1.0 INTRODUCTION

Ford Motor Company was initiated in 1903 by Henry Ford who was passionate with engineering and mechanics. Ford's first leap into the world of automotive mechanics was in 1899 when he founded the Detroit Automobile Company. The failure of Detroit Automobile Company led to the foundation of Ford Motor Company on June 16. 1903.Ford operates in two segments: Automotive and Financing. Products offered include: Ford, Mercury, Lincoln, Volvo and Jaguar. The company is led by CEO William Ford Jr. and employs over 246,000 people. It is headquartered in Dearbon, Michigan and has a 13.8 percent market share of the auto industry as of February 2009, as compared to 17.5 percent in 2007. The firms major competitor in the United States is General Motors and Toyota.Ford manufactures and distributes automobiles across six continents. The company operates about 108 plants globally and produces such models as Ford, Lincoln, Mazda, Mercury and Volvo. It has sold its Jaguar, Land Rover, and Aston Martin businesses. The company developed and implemented assembly line production by the release of the Model T in 1909, and produced planes and vehicles for the Allies in World War II. Ford has operated internationally since 1904, when it opened a branch in Canada to gain access to Commonwealth markets. For the first half of the 21st Century, Ford remained the dominant car manufacturer within the market it had effectively created. However, in 2006, Ford posted its biggest operating loss to date $12.6 billion. This coincided with continued decline in market share, with the majority of these losses being captured by Toyota and General Motors. From 1997 to 2007, Fords United States market share plummeted from 25% to 15%. In 2006, Alan Mulally was hired as CEO and took over a company at the precipice of failure. Mulally announced a new restructuring plan in 2006 entitled The Way Forward, designed to better align capacity to demand. At its core, this plan involved the closure of seven assembly plants and strategic reorientation towards One Ford. Championed by Mulally, this strategy focuses on creating a standard Ford personality which is seen and felt within every automobile produced by the company.

In addition, the plan entails standardizing chassis worldwide and a greater focus on the core Ford nameplate. As a part of this plan, Ford mortgaged all of its assets involving both physical and intellectual property in December 2006 for a $23.4 billion line of credit. While originally seen as a risky and potentially desperate move, this timely acquisition of capital has made Ford the most stable of the Big Three carmakers. The company also divested some of its non-Ford brands during this time, selling Jaguar and Land Rover to Tata Motors for $2.3 billion in 2008. Ford is also currently attempting to sell Volvo, which it purchased in 1999 for $6.5 billion.Since 2009, Ford Motor Company received $5.9 billion in Energy Department loans to helps retools its plants in Illinois, Kentucky, Michigan, and Ohio to produce 13-fuel efficient models, including 5000 to 10 000 electric cars per year starting in 2011. The success of Ford Motor Company was because of its strategy which encompassed a new way of manufacturing called mass production, advancements in technology, the supply chain and most of all changes in lifestyle. Ford's personal motto, Help the Other Fellow affected the goals, work environment and the corporate strategy of the Ford Motor Company. In this report, we have come up with a strategic plan of action for Ford for the next three years from 2010 to 2012 as the company is in financial trouble. This is because of the global economic recession as consumer demand for new autos has plummeted. Unavailability of credit and high unemployment rate are among the factors that create the needs of a new strategic plan of action for Ford to improve its financial performance.

2.0 FINANCIAL RATIO ANALYSISGrowth per year over yearYears20052006200720082009

Revenue (%)3.17-9.587.70-15.18-19.12

Operating Income (%)-29.85N/AN/AN/AN/A

Net Income (%)-41.96N/AN/AN/AN/A

EPS (%)-39.31N/AN/AN/AN/A

The overall growth performance of the company does not handled easy. The company suffers a huge decline of growth over the period of 2008-2009, and still struggling after that, with a raise of minimum growth and suffer quite considerable loss.For the Fords growth ratio, the company plummeted to a declining rate, from 7.7% growth in revenue during the year 2007 to the loss of 15% in 2008 and further loss in 19% over the year 2009. The severe loss may due to the global recession of 2007-2009 that hit this United Stated-based automobile company.Profitability RatioMargins % of Sales20052006200720082009

Revenue100100100100100

COGS81.8592.9783.0788.1784.54

Gross Margin18.157.0316.9311.8315.46

SG&A13.9211.9812.2814.6511.21

Operating Margin4.23-4.954.66-2.82-2.39

Net Int Inc & Other-3.10-4.45-6.83-7.024.94

EBT Margin1.13-9.40-2.17-9.852.56

For the profitability ratio, the company shows a stable yet fluctuate numbers on the Earning before Tax Margin (EBT Margin).

