Ford 5


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  • This presentation has been designed for the GCSE course on the American Boom. Opportunities exist for revision, literacy and modelling. Impress the pants of an Ofsted inspector (someone who can’t teach) if you got the students to grade their own work using the mark scheme, Remember press ‘P’ if you wish to return or undo the last action.
  • Ford 5

    1. 1. Ford Motors
    2. 2. The Model ‘T’ Ford <ul><li>Henry Ford set out to build a car which everyone could afford to buy. </li></ul><ul><li>It was slow, ugly and difficult to drive, and was nick named the ‘Tin Lizzie’ by the American people. </li></ul>
    3. 3. The Model ‘T’ Ford <ul><li>The attraction of the Model T Ford was that its price never increased. </li></ul><ul><li>Costing $1200 in 1909, the price in 1928 was only $295 . </li></ul><ul><li>By 1929 Ford was producing more than one car per minute </li></ul>
    4. 4. Mass Production <ul><li>Ford was able to sell cars cheaply because they were mass-produced and every part was Standardised (only one colour and one engine size were available). </li></ul><ul><li>By producing large numbers of cars on an Assembly Line Ford needed fewer skilled workers , and that cut the cost of paying wages. </li></ul>
    5. 5. Mass Production <ul><li>Ford invented the idea of using an Assembly Line to speed up production. </li></ul>
    6. 6. Key Quote – Henry Ford How would this have helped to cut production costs? ‘ A customer can have any colour he likes for his car so long as it's black’
    7. 7. Assembly Lines ‘… each man and each machine do only one thing ... the thing is to keep everything in motion and take the work to the man not the man to the work’ Henry Ford 1925
    8. 8. Car Industry Mass productions & Standardisation lead to increased car sales . More Standardised parts are needed More jobs are created in other industries. Steel Glass Rubber Leather More people with jobs means that they can afford to buy a car! Jobs in Diners, Motels & Gas Stations. More Oil is used. More roads are built. The Cycle of Prosperity!
    9. 9. Car Production & Cycle of Prosperity <ul><li>Car production used up 20% of America's steel , 80% of her rubber , 75% of her plate glass and 65% of her leather . </li></ul><ul><li>By the end of the 1920s American cars used seven billion gallons of petrol a year. </li></ul><ul><li>This helped to create jobs in the oil industry and made the oil state of Texas rich. </li></ul>
    10. 10. Aerial view of the Rouge plant in 1930 <ul><li>In 1929, there were 81,000 men working in this one factory </li></ul>
    11. 11. ford objectives <ul><li>position the company for sustained competitiveness, profitability and growth. </li></ul><ul><li>satisfy customers based on the design, quality, technology and value of our cars and trucks. </li></ul><ul><li>Continue solid growth in global vehicle sales.. </li></ul><ul><li>Investing dedicated to improving cultural, economic, educational, environmental, and social aspects of our communities. </li></ul>“ Ford Motor Company describes itself as a company that is “passionately committed to providing personal mobility for people around the world….We anticipate consumer need and deliver outstanding produces and services that improve people’s lives.” .&quot; Mission Statement:
    12. 12. Identified Problem <ul><li>Falling car sales has been a problem for ford due to increased competition from foreign manufacturers & rising oil prices. </li></ul>
    13. 13. The Economic Situation <ul><li>The combination of the sharp run-up in oil and gas prices, rapid declines in the housing/mortgage/credit sectors, and the lowest levels of </li></ul><ul><li>consumer confidence in nearly 30 years have all dramatically reduce both the economic and automobile industry outlooks. </li></ul><ul><li>over the past few months, U.S. auto sales have declined by more than 30%. </li></ul>
    14. 14. <ul><li>The automobile industry is highly competitive. The North American automobile industry is dominated by what’s known as the ‘Big Three’: General Motors, DaimlerChrysler, </li></ul><ul><li>The two largest foreign competitors include both Toyota and Honda. </li></ul><ul><li>Since Toyota’s introduction of the Prius, an innovative gas electric hybrid car, ford has been struggling to keep up with competition. </li></ul><ul><li>US auto makers lost 8% of the US auto market last year, while Asian manufacturers gained 5% and European companies gained 3% </li></ul>The Competitive Situation
    15. 15. Competitive Situation How Does GM compete? 2008 Sales Revenue Employees At 2008 Year-end $182 Billion $230 Billion $177 Billion $172 Billion 266,000 316,000 274,999 245,000
    16. 16. The Competitive Situation 2006 GCC Market Share
