Mohamed Aslam Khan (1121200124) Karthick SM (1121200113)Ibrahim Shamshad (1121200125) Mohammad Fairuz bin ahmad zulaini (1131200001)

INTRODUCTION• The ford Motor company is an American automobile manufacturer whose

headquarters are based in Dearborn Michigan.

• The company was founded in 1903 by Henry Ford and eleven other investors with $28,000 in capital.

• Following disagreement with other investors Henry Ford his wife and his son Edsel Ford bought the shares of the investors and became the sole owners and decision makers of Ford Motor company(Brinkley, 2004)

• Up to 2006, Ford’s CEO was always within the same industry.

INTRODUCTION• In September 2006, Alan Mulally of Boeing Corp was selected as the next CEO of Ford Motor

• Not all the board members were pleased with this

• Ford’s former UK subsidiaries Jaguar and Landrover were sold to Tata Motors of India in march 2008.

• Ford holds the series of brand which include ford Lincoln and Mazda.

• Automakers sales had dropped 37% by the end of 2008 compared to 2007 due the global economic recession.

• The big three automakers used for $ 25 billion bailout money from US government except Ford.

VISION & MISSION Vision

Mission

“To provide sustainable transportation that is affordable in every sense of the word: socially, environmentally and economically.”

Our mission is to improve continually our products and services to meet our customers’ needs, allowing us to prosper as a business

and to provide a reasonable return for our stockholders, the owners of our business.

PEST ANALYSIS

•The September 11th terrorist attack •The Iraqi war •The United Nations World Forum for Harmonization of Vehicle regulations •governmental policy•tax policies on every government

•Rising petrol prices •The financial crisis and global economic recession•Effective Market Amount •The growth potential of foreign target markets•The size of potential target markets•Economic development

•Geographical changes•Consumer attitude•Travel habits of consumers•Cut on personnel and jobs

•Supply chain collaboration•Ford’s operational capability•Technological improvements in distribution•Product development

Politics Economic Social Technological

SWOT ANALYSIS

*Strong position in US market record*ECOnetics initiatives*Financial performance*One Ford approach

*Poor vehicle dependability*High cost structure*Unprofitable Europe operations

*Increasing fuel prices*New emission standards*Strategic partnerships

*Decreasing fuel prices*Intense competition*Fluctuating exchange rates

S

T

w

O

COMPETITORS ANALYSIS

Strengths* Global presence* Strong brand portfolio* Strong presence in China

Weakness* High cost structure* Brand dilution* Car recalls

Strengths* Huge investments in R and D* Motorcycle market share in Asia

Weakness* Weak position in Europe automotive market* Decreasing sales

Strengths* Reputation for V-8 Hemi engine• Domination of

minivan market

Weakness* Merger combined two different company cultures (European and American)* Organisational Culture

Strengths* Wide range of car variants to offer* Strong industry position

Weakness* Weak presence in the emerging markets* Immense competition from world class competitors

GM HONDA

CHRYSLER

TOYOTA

PORTER’S FIVE FORCES ANALYSISBargaining Power of Buyer

Automobile Industry is huge and there are huge numbers of buyers, due to the availability of alternatives and the current economic downturn. The Bargaining power of buyer has gone up. The customers are looking for more affordable and reliable automobiles, and they have huge number of alternatives to choose from.

Bargaining Power Supplier

The bargaining power of suppliers is very low for Ford. Ford controls all its suppliers and has made special arrangement and commitments with its suppliers that favours its operation and helps cut cost for Ford.

Threat of Substitute Products

The threat for substitute is low but it still exists. With the cost of gas increasing and the economy not function very well, people have cut down their spending in long term investments like automobiles. They have gone to other alternatives like public transportation.

PORTER’S FIVE FORCES ANALYSISThreats of New Entrants

The threat of new competition is very high for Ford. With companies like Hyundai and Toyota, which are gaining extensive market share, we can say that there is major threat for Ford to lose market share to these new companies which are trying establishing their root in the American Auto Industry. Since both the scale of economy and Scope economy is high for the Auto Industry, the treat for new competition is imminent for company like Ford.

Intensity of Rivalry

The Intensity for Rivalry is very high for Ford. With other automobiles companies trying to boost their sales and new companies entering the market, there is intense rivalry. Although there are huge start up cost associated with new companies, but the companies trying to penetrate the market are already well established in other countries. The switching cost and exit cost associated with the automobile industry are very high which makes the rivalry even more tough.

HENRY FORD STRATEGIES• In 1917, the construction of rouge plant, envisioned by Ford as all in

one manufacturing complex, where the processing of raw materials, parts and final automobiles could happen efficiently in a single place.

• Ford vehicle rolling off the assembly line within 48hrs.

• Mass production process could create more jobs, that in turn would crate more people able to afford low price vehicles produced by Ford.

• Increased of wages in order to make sure that every individual of ford company can afford a Ford car.