From the graph depicted above in contrast between Gross Margin, Operating Margin and EBT Margin, we see a mirroring pattern between them, fluctuates and rises with mirroring image. We conclude that although the company suffer most severe loss, the is no clear gap between this margin, and thus predicted that the company is mostly stable, in performance alone and not economically.Profitability20052006200720082009

Tax Rate %N/AN/AN/AN/A2.28

Net Margin %1.14-7.88-1.58-10.032.30

Asset Turnover0.630.580.620.590.57

Return on Asset %0.72-4.60-0.98-5.901.32

Financial Leverage20.80N/A49.62N/AN/A

Return on Equity %13.96-265.76-251.78N/AN/A

Return on Invested Capital4.33-2.962.58N/AN/A

Interest CoverageN/AN/AN/AN/AN/A

While most of the data are not available for analysis, the companys asset turnover shown a little decline from 2007 to 2009, due to the problem of global recession and its impact on entrepreneurship on US soil. Problems of foreclosure, inflation and production problems may reduce the number of people buying automobiles or using Fords services, thus reducing the profit that the asset can generate. As you can also see, the Return on Asset has also fluctuates during the period of global recession, from a loss of 0.9% declining to a loss of 5.9%, and finally gain by 1.32% during the period of 2007-2008-2009 respectively. With the loss suffered from the previous two years (2007-2008), and the inactive state of the assets, it is thought that the company incur a loss to the investor and the stakeholder of the company during the period.Financial HealthBalance Sheet Item20052006200720082009

Total Current Asset (%)74.2765.6463.8067.6277.05

Total Assets (%)100100100100100

Total Current Liabilities (%)35.5528.8027.4950.7626.06

Total Liabilities (%)95.19101.2497.98107.93104.01

Total Stockholders Equity4.81-1.242.02-7.93-4.01

From the table above, we can observe the method of financing does the Ford Company hold true. The main method of financing used by the company mostly came from liabilities, such as loans. Since the company mainly operates on liabilities, it is easily influenced by the condition of the market, reflected by the amount of financing in 2007-2009 period, where they maxed out their financing not only to cover for the operation of the company, but the equity of the shareholders.Liquidity / Financial Health20052006200720082009

Current Ratio2.092.282.321.332.96

Quick Ratio1.642.132.191.252.85

Debt/Equity11.91N/A24.92N/AN/A

The liquidity ratio of the company is surprisingly stable for a company that fluctuates on the earning. Mainly due to the nature of the business as a producer of American automobile, the company may have numbers of assets available to be liquefied to cover for the short-term obligation. Source: http://financials.morningstar.com/ratios/r.html?t=F

3.0 STRATEGIC POSTUREVision- To become the world's leading consumer company for automotive products and services.Mission- to be relevant and profitable for the future.One team, one plan, one goalOne TeamPeople working together as a lean, global enterprise for automotive leadership, as measured by:Customer, Employee, Dealer Investor, Supplier, Union/Council, and Community SatisfactionOne PlanI. Aggressively restructure to operate profitably at the current demand and changing model mixII. Accelerate development of new product our customers want and valueIII. Finance our plan and improve our balance sheetIV. Work together effectively as one teamOne GoalAn exciting viable Ford delivering profitable growth for allExpected behavioursFord functional and technical excellence Know and have passion for our business and our customers Demonstrate and build functional and technical excellence Ensure process discipline Have a continuous improvement philosophy and practice

Own working together Believe in skilled and motivated people working together Include everyone; respect, listen to, help and appreciate others Build strong relationship; be a team player, develop ourselves and others Communicate clearly, concisely and candidly Role model Ford values Show initiative, courage, integrity and good corporate citizenship Improve quality, safety and sustainability Have a can do, find a way attitude and emotional resilience Enjoy the journey and each other; have fun never at others expenseDelivery results Deal positively with our business realities; develop compelling and comprehensive plans, while keeping an enterprise view Set high expectation and inspire others Make sound decisions using fact and data Help ourselves and account responsible and accountable for delivering result and satisfying our customersGoals Nonfinancial Goals Retain spot as global market leader with over 100 plants and 280 000 employees worldwide Sustain probability and rank 1 US auto company Enter and increase manufacturing in India to lower plant cost Build efficiency through better logistics, distribution and control Succeed at all implementation factors Build awareness and increase sales of all Ford Hybrid automobilesFinancial Goal Push industry hybrid sales to increase 10% annually

Current StrategyFords business strategy is embodied in the One Ford plan, which was adopted in 2007 and has guided the company ever since. One Ford expands on the companys four-point business plan for achieving success globally. The four-point business plan consists of the following:I. Aggressively restructure to operate profitably at the current demand and changing model mixII. Accelerate development of new products the customers want and valueIII. Finance the plan and improve the balance sheetIV. Work together effectively as one team Building on this plan, One Ford encourages focus, teamwork and a single global approach, aligning employee efforts toward a common definition of success. It emphasizes the importance of working together as one team to achieve automotive leadership, which is measured by the satisfaction of all customers, employees and essential business partners, such as the dealers, investors, suppliers, unions/councils and the communities in which the company operate. Ford has defined a set of behaviours that are expected of all employees to support the One Ford plan. The goal of One Ford is to create an exciting and viable company delivering profitable growth for all. They are focused on building: Great Products, a full family of vehicles small, medium and large; cars, utilities and trucks with best-in-class quality, fuel efficiency, safety and smart design; Strong Business, based on a balanced portfolio of products and global presence; and Better World, accomplished through our sustainability strategy.The company aims to have profitable growth across geographies and product types. One Ford has been implemented through the consistent use of processes at the highest levels of the company for risk assessment, strategy development, business planning and performance review.

