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  • Not only did Ford revolutionize the development of the automobile as a product, he is also the visionary behind the idea of mass production. Ford's ability to make automobiles affordable for the masses is cited as a driving force behind both the automobile industry creation of a middle class in America.The Highland Park plant in Michigan begins operations as the first moving assembly line and making Model T production 8 times faster. 
  • * Ford Explorer it has become the nation’s best-selling SUV model.
  • 2012 models have to meet government emissions standards. For example state regulations by 2016 will require at least mpg of 35.5 mpg.
  • Can easily switch manufactures
  • Low switching cost for buyers.
  • In regards to the size of potential target markets, if a market has a high GDP, consumers will be more likely to buy high-end or luxury cars Sales in Eastern Europe have increased by 9.4% over the last year while sales in Russia have increased by 50% and sales in Turkey by 110%
  • Consumer habits are different in different geographical areas. Ex) American consumers tend to drive much larger cars than European consumers Ford now designs cars around the travel habits of its consumers
  • Ford has a very strong supply chain collaboration as they have manufacturing plants in more than 30 countries Ford’s high level of product development allow them to meet the needs of all of their customers
  • Hybrid and electric cars are becoming increasingly popular and as of 2010 Ford had made more than half of their products available as hybrids Ford’s Michigan assembly plant is now powered by Solar energy and this saves them money and will help them as they begin building plug-in hybrid vehicles The Ford Fiesta sedan is Ford’s number one selling car in Europe for the past two years
  • - In 2006 had to lay off one third of the work force to remain profitable, – Constantly producing new models and redesigning existing modelsSustainability strategy (more fuel efficient cars, pilot program in Toronto encourages public transit, tackles short and long term sustainability challenges)3. Only company that did not receive government bailout during the steepest economic downturn in decades,Put up company assets including Ford logo as collateral to raise 26.2 billion in loans for North America,Eliminate as much as 10.4 billion dollars in debt by giving cash and stock to debt holders 4. -Committed to diversity in the workplace -Sells vehicles in 200 markets and employs 345,000 employees in 6 continents -Transformation to a team based workplace
  • WASHINGTON/DETROIT | Thu Apr 14, 2011 11:11am EDT WASHINGTON/DETROIT (Reuters) - Ford Motor Co and U.S. safety regulators have agreed to a greatly expanded recall of the best-selling vehicle in North America, the Ford F-150 pickup truck, the regulators said on Thursday.The expanded recall is for a possible short-circuit that could cause airbags to deploy unexpectedly, and involves nearly 1.2 million F-150 pickup trucks and 16,000 Lincoln Mark LT vehicles, said the U.S. National Highway Traffic Safety Administration.This is in addition to a previous recall of 144,000 Ford F-150 trucks, bringing the total for this issue to 1.33 million vehicles, NHTSA said.
  • In this economy most people will only purchase a new or second car if they are in a stable financial situation which most aren’t during a recession, this is where better marketing strategies must be implemented The fuel efficiency plan will set rules and regulations on cars built between the years of 2012 and 2016 Rising fuel prices have a direct effect on the economy and consumer spending habits which have recently been hurting the automobile industry Because of the environmental issues surrounding automobiles powered by gas, there has been an increasing demand for cars with lower emissions
  • Ford is producing more hybrid and electric vehicles as part of their strategy to save fuelFord sustainability strategy is based off of three separate components. 1.) Hard Science 2.) It tackles both long and short term sustainability challenges 3.) Its heretical Source:
  • In March 2011 Ford’s main US manufacturing plant in Michigan became completely operated through the use of solar powerFord's global electrification strategy will deliver a suite of five new electrified vehicles in North America and Europe by 2013 and builds on the company's overall vision of offering the widest possible range of fuel-efficient, low-emission technological solutions. Ford is committed to working with technology leaders, the energy industry and government to prepare consumers for a future with electric vehicles.The global key is a proven design that has been used very successfully in Europe for some timenow. The increased security of this global lock & key system meets global securityrequirements and has better security protection vs. the previous North American lock & keysystem
  • (Talk about mass producing cars and be able to sell them fast and cheap like first did with model T)
  • For example, U.S. automobile manufacturers had approximately a $1,000 cost disadvantage for their cars compared to similar classes of Japanese cars.Read more: Downsizing and Rightsizing - strategy, organization, levels, system, advantages, type, company, hierarchy, business
  • We were the first to mass produce automobiles affordable for the middle class and now we need to continue our tradition and mass produce hybrid that are affordable and reliable.
