Strategy Management of Ford Motor Company.

Presented by:
Institute of Information Technology,
University of Dhaka
MIT 11th Batch
Hafsa Akter Sonia (141116)
Zahra Rezwana (141120)
Faria Hasan (141115)
Protitee Yasmine (141150)
2

Outline
 History
 Vision, Mission ,Values & objectives
 SWOT Analysis
 Internal Analysis
3

History of ford
 Henry Ford invented Ford in 1903
 The company started making the
Model – T in 1908
 Started in Dearborn, Michigan
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4

Ford Motor Company – at a glance
The Ford Motor Company is an American multinational automaker
headquartered in Dearborn, Michigan, a suburb of Detroit. It was
founded by Henry Ford and incorporated on June 16, 1903.
Type Public company
Headquarter Dearborn, Michigan, U.S.
Area served Worldwide
Products Automobiles
Luxury Vehicles
Commercial Vehicles
Automotive parts
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5

Car Evolution
Old model vehicles
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7

Organizational Structure
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 Very Complex structure fairly mechanistic in nature
 Rigid departmentalization
 Low span of control
 High Centralization
CHAIRMAN
CEO
Executive
V.P and
CFO
Executive
V.P and CTO
Executive
V.P. of
America
Executive
V.P. of
Europe
Group Vice
Presidents and
president of
Asia Pacific

William Clay Ford, Jr., great grandson of Henry Ford, serves
as the executive chairman at the board of Ford Motor
Company.
Key Person
1111

Vision, Mission,
Values
& objectives
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12

Mission
Ford Motor Company describes itself as a company
that is “passionately committed to providing personal
mobility for people around the world….We anticipate
consumer need and deliver outstanding produces and
services that improve people’s lives.”
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Values
 People
 Products
 Profit
 Organizational culture
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Objectives
 stabilizing the climate by considering
reducing long-term emission.
 development of infrastructure that expand
the use of bio-fuels and reduce
dependence on oil
 cut the usage of global energy by 27%
and the usage of water by 25%
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SWOT Analysis
Strengths Weaknesses
1. US market position
2. Financial performance
3. ECOnetic approach
4. ONE Ford approach
5. Growth in china
1. High cost structure
2. Unprofitable Europe operation
3. Low exposure to Asia Pacific
Opportunities Threats
1. Green vehicles
2. Increasing fuel prices
3. New emission standards
4. Strategic partnership
1. Decreasing fuel prices
2. Rising raw material prices
3. Instances competitions
4. Fluctuating exchange rates
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Internal Analysis
 Strengths
 Weaknesses
 IFE matrix
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Strengths
 Producing Hybrid vehicles
 Brand recognition
 Profitable financial services division (Ford
Motor Credit)
 Manufacturing facilities in more than 30
countries
 Wide Range of Products targeting all
customer classes
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Weaknesses
 Weakening North American
automotive operations
 Sales in trucks decreasing rapidly
 Firing of Employees
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Outline
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 External Analysis
 Opportunities &
Threats
 Industry Analysis:
o Porter’s Five Forces Model
o EFE Matrix
o CPM
 Environmental Analysis
 Competitive Analysis
 Competitive Advantage
 Product Life Cycle

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Opportunities for Ford
 Global expansion.
 Brand Building
o Better Quality Vehicles
o Better Safety Rating
o Convenience features
 Consumers demand hybrid and
fuel efficient vehicles.
 Increase in consumer spending
trends.
 Consumers demand more
innovative vehicles.
 Industry experiences slow and
steady growth.
 Exploring new alternative fuels.

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Threats for Ford
 Low-cost manufacturers
o Chinese Auto Makers (Greely,
SAIC)
 Public Transportation
o Bus
o Railway (Metro)
 Weak USD
 Increase in steel and resin prices.
 Increase gasoline prices.
 Stricter CO2 emission standards.
 Increasing mortgage rates.
 Loss of market share.

