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1. Business development plan to improve
the business performance of Ford Motor Company
Major Project
Programme: Master of Business Administration
Prepared by: Aznauryan David
Student ID: 0044NEANEA1014
Supervised by: Dr. Kui Juan Tiang
A major project is submitted as a partial fulfillment of
requirements for the Master of Business Administration to the
Cardiff Metropolitan University
Submission Date: 7 September, 2015

2. 2
Declaration
I, Aznauryan David (ID: 0044NEANEA1014) declare that this major project "Business
Development Plan to improve the business performance of Ford Motor Company" is submitted
by my own and proves the accomplishment of the independent research being referred to the
sources stated throughout and at the end of the work.

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Acknowledgements
This major project is the result of all efforts made and knowledge gained during the education in
Westminster International College. I hope very much that this work will present me as a worthy
alumni and will help me in my future employment perspectives.
The greatest thanks I would like to extend to my family, my parents and my elder brother who
have been supporting me throughout this tough academic year. They were trying to maintain my
spirit up and stimulating to continue studying harder.
This Major Project may not have been written without my friends and especially my girlfriend -
Mary Martikyan. Frankly, I am very pleased that I met you in my life. Thank you for all your
patience. In spite of everything, you were keeping faith in me.
Special thanks I would like to address to my supervisor Dr. Kui Juan Tiang who were directing
me by giving instructions, comments, remarks guidance notes, and recommendations. I
appreciate your assistance a lot.

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Table of Contents
Declaration....................................................................................................................................................2
Acknowledgements.......................................................................................................................................3
List of Tables.................................................................................................................................................7
List of Figures ...............................................................................................................................................8
List of Charts.................................................................................................................................................9
Executive Summary.....................................................................................................................................10
1. Introduction.............................................................................................................................................12
1.1 Overview of Ford Motor Company...................................................................................................12
1.2 Purpose and rationale........................................................................................................................19
1.3 Terms of reference ............................................................................................................................20
1.3.1 Research Questions...................................................................................................................20
1.3.2 Research Objectives..................................................................................................................20
1.3.3 Research Framework.................................................................................................................21
2. Business Review .................................................................................................................................23
2.1 Market...............................................................................................................................................23
2.1.1 Economic environment .............................................................................................................23
2.1.2 Market demand and needs.........................................................................................................26
2.1.3 Market segmentation.................................................................................................................26
2.2 Marketing..........................................................................................................................................27
2.2.1 Innovative Products....................................................................................................................27
2.2.2.1 Product differentiation.........................................................................................................27
2.2.2.2 BCG-Matrix Model.............................................................................................................28
2.2.2.3 Product Quality and Safety..................................................................................................30
2.2.2 Pricing .......................................................................................................................................32
2.2.3 Promotion...................................................................................................................................32
2.3 Organisation......................................................................................................................................33
2.3.1 Leveraging Supply Chain...........................................................................................................33
2.3.2 Monitoring Strategies.................................................................................................................36
2.3.3 Business Processes.....................................................................................................................36
2.4 Financial Performance.......................................................................................................................38
3. Research Design..................................................................................................................................41
3.1 Research Philosophy.........................................................................................................................41
3.2 Research Methods.............................................................................................................................41
3.3 Sample Unit ......................................................................................................................................42
3.4 Sampling Method..............................................................................................................................43

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3.5 Sample Size.......................................................................................................................................43
3.6 Data Collection Methods ..................................................................................................................43
3.7 Expected Outcomes ..........................................................................................................................45
3.8 Limitations and Ethical Considerations ............................................................................................45
3.9 Research Gantt Chart ........................................................................................................................46
4. Data Analysis ......................................................................................................................................48
4.1 Primary Data Analysis......................................................................................................................48
4.1.1 General questions.......................................................................................................................48
4.1.2 Subject Matter Questions ...........................................................................................................52
4.2 Business Implications........................................................................................................................61
5. Business Model ...................................................................................................................................64
5.1 Business Model Canvas....................................................................................................................64
5.2 Business Model Elements .................................................................................................................65
5.2.1 Business Drivers.........................................................................................................................65
5.2.2 Key Partnerships ........................................................................................................................65
5.2.3 Key Activities.............................................................................................................................67
5.2.4 Value Chain Based Resources....................................................................................................68
5.2.5 Superior Value Proposition ........................................................................................................68
5.2.6 Priority Customer Segments.......................................................................................................68
5.2.7 Customer Relationships..............................................................................................................69
5.2.8 Channels.....................................................................................................................................69
5.2.9 Cost Structure.............................................................................................................................70
5.2.10 Revenue Streams & Cashflow..................................................................................................70
6 Business Plan ......................................................................................................................................72
6.1 Vision & Mission..............................................................................................................................72
6.2 Objectives .........................................................................................................................................73
6.3 Marketing Plan..................................................................................................................................74
6.3.1 STP-analysis...............................................................................................................................74
6.3.3 Strategic Growth ........................................................................................................................77
6.3.3.1 Product Development Strategy............................................................................................77
6.3.3.2 Global Diversification Strategy...........................................................................................78
6.4 Operational Plan................................................................................................................................79
6.4.1 Organisational Structure.....................................................................................................................79
6.4.2 Continuous Improvement...........................................................................................................80
6.4.3 Human Capital Plan ...................................................................................................................81
6.4.4 Business Process / Value Chain .................................................................................................84
6.4.5 Customer Satisfaction ................................................................................................................87

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6.5. Financial Plan...................................................................................................................................88
6.5.1 Balance Sheet.............................................................................................................................88
6.5.2 Income Statement.......................................................................................................................89
6.5.3 Justifications...............................................................................................................................90
6.6 Implementation Schedule – Gantt Chart ...........................................................................................91
6.7 Critical Success Factors ....................................................................................................................93
6.8 Risk Mitigation / Contingency Plan..................................................................................................94
References...................................................................................................................................................96
Appendices................................................................................................................................................102
i. Application for Ethics Approval .......................................................................................................102
ii. Questionnaire........................................................................................................................................110
iii. Ford Motor Company July 2015 U.S. Sales ........................................................................................115
iv. Ford Motor Company Ratio Analysis..................................................................................................116
v. Respondents` vehicle characteristics.....................................................................................................117

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List of Tables
TABLE 1. SWOT-ANALYSIS OF FORD MOTOR COMPANY.............................................................................14
TABLE 2. MARKET SHARES OF FORD MOTOR COMPANY IN DIFFERENT REGIONS ..............................15
TABLE 3. FORD`S CUSTOMER SEGMENTATION ..............................................................................................27
TABLE 4. FORD GQRS “THINGS GONE WRONG” (TGW) INDICATOR, BY REGION...................................30
TABLE 5. FORD GQRS CUSTOMER SATISFACTION, BY REGION..................................................................31
TABLE 6. FORD SIX SIGMA IMPLEMENTATION...............................................................................................36
TABLE 7. FORD ANNUAL REVENUE INFORMATION ......................................................................................38
TABLE 8. DIMENSIONS OF RESEARCH PHILOSOPHY.....................................................................................41
TABLE 9. QUALITATIVE VERSUS QUANTITATIVE RESEARCH....................................................................42
TABLE 10. SUMMARIZED DATA NEEDS MATRIX............................................................................................44
TABLE 11. RESEARCH GANTT CHART ...............................................................................................................46
TABLE 12. BUSINESS MODEL CANVAS..............................................................................................................64
TABLE 13. TYPES OF EVSE....................................................................................................................................87
TABLE 14. FORD 3-YEAR BALANCE SHEET FORECAST.................................................................................88
TABLE 15. FORD 3-YEAR INCOME STATEMENT FORECAST.........................................................................89
TABLE 16. IMPLEMENTATION GANTT CHART.................................................................................................91
TABLE 17. COMPARATIVE ANALYSIS OF CSF..................................................................................................93
TABLE 18. KEY AIM INDICATORS .......................................................................................................................95