EDSEL FORD & BILL FORD• Edsel believed that in addition to the functionality of the auto, the auto

could be stylish and beautiful.

• He convinced Henry that the Model T should be available in the variety of colors despite Henry’s famous statement “ You can have any color, as long as it’s black”

• Bill Ford has led the Ford to 3 straight years of profitability, this period has followed sharp decrease in profit and 1.44billion lose in the first half 2006.

• This motivated him to remove himself from the CEO position and search for a new CEO from outside the industry

ALAN MULALLY• Until Mulally, no one ever admitted anything was wrong

with Ford’s Brand• Restructuring of Ford:• Slashed Ford’s North American workforce by 40%• Diverged all none core brands • Mortgaged every asset the company owned• Accelerated the research and development • Developed a base design for all models of Ford• Trim labor cost

CREATING ONE FORD

One the first day of Alan Mulally arrival, he noticed that there wasn’t one Ford car in the executive parking lot. He said that “The key issue was clear if Ford executives wouldn’t drive Ford, who would?”

In response, Mulally developed the One Ford business transformation plan

ALAN MULALLY FORCING EVERYONE TO “JOIN THE TEAM”

Alan Mulally was surprised prior to his arrival the plan had been “to operate our eight Ford” (One separate business for each of Ford brands).

Mulally made his weekly executive meetings a safe environment where data could be shared without blame. Mulally tied each executive’s performance to the success of the company as a whole. According to Mulally “Data can set you free…You can’t manage a secret”.

ALAN MULALLY BUILDING CARS AND TRUCKS THAT PEOPLE ACTUALLY WANTEDMr. Mulally’s objective for Ford is to have the best in every category: small, medium, and large. Be best in:

* Quality and class* Green* Safety* Fuel efficiency

Ford has focused on consumer demands and qualityMr. Mulally said that “That’s not only good for Ford and our customers and our stakeholders but that’s good for the United States of America.”

BRANDING & MARKETING STRATEGIES

• The company reaches consumers through traditional venues such as newspaper, radio, television advertising as well as through social media such as Facebook, LinkedIn, twitter, YouTube etc.

• Ford came out with marketing strategy known as “swap your ride” in 2010 &2011. consumers were given the opportunities to exchange their competitive-make vehicles for the new Ford to drive for one week.

• Ford connects with teenage drivers and their parents by offering the driving skills for life program

BUSINESS STRATEGYCost leadership Strategy

It struggles to produce products that are standardized, and acceptable to its customers (Charles, 2012). There are efforts to lower costs as compared to their competitors in order to achieve the cost leadership of this industry market. The company has put measures to ensure that they produce efficient products, maintain their production and overhead cost, and minimizing their cost of sales.

Differentiation strategy

Ford Motor Company appreciates the fact that value to customers is achieved through unique products, and not low prices. The company is also offering financial services. This is a unique service that most of the companies in the car manufacturing industry are not providing.

BUSINESS STRATEGY

Focused low cost strategyThis occurs when a company sells its products to a specific small segment of the market (Thomas, 2005). The company has been utilizing this strategy in order to avoid competing only on prices. Ford Motor Company has divided up its market in order to provide specific services to a certain segment of the market

Focussed differentiation strategyThe company offers differentiated products to its small segments. For instance, the U.S government may need armoured vehicles for its military. This is a specific differentiated service that the Ford through its Marketing Department is lobbying the U.S government so as to win such tenders. The focused strategy may enable the company to serve the small segments efficiently than its competitors.

CORPORATE LEVEL STRATEGYStability strategy

The stability strategy of the company aims at making no changes in some of the company’s current activities (Thomas, 2005). This strategy does not neither seek to expand the company’s market nor invest in capital assets. The company has been using this strategy in specific market segments, especially in the developing countries where the industry experiences slow growth.

Retrenchment strategies

Retrenchment strategies involve decreasing the company’s level of activities. When the state of the economy of the country in which the company is operating is not stable, the company usually opt for this strategy. The strategy focuses on operational improvement. Owing to its financial deficits, the company discontinued its production of luxury vehicle under mercury brand in 2008.

CORPORATE LEVEL STRATEGYGrowth strategy

Growth strategy of the company on the other hand aims at expanding the company’s activities. The company has been diversifying at the corporate level while focusing on the business level.

vertical integration Horizontal integration

Ford Motor Company has diversified by engaging in financial services. The company has taken up a service that is being provided by financial institutions. Through Ford Credit business, the company has been financing its vehicles, and giving support to most of its dealers

This is where the company is trying to expand its products into new markets and geographical areas. The company has successfully engaged in horizontal integration by investing in mergers and acquisitions

CHALLENGES

• New entrants to the US Automakers can eventually come from China and India among others

• As the population increases roads and highways became more congested. People will opt other alternative transportation methods such as public transport, bicycle and walking. This would significantly decrease the consumer demand for vehicles.

Thank you!