A case study in ford

1. Mohamed Aslam Khan (1121200124) Karthick SM (1121200113)
Ibrahim Shamshad (1121200125) Mohammad Fairuz bin ahmad zulaini (1131200001)

2. INTRODUCTION
• The ford Motor company is an American automobile manufacturer whose headquarters are
based in Dearborn Michigan.
• The company was founded in 1903 by Henry Ford and eleven other investors with $28,000
in capital.
• Following disagreement with other investors Henry Ford his wife and his son Edsel Ford
bought the shares of the investors and became the sole owners and decision makers of
Ford Motor company(Brinkley, 2004)
• Up to 2006, Ford’s CEO was always within the same industry.

3. INTRODUCTION
• In September 2006, Alan Mulally of Boeing Corp was selected as the next CEO of Ford Motor
• Not all the board members were pleased with this
• Ford’s former UK subsidiaries Jaguar and Landrover were sold to Tata Motors of India in march 2008.
• Ford holds the series of brand which include ford Lincoln and Mazda.
• Automakers sales had dropped 37% by the end of 2008 compared to 2007 due the global economic
recession.
• The big three automakers used for $ 25 billion bailout money from US government except Ford.

4. VISION & MISSION
Vision
Mission
“To provide sustainable transportation that is affordable in every sense of the
word: socially, environmentally and economically.”
Our mission is to improve continually our products and services to meet our
customers’ needs, allowing us to prosper as a business and to provide a
reasonable return for our stockholders, the owners of our business.

5. PEST ANALYSIS
•The September 11th
terrorist attack
•The Iraqi war
•The United Nations
World Forum for
Harmonization of Vehicle
regulations
•governmental policy
•tax policies on every
government
•Rising petrol prices
•The financial crisis and
global economic recession
•Effective Market Amount
•The growth potential of
foreign target markets
•The size of potential target
markets
•Economic development
•Geographical changes
•Consumer attitude
•Travel habits of
consumers
•Cut on personnel and
jobs
•Supply chain
collaboration
•Ford’s operational
capability
•Technological
improvements in
distribution
•Product development
Politics Economic Social Technological

6. SWOT ANALYSIS
*Strong position in US market
record
*ECOnetics initiatives
*Financial performance
*One Ford approach
*Poor vehicle dependability
*High cost structure
*Unprofitable Europe
operations
*Increasing fuel prices
*New emission standards
*Strategic partnerships
*Decreasing fuel prices
*Intense competition
*Fluctuating exchange rates
S
T
w
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7. COMPETITORS ANALYSIS
Strengths
* Global presence
* Strong brand portfolio
* Strong presence in
China
Weakness
* High cost structure
* Brand dilution
* Car recalls
Strengths
* Huge investments in R
and D
* Motorcycle market share
in Asia
Weakness
* Weak position in Europe
automotive market
* Decreasing sales
Strengths
* Reputation for V-8
Hemi engine
• Domination of minivan
market
Weakness
* Merger combined two
different company
cultures (European and
American)
* Organisational Culture
Strengths
* Wide range of car
variants to offer
* Strong industry position
Weakness
* Weak presence in the
emerging markets
* Immense competition
from world class
competitors
GM HONDA
CHRYSLE
R
TOYOT
A

8. PORTER’S FIVE FORCES ANALYSIS
Bargaining Power of Buyer
Automobile Industry is huge and there are huge numbers of buyers, due to the availability of alternatives and the current
economic downturn. The Bargaining power of buyer has gone up. The customers are looking for more affordable and reliable
automobiles, and they have huge number of alternatives to choose from.
Bargaining Power Supplier
The bargaining power of suppliers is very low for Ford. Ford controls all its suppliers and has made special arrangement and
commitments with its suppliers that favours its operation and helps cut cost for Ford.
Threat of Substitute Products
The threat for substitute is low but it still exists. With the cost of gas increasing and the economy not function very well,
people have cut down their spending in long term investments like automobiles. They have gone to other alternatives like
public transportation.

9. PORTER’S FIVE FORCES ANALYSIS
Threats of New Entrants
The threat of new competition is very high for Ford. With companies like Hyundai and Toyota, which are gaining extensive
market share, we can say that there is major threat for Ford to lose market share to these new companies which are trying
establishing their root in the American Auto Industry. Since both the scale of economy and Scope economy is high for the
Auto Industry, the treat for new competition is imminent for company like Ford.
Intensity of Rivalry
The Intensity for Rivalry is very high for Ford. With other automobiles companies trying to boost their sales and new
companies entering the market, there is intense rivalry. Although there are huge start up cost associated with new
companies, but the companies trying to penetrate the market are already well established in other countries. The switching
cost and exit cost associated with the automobile industry are very high which makes the rivalry even more tough.

10. HENRY FORD STRATEGIES
• In 1917, the construction of rouge plant, envisioned by Ford as all in one
manufacturing complex, where the processing of raw materials, parts and final
automobiles could happen efficiently in a single place.
• Ford vehicle rolling off the assembly line within 48hrs.
• Mass production process could create more jobs, that in turn would crate more
people able to afford low price vehicles produced by Ford.
• Increased of wages in order to make sure that every individual of ford company
can afford a Ford car.