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List of Figures
FIGURE 1. STRATEGIES OF INTERNATIONAL BUSINESS...............................................................................13
FIGURE 2. FORD`S RECALL RATE........................................................................................................................16
FIGURE 3. FORD SALES IN CHINA.......................................................................................................................17
FIGURE 4. GLOBAL AUTOMOTIVE INDUSTRY FORECAST, 2013-2018 ........................................................18
FIGURE 5. LIGHT VEHICLE SALES FORECAST .................................................................................................19
FIGURE 6. RESEARCH FRAMEWORK..................................................................................................................21
FIGURE 7. PEST-ANALYSIS ...................................................................................................................................24
FIGURE 8. PORTER`S 5 FORCES............................................................................................................................25
FIGURE 9. FORD GLOBAL PRODUCT LINE ........................................................................................................28
FIGURE 10. BCG GROWTH-SHARE MATRIX......................................................................................................29
FIGURE 11. AUTOMOTIVE VEHICLES WITH MORE PROBLEMATIC INFOTAINMENT SYSTEMS ..........31
FIGURE 12. SUPPLY CHAIN MANAGEMENT FRAMEWORK: KEY ELEMENTS...........................................33
FIGURE 13. FORD MULTI-TIER SUPPLY CHAIN MANAGEMENT ..................................................................35
FIGURE 14. FORD`S REENGINEERED ACCOUNTS PAYABLE SYSTEM........................................................37
FIGURE 15. AZURE CLOUD-BASED DATA DELIVERY SERVICES.................................................................66
FIGURE 16. FORD`S FUTURE SALES PROPORTION..........................................................................................67
FIGURE 17. FORTHCOMING CHANGES IN VEHICLE SIZES............................................................................69
FIGURE 18. FORD VALUES ....................................................................................................................................72
FIGURE 19.STP-ANALYSIS.....................................................................................................................................74
FIGURE 20. FORD OPERATIONS MAPPING ........................................................................................................75
FIGURE 21. PROMOTIONAL MIX..........................................................................................................................76
FIGURE 22. PROPOSED STRATEGIC DIRECTION FOR FORD MOTOR CO....................................................77
FIGURE 23. COMPETITION IN EV MARKET .......................................................................................................78
FIGURE 24. FORD ORGANIZATIONAL STRUCTURE ........................................................................................79
FIGURE 25. BALANCED SCORECARD AS A STRATEGY MAP........................................................................80
FIGURE 26. EMPLOYMENT IN FORD MOTOR COMPANY, IN 1000S..............................................................81
FIGURE 27. THE TRIPLE HELIX MODEL OF UNIVERSITY–INDUSTRY–GOVERNMENT RELATIONS....82
FIGURE 28. FORD STRATEGIC HRM ....................................................................................................................83
FIGURE 29. TRIPLE BOTTOM LINE ......................................................................................................................83
FIGURE 30. FORD VALUE CHAIN.........................................................................................................................84
FIGURE 31. FORD LEAN MANUFACTURING SYSTEM.....................................................................................85
FIGURE 32. CUSTOMER PROFITABILITY FRAMEWORK.................................................................................87
FIGURE 33. PRIM-MODEL ......................................................................................................................................94

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List of Charts
CHART 1. NUMBER OF FORD VEHICLES SOLD FY2010 - 2014.......................................................................14
CHART 2. SUPPLIER WRI .......................................................................................................................................34
CHART 3. FORD KEY FINANCIAL METRICS......................................................................................................38
CHART 4. DATA COLLECTION DYNAMICS .......................................................................................................48
CHART 5. GENDER ..................................................................................................................................................48
CHART 6. RESPONSES BY GEOGRAPHICAL REGIONS....................................................................................49
CHART 7. RESPONSES BY AGE GROUPS............................................................................................................49
CHART 8. RESPONSES BY CATEGORIES OF DRIVING EXPERIENCE...........................................................50
CHART 9. RESPONSES BY MONTHLY INCOME ................................................................................................50
CHART 10. DRIVING EXPERIENCE OF FORD VEHICLES IN THE PAST........................................................51
CHART 11. FORD FUEL-EFFICIENCY...................................................................................................................52
CHART 12. FORD`S MARKET DEVELOPMENT PROGRESS .............................................................................52
CHART 13. FORD INNOVATIVENESS ..................................................................................................................53
CHART 14. CUSTOMER NEEDS AND WANTS ....................................................................................................54
CHART 15. UNIFIED VEHICLE MODEL ...............................................................................................................54
CHART 16. EXTERIOR DESIGN .............................................................................................................................55
CHART 17. INTERIOR DESIGN ..............................................................................................................................55
CHART 18. VEHICULAR INSPECTIONS...............................................................................................................55
CHART 19. TECHNICAL PROBLEMS....................................................................................................................56
CHART 20. MEDIA CHANNELS .............................................................................................................................56
CHART 21. SMALL ECO-FRIENDLY VEHICLES.................................................................................................57
CHART 22. SOURCES OF VEHICLE PURCHASE.................................................................................................57
CHART 24. CONGRUENCE WITH STANDARDS .................................................................................................58
CHART 23. FORD DEALERSHIPS ..........................................................................................................................58
CHART 25. THE INFLUENCE OF POLITICAL INSTABILITY AFFAIRS ...........................................................59
CHART 26. FORD MSRP ..........................................................................................................................................59
CHART 28. FORD COMPETITORS .........................................................................................................................60
CHART 27. INVESTMENTS IN R&D ......................................................................................................................60
CHART 29. CURRENT EQUITY OWNERSHIP......................................................................................................66
CHART 30. U.S. UTILITY PATENTS ISSUED TO FORD AND SUBSIDIARIES................................................68
CHART 31. EV CHARGING STATION UNIT SALES BY REGION, WORLD MARKETS: 2011-2017 .............86
CHART 32. CHARGING STATION UNIT SALES, BY TYPES OF EVS...............................................................86

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Executive Summary
Ford Motor Company is known worldwide as one of the veterans in car manufacturing. Reborn
after profound crisis situation with new restructuring plan in 2005, it has recovered unseized
positions and opportunities. The company has been steadily growing for little less than 10 years
and again started to feel difficulties. Therefore, this study aims to improve and nail down the
growth path of the company and, what is more, to provide a business development plan to
achieve the global leadership in the automotive industry.
The study begins with brief overview of the company, SWOT-analysis and PEST and Five
Forces frameworks estimating current external environment. Hence, the author using secondary
data information pursues the business review analysis based on the consideration of most
important factors influencing latest business performance that are: Market, Marketing,
Organization, and Financial Performance. Elaboration of these factors relies on current
company`s and industry`s perspectives. Market factor review helps to identify existing
tendencies of automotive market development. Marketing factor review includes 3 P`s of
marketing mix concept: product, price, and promotion. The main attention here falls to BCG
matrix model assessing current product capabilities. Organizational aspects such as supply chain
management, adoption of strategies and their consequences, and internal business processes
occurring in the company are examined further. And, finally, in financial performance
subsection, author highlights results by conducting revenue-, ratio-, and cash flow analysis. One
of the key researching processes of this major project is the online research survey that
additionally assists to find out crucial areas of investigation based on the primary data collected
from target respondents.
After revealing and listing the gaps of operational activity, the proposed Business Model and
Business Plan reflect the recommended mid-term strategy for further improvement based in a
certain degree on Japanese methodologies and contained the upgraded marketing, operational
and financial plans. Much attention is devoted to more electrified vehicle production. For this
reason, author especially outlined those activities of value chain which need to establish from the
very beginning. Implementation schedule of the strategy mentions all activities within the
following three (3) years in details.
The major project is supported by broad literature source base. Numerous tables, figures, and
charts serve as a reasonable evidence of author`s thoughts and make the perception of given
information understandable for readers.

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CHAPTER 1
INTRODUCTION

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1. Introduction
1.1 Overview of Ford Motor Company
Ford Motor Company is one of the oldest American automotive manufacturers that currently
operates worldwide with total 65 plants globally spread across the following geographical
segments: North and South America, Europe, Asia Pacific and Africa (MarketLine, 2015).Ford
is known as the first company in the world that applied the classical assembly car lines or
conveyor for manufacturing and realizing purposes. Introduced methods allowed to the company
and further to the whole industry operate with large-scale manufacturing thereby increasing the
total output. Subsequent stream of time was therefore named by the honor of the notion of mass
car production - Fordism.
In the middle of 2000-s due to tough and intense competition Ford was experiencing serious
financial difficulties and was on the verge of bankruptcy. The upgraded management team
proposed new restructuring plan of the company with “The Way Forward” strategy on its basis
initiated by former President and CEO Adam Mulally in 2006to provide cutting edge vehicles
with content and features that are characterized by “Quality, Safe, Green, and Smart” (Hughes-
Cromwick, 2011). The strategy implied the reduction of fixed capital costs and the return to
profitability by resizing the company and closing inefficient vehicle assembly plants in order to
match those current market realities.
The core organizational division of the company called the “Premier Automotive Group”
included that time such four prominent marques as Jaguar, Land Rover, Volvo, and Aston Martin
was eliminated by selling each of these particular business units to different automakers at the
lower prices. In addition, Ford discontinued the luxury-marketed car brand Mercury in 2010 and
sold its stakes in Mazda Motor Corporation and KIA Motors Corporation. But Ford still
produces and sells luxurious passenger cars under the Lincoln brand, which is going to regain its
lost ground, and off-road cars under the Brazilian Troller. The company successfully manages its
subsidiary in financial services sector – Ford Motor Credit Company. The downsizing of the
staff was also envisioned by the strategy, so that up to 30 000-factory jobs were cut.
On another side, all divestments brought the company possibility to consolidate the production
lines and to produce uniform automotive vehicles commonly for every single market. The
concept was called “One Ford”. As it generally known from international business science, there
are 4 most commonly-used strategies divided by two relative rates of pressures for local
responsiveness (complication of keeping costs low) and for cost reduction: 1) Localization, 2)
International, 3) Transnational, and 4) Global Standardization.

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Figure 1. Strategies of International Business
Source: Author based on (Prahalad & Doz, 1987)
Thus, Ford has moved from localization strategy, where it had been considering the world as a
portfolio of national markets, to global standardized strategy with the perception of the world as
a single integrated market and with ability for regional customization. In fact, accepted strategy
was slightly returning the company to rather profitable state.
Great rebound of the company was expected. By the end of 2010, Ford had been the third largest
car manufacturer right behind the General Motors and Toyota. However, recent years were
characterized by the decline of unit sales in certain countries, including some South-American
and European countries (See Figure 2). In 2014, Ford sank to 26th
place in the Fortune Global
500 ranking of largest corporations measured by revenues whereas in 2006 it was 9th
.Ford is a
blue chip company, meaning this is a public limited company, whose shares are being quoted on
the stock market (on NYSE in particular) and which are considered as very high qualified and
less liable to volatility.