The financial turnaround has been based largely on the companys ability to deliver high-quality, innovative and desirable products everywhere it operates, in both mature and rapidly growing markets. Ford had aligned their product development, manufacturing and marketing organizations worldwide to deliver the right products to the right markets as efficiently as possible. In all vehicles and regions, Fords global vehicles showcase its commitment to sustainability. Technologies like EcoBoost, direct injection of gasoline or diesel fuel, six-speed transmissions, and hybrid and plug-in hybrid powertrains deliver choice to drivers everywhere. Ford is continuing to implement the One Ford plan. But it also Go Further to deliver ingenious products, make them available to everyone, and serve each other, our customers and our communities. Go Further is Fords d global brand promise and their approach as it accelerates ahead.Current PolicyFord company policies1. Human RightsThis is the basic working conditions and corporate responsibility, which forms the foundation for work within the operations and Ford supply chain. This code articulates our commitments on key human and labor rights issues.2. DiversityThis policy are about to increase the diversity in work force. In Ford, all opportunity are equal in all aspect in business. Provide a broad work environment in which different ideas, perspectives and beliefs are respected.3. Bribery and CorruptionFord Company are fully comply with the law in the company that they do business. Which there are no bribery and corruption in the whole organization.4. Political ContributionsFord is committed to help the government to covers the issue relating the public policy.5. Customer Satisfaction and SafetyFord has several policy statements aimed at increasing the quality of their products and promoting the safety of their customers.6. Environment and Employee Health and SafetyFord are focus on employee health and safety and the global environment to make it clear that sustainable economic development is important to the future welfare of Ford and society in general.7. PrivacyPrivacy policy is to gain trust and confidence of ford customers are important to Ford Company and essential to building long-term relationships and delivering excellent products and personalized services.

Ford New VisionThe new vision that we would like to propose to Ford is to become automotive industry leader in fuel efficient and other fueled vehicles at an affordable cost with better quality to global customers. People will think of quality and innovation, when they think about Ford.Ford New Mission StatementThe new proposed mission statement for Ford will be: Ford Co is going to be an industry leader by anticipating consumer needs and provide safe, quality, and innovative products and services to consumers worldwide. To recover lost market share that was lost to local and foreign competition. Take back the position as the auto industry leader in sales, market share and profit by maximizing return by meeting and exceeding customers expectations for great quality, advanced technology, and world class customer service. Ford is committed to save the environment, to help the society and making sure that the employees welfare is taken care of, which is going to help improving Ford's name in the entire world.

4.0 EXTERNAL ENVIRONMENT ANALYSIS (EFAS)Opportunities

1. Further concessions from the United Auto Workers regarding labour costs, in times of hardship2. The few consumers purchasing vehicles focus on fuel efficiency, durability, and carmakers sustainability3. Light vehicle production exceeded the production of cars and trucks in North America and Europe by an estimated 16 percent and 14 percent, respectively4. In 2008, the Big Three began offering lowered interest rates or zero percent financing to lure buyers5. The auto industry has experienced a shift from trucks and SUVs to hybrid and small fuel-efficient vehicles6. Consumers/dealers willingness to improve brand/sales

Threats

1. The auto manufacturing industry has been crushed of late by the global economic recession as consumer demand for new autos has plummeted.2. Unemployment rates exceed 10 percent in many areas in the United States and is expected to remain high for part of 20103. Automakers have faced rising health care and pension costs4. The government bailout money is diminishing, and Ford has exhausted its credit lines5. Consumers are concerned about voided Warranties if the Big Three go out of business 6. Many banks are not making car loan which has been detrimental to auto firms.

Key External FactorsWeightRating Weighted Score

Opportunities

1. Further concession regarding labour costs0.0840.32

2. Few consumers purchasing vehicles focus on fuel efficiency, durability and carmakers sustainability0.0830.24

3. Light vehicle production exceeded production of car and trucks in north America and Europe estimated by 16% and 14% 0.0720.14