    17. 17. S.W.O.T. analysis <ul><li>Strengths </li></ul><ul><li>Name recognition </li></ul><ul><li>Corporate Social Responsibility </li></ul><ul><li>Quality improvements and perception thereof. </li></ul><ul><li>Opportunities </li></ul><ul><li>Cut health-care costs and move production overseas. </li></ul><ul><li>Concentrating on smaller more fuel efficient cars </li></ul><ul><li>Expansion of their global presence . </li></ul><ul><li>Weaknesses </li></ul><ul><li>The decline of market share. </li></ul><ul><li>High pension obligations and health care costs. </li></ul><ul><li>Lack of differentiated products. </li></ul><ul><li>Unfocused product line </li></ul><ul><li>Unresponsive corporate culture. </li></ul><ul><li>Too much investment in SUVs and Trucks. </li></ul><ul><li>Threats </li></ul><ul><li>Intensity of rivalry among competitors worldwide. </li></ul><ul><li>Weak consumer confidence and tight credit. </li></ul><ul><li>The UAW can hurt General Motors if unhappy. </li></ul><ul><li>The Volatility in fuel prices. </li></ul><ul><li>Government legislation. </li></ul>
    18. 18. President and MD, India Head, Asia Pacific Region They have a matrix organizational structure
    19. 19. Corporate Social Responsibility <ul><li>Setting of Sanjeevi Health Care Centre at a cost of more than Rs. 35 lakhs </li></ul><ul><li>Devoting lot of funds for cancer patients and research </li></ul><ul><li>Ford has also set up Centre for Vehicle Emission Research at IIT, Chennai and Delhi </li></ul><ul><li>In collaboration with CII helped residents of Panayur village after the Tsunami in December 2004 </li></ul><ul><li>Set up industrial centers in rural areas of Michigan. Set up 30 centre each employing more than 1000 employees. </li></ul>
    20. 20. Corporate Governance at Ford <ul><li>Succeeds at providing benefits to the society </li></ul><ul><li>Internal audit scheduled every quarter </li></ul><ul><li>Environmental Management System (EVM) audit is also done. Here detailed analysis of environmental issues are made e.g., air pollution, water pollution etc.. If non compliances are found action is taken </li></ul>
    21. 21. Corporate Governance( contd..) <ul><li>Aims at increasing the benefit for the shareholders. </li></ul><ul><li>Starting from the year 1996 till 2007, the company on an average has distributed dividends almost three times a year, around $0.42 per equity share. </li></ul>
    22. 22. Organization’s Mission Statement Provides a framework or context within which strategies are formulated, including Mission – The reason for existence – what an organization does Vision – A statement of some desired future state Values – A statement of key values that an organization is committed to Major Goals – The measurable desired future state that an organization attempts to
    23. 23. The Mission <ul><li>Ford Motor Company describes itself as a company that is “passionately committed to providing personal mobility for people around the world….We anticipate consumer need and deliver outstanding produces and services that improve people’s lives.” </li></ul>
    24. 24. The Vision <ul><li>“ he vision of Ford is “to become the world’s leading consumer company for automotive products and services.” </li></ul>
    25. 25. Values <ul><li>Throughout our history, we've always fostered an inclusive and diverse work environment </li></ul>
    26. 26. The all-new Ford Edge
    27. 27. Target Customer <ul><li>Inquisitive Spirits, age 30, newly married, no kids. </li></ul><ul><li>This audience is in a ‘me’ focused stage of life. Their ‘no kids to tie me down yet’ lifestage affords them the ability to go and try whatever their interest. They are always eager to push themselves to try new experiences. Sometimes that drive is reflected in their physical activities and other times it’s a challenge they’ve never tried before. </li></ul><ul><li>They have an appreciation for nature and the outdoors which shows itself in their activities and their sense of style (organic, simple, and unique). They find the joys of the outdoors in both urban and rural adventures. For them, it’s just about getting out there and gathering experiences. </li></ul><ul><li>Emotional Benefits Sought: </li></ul><ul><li>To be seen as stylish . </li></ul><ul><li>To be seen as confident . </li></ul><ul><li>To reward themselves. </li></ul><ul><li>To feel unique . </li></ul><ul><li>To feel good ( smart ) about decisions . </li></ul><ul><li>Product Benefits Sought: </li></ul><ul><li>Unique Styling – successful, outdoor, sporty </li></ul><ul><li>Agile handling – confident, spirited driving. </li></ul><ul><li>Adaptable Interior w/o compromising style </li></ul><ul><ul><li>Comfortably seats adults </li></ul></ul><ul><ul><li>Carries equipment for their active life </li></ul></ul><ul><li>Assured Safety </li></ul>
    28. 28. Appealing Style <ul><li>Organic – natural objects and settings </li></ul><ul><li>Simplicity – modern, clean & uncluttered lines </li></ul><ul><li>Unique – present something in a different way </li></ul>Appealing styles focus on the organic, the simple and the unique.
