Ford Motor

Company1

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)

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Outline

History

Vision, Mission ,Values & objectives

SWOT Analysis

Internal Analysis

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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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Ford Motor Company – at a glance

The Ford Motor Company is an American multinational automakerheadquartered in Dearborn, Michigan, a suburb of Detroit. It wasfounded by Henry Ford and incorporated on June 16, 1903.

Type Public company

Headquarter Dearborn, Michigan, U.S.

Area served Worldwide

Products AutomobilesLuxury VehiclesCommercial VehiclesAutomotive parts

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Car Evolution

Old model vehicles

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Logo

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Organizational Structure10

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 Person1111

Vision, Mission,

Values

& objectives

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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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IFE Matrix21

Internal Analysis22

Outline23

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 Buildingo Better Quality Vehicleso Better Safety Ratingo 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 manufacturerso Chinese Auto Makers (Greely,

SAIC)

Public Transportationo 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

BuyersBargaining 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

CARSTRUCKS

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 cars48

Market Segments

Market segmentation approaches-49

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 50

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 Strategy52

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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Recommendation54

Increase total sales in

European Auto Industry

Become industry

leader in the Chinese

market

Pass General Motors

and become the highest

Future Product55

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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QUESTIONS?58