4. The Big Three offering lowered interest rates or zero percent financing to lure buyers0.0830.24

5. The auto industry experienced a shift trucks and SUVs to hybrid and small efficient vehicles.0.0730.21

6. Consumers/ dealers willingness to improve sales/ brand0.0840.32

Threat

1. Due to global economic recession, consumer demand for new autos has plummeted0.0930.27

2. Unemployment rate exceed 10% in many areas in United States and expected to remain high for part of 20100.1040.4

3. Automakers faced rising health care and pension costs0.0830.24

4. Government bailout money is diminishing and Ford has exhausted its credit lines0.0920.18

5. Consumer are concerned about voided warranties 0.0920.18

6. Many banks are not making car loans0.0920.18

Total 1.002.92

5.0 INTERNAL ENVIRONMENT ANALYSIS (IFAS)Strengths1. The brand is well-known in automobile industry and global markets2. Huge marketing and advertising3. Greater amount of customer loyalty4. Individual brands have been enjoying the benefits of the good reputation that they have through the quality makes and services5. Providing the consumer more variety of car and commercial vehicle6. Quality to ensure Ford to be more complete and must be consistently monitored with permit standard7. Good relation with the employees8. Safety and better work environment 9. Competitive wages that are assert to recruits a qualified and skilled employee in all its functions10. ONE Ford approach11. Always develops cars on standardized procedure and invested heavily in alternate fuel source12. ECOnetic initiativeWeaknesses1. Brand image was harmed and cause a large cost2. Lack of design phase and innovative design structures on their new paddle of cars3. Management is missing focus on some lines performance4. Does not have an effective cost management system5. Ford will manufacture the standard cars which are not able to cope up with current market automobile.6. Has a small market share therefore the sale will decline the sales

Internal Factors Evaluation Matrix for Ford Motor Company

FORD MOTOR COMPANY SWOT ANALYSIS

Key internal factorsWeightRatingWeighted score

Strengths

1. The brand is well-known in automobile industry and global markets0.0430.12

2. Huge marketing and advertising0.0230.06

3. Greater amount of customer loyalty0.0540.20

4. Individual brands have been enjoying the benefits of the good reputation that they have through the quality makes and services0.0430.12

5. Providing the consumer more variety of car and commercial vehicle0.0440.16

6. Quality to ensure Ford to be more complete and must be consistently monitored with permit standard0.0530.15

7. Good relation with the employees0.1130.33

8. Safety and better work environment 0.1030.30

9. Competitive wages that are assert to recruits a qualified and skilled employee in all its functions0.0530.15

10. Always develops cars on standardized procedure and invested heavily in alternate fuel source0.0340.12

11. ECOnetic initiative0.0630.18

12. ONE Ford approach0.0640.24

Weaknesses

1. Brand image was harmed and cause a large cost0.0310.03

2. Lack of design phase and innovative design structures on their new paddle of cars0.0420.08

3. Management is missing focus on some lines performance0.1010.10

4. Does not have an effective cost management system 0.0710.07

5. Ford will manufacture the standard cars which are not able to cope up with current market automobile.0.0520.10

6. Has a small market share therefore the sale will decline the sales0.0620.12

Total1.002.63

6.0 ANALYSIS OF STRATEGIC FACTORS (SFAS)1. SWOT MatrixStrengths1. The brand is well-known in automobile industry and global markets2. Huge marketing and advertising3. Greater amount of customer loyalty4. Individual brands have been enjoying the benefits of the good reputation that they have through the quality makes and services5. Providing the consumer more variety of car and commercial vehicle6. Quality to ensure Ford to be more complete and must be consistently monitored with permit standard7. Good relation with the employees8. Safety and better work environment 9. Competitive wages that are assert to recruits a qualified and skilled employee in all its functions10. ONE Ford approach11. Always develops cars on standardized procedure and invested heavily in alternate fuel source12. ECOnetic initiative Weaknesses1. Brand image was harmed and cause a large cost2. Lack of design phase and innovative design structures on their new paddle of cars3. Management is missing focus on some lines performance4. Does not have an effective cost management system 5. Ford will manufacture the standard cars which are not able to cope up with current market automobile.6. Has a small market share therefore the sale will decline the sales

Opportunities1. Further concessions from the United Auto Workers regarding labour costs, in times of hardship2. The few consumers purchasing vehicles focus on fuel efficiency, durability, and carmakers sustainability3. Light vehicle production exceeded the production of cars and trucks in North America and Europe by an estimated 16 percent and 14 percent, respectively4. The Big Three began offering lowered interest rates or zero percent financing to lure buyers5. The auto industry has experienced a shift from trucks and SUVs to hybrid and small fuel-efficient vehicles6.Consumers/dealers willingness to improve brand/salesS-O Strategies1. Expand into S. American and European countries by offering better incentives and financing (S1, S4, O3, O4 O5),2. Produce more fuel efficient and smaller models and promote them with lower financing options (S1, S3, S4, O2, O3, O5)

W-O Strategies1. Improve operations by being more lean and cutting back excessive executive spending (W3, W4, W5, O1)2. Sell off business units to improve cash infusion to the company (W2, W3, W4, W5, O6)

Threats1. The auto manufacturing industry has been crushed of late by the global economic recession as consumer demand for new autos has plummeted. 2. Unemployment rates exceed 10 percent in many areas in the United States and is expected to remain high for part of 20103. Automakers have faced rising health care and pension costs4. The government bailout money is diminishing, and Ford has exhausted its credit lines5. Consumers are concerned about voided Warranties if the Big Three go out of business 6. Many banks are not making car loans. S-T Strategies1. Improve promotion on selected lower priced models with zero or very low rate financing to younger generation through Internet using Facebook, Twitter, and other networking channels (S2, S3, S4, S6, T1, T4, T6)2. Offer Free extended warranty for additional 2 years to gain customer loyalty and brand image (S4, S5, T1)W-T Strategies1. Since dealers are not able to turn around their inventory fast enough, offer advertising with more incentives for moving the cars faster (W1, W3, T4, T6)