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Chart 1. Number of Ford vehicles sold FY2010 - 2014
Source: (Statista, 2015)
Table 1. SWOT-analysis of Ford Motor Company
Strengths
1) Strong market position across product portfolio
Sometimes Ford`s strong market positions are associated with the endurance of the company`s
presence in particular regions. Traditionally, the North American region remains the most
profitable segment of the company. By 2012 year, the level of market share on the North
American market reached to 16,5% (Table 2). In addition, the product lineup of Ford is quite
wide and various and designed for numerous group of consumers from small cars (B-platform

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products) such as B-MAX sold in Europe to large commercial trucks sold globally. The
company`s medium segment car Ford Focus is one of the largest selling cars globally, especially
the second serial of the model was breaking the records of merchantability. Under the
commercial segment, the company`s F-series enjoys the leadership positions in the US best-
selling pickups market controlling the 40% of total market share. Apart from that, Ford trucks
enjoy dominant positions in commercial subcategories, including mining, construction, oil and
energy, small business. Hence, strong market position across product portfolio, backed by one of
the advanced showroom warehouses in the industry, gives Ford significant competitive
advantage in the market place and assist in delivering sustainable business performance
(MarketLine, 2015).
Table 2. Market shares of Ford Motor Company in different regions
2) Intense focus on sustainability and fuel-efficient technologies
Intense focus on sustainability and fuel-efficient technologies further enhances Ford's brand
equity that helps in further expanding its customer base. Ford focuses on delivering
environmentally and economically sustainable technologies. The company is recognized for its
efficient use of natural resources, including paint process improvements, retooling of
manufacturing facilities with energy-efficient equipment and large-scale lighting replacements.
Among its product sustainability efforts, the company is increasing the use of sustainable
materials, eliminating undesirable materials, substances such as heavy metals, and substances
that are known to be common allergens. Additionally, the company is highly focused on
delivering sustainable technologies and alternative fuel options to further improve fuel economy
and cut down CO2 emissions of its products around the world (MarketLine, 2015).
3) Robust research and development
Ford operates 56 engineering, research and development centers worldwide. And one of them
has been recently opened in the Stanford Research Park, Silicon Valley (Tilley, 2015). Strong
engineering, R&D capabilities support and enhance Ford's service offerings as well as enable it
to drive future growth. The R&D efforts are directed at improving the fuel efficiency, safety,
customer satisfaction, and developing new products (MarketLine, 2015).

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Weaknesses
1) Frequent product recalls
Frequent product recalls negatively affect the consumer's confidence on Ford, which in its turn
result in damage to the brand name, and reduced trust on the company's products. Product recalls
are mainly connected with manufacturing and design problems. For instance, the company has
recently recalled its release of Escape model SUV cars due to the huge number of customer
complaints on sticking brake pedal and parking brake issues, over accelerating, potential fuel
leakages, speed control cable, steering, rust, which caused many injuries and car fires and
crashes. Figure 3 reflects statistical data on the recalling rates of largest automakers (Atiyeh,
2014).
Figure 2. Ford`s Recall Rate
2) Decline of unit sales
A sustained decline of unit sales in certain countries or regions could negatively influence the
company’s market share and overall competitiveness in the future. The company has witnessed
decline in the unit sales of its vehicles in Russia. The company sold 105,000 vehicles in Russia
during FY2013 against 134,000 in FY2012, a decline of 21.6% during the period. As a result, of
this, the company's market share in Russia declined from 4.3% in 2012 to 3.8% in 2013. Ford's

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market share decline in Russia was largely driven by industry growth in SUV segments, where
the company is not fully participating (MarketLine, 2015).
Opportunities
1) New product launches
New product launches represents a huge actionable opportunity for Ford to enhance its
competitiveness in the evolving automotive industry and position itself to further drive profitable
growth. Thus, in 2015 six new models are anticipated to be released which will push the brand of
“Blue Oval” more up market and will capture new customers (Auto Express, 2015).
2) Increased focus on emerging markets
By making substantial investments, Ford is increasing its participation in newly developed and
emerging markets, such as Brazil, Russia, India, and China, in which vehicle sales are expected
to increase at a faster rate than in most mature markets. For instance, in May 2013, Ford
introduced its urban sport utility vehicle EcoSport in the Indian market that is expected to
become the third largest automotive market in the world by 2020 (MarketLine, 2015). In
December 2014 total sales escalated by 28% there (The Economic Times, 2015).
The Chinese automotive market
presents tremendous potential for
further growth especially in fast-
growing luxury car segment. The
Chinese luxury segment is
forecast to surpass the US luxury
segment by 2020. Luxury vehicle
sales are expected to more than
double - from the current 6% of
the market to nearly 9% by the
end of the decade to reach
approximately 2.7 million units.
Therefore, the company has
introduced Lincoln cars in China
in the second half of 2014 (Miller,
August 2014). Even though Ford
sales in China has tripled last
years, still some rivals sell more
units.
Figure 3. Ford Sales in China

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Threats
1) Intense competition and pricing pressure
The global automotive industry is highly competitive which pressurizes manufacturers' ability to
increase prices. The principal competitive factors include price, quality, available options, style,
safety, reliability, fuel economy and functionality.
2) Currency fluctuations and trade policy risks
Ford, as well as other large automotive industries, may negatively be affected by fluctuating of
exchange rates. There is a threat of U.S. dollar`s weakening. Therefore, floating profits might be
lower because of appreciating dollar against other currencies (MarketLine, 2015).
1.1 Business concept
The business concept can be considered from two sides: from the industry perspective and from
the company`s internal business processes and challenges expected to face in the future.
According to the forecast of one of the most authoritative publisher in the industry “IHS
Automotive”, the automotive industry is looking forward to gradual growth i.e. by the period of
2013-2018 it will increase by 11,6 million units and the total manufacturing industry value will
grow by one billion of USD (Pearson, 2015).
Figure 4. Global Automotive Industry Forecast, 2013-2018
(Statista, 2015)
Global automotive production will grow. According to the survey conducted by KPMG`s
analytics interviewed a number of executives in automotive industry, global vehicle sales will
surpass the 100 million mark within next 2-3 years, and continue to rise until the end of this

19. 19
decade, on the back of increasing demand in emerging markets like China. The Compound
Annual Growth Rate (CAGR) of light vehicle sales will increase by 4,1%. Breaking the
proposed forecast by segments, we can see that compact-size vehicles segment will achieve the
greatest growth by means of CAGR rates (KPMG, 2015).
Figure 5. Light vehicle sales forecast
Source: (KPMG, 2015)
1.2 Purpose and rationale
Previously we have already identified Ford`s weaknesses and opportunities. From company`s
perspective, the business concept bases on the removing of mentioned weaknesses and the
profiting by the advantages of these opportunities taking global place soon. That is why, Ford
must be willing to solve the quality issues and decrease the number of recalls.
Problem statement consists in the analysis of actual difficulties and fails that led to recent
underperformance of Ford Motor Company and the exploration of its global business
performance enhancement.
Hence, the main purpose of this project is to elicit solutions and make recommendations to
insure the mid-term (3-year) sustainable development of Ford Motor Company in terms of four
reviewing factors influencing its current activity: Market, Marketing, Financial Performance, and
Organization.

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The significance of the project becomes apparent while considering the potential growth of
automotive industry and Ford`s strategic position in it.
1.3 Terms of reference
1.3.1 Research Questions
1. General Research Question
The activity of Ford Motor Company have been capturing the attention of public audience for
over than a century and it still provides fields of study. After successfully implemented
restructuring plan, Ford again witnesses hard times. The important issue is how to nail down that
success and to restore the Ford brand identity to its previously held position. The main question
that comes from is what factors influence the dejectedness of Ford business performance.
2. Specific Research Questions
1) How does the market direction influence a business performance of Ford Motor Company?
What are current market demand and needs? How does Ford use customer segmentation to
group its customers with similar characteristics together and identify the differences between
these groups in order to develop the marketing strategy (Tsai, Hu, & Lu, Feb2015)?
2) What does the marketing policy of Ford Motor Company comprise? Why the decline in sales
is being observed? What features do the Ford products have? Which of them are in demand
and which are not?
3) What are financial circumstances of the company? How does the management team run the
company`s business? Why does the company witness abrupt financial fluctuations? What
measures should Ford introduce to achieve the financial soundness?
4) What are the company`s mission, vision and strategic intents? What is the role of innovations
and technological advancements in current operating activities of the company? What stages
does the business cycle of the company include? What is the organizational structure and
configuration of Ford Motor Company? How much attention is paid to human capital
management?
1.3.2 Research Objectives
1) To research the environment and current demand and needs of automotive market segments
in order to reach its targeted customer base and to adapt the Ford future marketing plan to
this realities.
2) To examine the use of Ford`s brand name and equity. To analyse the product portfolio of the
company. To research the applied pricing strategies. To investigate the effectiveness of its
promotional programs to advance the marketing mix of the company.