  • Based on North America 425 in operating cost and 500 million in technology. $6.6 billion earnings
  • Ford pp

    1. 1. By: Ed Zielonka, Bill McCann,Matt Gaynor, Zach Metcalfe, and Garrett Hasanbasic
    3. 3. Introduction Ford Motor Company is a global automotive industry leader based in Dearborn, Michigan Manufactures and distributes automobiles across six continents Includes Lincoln & Mazda 2nd largest automaker in the U.S. 5th largest in the world based on annual vehicle sales in 2010 118,308,000 in Revenues & 2,717,000 in Profit 2010
    4. 4. Introduction Cont. Competitors GM, Toyota, and Honda Products  Automobiles  Automotive parts Services  Automotive finance  Vehicle leasing  Vehicle service
    5. 5. History Founded by Henry Ford 1903: Ford Motor Company was incorporated 1908: Ford introduces the Model T 1913: First moving assembly line and making Model T production 8 times faster. 1964: Ford Mustang and Ford GT40 was introduced as super cars. 1975: The famous Ford F150 was introduced.
    6. 6. History Cont. 1990: Ford Explorer was introduced as sport utility vehicle 1993: Ford opens its first dealerships in China. Its brand sales in China increased 46 percent in 2005. 2001: Ford Motor Company recalls 13 million tires and Bridgestone/Firestone dumps Ford as a customer 2006: Alan Mulally hired as new CEO to try to revive the company
    7. 7. Key Executives William C. Ford Jr., Executive Chairman Alan R. Mulally, President & CEO Lewis Booth, Chief Financial
    8. 8. Ford’s Mission Statement ONE FORD MISSION: ONE TEAM:  People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction ONE PLAN:  Aggressively restructure to operate profitably at the current demand and changing model mix  Accelerate development of new products our customers want and value  Finance our plan and improve our balance sheet  Work together effectively as one team ONE GOAL:  An exciting viable Ford delivering profitable growth for all.
    9. 9. Expected Behaviors
    11. 11. Industry Analysis U.S. consists of 13 international automakers together produce 5.7 million cars and commercial vehicles (9% of global output) China surpassed North America in 2009 with 13.8 million units Laws and government regulations have affected the automotive industry  Emissions  Safety  MPG
    12. 12. Industry Analysis New Marketing  Demand from consumers  Technology Advances  Different Age Focus Automotive industry one of the largest employers in the country  Represents 4% of GDP in the nation
    13. 13. Competitors General Motors Honda Toyota
    14. 14. General Motors Founded September 27, 1908 Headquartered in Detroit, Michigan Products are automobiles and financial services 209,00 employees
    15. 15. Honda One of Ford’s largest competitors Founded September 24, 1948 Headquartered in Tokyo, Japan Currently manufacture 13 different products
    16. 16. Toyota Founded August 28, 1937 Headquartered in Aichi, Japan Products are automobiles and financial services 317,734 employees
    17. 17. Market Analysis China  Top auto market with 1.37 billion people and growing affluence  This market is growing at a rate of 30.45% year on year growth to 7.18 million units during the first six months of 2010 Europe  Electric and hybrid cars are really taking over this market  About 10% of new cars sold globally are either hybrids or electric cars
    18. 18. Market Analysis Electric cars  Automakers are looking to develop newer electric cars powered by batteries, the sun, or hydrogen fuel cells  Automakers are also looking for new ways to secure the power to “refuel” these newer cars on a national scale
    19. 19. Current Status (China) Over the first half of 2010 Ford sold 301,524 units Resulted in a 53% growth in sales The Ford Fiesta was a popular model with the younger generation in China  Also helped Ford gain market share
    20. 20. Chart World Motor Vehicle Rankings by Country (Million Units Produced)16 13.814 11.9512 11.6 11.56 10.8 10.7810 8.88 9.25 Us 8.71 7.93 8 5.71 5.71 China 6 4 Japan 2 0 2005 2007 2008 2009
    21. 21. Current Status (Electric Cars) Plans to launch a new electric Ford Focus sedan and the Ford Transit Connect commercial van Retooling North American truck plants to be used to produce
    22. 22. Current Status (Europe) Has a weak marketing strategy Focus on developing more fuel efficient cars and developing the Focus and Transit vehicles
    23. 23. Ford Drive ONE!