2. The Strategic Position and Action Evaluation (SPACE) Matrix

FPCPSPIP654321ConservativeAggressiveCompetitiveDefensive1234567-2-3-4-5-7-1-67-7-6-5-4-3-2-1

Financial Position (FP)Environmental Position (EP)

Return on Investment1Unemployment-5

Leverage1Technological Changes-3

Liquidity1Price Elasticity of Demand-2

Working Capital1Competitive Pressure-4

Cash Flow1Barriers to Entry into Market-5

Financial Position (FP) Average1Environmental Position (EP) Average-3.8

Competitive Position (CP)Industry Position (IP)

Market Share-2Growth Potential4

Product Quality-3Financial Stability2

Customer Loyalty-2Ease of Entry into Market4

Capacity Utilization-3Resource Utilization3

Technological Know-How-2Profit Potential3

Competitive Position (CP) Average-2.4Industry Position (IP) Average3.2

Y-axis: FP + EP = 1.0 + (-3.8) = -2.8X-axis: CP + IP = (-1.8) + (3.6) = 1.8Conclusion: Vector points in Competitive quadrant

Ford is competing fairly well in an unstable automotive industry.3. The Boston Consulting Group (BCG) Matrix

Relative Market Share Position

High Medium

Low

1.0 0.5 0.0

High +20

Industry Sales Growth RatePercent(percent)StarsII

Question MarksI.

Medium 0

Low -20Cash CowsIIIDogsIV

The U.S. Market Share of Top 11 Auto Firms (February 2009)

Company% of Market Share

General Motors Corp18.8

Toyota Motor Sales USA Inc.16.9

Ford Motor Company13.8 (RMSP=0.73)

Chrysler LLC10.9

American Honda Motor Co. Inc.10.6

Nissan North America Inc.8.0

Hyundai Motor America4.1

Kia Motors America Inc.3.3

Mazda Motor of America Inc.2.4

Subaru of America Inc.1.9

Mitsubishi Motors N A Inc.0.7

Source: Based on http://online.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesD.4. The Internal-External (IE) Matrix

The IFE Total Weighted Score

Strong3.0 to 4.0Average2.0 to 2.99Weak1.0 to 1.99

High3.0 to 3.99I

IIIII

The EFE TotalWeighted Score

Medium2.0 to 2.99IVV

Ford Motor Company VI

Low1.0 to 1.99VIIVIIIIX

5. Grand Strategy Matrix

Weak Competitive PositionQuadrant IIQuadrant IQuadrant IVQuadrant IIIStrongCompetitivePositionRapid Market GrowthSlow Market Growth

1. Market development2. Market penetration3. Product development4. Forward integration5. Backward integration6. Horizontal integration7. Related diversification

7.0 ALTERNATIVE & RECOMMENDATIONQuantity Strategic Planning Matrix (QSPM)Produce more different car models to cater distinct global preferencesExpand the business into other continents automotive market as to increase the market share value

Key FactorsWeightASTASASTAS

Opportunities

1. Further concessions from the United Auto Workers regarding labor costs0.0830.2440.32

1. Few consumers purchasing vehicles focus on fuel efficiency, durability, and carmaker's sustainability0.0830.2420.16

1. Light vehicle production exceeded the production of cars and trucks in North America and Europe by an estimated 16 percent and 14 percent, respectively0.0720.1440.28

1. The Big Three began offering lowered interest rates or zero percent financing to lure buyers0.08----

1. The auto industry has experienced a shift from trucks and SUVs to hybrid and small fuel-efficient vehicles0.0740.2830.21

1. Consumers/dealers willingness to improve brand/sales0.0840.3230.24

Threats

1. Due to global economic recession, consumer demand for new autos has plummeted0.0930.2740.36

1. Unemployment rates exceed 10 percent in many areas in the United States and is expected to remain high for part of 20100.1020.2040.40

1. Automakers have faced rising health care and pension costs0.08----

1. The government bailout money is diminishing, and Ford has exhausted its credit lines0.09----

1. Consumers are concerned about voided Warranties if the Big Three go out of business 0.09----

1. Many banks are just not making car loans0.09----

TOTAL1.001.691.97

Strengths

1. The brand is well-known in automobile industry and global markets0.0440.1640.16

1. Huge marketing and advertising0.0230.0640.08

1. Greater amount of customer loyalty0.0540.2040.20

1. Individual brands have been enjoying the benefits of the good reputation that they have through the quality makes and services0.0430.1230.12

