why ford no longer makes the contour cm02 jim barton kevin potter eric ramey

“Why Ford No Longer Makes the Contour…”

CM02 Jim Barton Kevin Potter Eric Ramey

Background of the ContourStarted as a global project in 1988 to

make one car that appeals to the global market.

Project was code-named CDW27.Mid-size family car was called “Mondeo”

in Europe, “Contour” in America.

Background of the ContourThe Contour represented the pinnacle

of Ford’s technology initiatives.Ford cut back on Contour production in

1999, and stopped offering new models in 2000.

The demise of the Contour may have been because of its emphasis on general appeal.

The Ford Contour

Strengths and Weaknesses Comfort Safety Initial Round:

4th in overall revenue 1st in contribution 1st in % of sales

Economy Price Ideal Position to Lose Market Share Because of Fierce Competition

Our Overall StrategyTry to maintain as much of our initial

position as possible. Cumulative Contribution Revenues % of Sales

Stabilize the Contour performance measurements.

Cater to Safety & Traditional Segments

Start of Simulation / Round 1Sales: $960.1M, Contribution: $290.3,

% of Sales: 30.2%Started to offer factory rebates.Moderate increase in advertising.Moderate changes to our advertising

mix and targets.Very conservative opening strategy.

Round 2Sales: $971.2M, Contribution: $255.7,

% of Sales: 26.3%Overestimated demand.Significant inventory buildup.Altered our production plan as a result.Started watching the “underdogs.”

Round 3Sales: $978.0M, Contribution: $237.7,

% of Sales: 24.3% Inventory situation worsened.Shifted some focus away from Safety

Conscious to Traditional.LX model becoming more popular than

base model.

Round 4Sales: $865.4, Contribution: $235.3,

% of Sales: 27.2%Lessons learned about cutting back on

production.Traditional segment surpasses Safety

Conscious segment.Key threat: Neon.Decision time: New model introduction.

Option 1: The Sporty Model

Or…..an SUV???

Round 5Sales: $910.5M, Contribution: $222.3,

% of Sales: 22.4%Scared of our own shadow: threat from

Neon dissipates.Major dilemma on how to handle the

introduction of our LX+ model.

EndgameSales: $813.8M, Contribution: $183.3,

% of Sales: 22.5%Pre-simulation contribution average:

$193M (approx).Post-simulation contribution average:

$227M (approx).Lost top position for period contribution

in the final round.

What Went Wrong?

Theory #1: The Ryan Factor

Actual Target Market…

But Seriously… Intense competition and price &

promotion wars among other players.Difficulties predicting demand conditions

and ideal inventory levels.Final round: difficult to predict and

handle the introduction of the LX+, poor timing.

What We Did Well…We were able to stabilize the Contour

performance measurements.We improved average contribution over

previous 5 periods.We ended up with the highest overall

cumulative contribution. (approx. $2B)We ended with the highest % of sales

figure. (22.5%)

In Case You Just Can’t Get Enough of Contour…

http://www.contour.org