Ford Motor Company

Presented by:

Texas Wesleyan University

Poornaka WettewaAbdulaziz AlharthiMohammed Alali

Mohammed AlghannamAndrew Hawkins

Outline

• History• Strategy• Value Chain• Internal Analysis

History of Ford

• On June 16, 1903 Henry Ford established the Ford Motor Company

• The first mass-produced vehicle was the Model T

• The company was started in Dearborn Michigan

Ford Motor Company• Ford is a world wide company that

started in the United states• Has 187,000 world wide• Its headquarters is in Dearborn,

Michigan• Ford Motor Company produces

Automobiles, Luxury Vehicles, Commercial Vehicles and Automotive Parts1

• Ford has three divisions Ford, Lincoln and Motorcraft..

The Evolution of Ford

The Evolution of Fords

Ford’s Plan

Input OutputFinished ProductsResources

PROCESSTransformation of inputs into outputs

Production System

• Product Planning and Design

• Raw Materials• Logistics• Part

manufacturing

• Manufacturing• Combine parts • Complete vehicle• Quality control

• Vehicles

Outline

• History• Strategy• Value Chain• Internal Analysis

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Insert Strategy here

Outline

• History• Strategy• Value Chain• Core Competence• Internal Analysis

Strategy

• The company projects a 3% economic growth in U.S.A. and China. thus there will be increased sales in these regions.

• Consumer sentiment is increasing with reduced fuel prices.

• Overall there is expected global economic growth that will accompany more sales.

Cost

• In the year 2014 cost was 133.8billion compared to 2013’s 135.2 billion.

• The reduction could be a result of volume produced, warranty costs, material procured.

• Research also takes much of the companies financial resources.

Technology Develepment

• Pre-collision assist with pedestrian detection.• Active park assist.• Adaptive cruise control.• Lane keeping.• Enhanced active park assist.

Innovation drive

• Take risk.

• Take nothing for granted.

• Ride the technology curve• .• Focus on customer experience.

• Constantly innovate.

Quality

• Have bold emotive exterior designs

• Great to drive.

• Great to sit in.

• Fuel economy.

• Unique in look.

• Exceptional value and quality

Strengths

• Making eco-friendly vehicles • Brand identification • Ford Motor Credit is profitable• Facilities for manufacturing in many

countries• Wide Range of Products targeting all

customer classes

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Weaknesses•Operations in north America is

decaying •Truck sales are declining rapidly

•Firing of Employees

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SWOT AnalysisStrengths Weaknesses1. Preforming well Financially 2. Low CO2 emissions 3. ONE Ford strategy 4. China growth5. The position in US

1. Weak Europe market2. Little presence to Asian market3. High cost structure

Opportunities Threats1. Green vehicles2. Emission rules and regulations 3. Strategic Alliance

1. Decreasing fuel prices2. Prices of raw materials are

increasing 3. Other competitors 4. Change of exchange rates

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Value Chain AnalysisGeneral 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

OperationsHigh 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

ServiceHigh level of service to after sales customers

Marg

in

Margin

Primary Activities

Supp

ort A

ctiv

itie s

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Outline• External Analysis

• Opportunities & • Threats

• Industry Analysis:• Porter’s Five Forces Model• EFE Matrix• CPM

• Environmental Analysis• Competitive Analysis

• Competitive Advantage• Product Life Cycle

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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

Industry Analysis: CPM

Ford GM DiamlerChrysler AG Toyota

Critical Success factors Weights RatingWeighted

Score RatingWeighted

Score RatingWeighted

Score RatingWeighted

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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Competitive Analysis• 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.

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Competitive Analysis (cont.)

• 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”

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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 TRUCKSCOMER-TRUCKSSUVs

E-CARS

PINTO

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

‘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

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.

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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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Effects on Profit Margin

• Ford started to hire more employees

• Ford must increase prices

• There have been new implications for strategy

Market Segments

Market Market Segment Market Sub segment

FORD Motor

Sports Cars

Economic vehicles

Trucks

Buses

Cars

Racing cars

Rally cars

.

Ford Racing

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Market SegmentsGeographic

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

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Ford Current Strategies Cont(..) Ford has a strategy on new key design Ford is beginning to use Solar energy to power their

manufacturing plantsGlobal 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

Future Strategy

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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

Recommendation

• Increase total sales in European Auto Industry

• Become industry leader in the Chinese market

• Pass General Motors and become the highest

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Future Product

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.

QUESTIONS?

References• www.ford.com• https://ycharts.com/compa

nies/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

Current Ratio

Profit Margin

ROE

References

Measuring Company Performance. (2015). Drake/Analysis. Analysis of Financial Statements, 205-239. Financial Statement and Company Risk Analysis. (2015). Financial Valuation Applications and Models, 85-120.