21. 21
3) To explore how the components of corporate strategy affects the business performance. To
gain an understanding of company`s supply and value chain management. To sort out
internal business processes occurring within the company in order to recommend a strategic
growth plan.
4) To conduct a financial performance analysis, including the observation of company`s main
financial statements by means of revenue- and ratio- analyses, and other financial appraisal
tools.
1.3.3 Research Framework
The business performance of Ford Motor Company serves as a dependent factor, which in its
turn regards four (4) independent factors.
Figure 6. Research Framework

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CHAPTER 2
BUSINESS REVIEW

23. 23
2. Business Review
Business Review chapter dedicates to critical assessment of up-to-date business performance of
Ford Motor Company broken into the four subsections; each of them contained reliable
information on current state of affairs in respective areas: Market, Marketing, Organization, and
Financial Performance.
2.1 Market
2.1.1 Economic environment
As we know, economic environment divides into two parts: macro- and micro. Macro
environment represents the range of uncontrollable for the company variables. For example,
nowadays there are some typical megatrends or drivers for changes taking place in global
economy especially touching transport and other related supporting industries. Some of them are:
- Environmental and ecological standards. Global communities are more concerned about
environmental and pollutive issues. Therefore, separate industries are being regulated by stricter
carbon emission standards set usually by international or regional agencies. The world is
currently governed by three major legislative emission standards for commercial vehicles
(Cummins Emission Solutions, 2011):
o Environmental Protection Agency or EPA Standards;
o California Air Resources Board or CARB Standards;
o European Commission or EuroV requirements.
 Ta-Luft, Germany;
 Vehicle Certification Agency (VCA), UK;
 Japanese Ministry of Land, Infrastructure and Transportation (JMLIT Standards).
Apart from above-mentioned worldwide emission regulations, there are some standards being
introduced by the governments of particular countries. For example, in US tightened Corporate
Average Fuel Economy (CAFE) standards intend to improve the average fuel consumption of cars
and light trucks (trucks, vans and sport utilities) (PWC Strategy&, 2015).
Ford makes a significant progress on a number of the environmental and sustainability issues that
have been identified as top public policy priorities, including improved fuel economy and reduced
vehicle greenhouse gas emissions.
In 2007, Ford launched the “Blueprint for Sustainability” plan. In 2012, it was improved by a
series of near-, mid-, and long-term product actions that address climate change, energy security
and affordability issues. The goal of this plan is to reduce the carbon dioxide emissions of our
U.S. and European vehicles by 30 percent by 2020. For its commitments on environmental

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sustainability, Ford has already been recognized as the “Best Global Green Brand” last year
(Fernandez, 2014).
- Fuel-efficiency concept. According to the latest forecasts, fuel prices will gradually drop
due to the opportunity of substitution of natural resources such as oil and gas by shale resources
that have a giant potential of development. The US shale industry shows remarkable resilience
because it has the greatest number of shale oil reserves, nearly 70% of the world reserves. The
boom of shale resources has begun in 2008, when Americans had firstly started their extraction.
However, environmentalists do not permit to do it because hydrocarbon production via fracturing
entails huge environmental damage. Even that is a current plan of OPEC: to force out the shale
producers from the market. At the same time, it costs very expensive for extractive companies.
- Upward trend of raw material prices. Catering for the rising of raw material prices, many
companies have to cut their expenses and reduce overheads or have to alter their business
processes or products (BDRC Continental, August 2012).
PEST-analysis of an automotive industry
By the nature, automotive industry is very dynamic and complex and its development is
frequently hard to predict (it relates to either the determination of economic cycle in which the
industry is operating or the pace of movement: it can be vigorous or sluggish). Anyway, the
study of external environment by means of the dimensions of PEST-analysis assists to explore
the current state and position of the industry.
Figure 7. PEST-analysis
1) Global political situation is extremely unstable due to regional conflicts between nations,
struggles for deposits and findings of natural resources and spheres of influence, obtrusions of

25. 25
Figure 8. Porter`s 5 Forces
values from dominated to submissive countries. Political instability may cause negative
implications on local consumer patterns of behavior, and particularly Ford investments in
jeopardized countries may also be subjected to risks. Strict taxation policy handled by the
government is also a political force for automotive manufacturers. They are charged greater tax
if vehicles emit higher levels of CO2.
2) The world economy dwells in the gradual recovery from global recession embraced in
latest post-crisis years. Further circumstances depend on projected macroeconomic indicators
such as inflation, interest, and unemployment rates, long-term prospects for gross domestic
product (GDP) per capita.
3) Social factor contains the changes in demographic situation people`s culture, behavior,
buying patterns and etc. One of the most crucial social issues of last decade is that technologies
have been replacing human labor. The more advanced they become, the less necessity manual
skills bring. Unfortunately, redundancies are proceeding to take place.
4) Technological. Complete replacement of fuel burning (gasoline, and diesel-based)
vehicles with combustion engines by electric ones is oncoming. At least every tenth vehicle sold
in 2025 will be electric (KPMG, 2015). Despite of the fact that for some countries this new
“green” technology is even unknown its diffusion and public acceptance will rapidly occur and
gather head. Modern automotive vehicles are full of electronic gizmos that obviously attract the
younger generation. Manufacturers equip its vehicles by electronic and software contents.
Porter`s 5 forces of Automotive Industry Structure
1) Bargaining Power of Buyers means the ability of
individual customers to negotiate and to come to deal
agreements. Because of the global recession, people tend
to maintain their cars for a while and to save funds for
rainy days. By the way, Ford`s products have quite high
durability ratio on market average (Ford Motor
Company, 2011). The force is moderate.
2) Bargaining Power of Suppliers is very low due to
the huge number of suppliers in the automotive industry
so that car manufacturers can easily switch to another
supplier picking by various qualifications: quality, cost,
delivery of spare parts. The registration of new suppliers
is a normal phenomenon.

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3) Threat of Substitutes. Increasing fuel prices have been pushing some urban drivers to use
public transportation. Nevertheless, Ford Motor Company did put efforts into easing the pressure
of substitutes like public transport (buses, railway, and subway). Customers can now get benefits
of Ford`s largest-ever investment in fuel-efficient power trains made in 2010. The company
launched nine new engines and six new speed transmissions. The company is on track to deliver
fuel-saving six-speed transmissions across most of its lineup of Ford brand vehicles by 2013.
4) New Entrances are hard to take place in near future because automotive industry has high
entry barriers. New players need to comply the industry and government requirements on factory
facilities, machinery, labor, technology, capital investments. New companies have to find
distribution channels represented by agents and brokers, distributors and dealers, wholesalers and
retailers, and other vendors, etc.
5) Degree of Rivalry shows the level of competition among existing firms within the
automotive industry. Current competition in the industry may be evaluated as highly intense and
powerful.
2.1.2 Market demand and needs
Market needs constantly widen as consumers always expect new innovative services that plug
seamlessly into ubiquitously connected solutions (KPMG, 2015). Therefore, manufactures have
to produce vehicles that are in line with emerging socio-cultural trends. To stay ahead, traditional
automotive players may need to reinvent their business models and ask themselves two pressing
questions: “how do I become a high value service brand, while making the most of my strong
product and engineering heritage?” and secondly, “how do I think about my brand from a
consumer perspective, to attract the new generation of “digital natives”. Eventually the winning
competitors will be those who will firstly use newly available technologies to capitalize on the
trends and those who will react strategically to demand shifts and those who will leverage its
cost structure.
2.1.3 Market segmentation
Demographic segment includes such identities as age, gender, income, marital status, ethnic
background. Some experts claim that demographic trends are working against the auto industry
as the "growth in the vehicle buying population is set to moderate to the slowest pace in more
than 50 years" (CBC News, 2010). Population ageing is a serious challenge and a factor that
directly influence when focusing on sales. From another side, younger consumersis leading
more, how Ford calls, “electric” lifestyle (Ford Motor Company, 2015). Thus, manufacturers are
torn between these two issues and on targeting plans as well because both generations have
different expectations.

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Psychographic segmentation divides the customers by social class, personality and values, and a
lifestyle that is broken on activities, interests, and opinions (AIO), and attitudes (Pickton &
Broderick, 2005). Ford offers cars at affordable prices so that low and mid-class segments can
allow themselves to purchase. As part of sales promotion, Ford categorizes the customers in
different segments in order to achieve sales objectives and provide promotional offers to them
like discounts, price deals, premium offers; for dealers and merchandisers - point-of-sale
displays, leaflets and product literature.
Table 3. Ford`s customer segmentation
2.2 Marketing
In 2012, Ford launched Global Electrification strategy the main goal of which is to develop this
portfolio of hybrid electric, plug-in hybrid electric (PEV) and battery electric vehicles (BEV) as
according to the company`s projections electrified vehicles will comprise somewhere between
10-25 percent of all global mix by the end of this decade (Hughes-Cromwick, 2011). Under this
strategy, there is a need in the establishment of an effective and dependable marketing program.
Current marketing policy of Ford is not clearly defined and it has gaps. At this moment, it is
primarily driven by social-first tactics, which was rather smart step as shifting away from
traditional media relations allowed company to economize some funds abandoning expensive
augmented TV advertisements and to direct them to other more promising projects.
2.2.1 Innovative Products
2.2.2.1 Product differentiation
Regional product differentiation is necessary to ensure that products are sufficiently geared
towards disparate global preferences (Dornbach-Bender, Slade, & Thorpe, April 2009). Ford has
a wide range of products targeting all customer classes. It focuses on the manufacturing of
passenger cars, crossovers, SUVs, hybrid & electronic vehicles, trucks, commercial vehicles.
Ford also supplies its vehicles to emergency, salvage, rescue and military national services.

