Ford Motor Company

CHETAN KHANNA

HISTORY
Henry Ford began this corporation on June 16, 1903 with 11 business associates & $28,000 in capital Ford faced with minimal leadership problems Over 20 years, CEOs turned over 13 times Current CEO Allen Mulally was appointed on Sept 2006

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CHALLENGES
On the verge of a financial collapse, reporting a $12.6 billion dollar loss in 2006 and a $2.7 billion dollar loss in 2007 An outsider was hired for saving the company from bleeding

Ford Motors was expected to have just a 14% market share in 2008, but had enjoyed 25 % in the late 1990s
Employees were lethargic , bureaucratic style of functioning

Consumers preferring competition

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FUNCTIONAL STRATEGY
Research & development: develop alternative fuel vehicles & associated technology Fords primary engineering effort attractive safety & convenience features. Safety features- Roll stability control for its car models, Advance Trac, adaptive cruise control.
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BRANDING & MARKETING: Implemented new websites for North America dealerships. Innovation as their strategy. Product design that demonstrates confidence. Push targeted ads & promotions out to customers through its websites.

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CURRENT STRATEGIES
Global powertrain strategy Production of next-generation engine plants Medium-sized production model of about 325,000 units annually This new technology helped in enhancing efficiency and allowing Ford to adapt quickly to changing market needs. Flexible techniques are already being put into operation at other plants Manufacturing equipment and plant-floor layouts will be similar around the world, reducing capital-investment costs. Cross shipping of components between plants is possible, easing launch startups and helping speed products to market.

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PORTERS 5 FORCES
New entrants

High

Bargaining power of suppliers Low

The Industry (competitors)

Bargaining power of customers High

Substitute products or services

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Low

STRENGTHS
Efficient manufacturing chains , assembly lines. It manufactures and distributes vehicle crossways 5 continents. distribution network is one of the biggest networks in the world. It is geographically distributed and most diverse in the auto industry by having 45 distribution centers and 9,500 dealers globally.

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WEAKNESS
Ford recollected 527,000 Escape sport utility automobiles due to engine fires connected to the anti-lock footbrake connectors. Ford Motors is not able to respond well to the competition from European and Japanese manufacturers. Weak financial position after financial and automotive industry crisis also results in low stock prices. forced to mortgage its factories and even its blue oval logo to borrow more than $23 billion in 2006 and 2007. The payment of this debt is also a burden for the company.

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OPPORTUNITIES
Produced fuel-efficient, smaller, and higher-quality models Chinese government condensed automotive taxes in order to encourage declining sales. India , still not a well penetrated market Diversification in other related and unrelated products or shifting to the hybrid electric engines. The purchasing power of consumers is increasing due to end of financial crisis 2007-10.

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THREATS
The financial crisis of 2007-10 caused spending power of customers to reduce Entry of Asian competitors North American consumers shifted to more fuel-efficient and higher-quality product of European and Japanese automakers. Environmental politics : Emission laws are subject to change

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CORE STRATEGY
Powertrain strategy common engine architectures communized manufacturing facilities modern, flexible, numerically controlled machine tools that - easily retooled and reprogrammed to perform new tasks with minimal disruption to production.

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THE ECOBOOST REVOLUTION

EcoBoost technology combines turbocharging and direct gasoline injection and is a key part of Ford's overall strategy to improve fuel efficiency and lower CO2 emissions company wide

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PRODUCT PROLIFERATION STRATEGY

Offers a wide variety of cars for every segment Acquired Aston matron, jaguar for premium segment Light trucks, cars targeting price conscious consumers

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OTHER STRATEGIES
Introduce advice technology the equalizes diesel and gasoline emissions. Work smarter with what it has Get rid of needless complexity Streamline operations rather than differentiating process for different countries
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CORPORATE LEVEL STRATEGY

Horizontal integration - acquired to cater to all premium segments - related diversification Global standardization

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BLUE OCEAN STRATEGY

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CURRENT RATIO
Ford = 0.539 General = 0.872 Toyota = 1.070
It measures the extent to which the claims of short term creditors are covered by assets that can be quickly converted into cash . Companies who do not have a min ratio of 1 can lead to bankruptcy

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MCAP/SALES
Ford = 0.089 Toyota = 1.0419 Honda = 0.724 Daimler Chrysler = 0.314

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RECOMMENDATIONS
Start doing extensive strategy reform on auto industry to frame their decision making process Start focusing on brands in every market segment with carefully defined products Focus on quality, fuel efficiency, safety, and value
Functional line discipline culture should be introduced to make everyone involved Goals and behaviors for the employees should be set so that all employees know where the company is headed

Align the culture with the plan

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Establishing a two way culture with the employees

Thank You !!

CHETAN KHANNA