    29. 29. Ford’s Strategy for Target Customer <ul><li>Design & Package </li></ul><ul><li>Interior and exterior design is stylish and distinctive. Exterior: a bold chrome grill, dual chrome exhaust and sporty, muscular stance. Interior: textured aluminum and chrome accents, contrast seat stitching, two tone door panels. </li></ul><ul><li>17” and 18” wheels available </li></ul><ul><li>Available panorama roof with dual power sunshades. </li></ul><ul><li>Available luxury technology, including navigation system, satellite radio and rear DVD . </li></ul><ul><li>Uncompromised rear seat room </li></ul><ul><li>Reclining rear seatback, also easily folds flat, using an electronic switch and spring assist. Fold flat front passenger seat. </li></ul><ul><li>Compartmentalized Center Console Storage Bin </li></ul><ul><li>Driving Dynamics </li></ul><ul><li>Independent multilink suspension, based on the Fusion and Mazda 6 design, delivers responsive, sports sedan-like handling. </li></ul><ul><li>New &quot;Active&quot; AWD system available – initiates preemptive torque transfer – tuned more for traction and on-road performance than for off-road capability. </li></ul><ul><li>New engine-controlled traction assist and Integrated Vehicle Dynamics with Roll Stability Control . </li></ul><ul><li>Performance </li></ul><ul><li>First vehicle to use the all-new Duratec 35, 3.5L V6 , with 250 hp and 240 lb-ft of torque </li></ul><ul><li>All-new 6-speed adaptive automatic transmission . </li></ul><ul><li>Targeted to be best-in-class 0-60 acceleration performance . </li></ul>
    30. 30. Job openings <ul><li>Provide jobs according to the interest & skills </li></ul>
    31. 31. Work environment <ul><li>Very much familar envionment </li></ul>
    32. 32. Company culture <ul><li>Technology innovation & environmental steuardship  </li></ul>
    33. 33. Career programs <ul><li>They provide opportunities for students college grads & experienced professionals </li></ul>
    34. 34. Hiring process <ul><li>Process is personal thorough & efficient </li></ul>
    35. 35. Ford Motor company <ul><li>Established 1903 in USA by Henry Ford </li></ul><ul><li>Is the 4 th largest automobile manufacturer in terms of production volume </li></ul><ul><li>Sells vehicles under Ford, Mercury, Volvo & Lincoln brands. </li></ul><ul><li>Revenue for 2007 was $ 173.9 billion,2.7 billion loss posted </li></ul><ul><li>6,247,506 vehicles made, controlled a 15.6% market share in the US and 8.6% worldwide. </li></ul>
    36. 36. Smiles &Tears <ul><li>Loosing market shares in US,10% point loss from 1995-2005 </li></ul><ul><li>Showed profit in BRIC countries </li></ul><ul><li>Asia-Pacific/Africa = 2.4% in 2006 and 2.3% in 2007 </li></ul>
    37. 37. Problems in U.S.A. <ul><li>Expensive labor </li></ul><ul><li>Very high health and retirement obligations </li></ul><ul><li>High reliance on trucks, decline by 22 %of sales volumes witnessed during recession months. </li></ul>
    38. 38. Strategy? <ul><li>Ford reached an agreement with United Autoworkers Union (UAW) that will shift healthcare obligations for Ford's 123,000 retirees to the union in exchange for Ford setting up a healthcare fund of $15.4 billion. </li></ul><ul><li>Cut 40,000 job in 3 years </li></ul><ul><li>Closed 7 factories in 5 years </li></ul>