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Ford possesses a wide variety of propulsion systems for its vehicles including internal
combustion engines fueled by (The Economist, Apr 20th 2013):
o Propane or natural gas;
o Conventional petrol;
o Conventional diesel;
o Hybrid;
o Plug-in hybrid;
o Electric,
o Solar.
Figure 9. Ford Global Product Line
2.2.2.2 BCG-Matrix Model
According to the latest July sales results of Ford Motor Company, all models were being
allocated to four (4) quadrants of BCG Growth-Share Matrix (See Appendix №3).It is used for
evaluation of an organization`s product portfolio in marketing and planning processes through
two dimensions – industry growth rate and relative market share. The overall goal of this ranking
is to help corporate analysts decide which of their business units to fund, and how much and
which units to sell. The most critical and deciding factor during Ford model allocations was the
change performance indicator measured by percentage ratio (%) in comparison to same
performance but last year.
 Cash Cows are units with high market share in a slow-growing industry. These units are
typically generate cash in excess of the amount of cash needed to maintain the business. They are
regarded as staid and boring in a mature market and every company would be thrilled to own as
many as possible. They are to be “milked” to continuously operate with as little investment as
possible, since such investment would be wasted in an industry with low growth. At this stage
are settled vehicles of following models: Escape or Kuga outside of U.S. (10,1%),
Fusion/Mondeo (4,9%), F-Series and Ranger (4,8%), Focus (-3,9%), Heavy Trucks (-6,8%),
Everest and Territory (not available).

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 Dogs are units with low market share in a mature, slow-growing industry. These units
typically “break-even” generating barely enough cash to maintain the business`s market share.
Though owning a break-even unit provides a social benefit of providing possible synergies that
assist other business units, from an accounting point of view such unit is worthless, not
generating cash for the company. They depress a profitable company`s return on assets ratio used
by many investors to judge how well a company is being managed. On the verge state are
situated: Fiesta (-27,2%), Taurus (-28,4%), C-MAX (-35,9%), Expedition (-37,5%), and E-Series
(-66,5%), Pinto (not available).
 Question Marks are rapidly growing and consuming large amounts of cash, but because
they have low market shares, they do not generate much cash. The result is large net cash
consumption. They have a potential to gain market share and become a star, and eventually a
cash cow when the market growth slows. On the contrary, if the question mark does not succeed
in becoming a market leader, then after few years of cash consumption it will transfer into a dog
when the market growth declines. Question marks must be analyzed carefully in order to
determine whether they are worth the investment required to grow market share. It applies to:
Flex (0,2%), S-MAX, EcoSport (not available).
 Stars are units with high market share in a fast-growing industry. The hope is that stars
become the next cash cows. Sustaining the business unit`s market leadership may require extra
cash, but this is worthwhile if that is what it takes for the unit to remain a leader. When growth
slows, stars become cash cows if they have been able to maintain their category leadership, or
they move from brief stardom to dogdom. Here are presented: Transit Connect (15,5%), Edge
(17,0%), Lincoln Brand (21,3% on average), Explorer (27,2%), and Mustang (29,2%).
Figure 10. BCG Growth-Share Matrix

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2.2.2.3 Product Quality and Safety
1. Product Quality
Assessing approximate product quality is a long, hard process as the volumes of conveyed
vehicles are very large, and it depends on regional operations. Therefore, Ford has launched a
sponsored competitive research survey under the instructions of U.S. Global Quality Research
System (GQRS), which stands for measuring two indicators: a) “things gone wrong” and b)
customer satisfaction.
1) Things Gone Wrong (TGW) is a key measuring and tracking quality tool within
automotive industry that represents customer-reported product defects and serves as a “report
card” for a manufacturer, brand, model or assembly plant. TGW measurement is typically
conducted by surveying consumers regarding problems they have experienced with their vehicle
after certain periods of ownership (i.e., 3, 12, 36 months, etc.). All problems are weighted
equally and overall vehicle performance is commonly summarized with “Things Gone Wrong
per 1000 vehicles” designations (RDA Consulting Group: Harper, Pietrowski, & Vijayendra,
2004).
Table 4. Ford GQRS “Things Gone Wrong” (TGW) indicator, by region
In 2013, the average global full-year “things gone wrong” (TGW) was 1,388 per 1,000 vehicles
compared with 1,373 in 2012, an increase of 1 percent. However, while for 2008, Ford ranked
best in class for TGW performance in Vehicle Engineering and Electrical among major
manufacturers (Auto123, 2008).
In order to find out what usually goes wrong, Consumer Reports National Research Center
conducted a survey, which revealed the most frequent reported problems. Nowadays they relate
mostly to electronic troubles of passenger cars` infotainment systems such as audio, navigation,
and communication systems. In the October 2013 survey, more than a third of 3,148 respondents
who owned a car with an infotainment system experienced one or more problems. More than a

31. 31
third (32%) of owners with the MyFord/Lincoln Touch systems reported problems connected
with unresponsive screens, freezes, and Bluetooth pairing (Consumer Reports, February 2014).
Moreover, Ford has the worst fuel-efficiency record of any car company (Tippins, 2014).
Figure 11. Automotive vehicles with more problematic infotainment systems
2) Customer Satisfaction
Ford has made a significant progress in customer satisfaction level by regional aspect, especially
in Europe and Asia-Pacific regions (Ford Motor Company, 2015).The very thing is that Ford has
focused on improving quality in areas such as infotainment, transmissions and interiors.
Customer satisfaction is trending up also because of well-organized Global Product
Development System that fosters to substantial improvements in more-efficient vehicle launches,
fewer downstream changes, and improved timing.
Table 5. Ford GQRS Customer Satisfaction, by Region
2. Safety
Despite that, Ford has won several awards and received a five-star rating on safety standards
compliance including from the U.S. National Highway Traffic Safety Administration

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(NHSTA)and Euro NCAP, still there are problems remained (Ford Motor Company, 2015).Ford
has new recalls involving 423,000 vehicles with potential steering problems and 19500 Mustangs
with fuel leaks (Priddle, Ford recalls vehicles for fuel tank, steering problems, 2015). Particular
models as Pinto, Fusion, Ford Edge crossovers, Lincoln MKZ mid-size sedans (Priddle, NHTSA
Administrator Mark Rosekind to visit Detroit automakers Thursday to talk safety and foster
relationships, April 2015).
2.2.2 Pricing
It is worth to remember that price is the only one element of marketing mix that produces
revenue; the other elements produce costs. From the economics, we know that the relationship
between price and demand is that the higher the price, the lower the demand. Automotive market
is price sensitive, because for most customer automotive industry is quite expensive, thus, the
demand is inelastic and sellers cannot consider lowering prices to generate more total revenue.
However, we can observe the opposite situation right now. Automotive manufacturers are facing
elastic demand that implies the lowering of prices.
Ford applies penetration-pricing strategy wherein prices are artificially low in order to attract a
large number of buyers quickly and to gain market share. This is a good strategy to use if there
are many competitors. Profits are not a concern under this strategy. The most important thing is
to get your product known and worry about making money later. Ford has to maintain
penetration pricing now in order to improve the capacity utilization and to withstand the
competition in the established markets. But is this strategy effective enough for emerging
markets, where Ford will target to operate in the next few years and where a number of
competitors are not so many yet – that is a question mark.
2.2.3 Promotion
Sponsorship campaigns play a vital role in Ford`s public relation strategy and has two major
objectives. One is to reinforce and further build the Ford brand recognition. The other is to
achieve a good connection between Ford and its potential customers (Business Case Studies,
2012).
Ford was being well-promoted by the partnership and sponsorship agreement with one of the
most appealing and beneficial opportunity for brands – the most prestigious European and club
football tournament UEFA Champions League. Ford had successfully this popular event to
launch several car models over the past two decades, including the Ford S-Max, the Kuga, and
new generations of the Fiesta, Focus and Mondeo. In addition, marking the end to its 22-year
sponsorship, Ford had planned the revealing a special made spot to promote its 50-year
anniversary of Mustang model at the UEFA Champions League Final in Lisbon last year.

33. 33
Surpassing the American Super Bowl, It was expected to be seen by 300 million television and
online viewers in more than 200 countries and Mustang has recently gone on sales across Europe
for the first time in the history (Eleftheriou-Smith, 2014).However, Ford has decided to give up
the cooperation and not to extend the sponsorship due to some financial losses and difficulties
and now Nissan has replaced it by signing a 4-year agreement with UEFA Champions League.
The actual reasons remain unknown but, according to the words of the president of Ford Europe,
Middle East and Africa, Stephen Odell, now the right time has come for Ford to move in a new
direction as it accelerates new product launches in Europe, with more than 25 new vehicles
coming over the next five years" (UEFA, 2014).
2.3 Organisation
2.3.1 Leveraging Supply Chain
According to Mentzer and colleagues, supply chain is a set of three or more entities
(organizations or individuals) directly involved in the upstream and downstream flows or more
entities (organizations or individuals) directly involved in the upstream and downstream flows of
products, services, finances, and/or information from a source to a customer (Mentzer, et al.,
2001).
Figure 12. Supply Chain Management Framework: Key Elements
Source: (Lambert, Cooper, & Pagh, 1998)
1. Supply Chain Business Processes
- Supply Chain Consolidation. Ford is currently consolidating its supply base to turn the work
with them into more efficient way. Suppliers have an incentive to participate in the program in
order to gain or maintain their position as a strategic suppliers.

