Internal and external analysis of fords motor. to bettter understand the automobile industry.this includes its SWOT, PESTEL, FINANCIAL analysis. plus trends and future.

1. FORD MOTORS
Submitted By:
Neetika Rao

2. • Ford Motor Company is a multinational
automaker
• Headquarter--Dearborn, Michigan, Detroit
• Founded by Henry Ford and incorporated
on June 16, 1903
• Sell commercial automobiles under Ford
brand &luxury cars under Lincoln brand.
• Ford had developed the basics of an assembly line and
had reduced production from 12 ½ hours to eventually 1
hour and 33 minutes. The sales reached 501,462 in 1915.
By 1920, production exceeded one million a year.

3. Sectorial Brief and Industry Analysis
• The Ford Motor Co. belongs to the Automotive Industry.
• The global automotive industry is a multi-billion industry
with several large brands competing in the market for an
appropriate share.

4. • Global Automotive industry is one of the fastest growing
sectors in the world.
• But according to experts, this industry has reached to its
Maturity Stage now.
Worldwide automobile production
from 2000 to 2017 (in million
vehicles
No. of cars sold
worldwide 2009-19

5. • The slowdown that has come in the automotive industry is
because of the changing consumer demands;
• Skyrocketing fuel prices and growing environmental
concerns have made consumers' to shift their preferences
away from fuel-guzzling pickup trucks to smaller, more fuel-
efficient cars.
• Also with the advent of more technological transformations
like coming up of automation and AI, market is demanding
more innovative products like Autonomous cars.

6. PESTEL Analysis
• Political : Regulations like coming up with stringent wage
laws or regimes like favoring upcoming technologies of
low emission vehicles bear large impact on the industry.
Eg – CPCB’s scrapping of cars older than 15 years.
• Economical : The size of the economy and the economic
conditions globally, have a major impact on the profitability
of the auto industry.
• Socio-Cultural : Social trends also keep changing
continuously affecting the popularity of brands and
models. Changing trends may sometimes make the older
models obsolete or go out of fashion.

7. • Technological : Technology and innovation are important
determinants of market share in the automotive industry
Eg – Advent of automation in the Automotive industry
• Ecological : The laws related to environment friendliness and
carbon emissions are growing harsher around the globe. Thus
all the major players in the automotive industry had to focus
upon low emission vehicles.
• Legal : Law is another important factor that affect the
profitability and performance of the vehicle brands. The
pollution laws also have grown stricter thus the vehicles being
exported overseas have to pass strict emission controls.

8. Five Trends transforming the Automotive
Industry - EASCY
• Going ‘Emission-free’ a global initiative
• Electricity used to charge vehicles will come
from renewable sources to ensure C02-
neutral mobility
Electrified
• Autonomous vehicles, ie, vehicles that
require no human intervention even in
complex traffic situations is now possible
because of AI, machine learning and deep
neutral networks.
Autonomous
• Car-sharing facilities is be readily available
to order wherever the user is via a
convenient ‘on demand’ service.
• It is economical as well as saves fuel.
Shared
• It applies to Car2Car and Car2X
communication – networking of the car with
other cars or with transport infrastructure.
• It also includes networking of car occupants
with the outside world.
Connected
• Model cycles which earlier were 5-8 years
will reduce to annual updation due to ever
increasing technology.
• Due to higher purchase cost, shorter
innovation cycles would require regular
updation of shared vehicles.
Yearly
Updated

9. Porter’s Five Forces of the Automotive
Industry
Threat of New Entry (Weak)
• Large amount of capital required
• It is very hard to achieve economies of scale for small
companies
• Existing automotive companies have established brand image
and reputation
• Products are mainly differentiated by design and engineering
quality
Supplier power (Weak)
• Large number of suppliers
• Materials widely accessible
• Suppliers do not pose any threat of forward integration
Buyer power (Strong)
• There are many buyers
• Low Switching cost for buyers
• Buyers are price sensitive and their decision is often based on
how much does a vehicle cost
• Corporates or governments usually buy large fleets and can
bargain for lower prices

10. Contd..
Threat of Substitutes (Weak)
• Although there are many alternative types of transportation
available
• But substitutes can rarely offer the same convenience
• Alternative types of transportation may cost less and
sometimes are more environment friendly but automobiles
cannot be substituted.
Competitive Rivalry (Very Strong)
• Moderate number of competitors
• Industry is very large but matured
• There is moderate threat of being acquired by a competitor
• Automotive firms are aggressive with each other in terms of
marketing and innovation.

11. Analysis of Ford Motor Corporation
I. Core Competencies
Brand Image : Ford is able to achieve high level of
popularity and strong customer loyalty as it has built a strong
brand image.
Supply chain: Ford Motors has been able to excellent
supply chain management. To ensure continued and timely
availability of raw materials it has formed strong and long
term relationships with its suppliers.
Technological capabilities: Ford spends a large sum on
R&D as a result got strong technological capabilities.
 Global presence: It is a global brand which is operational
across a large number of companies worldwide. It has a
global distribution network and supply chain.

