune for -1.0
3 consecutive years in early 2000s
5 Joint venture with China’s conglomerate (Jin Jiang) -2.0
6 Cost and purchasing synergies by merger -2.0
Genuine parts
Ford motor credit & financing and
Vehicle Brands

Ford company is continuously facing loss
 Ford has high debt ratios.
 Low return on investment.

Customers loyalty with ford
 Strong customer service
 Comparatively low market share.

Focusing on product approach rather than customer approach

Efficient supply chain management

Ineffective employment policy


Focusing on new technology

Innovate their products

Strong in learning hybrid products

Blue ocean strategy

Ford’s electrifications strategy

• Pure battery electric vehicles

• Affordability

• Fuel economy solution

Planning to invest in new, smaller, fuel

efficient vehicles
Reducing salary personnel and achieving additional efficiency

Reducing inventory cost

Long-term restructuring action

Developing incremental source funding, including sale of non core assets

Increase warranty cost

Developed Strategies
1. Continue R&D for hybrid automobile, pure battery electric motors
2. Open new production facility in eastern Europe and china
3. Focus on social marketing that will cause more support from the Govt.
4. Restructure to reduce cost of labor and raw material
5. Focus development on cutting edge. Fuel efficient automobiles
6. They should focus on more customer oriented approach rather than
7. E.E.O, should encourage black people and position them in top
8. Should offer at least 100,000 miles warranty on all new vehicles (0
Alternative Strategies
X => R&D for Hybrid Cars

Y => Reduce cost of labor and raw material

and increase cost of warranties

Z => Open production facilities in Eastern

Europe, china and Asia
Key Factors X Y Z