34. 34
- Supplier Relationship Management (SRM) is an important attribute of the whole supply chain
management system of the company. Building robust relationships with company`s strategic
suppliers is one of the most prioritized directions of Original Equipment Manufacturers (OEMs).
However, relationships between them and their suppliers continue to deteriorate as it costs
hundreds of millions of dollars (Martinez, 2015). And indeed, Ford has not been improving latest
years its supplier Working Relations Index (WRI) - the major rate that indicates the relations
between the six largest US and Japanese automakers and their Tier One suppliers (Planning
Perspectives, Inc., 2015).
Chart 2. Supplier WRI
Ford has steady adequate WRI, and no growth is being observed. Whereas Toyota and Honda
using same American suppliers as Detroit`s Big Three OEMs treated them as partners and
included them on decisions. “I help you to help myself” was an intelligent decision (Haynie,
2015).
- Ford Supply Diversity Development program intends to create business opportunities for
diverse suppliers to grow into profitable enterprises and further strengthening the Ford supplier
network to reflect the company’s work force and customer base.
2. Supply Chain Management Components
In pursuing its supply chain sustainability objectives and building strong and long-standing
relationships, Ford has taken a three-pronged approach to effectively engage suppliers
throughout the chain.

35. 35
1) Individual facilities. Training and capability building (especially in low cost regions like
South America) are the fundamental basis of Ford's supply chain sustainability program,
supported by assessments of individual tier-one supplier factories.
2) Corporate engagement. Ford is building stronger supplier relationships and leveraging an
innovative supplier partnership initiative, called the Aligned Business Framework (ABF), to
enhance supplier ownership at the corporate level for supply chain sustainability management
and performance systems at its suppliers and throughout the automotive supply chain.
3) Industry collaboration. Ford is driving collaboration and tool development for global supply
chain sustainability issues through industry and cross-industry partnerships (Newton, 2013)
3. Ford Supply Chain Network Structure consists of 4 supplier tiers with non-ignorable
impact of the automotive industry. A Ford "Tier 1" supplier is a supplier who directly provides
goods and services to Ford including (a) production and service parts, components, assemblies
and accessories; (b) raw materials; (c) tooling; and (d) design, engineering or other services that
are covered by the Global Terms (Institute for Industrial Productivity, 2011).
"Tier 2" is set to increase opportunities for minority businesses. Ford works with large corporate
suppliers to assist them in establishing Supply Diversity Development (SDD) Programs similar
to Ford`s. This effort is designed to create more opportunities for diverse owned businesses in
the automotive industry. It is especially helpful for smaller diverse businesses that do not have
the capacity to supply Ford and other manufacturers directly (Ford Motor Co., 2014).
The remaining chain of supplier tiers provide above-mentioned bigger suppliers with thousands
of material and components.
Figure 13. Ford multi-tier Supply Chain Management

36. 36
2.3.2 Monitoring Strategies
1) Ford is one of the adopters of Balanced Scorecards management and quality measurement
system that provides reporting tools which offer monthly values versus target figures, year-to-
date/year-end values against target, and a prioritization system using red (under the target) /green
(on or over target) /yellow (under target, but better than last year) evaluations to pinpoint where
improvement is needed.
2) Ford has applied Six Sigma to reduce costs and measure quality & control systems by
eliminating data-driven defects. Particularly, Ford has been regarding DMAIC approach of Six
Sigma projects that includes following steps of the process: Define, Measure, Analyze, Improve
and Control (Thompson, 2007). Applying this approach, Ford started by defining project
stakeholders using a suppliers, inputs, process, outputs, customers (SIPOC) analysis. According
to the results, the degree of cost reductions was high, customer satisfaction level was moderate,
and the reduction of volatile organic compound (VOC) emissions was also moderate. Goals,
targets, and results of Ford Six Sigma project are shown below in the table 6 (Jacobsen, 2011).
Table 6. Ford Six Sigma Implementation
2.3.3 Business Processes
Ford transformational processes included:
1) Standardization (common product platform) with the ability for regional customization,
2) Inventory/customization (Client build to order),
3) Technology
 Interactive communication with the members of supply chain
 Virtual manufacturing (speed to market / quality improvement
 Technology (EcoBoost) and Safety developments
4) Location. Significant reduction in the number of manufacturing plants 113 reduced to 59
improving economies of scale

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5) Business Process Reengineering
 Purchasing & Accounting
In early 80-s Ford was well known due to its business process reengineering (BPR) upheaval on
the procurement and accounts payable systems to cut costs, to reduce mediation, turnaround
times and error rates through IT (Hammer, Reengineering Work: Don’t Automate, Obliterate,
1990). Old process involved 3 functions - purchasing, receiving and accounts payable and all of
them were participated indirectly cooperating by sequential document flow. But new process
started to use shared database and every function was participated directly which led to 75%
workforce reduction - from 500 to 125 (Hammer & Champy, Reengineering the Corporation: A
Manifesto for Business Revolution, 1993). As a result, the new system has significantly
facilitated the purchase of vehicle spare parts and details and still operates in quite effective way.
Figure 14. Ford`s Reengineered Accounts Payable System
 Inventory Management. Make or Buy ?
A basic consideration in manufacturing is whether goods are made to stock or to order (Needle,
2006). Until 1995, Ford had been using a "Push System" – Made to Stock (MTS). In 2000-s it
shifted towards a Pull System – Order to Delivery (OTD) and it became another reengineering
initiative. Ford’s approach to implementing an improved OTD process relied on several
elements: (1) ongoing forecasting of customer demand from dealers—before OTD Ford had
never officially involved dealers in forecasting demand, (2) a minimum of 15 days of vehicles in
each assembly plant’s order bank to increase manufacturing stability—gaps in the order bank are
filled with “suggested” dealer orders based on historical buying patterns, (3) regional “mixing
centers” that optimize schedules and deliveries of finished vehicles via rail transportation, and
(4) a robust order amendment process to allow vehicles to be amended for minor color and trim
variations without the need to submit new orders. The OTD vision was to create a lean, flexible,
and predictable process that harmonized the efforts of all of Ford’s components to enable it to
provide consumers with right product in the right place at the right time.

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2.4 Financial Performance
Chart 3. Ford key financial metrics
Ford have been facing financial fluctuations for quite long time. In 2006, it overcame the
dippiest loss in more than a 100-year history of the company. Because of the slumping in sales,
for the full year Ford suffered a $12.8-billion loss (Bunckley, 2007). That time “Ford mortgaged
its assets to borrow up to $23.4 billion to pay for the restructuring and to cover losses expected
until 2009” (NBC, 2007). Ford was the only North-American automotive manufacturer that did
not opt in U.S. government bailout plan that was issued in 2009.
Revenue Analysis (Annual Report, 2015)
Ford overall revenue has slowed down by the end of 2014 due to the underperformance in some
regions (Ford Motor Company, 2014). Ford has suffered significant drop in home North-
American region. Revenue decline is also observed in South America and Asia Pacific. And
growth is shown in Europe, but comparing with 2010 financial year`s performance there is no
progress at all (Sharman, 2014).
Table 7. Ford annual revenue information

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Ratio-analysis (Bloomberg Business, 2015)
1. Profitability
The main disturbing point of Ford`s profitability is the declined revenue and operating profit
margin metrics. Especially in South America it was negative by 13,2% in comparison with
previous reporting period. The deterioration was driven by ongoing execution of strategy
reflected in the expansion of product line-up and the replacement of legacy products by global
One Ford offerings. It was also connected with unfavorable changes in the external environment,
like slowing GDP growth, lower industry volumes, weaker currencies, high inflation and policy
uncertainty in some countries.
2. Liquidity
Both current and quick liquidity ratios declined in 2014 financial year. This decline reflects in
the raised amount of accounts payable, long-term capital leased liabilities and the unearned
revenue. The numbers of current assets and inventories have not almost been changed from 2013
financial year.
3. Efficiency
Ford is pursuing quite effective financial management policy as it collects debts much faster than
pays for accounts receivables. The creditor payment period was increased by 3 more working
days. And the revenue deficiency caused a slight increase of debtor collection period and fixed
asset turnover ratios.
4. Capital Structure
Overall Ford`s capital structure became worse due to the increased current liabilities of the
company and less profit from operations. Lower equity figure only added the aggravation of
company`s gearing ratio.
5. Investors ratio
Consequently, the ratio of Return per Capital Employed dropped from 19% in 2013 to 12% in
2014. Earnings per share or EPS significantly fell down and now Ford shares are not considered
as non-attractive for potential investors.
Cash-Flow Analysis (Bloomberg Business, 2015)
Net Income has shrink from $7.2B to $3.2B. Total depreciation and amortization costs increased
by 13% that means the aging of main fixed assets of the company. Cash from operations rate has
shown growth in comparison with last 3 years. Cash from investing and total debt repaid is
negatively growing. The number of unpaid dividends is increasing. The growth of cash received
from financing the activities slowed down.