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Porter’s Five Forces
Model
Threat of Substitutes
Threat of New Entrants
Bargaining Power of
Buyers
Bargaining Power of
Suppliers
High:
• Chinese Auto Industry
High:
• To many models and
options
High:
• Alternative Fuels
• Modes of Transportation
• Customer Loyalty
Low:
• Option for Outsourcing
to low-cost destinations
• Forward Integration
Industry Rivalry
High:
• Numerous competitors
• Low switching costs

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Industry Analysis: EFE
Matrix

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Industry Analysis: CPM
Ford GM
DiamlerChrysler
AG Toyota
Critical Success factors
Weight
s
Rati
ng
Weighted
Score
Rati
ng
Weighted
Score
Rati
ng
Weighted
Score
Ratin
g
Weighted
Score
0.0 to
1.0 1 to 4 1 to 4 1 to 4 1 to 4
Global Expansion 0.14 2 0.28 3 0.42 2 0.28 3 0.42
Financial Position 0.10 2 0.2 4 0.4 3 0.3 3 0.3
Growth 0.16 1 0.16 3 0.48 1 0.16 4 0.64
US Market Share 0.20 3 0.6 4 0.8 2 0.4 2 0.4
Customer Loyalty 0.15 4 0.6 3 0.45 4 0.6 3 0.45
Hybrid/Fuel Efficient Vehicles 0.18 3 0.54 3 0.54 2 0.36 2 0.36
Management Experience 0.07 3 0.21 4 0.28 3 0.21 3 0.21
Totals 1 2.59 3.37 2.31 2.78

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Environmental Analysis
• Reduce CO2 Emissions
• Clean diesel fuel technology
– BLUETEC – reduce nitrogen oxide levels
• Reuse of car components

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 Toyota, Honda, and Nissan have grown in market
share largely as a result of their ability to deliver
better products at lower prices, particularly for
more fuel efficient smaller vehicles.
 Toyota has
 High Quality, High Safety Ratings (NHTSA)-5 star
ratings
 Streamlined operations with similar models globally
 Hybrid models across all segments
 Ford has been more successful than both GM and
Chrysler in reducing legacy costs.
Competitive Analysis

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 General Motors (GM):
 Focusing on emerging markets
 Researching Alternative Fuels:
 Chevy Equinox Fuel Cell
 Plans to develop 12 hybrid models
 Implementing the new “Tru-Flex system”
Competitive Analysis (cont.)

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Competitive Advantage
 Cost Advantages:
 low production cost
 cut down of huge expenditure on raw materials
 the online manufacturing process
 Differentiate Advantages
 production of smart cars with fuel efficiency
 centralized decision making system.
 increased market share.
 Ford SYNC - fully integrated communication and
entertainment system

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Product Life Cycle
CARS
TRUCKS
COMER-TRUCKS
SUVs
E-
CARS
PINTO

Outline Outline
 Value Chain Analysis
 Strategy implementation
 Organizational Culture
 Products, Sales and Revenue
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Value Chain Analysis
General Administration –It should use high level of information
system to make strategic and routine decisions.
HR Management – Strong management with continuous evaluation process.
Healthy relation with labor union.
Technology and Systems – use the high-tech information technology to
integrate suppliers.
Procurement – Minimize dependence on a single supplier. Leveraged strong buyer
power into timely, low-cost, and high quality of raw materials. Strong long lasting
relationships with suppliers and efficient inventory management.
Inbound
Logistics
•Efficient
inbound
warehousing
system
•Quality
inspection at
supplier level
Operations
High level of
automation.
Outbound
Logistics
•Reduce
delivery time
•Increase
efficiency of
finished
product
warehousing
Marketing
and Sales
•Develop
Quality
•Increase
brand loyalty
•Increase
demand
creation
Service
High level of
service to
after sales
customers
Primary Activities35