    24. 24. Porter’s Five Forces Used for industry analysis and business strategy. Developed by Michael Porter of the Harvard Business School in 1979. Used to develop a competitive edge over rival competitors.
    25. 25. Porter’s Five Forces Threat of New Entry Power of Suppliers Power of Buyers Threat of Substitute Intensity of Rivalry
    26. 26. Threat of New Entry Low Manufacturers must be able to mass produce automobiles so they can be affordable for every consumer Extreme amount of capital is needed in order to manufacture automobiles keep up on research and development Difficult entering into established industry
    27. 27. Power of Suppliers Relatively Low It takes several suppliers to manufacture an automobile because there are so many different parts used. When there are a large number of suppliers in an industry, they do not have much power.
    28. 28. Power of Buyers Fairly high All of the manufacturers will depend on the consumers because they purchase most of the output Most of the revenue comes from the buyer If Ford cannot keep the consumer happy, they will lose them to another competitor
    29. 29. Threat of Substitute High Other forms of transportation  Walking  Riding a bike  Public Transportation Customer Loyalty Ample amount of other options in car industry
    30. 30. Intensity of Rivalry Very High Most competitors have the same general focus so it makes the rivalry intense All competitors are trying to achieve same common goal Price, quality, and durability are factors that are taken into consideration to become superior to other competitors
    31. 31. P E S T Analysis Political Economic Social Technological
    32. 32. Political Exchange rates of the US dollar compared to other countries Oil prices and free trade flows Foreign ownership regulations Foreign laws and regulations Labor unions
    33. 33. Economic The growth potential of foreign target markets The size of potential target markets Economic development Oil price fluctuations The sales increase of Eastern European countries (Turkey, Hungary) Ford is the market leader in the UK, Hungary and Turkey
    34. 34. Social Geographical changes Consumer attitude Travel habits of consumers Cut on personnel and jobs
    35. 35. Technological Supply chain collaboration Ford’s operational capability Technological improvements in distribution Product development
    36. 36. External SWOT Analysis Opportunities Threats
    37. 37. Opportunities Customers demand for more fuel efficient cars Ford’s investment in the Solar Power industry “The Way Forward Plan” The European and Chinese markets Release of the 2011 Ford Fiesta
    38. 38. Threats Rising new material prices Increasing competition The “war on terrorism” and its overall threat to the world market and economy The economy Rising oil prices Housing market decline
    40. 40. Corporate Culture Second largest car manufacturer in the world Widely know for its vehicle service for its customers Large emphasis on customer first and customer satisfaction Areas served are worldwide Ford has invested $50,000 to help hundreds of Ford volunteers complete urgent projects identified by the companys nonprofit agency partners.
    41. 41. Current Mission1.) “Aggressively restructure to operate profitably at current demand changing model mix.”2.) “Accelerate the development of new products our customers want and value.”3.) “Finance their plan and improve their balance sheet.”4.) “Work together effectively as one team which emphasizes the importance of working together as one team to achieve automotive leadership , which is measured by the satisfaction of our customers, employees and other essential business partners, such as our dealers, investors, suppliers, unions/councils and communities.”