11. EDSEL FORD & BILL FORD
• Edsel believed that in addition to the functionality of the auto, the auto could be
stylish and beautiful.
• He convinced Henry that the Model T should be available in the variety of colors
despite Henry’s famous statement “ You can have any color, as long as it’s
black”
• Bill Ford has led the Ford to 3 straight years of profitability, this period has
followed sharp decrease in profit and 1.44billion lose in the first half 2006.
• This motivated him to remove himself from the CEO position and search for a
new CEO from outside the industry

12. ALAN MULALLY
• Until Mulally, no one ever admitted anything was wrong with Ford’s
Brand
• Restructuring of Ford:
• Slashed Ford’s North American workforce by 40%
• Diverged all none core brands
• Mortgaged every asset the company owned
• Accelerated the research and development
• Developed a base design for all models of Ford
• Trim labor cost

13. CREATING ONE FORD
One the first day of Alan Mulally arrival, he noticed
that there wasn’t one Ford car in the executive
parking lot. He said that “The key issue was clear if
Ford executives wouldn’t drive Ford, who would?”
In response, Mulally developed the One Ford
business transformation plan

14. ALAN MULALLY
FORCING EVERYONE TO “JOIN THE TEAM”
Alan Mulally was surprised prior to his arrival the plan had been “to operate our
eight Ford” (One separate business for each of Ford brands).
Mulally made his weekly executive meetings a safe environment where data could
be shared without blame. Mulally tied each executive’s performance to the success
of the company as a whole. According to Mulally “Data can set you free…You can’t
manage a secret”.

15. ALAN MULALLY
BUILDING CARS AND TRUCKS THAT PEOPLE ACTUALLY
WANTED
Mr. Mulally’s objective for Ford is to have the best in every category: small,
medium, and large.
Be best in:
* Quality and class
* Green
* Safety
* Fuel efficiency
Ford has focused on consumer demands and quality
Mr. Mulally said that “That’s not only good for Ford and our customers and
our stakeholders but that’s good for the United States of America.”

16. BRANDING & MARKETING STRATEGIES
• The company reaches consumers through traditional venues such as newspaper,
radio, television advertising as well as through social media such as Facebook,
LinkedIn, twitter, YouTube etc.
• Ford came out with marketing strategy known as “swap your ride” in 2010 &2011.
consumers were given the opportunities to exchange their competitive-make vehicles
for the new Ford to drive for one week.
• Ford connects with teenage drivers and their parents by offering the driving skills for
life program

17. BUSINESS STRATEGY
Cost leadership Strategy
It struggles to produce products that are standardized, and acceptable to its
customers (Charles, 2012). There are efforts to lower costs as compared to their competitors
in order to achieve the cost leadership of this industry market. The company has put
measures to ensure that they produce efficient products, maintain their production and
overhead cost, and minimizing their cost of sales.
Differentiation strategy
Ford Motor Company appreciates the fact that value to customers is achieved through unique
products, and not low prices. The company is also offering financial services. This is a unique
service that most of the companies in the car manufacturing industry are not providing.

18. BUSINESS STRATEGY
Focused low cost strategy
This occurs when a company sells its products to a specific small segment of the
market (Thomas, 2005). The company has been utilizing this strategy in order to avoid
competing only on prices. Ford Motor Company has divided up its market in order to provide
specific services to a certain segment of the market
Focussed differentiation strategy
The company offers differentiated products to its small segments. For instance, the U.S
government may need armoured vehicles for its military. This is a specific differentiated
service that the Ford through its Marketing Department is lobbying the U.S government so as
to win such tenders. The focused strategy may enable the company to serve the small
segments efficiently than its competitors.

19. CORPORATE LEVEL STRATEGY
Stability strategy
The stability strategy of the company aims at making no changes in some of the company’s current activities (Thomas,
2005). This strategy does not neither seek to expand the company’s market nor invest in capital assets. The company has
been using this strategy in specific market segments, especially in the developing countries where the industry experiences
slow growth.
Retrenchment strategies
Retrenchment strategies involve decreasing the company’s level of activities. When the state of the economy of the country
in which the company is operating is not stable, the company usually opt for this strategy. The strategy focuses on
operational improvement. Owing to its financial deficits, the company discontinued its production of luxury vehicle under
mercury brand in 2008.

20. CORPORATE LEVEL STRATEGY
Growth strategy
Growth strategy of the company on the other hand aims at expanding the company’s activities. The company has been
diversifying at the corporate level while focusing on the business level.
vertical integration Horizontal integration
Ford Motor Company has diversified by
engaging in financial services. The
company has taken up a service that is
being provided by financial institutions.
Through Ford Credit business, the
company has been financing its vehicles,
and giving support to most of its dealers
This is where the company is trying to
expand its products into new markets and
geographical areas. The company has
successfully engaged in horizontal
integration by investing in mergers and
acquisitions

21. CHALLENGES
• New entrants to the US Automakers can eventually come from China and India
among others
• As the population increases roads and highways became more congested.
People will opt other alternative transportation methods such as public transport,
bicycle and walking. This would significantly decrease the consumer demand for
vehicles.

22. Thank you!