12. II. Financial Analysis
II. Financial Analysis
In 2017, its revenue grew to 145.7 Billion dollars from
141.5 Billion dollars Net Income attribute of the brand was
4.6 billion in 2016 and then rose to 7.6 Billion in 2017. The
fourth quarter of 2017 was especially good when it sprung
to profits.
(Based on Ford Motors Annual Report 2017)

13. III. Value Chain Analysis of Ford Motors
• Primary activities
• 1. Inbound logistics: Throughout the world from USA
and China to Africa, Ford has assembly and
manufacturing plants. The main logistic partner of Ford is
DHL. It has played a major role in its European supply
chain. Ford is in contract with DHL under which DHL
supply chain will manage the movement of prototype
parts from suppliers to Ford’s R&D locations globally.
• 2. Outbound logistics: Ford has been able to optimize
efficiencies and reducing road miles with the help of
balanced mix of transport solutions. The collaboration of
Ford with industry and its logistics pattern helps in
measuring accurately and improving the impact of
transport down its supply chain.

14. • 3. Operations: As of 2017 Ford has 61 manufacturing plants whose
distribution is as follow:
Number of Ford manufacturing plants (2017)
Automative business Units Plants
• North America 31
• South America 8
• Europe 16
• Middle East & Africa 2
• Asia Pacific 4
• Total 61
• (Based on Ford Motors Annual Report 2017)
•
• 4. Marketing and sales: Focus on marketing and sales increases with
the increase in the competition. Ford spends a large amount on its sales
promotion and advertising. In the last 3 years Ford spends around 4
billion on its advertising. Ford also promotes its brand and product
through auto shows and events.

15. • Support Activities
• 1. Technology : In the vehicle industry technology plays an important
role. It is one of the main factors that can help company for its fast
growth and a source of competitive advantage. Ford keeps working
on the improvement of its technological capabilities down its supply
chain and manufacturing and improving its efficiency through
investment in technology and thus been able to implement a world
class IT system.
• 2. HRM : Ford motor company employed approx 199000 employees
in the fiscal year of 2018. Employees in the 21st century for any brand
can be a major source of competitive advantage. It invest a lot in the
development of its Human Capital and on HRM innovations.
• 3. Procurement : Thousands of suppliers around from around the
globe provides raw materials to Ford. Global procurement allows it to
enrich livelihoods, encourage entrepreneurship and contribute to local
economies. Through responsible sourcing it helps the brand secre a
sustainable supply of goods and services.

16. Ford Motor Trends
• 100 % of Ford’s new U.S. vehicles will be built with connectivity by
2019. It has similar plans for China & other markets as 90% of its new
global vehicles will feature connectivity by 2020.
• Ford is targeting to reduce automotive cost growth by 50 % through
2022. For this the company is also targeting reductions in marginal
material cost by increasing use of common parts across its full line of
vehicles, reducing order complexity and building fewer prototypes.
• Reallocation of capital from cars to SUVs and trucks . It is also
reducing its capital expenditure on internal combustion engine and
reallocating that into electrification.

17. Contd…
• Ford’s M&A, partnerships and collaborations :
 Strategic alliance with Mahindra Group to transform its business in
India and with Zoyte in China to develop a new line of low cost all
electric passenger vehicles.
 In the sector of autonomous vehicle development, it recently
announced a relationship with Lyft to work toward
commercialization .
 To research the customer experience of delivery services, it
collaborated with Domino’s Pizza.
• Recent announcement of a dedicated electrification team within Ford
focused exclusively on creating an ecosystem of products & services
for electric vehicles. This is followed by the company’s earlier
commitment to deliver 13 new EVs in the next 5 years.

18. Rationale for selecting organization
• I. New Goals for Flexible and Advanced Manufacturing
• its legacy of innovation by expanding advanced manufacturing
capabilities and introducing latest technologies that could
change the whole outlook to mass production in the future.
• Ford is swiftly expanding its manufacturing capabilities and
increasing global production to achieve surging demands from
the customer. By 2017,
• Ford also projects that 90 % of its plants all over the world will
be running on a 3-shift or crew model by 2017, which will help
improve the production time by more than 30 percent.
• Also virtually all Ford vehicles will be made up off nine core
stands, uplifting manufacture efficiency, while giving customers
the characteristics, fuel efficiency and technology they want in
the world. Today, Ford builds vehicles on 15 platforms with the
freshest setup in the industry.