    42. 42. Industry RankingsRanking Automake Jan. Jan. 2009 Year to Year to Jan. 2010 r 2010 Sales Year % Year % Market Sales Change Change Share (unadjust (adjusted ed) )1 GM 146,825 129,227 +13.6 +23.1 20.9%2 Ford 112,406 90,596 +24.1 +34.4 16.7%3 Toyota 98,796 117,287 -15.8 -8.7 14.1%4 Honda 67,479 71,081 -5.0 +2.9 9.6%5 Nissan 62,572 53,884 +16.1 +25.8 9.0%6 Chrysler 57,143 62,157 -8.1 -0.4 8.1%7 Hyundai 52,626 46,608 +22.3 +12.9 7.6% Group
    43. 43. Ford Financial Performance Revenues Gross Margin % Earnings per share2006 (160,065,000) 2006 (7%) 2006 (-6.72)2007 (168,884,000) 2007 (16.9%) 2007 (-1.32)2008 (143,584,000) 2008 (11.8%) 2008 (-6.46)2009 (116,283,000) 2009 (15.5%) 2009 (0.86)2010 (128,954,000) 2010 (19%) 2010 (1.66)
    44. 44. BCG Matrix In the matrix there are four quadrants. These quadrants are the Dogs, Question Marks, Stars, and Cash Cows.  The Dog quadrant describes parts of the company that are not doing well  The Question Mark quadrant deals with the parts of the company that have low market share but are growing  Stars are the part of the matrix where there is high relative market share and high market growth  Cash Cows are the most desirable market segment. These divisions have a high relative market share and low market growth
    45. 45. BCG Matrix Relative Market Share High Low Stars Question Marks Market Growth Rate Cash Cow DogsLow
    46. 46. CEO BookFord sales during the last year Recorded revenue of $128.954 billion in fiscal year 2010  Net Income of $6.561 Billion  Operating Income of $7.149 Billion  Total sales grew by 15.2 %  Increased market share for 2nd consecutive year  Inventory Velocity is 21  Return on assets is 4%
    47. 47. Ford and their competitors As of 2010, Ford’s net profit margin was 6.56 Billion Honda net profit margin=3.8 Billion Toyota net profit margin=5.2 Billion General Motors net profit margin=4.7 Billion
    48. 48. Profit Margin 2006  5.98 Billion 2007  6.23 Billion 2008  6.12 Billion 2009  6.21 Billion 2010  6.56 Billion
    49. 49. Effects on Profit Margin… Ford started to hire more employees Ford must increase prices There have been new implications for strategy
    50. 50. Cash Flow & Competition Increased revenues 48.7% Revenues have continued to increase Ford is the second largest automotive maker in the United states
    51. 51. Internal SWOT Analysis  Strengths  Weaknesses
    52. 52. Strengths Producing Hybrid vehicles Brand recognition Profitable financial services division (Ford Motor Credit) Manufacturing facilities in more than 30 countries Wide Range of Products targeting all customer classes
    53. 53. Weaknesses Weakening North American automotive operations Recalls Sales in trucks decreasing rapidly Firing of Employees
    54. 54. Current Strategy Use free cash flow to pay off significant amounts of debt Truck/car sales mix transitioned to 48%/52% from 54%/46% Sell off preferred securities to reduce $2.98 billion in outstanding principal, and decrease interest on debt by 190 million a year Reduce debt, generate free cash flow Sold off Jaguar, Land Rover, Mercury, and Volvo
    56. 56. Key Strategic Issues
    57. 57. Strategic Issues of theEconomy Fuel Prices Better marketing strategies for automobiles Finding ways to lower emissions The US government and automobile companies have agreed on a long term fuel efficiency plan Better quality and safety
    58. 58. Strategic Issues of theIndustry Finding ways to attract customers in a struggling industry Expanding into other markets that offer a greater potential (ie. China and Europe) Finding a way to build more fuel efficient vehicles (ie. Hybrid and Electric vehicles) Separating themselves from competitors through the use of marketing and new innovations
    59. 59. Strategic issues for Industry Auto industry has faced shortages of engineers U.S. industry must add thousands of carmakers to build fuel-efficient vehicles to meet more stringent federal regulations and growing consumer demand. The nations auto sector has added a total of 32,000 employees 1,000 of which are engineers Threat of industry wide bankruptcies Fuel efficiency standards are placed on 2012 models