1. Providing the consumer more variety of car and commercial vehicle0.0440.1630.12

1. Quality to ensure Ford to be more complete and must be consistently monitored with permit standard0.0520.1030.15

1. Good relation with the employees0.1110.1110.11

1. Safety and better work environment 0.1010.1010.10

1. Competitive wages that are assert to recruits a qualified and skilled employee in all its functions0.0520.1040.20

1. Always develops cars on standardized procedure and invested heavily in alternate fuel source0.0340.1230.09

1. ECOnetic initiative0.0630.1830.18

1. ONE Ford approach0.0640.2440.24

Weaknesses

1. Brand image was harmed and cause a large cost0.0340.1230.09

1. Lack of design phase and innovative design structures on their new paddle of cars0.0440.1630.12

1. Management is missing focus on some lines performance0.1020.2030.30

1. Does not have an effective cost management system 0.0720.1420.14

1. Ford will manufacture the standard cars which are not able to cope up with current market automobile.0.0530.1510.05

1. Has a small market share therefore the sale will decline the sales0.0630.1840.24

SUBTOTAL1.002.602.69

SUM TOTAL ATTRACTIVENESS SCORE4.294.66

Strategic RecommendationsThe following strategic recommendations are designed to address short run and long run problems faced by the company. Fords management seems to be on the right track, but recent progress is uncertain and could easily decadent as the current market and industry conditions was not in the good condition. Thus, the strategic recommendation would be as follows according to the QSPM analysis.1. Market share expansionThrough an agreement with a China automotive firm which is Changan Automotive, Ford is able to access market in China. This joint venture had sold approximately 204,000 vehicles, comprises the manufactures of Ford Focus, Fiesta and Mondeo lines. As the production was progressing positively, Chinese demand for vehicles is expected to rise approximately 20% by the year of 2009. However, despite of the increase demand on Fords cars, Ford only held a meager two percent of Chinas market share. The Ford Fiesta was observed as it has high demand in China automotive market as it experiencing strong sales and we believe that Ford Fiesta is the key to enhance Fords market share in China. Sales of the sedan and hatchback Fiesta models combined should surpass the 100,000 unit mark and significantly boost Fords overall 2009 China sales. Given the economic incentives provided by the Chinese government and GMs ongoing difficulties, we believe now is the opportune time for Ford to make a full push to steal market share in China and establish itself as the dominant American brand. While there is inherent risk to this strategy, we believe that a narrow window of opportunity exists for the company to overcome its poor start in the Chinese market.

Other than that, we also recommend Ford to divest Volvo division, produce more different car models to cater distinct global preferences and reconstruct their factory and supply chain management. The explanations are as follows.

1. Divest Volvo divisionVolvo seems befitting with its brand name as it has an excellent reputation whereby the main market target are the upper middle class consumers who seeks for an ultra-safe luxury vehicle but with an affordable price which are significantly lower than other luxury brand such as Mercedes and BMW. Thus, this make Volvo had the potential to serve within Fords premium line of vehicle. However, Volvo does not fit into the One Ford strategy that being pursued by the company. Given the current conditions of economy, it is best to sale Volvo as it is seen as the best alternative to increase the capital of the company. We would like to suggest Ford to sell Volvo division back to the Volvo Group, a Swedish parent company which sold Volvo to Ford in 1999. Volvo Group continues to manufacture trucks, buses, construction equipment and boats within Sweden. Ford held over 15,000 jobs position in Sweden, through the Volvo Cars Subsidiary. In 2008, the Swedish government issued a $3.5 billion bailout of Volvo Cars and one other brand. We believe that Ford should use this opportunity to pressure the Swedish government to support the repurchase of Volvo Cars by Volvo Group by providing significant support for the deal. However, if the Volvo Group was not interested in repurchasing Volvo Cars, it would affect Ford as Ford will be exposed to a long term strategic risk.There are three firms were bidding for the acquisition of Volvo which are Geely Holding Group, Beijing Automotive Industry Holding, whereby both firms are China-based automotive firms and the other firm is a Europe-based group of investors. Ford should not hesitate to execute the sale of Volvo if any of these three firms are able to procure the necessary funds.

1. Product differentiationRegional product differentiation is necessary for Ford to ensure that products are suitably geared towards distinct global preferences. As we recognize management was under substantial pressure to affect change, Ford should never again stake so much of its future on one line of vehicles. The Ford Fiesta World Car will determine the future of Ford, and while early reactions and sales are positive Ford should create a high end equivalent to the Fiesta to capitalize on similar cost savings measures. Ford has joined the growing hybrid market by introducing Ford Fusion which is a hybrid model car. Although being late in joining to the growing hybrid market, Ford has succeeded in manufacturing a vehicle that compete with the existed hybrid cars as it has similar quality and price if to be compared with the competitors such as Toyota and Honda. Despite being still at a disadvantage compared to Toyota in this market, it has launched a new lineup of vehicles that has an opportunity to redefine the competitive landscape. Thus, investment towards new innovative technologies will benefit the company in its future for profitability growth.

1. Factory and supply chain managementFord must continue its aggressive drive to confine and passive factories, emphasizing on factories situated in the European and US regions. Additionally, Ford must reconstruct its supply chain after executing these closures as this helps to accomplish the results faster than anticipated. Previously Ford entertained approximately 1600 supplier with an expected reduction leaving only 750 active. Current instability within the market, particularly the potential bankruptcy of a competitor, heightens the importance of this reduction and leads us to recommend deeper cuts in the number of suppliers Ford contracts with. All the suppliers must be carefully examined, in order to identify those that are vital to the Ford supply chain.

