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FORD MOTOR

COMPANY:
THE WAY
FORWARD
LIM, RODRIGUEZ,
SIAPNO

SUMMARY OF THE CASE


In April 1994, Ford announced to become
a single global entity by merging its
North American and European vehicle
business namely Ford Automotive
Operations (FAO).
In 1996, Fords European operations
incurred losses of $291 million due to
the intensely competitive European
market.
By mid 1998, Ford had made substantial
progress on reducing costs as reflected

SUMMARY OF THE CASE


In April 1999, Ford made partnerships
and alliances with the following: KwikFit, Royal Automobile Club (RAC),
Norwich Union and Jardine Motors
Group.
In the same year, Ford had a new
Premier Automotive Group which
brought four luxury brands (Jaguar,
Aston Martin, Volvo and Lincoln) into a
single organization.
In 2000, Fords total company sales

SUMMARY OF THE CASE


The company was ranked second in the
US market and ranked fifth in the
European market.
Ford also achieved an additional $500
million in total cost reductions in
worldwide operations.
In April 2001, Ford reported a 41%
slump in profits caused partly by
concerns in America over the safety of
its Explorer sports utility vehicle after
being linked deaths and injuries.

SUMMARY OF THE CASE


In the same period, both Ford and
General Motors were under pressure
from increased competition and rising
unemployment.
In January 2002, Ford announced a new
series of incentives to offer $2,500
rebates in response to the move by GM
to offer $2,002 rebates.
In addition, the company executed cost
cutting measures to main investment in
research and development.

SUMMARY OF THE CASE


In 2004, Fords market share fell to low
of 58.5% while Japanese brands
reached a of 30.6% and Korean brands
climbed to 4.1%.
Both Ford and GM attempted to
streamline their operations by closing
plants but continued to invest heavily in
new assembly plants.
Towards the end of 2006, Ford
confirmed plans to cut between 25,000
and 30,000 jobs in North America and

SUMMARY OF THE CASE

STATEMENT OF THE
PROBLEM

How can Ford Motor Company


become the worlds leading
manufacturer of automotive
products and services?

OBJECTIVES

To be able to increase market share


and revenue across all regions.
To be able to improve results at all
automotive operations.
To be able to improve product quality
and customer satisfaction.
To be able to continue delivering
exciting new products.
To be able to reduce overall costs at
all levels.
To be able to become competitive in
the aggressive automobile industry.

MISSION AND VISION


STATEMENT

SWOT ANALYSIS
STRENGTHS
- Strong brand image - Wide range of
products
- Global supply chain
-

WEAKNESSES
High cost structure
Limited network of
production
facilities
Low quality of car
products
OPPORTUNITIES
THREATS
- Growth through
- Intensely
product
competitive market
development
- Consumer
expectations and
- Strategic
partnership and
preferences
joint ventures
- Fluctuating oil
- Cutting of jobs and
prices

PORTERS FIVE FORCES

ALTERNATIVE COURSES OF
ACTION
ACA 1: Status Quo
ACA 2: Migration of costs to low-cost
countries
ACA 3: Divestiture of Premier
Automotive Group (PAG) to improve
its R&D on higher demand vehicles

DECISION CRITERIA
ACA 1

ACA 2

ACA 3

To be able to increase
market share and revenue
across all regions

To be able to improve
results at all automotive
operations

To be able to improve
product quality and
customer satisfaction

To be able to continue
delivering exciting new
products

To be able to reduce overall


costs at all levels

2.6

1.6

1.8

RECOMMENDATION
Using the decision criteria, we recommend the ACA 3, since
the divestiture of Premier Automotive Group (PAG) to
improve its R&D on higher demand vehicles will help the
achievement of its goal to be a leader in the automotive
industry.
Ford Motor Company should also consider its global design
strategy which is think global, act global strategy to
migrate to think local, act local strategy. Now, the
company involves the development and production of
standardized models with country-specific modifications
limited primarily to what is required to meet local country
emission and standards. However, if they will adapt the
think local, act local strategy, they can offer mass
customization production that will fit to the local
customers.

IMPLEMENTATION

BALANCED SCORECARD

END

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