    60. 60. Competitors - Toyota In January 2010 Toyota announced it would temporarily stop building and selling eight models in the North American market Toyota recalled more than 11 million vehicles globally because of floor mats and sticky accelerator pedals in late 2010 Toyota was issued three fines totaling $48.8 million because the Transportation Department said Toyota had not reacted appropriately to reports of problems
    61. 61. Competitors - GM GM was forced into bankruptcy court in March 2009 In July of 2009 GM sold off its assets to a government owned company and the US government now owns 61% of the new company  This creates an opportunity for Ford to capitalize on a company that is not financially stable
    62. 62. Competitors - Honda Recalls on 2,800 Odyssey mini-vans due to defect in front windows coming off the tracks New Odyssey mini-vans re-called 33,000 models due to faulty windshield wipers Third highest automaker involved in recalls in the U.S. last year – second highest in Japanese market Struggles through the effects of the earthquake, tsunami, and nuclear meltdown
    63. 63. Competitors – Honda Cont. Increased pressure from U.S., South Korea, and European competitors Honda lagged 12 points behind industry average of J.D. Power APEAL (Automotive Performance, Execution and Layout) Introduction of new line of cars will be delayed due to March 11, natural disaster
    64. 64. Ford Strategies in the Past Ford used to have a very corporate orientated strategy, but now focus on specialized product production and meeting specific needs of the consumer Ford used to imply a mobility strategy that worked to determine the long term profitability of the company but has altered that strategy since the recession
    65. 65. Ford Strategies Now 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 Ford has developed a very strong sustainability strategy
    66. 66. Ford Strategies Now Cont. Ford is beginning to use Solar energy to power their manufacturing plants Global Electrification strategy Ford has a strategy on new key design Ford has a very strong marketing strategy as they market all of their vehicles differently
    67. 67. TOWS Chart Uses the SWOT matrix to develop specific strategic options for your company The components of the SWOT are matched, and strategies are developed to address them SO , WO, ST, AND WT
    68. 68. TOWS ChartsStrengths Weaknesses1. Producing Hybrid vehicles 1. Weakening North American2. Brand recognition automotive operations3. Profitable financial services 2. Recalls division (Ford Motor Credit) 3. Sales in trucks decreasing4. Manufacturing facilities in more rapidly than 30 countries 4. Firing of Employees5. Wide Range of Products targeting all customer classes
    69. 69. TOWS Charts TOWS ChartsOpportunities Threats1. Customers demand for 1. Rising new material prices more fuel efficient cars 2. Increasing competition2. Ford’s investment in the 3. The “war on terrorism” and its Solar Power industry overall threat to the world3. “The Way Forward Plan” market and economy4. The European and 4. The economy Chinese markets 5. Rising oil prices5. Release of the 2011 Ford Fiesta
    70. 70. TOWS Combinational SO Strategy  ST Strategy Focuses: Focuses:1. Continue 1. Continue marketing and marketing and research & research & development of development of hybrid hybrid cars cars(S1,O1, O2) (S1,T4,T5)2. Consolidate more 2. Improve fuel in European and consumption Chinese markets (S1,T4,T5 ) (S4, O4)
    71. 71. TOWS Combinational WO Strategy  WT Strategy Focuses: Focuses:1. Continue Research 1. Increase incentives and Development for customers. of Hybrid Cars Examples: mileage (S1,W2) warranties (T2,W1)2. Reduce recalls in 2. Reduce threat of newer products competition by (W2, O2) developing flexible product line(T2,W3)
    72. 72. Ansoff Matrix Purpose is to use this matrix to increase sales of a company’s current products without adjusting it in the existing market. The four main quadrants are market penetration, market development, product development and diversification. These four major classifications are in the new markets and existing markets.
    73. 73. Ansoff Matrix Existing Product New Product Market Penetration Product Existin Discount vehicles Development g and focus and New range Market advertise for the development. company. Market Development Diversification New Target the Develop new Market internet as prime line of cars. source for marketing.
