why ford no longer makes the contour cm02 jim barton kevin potter eric ramey
DESCRIPTION
Background of the Contour The Contour represented the pinnacle of Ford’s technology initiatives. Ford cut back on Contour production in 1999, and stopped offering new models in The demise of the Contour may have been because of its emphasis on general appeal.TRANSCRIPT
“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