19. • II. Innovations that has Changed the World
• The new process created by Ford changed production and dropped
the assembly time for a single vehicle from 12 hours to about 90
minutes. By reducing the money, time and manpower required to
make the cars as they refined the assembly line over the years, Ford
brought down the price of Model T from $850 to less than $300.
• For the first time in history, quality vehicles were affordable to the
masses all around. Eventually Ford built the esteemed Model T every
24 seconds and sold more than 15 million worldwide by 1927,
accounting for almost half of all the automobiles then sold.
• The move created loyalty among the Ford workers and is credited
with giving rise to a whole new middle class of consumers
unencumbered by geography, free to travel the open roads and to live
where they please chasing the American dream.
• III. New Technologies Shape the Future
• Ford already is in realizing the benefits of advanced manufacturing
technologies that will shape the future.
• Ford is expanding its capabilities which create production-
representative 3D parts layer by layer for testable prototypes. With 3D
printing Ford can make multiple versions of one part at a time and
deliver prototype parts to the engineers for testing in days rather than
months.

20. • IV. Impact of a Big Idea
• Not only the moving assembly line dramatically increase the pace at
which cars were being produced, it also drove down the price of each
car making them more in access to the masses of the world. Bringing
the product towards worker instead of moving various workers to the
product became the idea that overhauled the manufacturing industry
as a whole. A new standard is created over making it possible to
generate more products and greater income through mass
production.
• V. Greenfield Labs
• Greenfield Labs is a human based design group, created to place the
human needs back at centre of everything we all do. It is a
volunteering social movement with a simple message — that the street
is yours; yours to use in ways.
• One of their major new initiatives is the National Street Service,
inspired by custodial mission of the NPS . At first, it may seem
surprising to learn that the National Street Service was created from
Greenfield Labs, a team of Ford Motor Company. After all, Ford owes
its success to America’s highways, not its streets. But as new
technologies — from autonomous vehicles to smart mobiles — are
disrupting transportation, and as awareness grows of the costly
impacts of neglecting our streets and street life, Ford is transforming
too.

21. • VI. Innovative leadership in SCM
• Bringing Suppliers Along for the Ride: Ford’s supply
chain largely influences its environmental and social
impacts also values. Ford’s long-term environmental
management strategy has expanded from reducing
greenhouse gas (GHG) emissions and developing a
market for reduced, product-related, GHG emissions to
active supply chain engagement. Ford’s 2016 materiality
matrix listed “supply chain management, assessment,
capacity building, and performance” as the second-most
critical topic to its stakeholders and the company.

22. • Focuses on the Highest Impacts and Continued Growth: Ford’s
ecological supply chain engagement strategy focuses on suppliers
with highest impact. Ford requested that 242 suppliers respond to the
CDP Climate Change questionnaire, helping Ford identify supplier
impacts. To determine whether a supplier has a large environmental
footprint. Ford works with suppliers in India, China, and other water-
stressed locations to raise over awareness about water security and
to help incorporate environmental responsibility into suppliers’
business strategies.
• Simplify Supplier Reporting to Engage Suppliers: The automotive
industry has established widely an extensive complex supply chain,
Ford seeks to increase the involvement of indirect supplier
participation by engaging with its indirect suppliers’ leadership and by
communicating the importance of measuring, monitoring, and
reporting environmental data to stakeholders. Ford often faces
challenges with engaging indirect suppliers in meaningful
environmental and social initiatives and in reporting on these efforts.

23. • Provide Support through Dialogue and Shared
Learning: To create an open environment for shared
learning, Ford encourages suppliers to talk openly with
Ford and to identify vulnerabilities so that both parties can
work to mitigate risks. Ford strives to help suppliers
realize mutual value added from the, including competitive
advantages, reduced costs, decreased disruption risks
and sustainable initiatives.
• Recognize Suppliers: Although supplier participation
remains voluntary, Ford strongly encourages and
culturally fosters participation. They also acknowledge the
efforts of suppliers following excellence in environmental
stewardship.

24. Revamping product development and modernizing
factories
Ford is focusing on redesigning its operations with following priorities:
• Decreasing the orderable combinations of many nameplates by focusing
on what customer’s value most.
 Ten fold reduction of orderable combinations in next generation Escape.
 Reduction from 35000 combinations to only 96 in the next generation
Fusion.
• Ford is aiming to reduce new vehicle development time by 20% in the next
years, with new tools & fewer orderable combinations.
• Through the use of virtual assembly lines, company has been able to reduce
new model changeover time by 25%.
• Redesigning the company’s factories of the future.
 Accelerating and scaling 3D printing, robotics, virtual reality tools & big data
will improve logistics and enable a more efficient manufacturing footprint.

25. Future Case Scenario - Transforming
Business Capability
As per the Investors Daily Report (2015) by 2020 electric vehicles would comprise
product portfolio around 40% indicated by the Ford leadership. Which means Ford
may try to shift its strategy towards the potential options such as electric vehicles.
Since the demand for the hybrid and electric cars in the short term i.e. 5-10 years
are expected to rise, Ford should be focusing on the marketing and development of
electric and
hybrid vehicle.
Sharing economy can be another area where Ford should concentrate in the
rapidly
changing dynamic environment.
Considering the long term i.e. 10-20 years, in the auto industry a driverless car
would be the dynamic face and the experience of the customers will change for good.
This means that the Ford should think to work with technology partners and a step is
needed in the investment if technology. This will help Ford to secure a better future of
the company.