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CHAPTER 3
RESEARCH
METHODOLOGY

41. 41
3. Research Design
3.1 Research Philosophy
Before the determination of methods allowed using in the research, it is necessary to understand
and be familiar with basic philosophical research concepts. The research will use positivism
research philosophy that usually considers things from the view of an objective reality. There are
three main dimensions of research philosophy: Epistemology, Ontology, and Axiology. Table 3
shows the philosophical assumptions with their own implications for practice.
Table 8. Dimensions of Research Philosophy
Ontological dimension of research philosophy will give us an understanding of a nature of
difficulties and realities occurring within Ford Motor Company and will assist to find out the
cause-and-effect relationships between dependent and independent variables described in the
research framework structure.
3.2 Research Methods
The quantitative research method is admitted as a better method for giving a causality
explanation between several units, factors, variables or phenomena (Muijs, 2010). The
objectivity of quantitative analysis is evinced on the fact that the research emphasizes things that
can be measured and relies on standardized protocols. The general purpose of quantitative
research method is to produce and emphasize generalizations and replications. The research will
use deductive “top-down” theoretical approach as it usually tests theory through observations

42. 42
that portray people attitudes, individual feelings, perceptions or intentions. Quantitative analysis
always encompasses with numeric data collections using statistical method. Among the data
collection instruments we can isolate charts, tables, graphs, calculations based on formulas and
etc.
Table 9. Qualitative versus quantitative research
Sources: (Johnson & Christensen, 2008) and (Lichtman, 2006)
Internet survey would be the major research method of quantitative analysis. The survey is
undertaken to detect patterns in the data of Ford vehicle-buying population from which useful
discoveries can be made. It will bear out the views of consumers on company`s present products
and overall direction of development and will help to remove revealed gaps by taking further
actions orientated on the improving the quality of products and business performance of the
company.
3.3 Sample Unit
To draw up the sample unit of the research, we might be needed the Ford customer profile
information from its internal database, which falls into it when the actual purchase happens. If

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the researcher obtains an admission to this database and the permit to extract needed profile
information, thus the research get one more method – archival. If not, the survey would be done
online. It is even more convenient due to the limit of time and the ease for searching of
respondents. In any case, it is necessary to receive the firsthand and trustworthy information on
their handling and driving feelings of Ford vehicles. It is desirable to survey stratified sampling
population, i.e. people from different social class categories, owners of different vehicle series
and models so that we will be able to work up and research the collected data to move further to
statistical testing and analysis.
3.4 Sampling Method
Convenience-based sampling is the main sampling method of our research. It is a non-
probability sampling technique where subjects are selected because of their convenient
accessibility and proximity to the researcher. It is the least costly to the researcher, in terms of
time and effort but may result in poor quality data and lacks intellectual credibility (Marshall,
1996). Besides, simple random sampling will be used for the selection of respondents from
different strata.
3.5 Sample Size
The actual sample unit (Ford vehicle-buying population) would be too large to pick for the
exploration. Therefore, we will implement the survey of the research through the sample size of
115 target respondents who would take part in the survey. As the research deals with company`s
global business operations, then respondents may be from different countries and different
cultural backgrounds. The survey is deliberately prepared by counting upon it.
3.6 Data Collection Methods
There are two types of data sources: primary and secondary. The data collection method used
to gather primary data is with the aid of self-administered questionnaire. It allows target
respondents to express their own opinion on Ford as a company as a whole filling up the
questions and to assist the researcher in collecting data for its testing and analysis.
The questionnaire is composed of three parts. First part includes general administrative questions
such as personal details, information on respondent`s Ford vehicle or his/her previous driving
experience. The second part consists of subject matter questions. The questions are mostly built
in unstructured (open-ended) manner that is usually non-type for causal researches. Finally, the
third part contains the empty field where respondents can leave their comments or suggestions
by their own requests. Any thoughts are welcome and will be attentively considered. The
questionnaire is created via Google.Docs and intended for online fill-ups.

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Researcher will use qualitative research method as well. Collecting primary information for
qualitative analysis will be acquired from numerous Ford communities in social media mostly
created by geographical locations, or dedicated to particular Ford vehicle models. Discussions
among members of these communities are usually very spirited consecrated to latest news,
events, observations or joint resolutions of frequently-appeared problems during vehicle
utilization.
Secondary qualitative data of the research consists of documentary written materials,
corporate disclosure reports, open-ended answers of the target respondents where they share their
views or make suggestions and recommendations on company`s further improvement, giving
additional fields of study, and, finally archival research implied in seeking out and extracting
evidence from original corporate archival records while considering business review of the
company based on four (4) main dependent investigated factors and proposing future business
model and plan later in the second part of the research (UTARMS, 2015).
Table 10. Summarized Data Needs Matrix

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3.7 Expected Outcomes
There is an expectation that survey outcomes and implications will assist to respond to all
formulated questions and to achieve all objectives of the research and will create a ground to
make a substantial business plan of Ford Motor Company.
3.8 Limitations and Ethical Considerations
Researchers usually come across with certain limitations and ethical issues while conducting an
academic research. One of the most anxious limitations are timeframes. The research subject is
multilateral so that every section needs in more in-depth study. Besides, as soon as the
questionnaire is drawn up, the researcher has to place it in Ford social media websites in order to
gain a feedback from respondents, but initially gain the permission from the administration of
Ford online communities. In addition, respondents may face several difficulties while filling out
the questionnaire or some questions may cause misunderstandings.
Among ethical issues, it is necessary to figure out the rights of respondents. They have following
rights:
o Right of Informed consent is a participant`s consent given freely and based on full
information about participation rights and use of data (Saunders, Lewis, & Thornhill, 2009). The
researcher must give to the participants an understanding of voluntary nature of the proposed
research survey, they should not be forced to participate.
o Right of Privacy & Confidentiality. Researcher acknowledges and respects respondents`
desire to not divulge their profiling information as some of them prefer to stay anonymous and
not to be subsequently contacted.
o Right of refusal. Participants have full rights to withdraw themselves from the research
questionnaire at any time, without any reason provided. And researcher should not blame and
penalize them at any cost. They can even turn down the researcher`s proposal to undertake the
survey because of the poorly designed questionnaire.
o Right to edit responses. Respondents have a right to change their answers either while
completing the survey or after they submit it. If submitted, respondents can click the survey link
to open the survey again, then they will be able to update their responses. For respondents
convenience, they can edit from any computer or device since their responses are tied to their
email address (SurveyMonkey, 2015).
I proclaim that all gathered information would not be the subject of alteration and would
be addressed only for exploration and examination purposes. The researcher shall ensure that
projects and activities are designed, conducted, reported and documented accurately,

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September
No Task Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4 Week 1 Week 2 Week 3 Week 4 Week1
1 Title and factors approval
2
Writing of first three (3)
chapters
3 Collection of data
4 Data analysis
5
Draft report and writing of
second three (3) chapters
6 Supervisor’s feedback
7 Revise report
8 Final report submission
June July August
Table 11. Research Gantt Chart
transparently and objectively. The research has no signs of plagiarism as it distinguishes from all
others previously done in business academic science.
3.9 Research Gantt Chart
The whole research will be enduring thirteen (13) weeks broken by eight (8) stages. Some stages
may clash with each other due to the lack of time. For example, the execution of stages number
3, 4, and 5 are to be conjoined together. Collection of data lasts two weeks but on the second
week, we need to start analyzing respondents` data from the first week, it will save time to us.
Similarly, analyzing respondents` data we need to enter on the report and 3-year business plan.

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CHAPTER 4
DATA ANALYSIS

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4. Data Analysis
4.1 Primary Data Analysis
Primary data collection was lasting for 4 days from 23rd
to 27th
of July and total number of
collected responses amounted to 115. Before answering the questions, respondents must have
agreed with the terms of the questionnaire implied that it was occuring on the volutary basis and
that they may ignore some questions if they feel uncomfortable to respond. All of them was
accepted by the researcher.
Chart 4. Data collection dynamics
4.1.1 General questions
There were eight (8) general questions namelyrespondents should have indicated their name by
request, gender, region of belongingness, age group, driving experience counted in years,
monthly income class, whether they have ever previously driven Fords or not and the detailed
characteristics on their vehicles included the types of vehicle`s body, engine, and gear-box, total
number of kilometres or mileage travelled and a release date.
1. Gender
According to the survey, male group constitutes the overwhelming majority of respondents. It
proves that Ford vehicles are more preffered by men and that they keep track of all news and
events and are always wide awakeof affairs concerning the company, either that is a release of a
new model or an upgrade version of the existing vehicle. They rapidly react on everything
happening inside the organizationthereto it has become easier to follow the company widely
presented in social media websites.
Chart 5. Gender
0
10
20
30
40
50
22.07.2015 23.07.2015 24.07.2015 25.07.2015 26.07.2015 27.07.2015 28.07.2015
Number
of
Responses
Date
Data Collection Dynamics, per day