    39. 39. For U.S <ul><li>Plans to bring six of its fuel efficient models (average fuel economy of over 30 mpg) currently sold in Europe to the U.S. market. </li></ul><ul><li>Mitigated public resistance </li></ul>
    40. 40. Region wise distribution
    41. 41. “ World Cars” <ul><li>Revenue (in millions) </li></ul><ul><li>North America -$4,161 </li></ul><ul><li>South America $1,172 </li></ul><ul><li>Europe $744 </li></ul><ul><li>Asia/Pacific/Africa and Mazda- $206 </li></ul><ul><li>JD Power reports Ford's quality improved faster than industry average . </li></ul>
    42. 42. Strategy at work <ul><li>So aims at developing fuel efficient cars in Europe, moving it to China and US </li></ul><ul><li>Ford Fiesta first car in this class </li></ul><ul><li>Aims at closing gap between Japanese competitors </li></ul>
    43. 43. Relative status
    44. 44. Market Shares
    45. 45. Competitive strategy <ul><li>2007-reduced cost, increase revenue </li></ul><ul><li>Revenue rose 8.6% to $173.9 billion and net losses declined from $12.6 billion to $2.7 billion. </li></ul><ul><li>Deal with UAW </li></ul><ul><li>Halved US hourly workforce(99,500- 54,000),closed 14 North American units </li></ul><ul><li>Dual pay adapted. </li></ul>
    46. 46. Strategy at work <ul><li>Ford still lost $1,467 on every vehicle it produced(Honda made $1,641/vehicle, Toyota $922) </li></ul><ul><li>Halted truck production as oil prices rose </li></ul><ul><li>To launch 6 newer models in 18 months (world cars) </li></ul><ul><li>Transmissions with more gears, direct injection turbochargers (&quot;ecoboost&quot;),low resistance tyres. </li></ul>
    47. 47. Region wise profit <ul><li>Pre-tax profits soared 237% in Europe (from $219 million to $739 million) </li></ul><ul><li>Pre-tax profits went up 127% in South America (from $113 million to $257 million). </li></ul><ul><li>Pre-tax profit in the Asia/Pacific region was $1 million pre-tax profit in the Asia/Pacific region compared to a $26 million loss last year. </li></ul>
    48. 48. Aggressive fight back! <ul><li>Ford introduced the Ford Fiesta, an all-new global small car, at the Geneva Motor Show. It’ll be sold in major worldwide markets by 2010. </li></ul><ul><li>Mondeo and European version of the Focus, both fuel efficient coming to US </li></ul><ul><li>2009 Ford Escape(better mileage than Toyota Rav4 or Honda CRV.) </li></ul>
    49. 49. Sales volume
    50. 50. International strategy <ul><li>China 22% ,Brazil 26%, Russia 36% and India 12% increase in car sales. </li></ul><ul><li>Targeting BRIC </li></ul><ul><li>Ford Transit van,worldwide(from Europe) </li></ul><ul><li>Fiesta in India, China </li></ul>
    51. 51. Strategic academic alliance <ul><li>Strategic academic alliances with two of China's most prestigious universities – Nanjing University of Aeronautics and Astronautics (NUAA) and Shanghai Jiaotong University (SJTU) </li></ul>
    52. 52. Benefits <ul><li>Cheap labor in research department </li></ul><ul><li>Getting rid of apprehensions </li></ul><ul><li>Fuel efficiency enhanced in China </li></ul><ul><li>Broad base for R&D </li></ul><ul><li>Penetrating China </li></ul>
    53. 53. Future expectations <ul><li>Working on efficiency of fuel </li></ul><ul><li>Working on cost cutting </li></ul><ul><li>Off shoring </li></ul><ul><li>Entering less saturated markets </li></ul><ul><li>Expansion rather than divestment </li></ul>
    54. 54. Thank you?