Strategy implementation
 ‘One ford’ strategy
 Friendly competition
 ‘Less is more’ new approach
 Reduction of complexity
 Creating a new corporate culture
 A shift toward smaller and more fuel-efficient
cars
 Globalizing the Ford brand
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‘One Ford’ approach
 One team
 People working together as a lean, global enterprise for
automotive leadership
 Measured by customer, employee, dealer, investor, supplier,
council and community satisfaction
 One goal
 An exciting viable Ford delivering profitable growth
 One plan
 Aggressively restructure to operate profitably at the current
demand and changing model mix
 Accelerate development of new products customers want and
value
 Finance plan and improve balance sheet
 Work together effectively as one team
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‘Less is more’ new approach
 The ‘bigger is better’ worldview defined ford for
decades
 Replaced with a new approach: less is more
 Cut costs
 Transform the way it did business than to
measure market share
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A New Corporate Culture
 Structural and procedural changes
 Executives meet with Mulally every week
 ‘we are actually committed to hitting the
numbers.’
 Team working
 Senior executive reorganization
 Report directly to him
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Cost Advantage Through Focus
(A shift toward smaller and more fuel-efficient cars)
 Oil prices persistently increasing over the last
few years
 A dramatic change in consumer’s car buying
habits, reducing the demand for large vehicles
 leased cars are sold for much less than their
residual values
 A change in products, shifting to smaller and
more fuel-efficient cars
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Globalizing the Ford brand
 Globalize the Ford brand
 All Ford vehicles competing in global segments
would be the same in North America, Europe, and
Asia within the next five years
 Deliver more vehicles worldwide from fewer
platforms and maximize the use of common
parts and systems
 reduction of costs in the purchasing and
manufacturing processes
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Products, Sales and Revenue
 Sells broad range of
automobiles under
different brand names.
 Strong growth in sales all
over the world.
 14 straight quarters of
operating profit in 2012
 Tough competition from
other brands like GM and
Chrysler.

Outline Outline
 Profit Margin
 Market Segmentation
 Current Strategies
 Future Strategies
 Recommendation
 Future Product
 Conclusion
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Profit Margin
Profit margin represents the percentage of revenue that
a company keeps as profit after accounting for fixed and
variable costs.
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Profit Margin
 2008
 5.98 Billion
 2009
 6.23 Billion
 2010
 6.12 Billion
 2011
 6.21 Billion
 2012
 6.56 Billion
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Effects on Profit Margin
 Ford started to hire more employees
 Ford must increase prices
 There have been new implications for strategy
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Market Segments
Market Market Segment Market Sub segment
FORD
Motor
Sports
Cars
Economic
vehicles
Trucks
Buses
Cars
Racing
cars
Rally cars
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Jari-Matti Latvala driving
the Ford Focus RS WRC 09 in
2010.
Ford Mustang GT (racing GT car)
Ford Performance Racing Ford
Falcon V8 Supercar at Eastern Creek in
Australia in 2008.
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Ford racing cars
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Market Segments
Market segmentation approaches-
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Geographic
Segmentation
-ford aims to grab the
market of UK as well as
India, China, Malaysia
Physiographic
Segmentation
-FORD FIESTA comes at
reasonable price
Demographic
Segmentation
-FORD FOCUS aims for
young people, ladies and
average income
consumer
Behavioral Segmentation
-with the benefit for
safety and fuel efficiency

Ford Current Strategies Cont(..)
 Ford has a strategy on new key design
 Ford is beginning to use Solar energy to power
their manufacturing plants
 Global Electrification strategy
 Ford has a very strong marketing strategy as they
market all of their vehicles differently
 Ford is making more hybrid vehicles through the
increase use of renewable and recyclable
materials
 Ford is developing natural-fiber composites as a
potential substitute for the glass fibers traditionally
used in plastic car parts to make them stronger
while reducing vehicle weight
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Future Strategy
 Reduce manufacturing expenses by 15-20%
 Introduce new small fuel efficient vehicles
 Enter Latin American and Asian market with hybrid
vehicles
 Develop affordable electric car for US market
 Increase market share
 Manufacturing of new small fuel-efficient vehicle
 Entering the Latin American and Asian market with
hybrids $ 20 billion
 Implementation of electric car in the US market $ 13
billon
 Total Cost = $ 40 billion
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Recommendation
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Increase total sales in
European Auto Industry
Become industry
leader in the Chinese
market
Pass General Motors
and become the highest

Conclusion
In spite of having strong competition in market,
Ford is still dominating the motor industry as
well as their business strategies are quite
strong for sustaining in this market.
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References
 www.ford.com
 https://ycharts.com/companies/F/profit_margin
 http://www.slideshare.net/Harrisa011/fords-strat
 https://corporate.ford.com/innovation/innovation-ideas
 http://www.ford.com/cars/fiesta
 http://www.advfn.com/stockmarket/NYSE/F/financials
 http://www.at.ford.com/news
 http://www.1000ventures.com/business_guide/marketing
_main.html
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Strategy Management of Ford Motor Company.

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