8.0 IMPLEMENTATIONFor the implementation part of the Ford Company, there are several implementations that can be done to ensure the Ford Company sustainability in the market. Most of the implementations are more toward the customers in order for the company to grab customers loyalty to stay with them. The implementations are as follow: 1. Get to market the finished product as soon as possible.In the manufacturing plant, the faster the end product produced means faster the product can be market. In China and India, the manufacture plant in both countries will help to the tremendously market the Ford product as that countries have enough raw material and huge plant site that can produce more and even faster than other countries.

2. Customers easy and affordable take home a Ford vehicle by providing them special programs.This programs can be determine at dealer level, the Ford Company can provide overall guidelines as to what the dealer can and cannot do to the customers in terms of contracts that provided. By this program, the customers can easily own the Ford product as it can gives benefit for both customers and the company itself.

3. Customer services improvement.In the customer service, it becomes necessary to make sure unhappy customer to feel warm and comfortable about their purchase. This can be done by provide them with the suitable solution based on their problems. The improvement also gives the huge impact that depict how the company care about their customers Besides that, Ford should offer manufacturers rebates as a matter of their policy. By included in the policy, it protect customer because customers feel save about their products.

4. Specific features based on regional markets.Manufacture plants in India are not as same as manufacture pants in China. There will little bit different processes for a slightly different car model in both countries. This is due to different countries have different kind of features which is suit for certain countries. In the regional suppliers, the customers may choose their features based on their needs in the region. This is to ensure that Ford Company can give customers with the features that match with the function and uses in that region.

5. Aware specific government programs that support car purchasing.Different countries have different kind of government regulations. Like in China, government are subsidizing the fuel cost in huge scale, making the customers affordable to own cars with less money.

6. Press release.On the press release, the Ford Company may have to create the good word of mouth to attract more customers to use Ford products. A good press not only attract, but can bring a huge impact to customers by bring the new technology into Fords products such as implementation the hybrid into Ford product.

7. Make a specific market campaign for different regions.Ford Company should partner with the local advertising company in different regions. This step to ensure Ford delivers the suitable messages and media for the target market in different regions and grab the attention of customers. Besides that, it should be based on the projection of target markets so that the advertisement cost can be covered with the demand in the regions. If not, the Ford Company will end with larger cost of advertisement from getting selling profit.

8. Global pricing standardizing.The use of price standardizing is most suitable way to obtain the customers. By the standardizing, it can depict how elastic the demand of certain product in different culture and markets. This can help to provide company to better insight about that product in different regions.

9. Facilitators acquire.The Ford Company cannot moving forward successfully without the help from the financial institutions and the insurance companies. Both of the institutions and the companies helps in term of giving the choice to customers, best rate of financing and even the best kind of protection package that suit to the customers needed. It actually brings back to the company because it increasing their products sales.

10. Car rebates and services warranty.On the rebates of the Ford product, the rebates are managed by the dealer level with the supervision of the company. The rebates given to ensure the all the stock of the product can be cycle and finished based on the target of the company. In additions, services warranty that provides by Ford Company attracts the customers to come again and maintain their Ford product in the authorized Ford service centre. This not only gives benefit and easier to the customers, but also to the company because the company still can provides extra sales and services even after the customers purchase their products.

