ASSIGNMENT ON CASE STUDY FORD MOTOR COMPANY

SUBMITTED TO: PROF.RAMZAN ALI

SUBMITTED BY:

ZEESHAN FREED MUZAFFAR MAHMOOD ASMAT NASIR NADEEM RASHID ALI

283 285 294 299

HAILEY COLLEGE OF COMMERCE UNIVERSITY OF THE PUNJAB LAHORE

History:

Ford Motor Company is an American automaker and the world's fourth largest automakerbased on worldwide vehicle sales. Based in Dearborn, Michigan, a suburb of Detroit, the automaker was founded by Henry Ford, and incorporated on June 16, 1903. Henry Ford was 40 years old when he founded the Ford Motor Company, which would go on to become one of the largest and most profitable companies in the world, as well as being one of the few to survive the Great Depression. The largest family-controlled company in the world, the Ford Motor Company has been in continuous family control for over 100 years. Ford now encompasses several brands, including Lincoln and Mercury etc.

Mission statement:
"We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world." Vision statement :
To become the world's leading consumer company for automotive products and services.

Ford Space Matrix

SPACE MATRIX |

Financial Strength | Ratings | Return on investments is high, increasing to 5.86%. Liquidity Ratio (Cash) increased to 0.98 Inventory Turnover is high, increasing to 13.2. | 1.0 | Working Capital improved to $23.55. Target EPS for 2011 of 1.89 was achieved. Ford reported a 6.8 percent sales increase in December 2010 total scores Industry Strength |

| 2.0 | | 3.0 | | 3.0 | | 2.0 | | 4.0 | | 15.0 |

The growth potential is very high most especially for the existence of small cars like Focus. | 5.0 | Profit potential is high due to the needs of cars. | 2.0 | Financial stability is low. Due to the increasing prices of fuel in the world market and increasing prices of materials needed. | 3.0 | Technology is rapidly developing. New cars and styles were selling out to the market. Ford for being an innovative one in making their cars eco-friendly makes them outsold other companies like G.M in February 2010 | 2.0 | Resource utilization is low due to the increased price

of materials that are needed for production. Some companies like Ford shift for being eco-friendly to save and utilize the limited resources. | 4.0 | New comers in automotive industry have difficulties to compete to the large and known logo in the said industry. Since Ford is the pioneer to the industry. | 3.0 | total scores 19.0 |

Environmental Stability | | Relatively low flexibility in adapting to new technology | -5.0 | Interest rates have increased | -2.0 | Demand declined due to economic conditions | -3.0 | Price difference between products is not that far | -3.0 | Capital intensive and high capitalization industry disabling entrants | -4.0 | Close competition between company rivals | -5.0 | Risk is minimized due to diversification | -3.0 | total scores Competitive Advantage | | Ford is increasingly winning new customers from competing brands | -5.0 | Ford quality jumps 11 percent, soaring above the industrys 2 percent improvement. | -4.0 | Forward and backward integration Total scores Conclusion: FS Average: CA Average: 15/3=5 -11/3=-3.67 (-2) (-11)

( -25.0 )

ES average: IS average:

-25/7=-3.57 19/6=3.2

Directional vector coordinates: X- axix. 3.2+(-3.67)= -.05 Y- axix. 5+(-3.57)= 2.57 Ford company will pursue AGGRESSIVE STRATEGY.

Ford Motor Company SWOT Matrix:

Strengths

High R&D Innovation Loyal customers Market share leadership Strong management team Strong brand equity Strong financial position Reputation management

Weaknesses

Association with low mpg vehicles High labor costs Toyota is better

Opportunities
Emerging markets and expansion abroad Innovation Structural slimdown and refocus on core Domestic competitor bankruptcies

Threats
Competition Economic slowdown Exchange rate fluctuations Lower cost competitors or imports

Strength opportunities strategy:

Add new R & D departments to emerge the competitive markets Update the product innovation in accordance with competitors product Focus on the CSR to gain the competitive advantages

Weakess opportunities strategy:

Labour cost is reduced by less hierarchical level Focus on better innovatio0n to improve the quality of its product

Strength threats strategy:

Globally and strong placed trade name is used to avoid the global economic recession as consumer demand The subsidiary, Ford Motor Credit Company, offers auto financing to both dealers and customers globally to avoid the unavailability of credits from banks Good R&D department was made to determine the Increasing gasoline prices

Weakness threats strategy:

Instyall new plants to improve the technology and innovation as with the Toyota Merge with the Toyota company

BCG MATRIX:

Fig. 9-1: The BCG Growth-Share Matrix

Cash Generation (market share)
High Low

Cash Use (growth rate)

High

Low

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.

Cash cows are units with high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business. They are to be "milked"
continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.

Dogs, or more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share

Question marks (also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption. A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines. Stars are units with a high market share in a fast-growing industry. The hope is that stars become the next cash cows. Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader. stars whose high share and high growth assure the future;

FORD MOTOR COMPAY will pursue the CASH COWS strategy because the Ford motor is having a large amount of RMSP but there is a lesser amount of Industry growth, so the company generate cash in excess of the amount of cash needed to maintain the business. They are to be "milked"
continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.

The grand strategy matrix:

FORD MOTOR COMPANY will pursue the QUADRANT 2 because this firm is needed present approach to the market place seriously. Although, this industry is growing, yet this is unable to compete effectively, and they need to determine why the firms current approach is ineffective and how the company can best change to improve its effectiveness.. Because, Ford motor is pursuing quadrant 2 and in a rapid growth industry, an intensive strategy is opposed.

Internal-External Matrix (IE)

Grow & Build Market Penetration Market Development Product Development Backward Integration Forward Integration Horizontal Integration Hold & Maintain Market Penetration Product Development Harvest or Divest Retrenchment Divestiture Liquidation FORD MOTOR COMPANY WILL PURSUE HOLD AND MAINTAIN STRATEGY because the firm is holding a large amount of Relative market shares but lesser industry growth as the competitors are increasing along with the better technological innovation than the FORD MOTOR so, the the firm should pursue hold and maintain strategy.