Ford Motor CompanyFord Motor Company

By: Jennifer BrownBy: Jennifer Brown

Puneet KankariaPuneet Kankaria

Cody ReynoldsCody Reynolds

Brief IntroductionBrief IntroductionHistory of Ford:History of Ford: The Ford Motor Company started in The Ford Motor Company started in

June 1903 by Henry FordJune 1903 by Henry Ford Under Henry Ford the company Under Henry Ford the company

suffered massive lossessuffered massive losses Henry Ford II transformed Ford’s Henry Ford II transformed Ford’s

leadership style: “tyrannical leadership style: “tyrannical dictatorship to professional dictatorship to professional oligarchy”oligarchy”

Alan Mulally was appointed CEO in Alan Mulally was appointed CEO in September 2006September 2006

OutlineOutline

I.I. External EnvironmentExternal Environment

II.II. Business EnvironmentBusiness Environment

III.III. SWOTSWOT

IV.IV. Looking Toward the FutureLooking Toward the Future

External EnvironmentExternal Environment

Economy is at a Economy is at a standstillstandstill

Shift in Growth Shift in Growth (demand) (demand)

Business EnvironmentBusiness Environment

Alternative Fuels and Higher Fuel Alternative Fuels and Higher Fuel EfficiencyEfficiency• E85 – corn based fuelE85 – corn based fuel• Hydrogen Fuel CellHydrogen Fuel Cell• Hybrid technologyHybrid technology

Outsourcing Outsourcing

Domestic manufacturing companies:Domestic manufacturing companies:• VisteonVisteon• DelphiDelphi

Competitor OutsourcingCompetitor Outsourcing Moving operations to low-cost Moving operations to low-cost

destinationsdestinations

Market SegmentationMarket Segmentation Target smaller customer segmentsTarget smaller customer segments Increase in number of models availableIncrease in number of models available Multiple Branding to cater each market Multiple Branding to cater each market

segment:segment:• VolvoVolvo• LincolnLincoln• MercuryMercury• FordFord

Strengths of FordStrengths of Ford Integration of User-friendly dealer Integration of User-friendly dealer

website with Ford websitewebsite with Ford website Large dealer networkLarge dealer network Brands across all market segmentsBrands across all market segments Push toward R&DPush toward R&D

• AdvanceTrac – vehicle stabilityAdvanceTrac – vehicle stability• Adaptive cruise controlAdaptive cruise control• Intelligent Safety SystemIntelligent Safety System

Economies of ScaleEconomies of Scale

Weakness of FordWeakness of Ford

Weaker Brand ImageWeaker Brand Image• Quality IssuesQuality Issues• Low National Highway Traffic Safety Low National Highway Traffic Safety

Administration RatingsAdministration Ratings Too many layers of ManagementToo many layers of Management Late to focus on alternative fuelsLate to focus on alternative fuels Outsourcing (Visteon)Outsourcing (Visteon) Exposure to Fleet salesExposure to Fleet sales

• Taurus modelTaurus model

Opportunities for FordOpportunities for Ford

Emerging Markets Emerging Markets Brand BuildingBrand Building

• Better Quality VehiclesBetter Quality Vehicles• Better Safety RatingBetter Safety Rating• Convience featuresConvience features

Exploring new alternative Exploring new alternative fuelsfuels

Threats for FordThreats for Ford

Low-cost manufacturersLow-cost manufacturers• Chinese Auto Makers Chinese Auto Makers

(Greely,SAIC)(Greely,SAIC) Public TransportationPublic Transportation

• BusBus• Railway (Metro)Railway (Metro)

Loss of Market ShareLoss of Market Share

Porter’s Five ForcesPorter’s Five Forces

Industry Rivalry

Threat of Substitutes

Threat of New Entrants

Buyer PowerSupplier Power

HIGH:• Chinese Auto Industry

High:• Numerous competitors • Low switching costs

Moderate:• Fleet owners• To many models and

options

High:• Alternative Fuels• Modes of Transportation

Low:• Option for Outsourcing

to low-cost destinations• Forward Integration

Environmental AnalysisEnvironmental Analysis

Reduce Carbon EmissionsReduce Carbon Emissions Clean diesel fuel technologyClean diesel fuel technology

• BLUETEC – reduce nitrogen oxide levelsBLUETEC – reduce nitrogen oxide levels Reuse of car componentsReuse of car components

Competitor AnalysisCompetitor Analysis

Toyota:

•High Quality

•High Safety Ratings (NHTSA) – 5 star ratings

•Streamlined operations with similar models globally

•Hybrid models across all segments

Competitor AnalysisCompetitor Analysis

General Motors (GM):General Motors (GM): Focusing on emerging marketsFocusing on emerging markets Researching Alternative Fuels:Researching Alternative Fuels:

• Chevy Equinox Fuel CellChevy Equinox Fuel Cell• Plans to develop 12 hybrid modelsPlans to develop 12 hybrid models

Implementing the new “Tru-Flex Implementing the new “Tru-Flex system”system”

Recent EventsRecent Events

Spike in fuel prices and loss of Spike in fuel prices and loss of market positionmarket position

Restructuring of the company Restructuring of the company • Selling off unprofitable divisions (Aston Selling off unprofitable divisions (Aston

Martin) Martin) • Selling Jaguar and Land Rover to Tata Selling Jaguar and Land Rover to Tata

MotorsMotors Buyout of employees retire contractsBuyout of employees retire contracts

• 10 plants were closed 10 plants were closed

Strategic FormulationStrategic Formulation

Mulally’s focus is to unite the Mulally’s focus is to unite the company with a “single business plan”company with a “single business plan”

Working smarter with the resources it Working smarter with the resources it has for better satisfactionhas for better satisfaction

Streamline global operationsStreamline global operations

Company UpdateCompany Update Ford is producing less SUVs and trucks due to Ford is producing less SUVs and trucks due to

soaring gas pricessoaring gas priceshttp://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-fhttp://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-adjusts-production-to-lower-28275ord-adjusts-production-to-lower-28275

Ford Focus ECOnetic – one of the new models Ford Focus ECOnetic – one of the new models to be launched for better fuel efficiency to be launched for better fuel efficiency (66mpg)(66mpg)

http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-ford-invitation-to-test-green-28274

New Ford Flex has new twist in interior New Ford Flex has new twist in interior design from Anthony Prozzi (DKNY designer)design from Anthony Prozzi (DKNY designer)

http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-http://www.ford.com/about-ford/news-announcements/press-releases/press-releases-detail/pr-designer-brings-fashion-world-to-28266designer-brings-fashion-world-to-28266

OpinionOpinion

Focus on safety features to have high Focus on safety features to have high NHTSA ratingsNHTSA ratings

Reduce layers of management and Reduce layers of management and have a cohesive business planhave a cohesive business plan

Create innovative ways for fuel Create innovative ways for fuel efficient modelsefficient models

Reduce inventory (Honda Fit)Reduce inventory (Honda Fit)