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2. Georgraphical environment
Geographical field of the research covers all populated continents and all areas where Ford
Motor Company is presented with its subsidiaries and plants. Survey unexpectedly showed that
respondents from Asia-Pacific region had formed the major part (one third) of the whole sample
size. North American region where Ford is targeted the most was right behind with 29%.
European respondents amounted to 18% out of all survey participants.
3. Age
Survey revealed that Ford vehicles are more used by younger drivers. However, it does not prove
their predominance over the middle and old age groups in reality, because results were received
online where users among younger population has definitely got a superiority. Many mature
people throughout the world prefer to own Ford trucks rather than alternative truck
manufacturers especially those who carry on a rural lifestyle. All in all, 25-34 age group
respondents constitute the largest part.
Regions North America South America Europe Asia-Pacific Middle East Australia Total
№ 34 9 21 37 3 11 115
% 29,57 7,83 18,26 32,17 2,61 9,57 100
Age Group 18-24 25-34 35-44 45-54 55-64 Above 65 Total
№ 19 42 23 15 13 3 115
% 16,5 36,5 20 13 11,3 2,7 100
Chart 6. Responses by Geographical Regions
Chart 7. Responses by Age Groups

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From the organizational perspective, it is obviously better to inquire and elicit reasonable
particulars ofgrievances from wide-experienced drivers so that engineers will diagnose the
problemeasier and will do the correction of mistakes. However, comprising together three (3)
categories we can conclude that almost two third (2/3) of the respondents has medium driving
experience.
4. Monthly income class
Survey confirms the main pricing concept of Ford Motor Company: to produce affordable
vehicles for low and middle class customer segments. Just these segments were presented the
most here. They figure approximate prominency of all respondents (ninety percent (90%).
Income, $ Below 499 500-999 1000-1999 2000-3999 4000-5999 Above 6000 Total
№ 15 13 21 27 21 13 100
% 13,6 11,8 19,1 24,5 19,1 11,8 100
Time Less than 1 year 1-5 years 6-10 years 11-15 years 16-20 years More than 21 year Total
№ 13 19 33 19 15 14 113
% 11,50 16,81 29,20 16,81 13,27 12,39 100
Chart 8. Responses by categories of driving experience
Chart 9. Responses by monthly income

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5. Previous experience of driving Ford vehicles
81% of respondents has been driving Ford vehicle before their actual one. Thus we can assume
that they did like their first experience of driving. And 19% has not never driven Fords.
Chart 10. Driving experience of Ford vehicles in the past
7. Vehicle characteristics
It is open-ended question and serves as supplementary feedback material. The primary intention
to ask was simply to know more about current Ford drivers` experiences and opinions about their
vehicles. After reviewing submitted responses, researcher identified that not all respondents
(only 101 out of 115) agreed to provide a feedback and to describe their vehicle characteristics
(See Appendix № 5).

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4.1.2 Subject Matter Questions
Factor 1. Market
Question 1. Assess how fuel-efficient your vehicle is.
As we see from the diagram, scaling options from 1 to 4 that occupy exactly 70% of Ford
ownersindicate the smouldering discontent with fuel-efficiency of their vehicles. They have to
replenish more frequently and consequently suffer additional maintenance costs.
By the way, Ford vehicles are equipped by EcoBoost direct injection petrol engine
system that is supposed to deliver a 20% better fuel-efficiency and provide 15% less greenhouse
emissions than other automotive combustion engines.EcoBoost is available for the following
models: Fiesta, Focus ST, Fusion, Taurus SHO, Escape, Edge, Flex, Explorer, and F-150 (Ford
Fuel Efficiency, 2015).
Chart 11. Ford Fuel-efficiency
Question 2. How does Ford get on with market development speed?
Automotive market develops headily and 86% of respondents believe that Ford Motor Company
gets on quite well and keeps apace with market progress. Market is regularly expanding by
discovering and entering in new segments, attracting new users, and increasing the number of
vehicles sold.
Estimation Excellent Good Average Poor Very Poor Total
№ 16 49 33 11 6 115
% 13,9 42,6 28,7 9,6 5,2 100
Chart 12. Ford`s market development progress

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Question 3. Are your vehicle equipped by latest modern technologies? How innovative your
vehicle is?
Ford leverages its key new technologies across multiple regions and on its global
platforms, which enables it to generate growth across products, and drive significant scale, and
efficiency savings. Ford collaborates with Microsoft Corporation to equip its vehicles by fully
integrated voice-activated in-car communication and entertainment system for mobile phones
and digital music players - “Sync Interactive Technology”.
However, this question aimed to learn the degree of Ford innovativeness and
technological development among consumers and repeatedly convince the company itself in the
acceptance of right direction. So far, 40% of Ford owners are pleased with technical equipment
of the vehicles. Nevertheless, there is a room to grow because only 14% are fully satisfied.
Question 4. The understanding of customer needs and wants
Customer orientation is defined as an approach to sales and customer-relations in which staff
focus on helping customers to meet their long-term needs and wants (Cross, 2015). Customer
orientation plays crucial role in the forming of strategic business goals, performance indicators
and operational decisions. In respondents` opinion, Ford will come back only by giving
customers what they want.36% of them believe that Ford clearly understands needs and wants of
its buyers.
Estimation Excellent Good Average Poor Very Poor Total
№ 21 45 35 9 4 115
% 18,4 39,5 30,7 7,9 3,5 100
Chart 13. Ford innovativeness

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Factor 2. Marketing
Question 1. “Unified vehicle model implementation for all markets will positively reflect
the company`s future business performance”.
Nine tenths of the respondents agree with the statement to a variable extent i.e. the model will be
beneficial for both customers and the organization as producing unified vehicles will equally
deliver technological development to ones and will reduce production costs and maximize profit
for others. Thus, Ford should carry on the implementation of the model but it is still far away
from the highest effectiveness. Giving justifications on this question, Ford owners note that some
models are just absent in certain auto markets due to the complexity to meet requirements of
different markets. For instance, a number of cars presented in European market is overlooked in
Australia.
Estimation Excellent Good Average Poor Very Poor Total
№ 30 39 39 6 1 115
% 26,1 33,9 33,9 5,2 0,9 100
Estimation Excellent Good Average Poor Very Poor Total
№ 14 41 37 13 10 115
% 12,2 35,7 32,2 11,3 8,7 100
Chart 15. Unified Vehicle Model
Chart 14. Customer needs and wants

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Question 2. Vehicle designs
As for the exterior design, respondents hold contrary viewpoints. First group of options from 1 to
5 take 51%, and another one takes the rest 49%. Exterior design should be more innovative.
Interior design is little better perceived by Ford owners than the exterior. It needs more focus on
aesthetics. In any case, to explore design issues more attentively, company needs to investigate
by particular models.
Chart 16. Exterior design
Chart 17. Interior design
Question 3. Vehicular Inspections
Vehicle inspections are mandatory procedures for all drivers that can be required at various times
and in which technical conditions of the vehicle are being inspected to ensure that it conforms to
regulations governing safety and environmental emission standards (B.C. Ministry of
Transportation and Infrastructure, 2010). Ford drivers undergo vehicular inspections every ten
thousand (10,000) kilometers at most.
Chart 18. Vehicular inspections

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Question 4. Technical Problems
Opinions based on the pure driving experience are equally divided in this question. Some
negative answers really attacks the right-brain side while trying to imagine similar situations. For
example, the door-latch system is so horrible that were some cases when drivers could simply
fall out from the car. Or head lights may suddenly shut down. Or cars can come to a dead stop
because of the errors of transmission.
Chart 19. Technical problems
Question 5. Media Channels
An overview of main media channels and marketing tools of Ford Motor Company is shown on
the histogram. It stands to reason that Internet is the largest source to get an information about
Ford cars, it deservedly takes first place by popularity. As we can see, word-of-mouth (WoM) is
a kind of powerful tools that can influence business results from both sides it either will drive
sales of the company or will ruin it (Whitler, 2014). It includes everything that individual
customers hear, learn and then share with the folks around themselves. Extant auto shows &
exhibitions still are being visited a lot. According to the Foresight Research, they help to
maintain consumer interest, strongly influence purchase decisions and provide tremendous
opportunity for the manufacturer to reach high level of potential car buyers (Snavely, 2015).
Chart 20. Media channels

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Factor 3. Organization
Question 1. Give your opinion on the following statement
Almost the half of respondents answered agreed with the statement.Year by year we have
already been meeting more eco-friendly vehicles and we will see even more on sale. Cars with
small engines or combinations of small engines with electric motors and power trains that help to
minimize the amount of fuel used (Baker , 2014).
Chart 21. Small eco-friendly vehicles
Question 2. Dealership relations
One of the key findings of the conducted Foresight Research was that 53% of auto show
attendees usually plan to visit an auto dealership right after the event (Snavely, 2015).Dealers
serve as a sales intermediaries between headquarter and customers. Therefore, it is extremely
important to give them aright understanding of organizational values because they need to
transmit them to potential buyers.
Chart 22. Sources of vehicle purchase

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One third of respondents assessed the quality of service as quite well. However, among negative
answers, respondents claim that specialists in dealer offices are not qualified and competent
enough, irresponsible and not customer-friendly. Moreover, the after-sales service and support is
woeful. The working cooperation needs to be strengthened to provide better customer service
that plays very significant role because for the Ford lovers current vehicle may not be the last
one. As a brand, Ford must maintain its ability to retain existing customers. For this reason, it
needs to train its workers better.
Question 3. How does Ford follow environmental and ecological standards?
The half of respondents acceptably estimates the overall congruence of Ford Motor Company
with environmental and ecological standards. Indeed Ford has made a huge contribution towards
a keeping of sustainable environment and that is why was recognized among most ethical
companies in the world for the fifth time in a row. Ford pays a lot of attention to corporate
responsibility (Khan, 2015).
Chart 24. Congruence with standards
Chart 23. Ford dealerships