9.0 EVALUATION AND CONTROLCompanies are investing enormous amount in make sure that managers and directors work in the best interest of their shareholders, beyond this fact they are also expected to the decision that are strategic and beneficial , both in the short and long term. Currently some managers take decision that seek their own interest and as a result put the company, shareholder and stakeholder at risk. It is extremely important that these managers work with some code of ethic, which is enforceable by law to protect stakeholder interest. The Ford motor company was founded June 16, 1903, when Henry ford and 11 others signed the company articles of incorporation. Their first sale was a month after they commenced operation. Fords moving assembly line proved tremendously efficient and this increased the production levels, which outwitted that of their competitors and making the vehicles more affordable. Henry Ford competitive strategy focused on the production of cars for the masses, and after 19 years, ford motor company was a force to reckon with in the car industry. 1925 saw the acquisition of Lincoln motor company thus moving into a different competitor group more luxurious segment, ford motors also created the mercury division, Companies are investing enormous amount in make sure that managers and directors work in the best interest of their shareholders, beyond this fact they are also expected to the decision that are strategic and beneficial , both in the short and long term. Currently some managers take decision that seek their own interest and as a result put the company, shareholder and stakeholder at risk. It is extremely important that these managers work with some code of ethic, which is enforceable by law to protect stakeholder interest. Some macro environmental factor and globalization have driven companies to pursue growth strategies such as integrating both vertically and horizontally. Clearly is important to spell out the role of the board, evaluate the logic behind their corporate strategy evaluate their performance against industry benchmarks and guidelines. Some general board duties are to ensure that the company survives continuously, profitable. Maximizes shareholders interest , also the board must ensure control, be entrepreneurial as they decide the corporate strategy, define the purpose and scope of business activities they should be sensitive to short term issue as they plan long term. The board also must evaluate the performance of the chief executive against goals and strategies, they should also nominate key personal, structure remuneration, and also ensure that the company is effectively managed and not to run it. As a result of the various corporate scandal internationally, Investors currently focus on two key areas, the reliability of audited account and the factor that drive corporate strategy its effect on their wealth. The element of corporate governance and area of accountability are to set and review purpose. Strategy, communicate this to shareholders and to conduct current and future activities in compliance with legislature, also to give true financial position of the company. Ford growth and global strategy has been by horizontal integration and in becoming a global player competing within different competitor groups. Ford motors are faced with challenges of managing their current financial crisis, which has caused the sale of Aston martin and force them to shut down their factories in North America and made 45,000 workers redundant. An extensive analysis of fords corporate strategy and logic behind the strategy will be evaluated to determine its effectiveness and whether or not have really worked in the interest of shareholders, or their strategies were merely short term and not strategic. It is important to analyse and define the problems they are facing, explore option available and recommend strategic options that are suitable, acceptable and feasible. Ford Motor has achieved its globalization strategy largely through horizontal integration with acquisitions and forward integration. Their competitive strategy differs as per competitor group, their objective is to satisfy their global customer need irrespective of the consumer segment. Their initial objective was produce affordable car for the mass market, until they started developing new market and product for middle and upper class. Ford motors product portfolio is made up seven different band namely Ford , Jaguar , Volvo ,Loncoln , Land Rover , Mazda and Mercury. The financial position of ford motor for 2006 was $12 Billion loss and this has necessitated the sale of Aston martin Ford Motor are in a critical situation, but with the right strategies could win this battle, but the worst that could happen are the sale of other brands which are not that profitable from manufacturing like Jaguar and Land Rover as finance option for the car giant, but this could happen in the short to medium term. If the problem retain, there could be pressure from shareholders, stakeholder to sell off their stake in the business as they want to make economic profit from their investment. The risk of takeover will be eminent in the long run as other players who want access to new market and technology would be option for opportunity like this.

Balanced ScorecardArea of ObjectivesMeasure or TargetTime expectationPrimary Responsibility

Customers-satisfy the customer-market share-customer retention percentage-time taken to fulfil customer requestsReturning customer score1 yearFront line

Financial-improve profitability-operating income-cost reduction in some areas-return on investmentGross margin2 yearsFinance

Process-deliver products on time-defect ratesOn-time deliveries1 yearOperation

Learning and Growth-foster an enjoyable workplace-employee education and skill level

Employee retention1 yearHuman Resource

10.0 CONCLUSIONFord Motor Company has been the King of innovations in the automobile industry. Ford R&D and their all-time proven invention of interchangeable parts in moving assembly lines resulted in phenomenal global expansion for them. They ruled the global automobile markets of the world. In fact some of the most prestigious motor brands of the world have been owned by Ford Motor Company.Ford had witnessed the best times in terms of revenues and profitability and enjoy a large customer base until today. However, some mistakes such as Ford 2000 initiative caused permanent damages for which Ford Motor Company is still paying the price and in this context they completely went the wrong way and hence could not survive Japanese competitors that were quick to grab Fords own home market in USA.As presented earlier in terms of mapping with Michael Porters five forces theory, Ford Motor Company was critically hit by new entrants in the market. They indulged deep into debt financing due to financial crisis and hence have today become largely debt financed company. The highest debt/equity is in 2005 with 11.91%. They had sell Jaguar and Land Rover companies to Tata Motors to build some cash which, however are peanuts because bad times are continuing. Moreover, they havent paid dividends for past two years and hence are losing shareholder confidence.They have not able to manage their cash flows and have lost substantial cash in 2008 and rapidly closing extra plant capacities and laying off people to downsize as per their current market standing. The lowest EBT Margin is in 2008 with -9.85%. Their Net Margin in 2008 is -10.03% and Return on asset in 2008 is -5.90%. We strongly recommend the company to implement the strategy that we have presented in this analysis. Ford Motor Company should take corrective action as soon as possible to avoid from losing market share to Chrysler LLC who holds 10.9% of market share in the United States in February 2009.

11.0 REFERENCES

Bateman, T. S., Snell, S., A., (2009); Management: Leading and Collaborating in the Competitive World, Eighth Edition. McGraw-Hill/Irwin: New York, NY. Fred R. David. (2013). Strategic Management: Concepts and Cases, Fourteenth Edition. Pearson Education Limited: United KingdomFord Motor Company. (2008). Ford Motor Company - Press Release - As customers rebuild from hurricane Ike, Ford Motor Credit offers financial relief. Retrieved Oct. 1, 2008, from http://media.ford.com/newsroom/release_display.cfm?release=29045 Ford Motor Company: Cars, Trucks, SUVs, Hybrids, Parts-Ford. (2008). Letter from Alan R. Mulally. Retrieved October 3rd, 2008 from http://www.ford.com/microsites/sustainability-report-2007-08/overview-letter-mulally

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