    74. 74. Identification of Strategic Alternatives
    75. 75. Overarching Strategy Expand Globally, while mass producing hybrid technology (Aggressive) Continue to compete in automotive market, while focusing on core profitable products (Passive)
    76. 76. Expand Globally Develop a plan:  Expand into different market segments  China  Europe  Stronger Marketing campaign  Brand Awareness in foreign markets
    77. 77. Focusing On Core Products Develop a plan:  “Slim down to grow”  Getting rid of weakest brands and using that money to invest into new product development and marketing  Separate the company’s slow-selling secondary brands, and concentrate on shoring up its core business.
    79. 79. Strategic Intent (Goals) Increase total sales in European Auto Industry. Become industry leader in the Chinese market. Pass General Motors and become the highest ranked company in the US automobile market
    80. 80. Expanding Globally Pros Larger market potential, increase in sales Better brand recognition Access to different economies of scale Extend product life cycle by reaching larger markets Operational flexibility
    81. 81. Expanding Globally Cons Foreign economies are all structured differently Labor in foreign countries Lack of brand recognition Low customer loyalty Higher marketing costs
    82. 82. “Slim Down to Grow” Pros More room to focus on specific products Easier to market to certain economies Less costs associated with product development Better chance of financial safety
    83. 83. “Slim Down to Grow” Cons Loss of highly-skilled and reliable workers and the added expense of finding new workers An increase in overtime wages A decline in customer service because workers feel they lack job security after layoffs Restructuring programs sometimes take years to complete because of ensuing employee confusion and the amount of time it takes for employees to adjust to their new roles and responsibilities
    84. 84. Preferred Choice Expand Globally, while mass producing hybrid technology (Aggressive)
    85. 85. Arguments for Preferred Choice Car ownership in China has more than doubled in the last five years, from 12% of households in 2004 to 28% in 2009 Report show that its possible for Chinas percentage to top 50% by around 2015. Chinese have become less sure about their preferences, leaving a large group of undecided customers European market has increased demand for fuel efficient compact cars
    86. 86. ProjectionsGloballyExpansion Grow customers by 20% annually Increase number of dealerships by 10 per year
    87. 87. Market Expansion (China)
    88. 88. Annual Objectives - Year 1 Total Cost: 1.2 billion (China)  Franchise: $500,000+  Technology Investment: 750 million  Operating Cost: 400 million  Unforeseen Cost:1.5 million Total Earnings: 3.5 billion
    89. 89. Annual Objectives - Year 2 Total Cost: 1.2 billion (Europe)  Franchise: $500,000+  Technology Investment: 750 million  Operating Cost: 400 million  Unforeseen Cost:1.5 million Total Earnings: 3 billion
    90. 90. Annual Objectives - Year 3 Total Cost: 1.7 billion  Technology Investment: 750 million  Operating Cost: 800 million (400 China/Europe)  Unforeseen Cost:1.5 million Total Earnings: 7.5 billion  Europe Market: 3 billion  China Market: 3.5 billion
    91. 91. Implementation Increase Research and Development of Hybrid energy  Joint venture with energy companies  Help to develop longer lasting fuel supplies Increase Foreign market share  China  Europe
    92. 92. Technology!
    93. 93. Trigger/Contingency-1 Trigger:  Unstable economy Contingency Plan:  Reduce lower selling models/product lines to maintain profitability  Downsize work force to generate operating cash
    94. 94. Trigger/Contingency-2 Trigger:  Natural disaster Affects gas prices Affects production in foreign sectors Contingency Plan:  Develop partnership with relief organizations  Donate F150s (help brand awareness)
    95. 95. Mission Statement – Revision ONE FORD MISSION: ONE TEAM:  People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction ONE PLAN:  Aggressively restructure to operate profitably at the current demand and changing model mix throughout the world  Accelerate development of new products our customers want and value  Finance our plan and improve our balance sheet  Work together effectively as one team to manufacturer the safest possible vehicle ONE GOAL:  An exciting viable Ford delivering profitable ONE WORLD:  Strive to be the safest automobile manufacturer in the world along with providing consumers with eco friendly vehicles.
    96. 96. QUESTIONS?