Slides ford 2015

FORD MOTOR COMPANY 2015
CASE ANALYSIS
PREPARED BY
AINA HAZIRAH HAFIZALSHAH (GA02618)|SITI AISYAH AZLAN (GA02665)|SITI THOLEHA MUSTAPA (GA02668)
IRMY MARZITA IBRAHIM (GA02678)|NUR ELHAM ANUAR(GA02680)
1

2
EXECUTIVE SUMMARY
Ford Motor Company is the second – largest U.S automaker behind General Motors. The
company produces many different cars and trucks ranging from entry level to luxury cars.
Ford’s F-150 pickup truck is the most popular truck in the world for 32 years running. Ford
owns stakes in several car manufacturers around the world, including Aston Martin, Jiangling,
Troller, and FPV. In the past, Ford has owned portions of Jaguar, Land Rover, and Volvo. In
2015, Ford switched the body of its famous F-150 to aluminum from steel. The extra cost was
$395 per truck, but fuel economy improved with the reduced weight. However Ford’s recent
income statement showed a decline in profitability in a row. Sales of ford cars and utility
vehicles fell 8.1% and 2.3%. Ford shareholders were not pleased with all the declines. This
report makes the following recommendations a 3 - year strategic plan for Ford’s new CEO Mr.
Mark Fields.

3
ORGANIZATIONAL STRUCTURE
CHAIRMAN
COO EVP
MARKETING
EVP
MANUFACTU
RING
EVP & CFO
GROUP VP
COMMUNICA
TIONS
GROUP
VP HR
GROUP VP &
GENERAL
COUNSEL
GROUP VP
PRODUCT
DEV
GROUP VP
COMMUNITY
RELATION
VP &
CONTROLLER
GROUP VP &
CHIEF
INFORMATIO
N OFFICER
CEO
EVP & PRESIDENT THE
AMERICA
EVP & PRESIDENT
EUROPE MIDDLE EAST
& AFRICA
GROUP VP &
CHAIRMAN FORD
MOTOR CREDIT
GROUP VP &
PRESIDENT ASIA
PACIFIC
• Very Complex structure fairly
mechanistic
• Rigid departmentalization
• Low span of control
• High Centralization

4
Allow
Synergy
Minimize
Conflicts
Assist in
Evaluation
LONG - TERM OBJECTIVES
SINCE 1903
TYPE PUBLIC COMPANY
HEADQUATER DEARBORN, MICHIGAN, US
INDUSTRY AUTOMOTIVE
AREA SERVED WORLDWIDE
PRODUCTS AUTOMOBILE
LUXURY VEHICLES
COMMERCIAL VEHICLES
AUTOMOTIVE PARTS
FORD AT A GLANCE

5
Rivalry Among
Competing Firms
Potential Entry of New
Competitors
Potential Development
Of Substitute Products
Bargaining Power of
Suppliers
Bargaining Power of
Consumers
THE FIVE – FORCES MODEL
Rapid changing consumer demands, Market
growth increase and Barriers to exit are strong
The industry is massive and mature
Government regulations barriers of entry
HIGH
LOW
Public Transportation if Affordable
Gas prices rapidly changing
MODERATE
Many existing of suppliers means low power.
Sales are expecting to grow, increasing buying
power, many customer base means a low buyer
threat
LOW
MODERATE
– HIGH

6
FORD GM TOYOTA
Critical Success Factors Weight Rating Score Rating Score Rating Score
Advertising 0.08 3 0.24 4 0.32 2 0.16
Product Quality 0.18 3 0.54 2 0.36 3 0.54
Price Competitiveness 0.15 3 0.45 3 0.45 4 0.6
Management 0.11 3 0.33 3 0.33 4 0.44
Financial Position 0.10 2 0.2 3 0.3 4 0.4
Customers Loyalty 0.15 3 0.45 3 0.45 4 0.6
Global Expansion 0.15 2 0.30 3 0.45 4 0.6
Market Share 0.08 2 0.16 3 0.24 4 0.32
Total 1.0 2.67 2.90 3.66
COMPETITIVE PROFILE MATRIX (CPM) MATRIX

7
THE EXTERNAL FACTOR EVALUATION (EFE) MATRIX
Opportunities
1. Ford reached an agreement with the UAW to avoid a government takeover, unlike its counterpart,
GM.
0.03 4 0.12
2. China expects to increase its global market share lead. 0.06 4 0.24
3. Lower rates and easy access to loans has been great for automakers. 0.05 3 0.15
4. Most consumers focused with styling and price, but there are many exceptions and subsets of each
population.
0.04 3 0.12
5. Factories are closer to the market which reduces shipping costs and there is more control over
operations
0.04 2 0.08
6. Automakers started applying hybrid technology. 0.07 4 0.28
7. Recalls continued their upward trend, resulting in billion-dollar penalties, including $1.2B penalty on
Toyota and that will give an opportunity to ford
0.04 2 0.08
8. Oil prices fell nearly 50% from summer 2014 to year – end 2014. 0.06 3 0.18
9. In 2014, sales of SUVs, mini-vans and light-duty trucks increased nearly 10%. 0.04 3 0.12
10. Pickup trucks remain popular in the U.S, with the F-150 the best seller. 0.07 4 0.28
Key External Factors Weight Rating Weighted
Score

8
THE EXTERNAL FACTOR EVALUATION (EFE) MATRIX
THREATS
1. Rising gas, falling market share to foreign products, a demanding United Auto Workers (UAW) union that
contributed to downfall.
0.05 1 0.05
2. Europe remains a laggard in the world vehicle market, experiencing reduced sales for both Ford and GM. 0.04 2 0.08
3. Europe is starting to stabilize economically, although the euro continues decline, losing 25% of its value.
(putting further pressure on US Car manufactures).
0.05 3 0.15
4. Mini-vans and full-size vans have experiencing declining sales. 0.02 2 0.04
5. Wages, the second-largest expense, have been about $70,000 per employee in the US and account for 5 % of
total revenue expenses.
0.05 1 0.05
6. In 2017, GM plans to introduce a self-driving car that are safer, fuel savings and fewer accidents. 0.05 3 0.15
7. About 75% of all revenue goes to purchase raw materials, so the industry affected by prices of steel. 0.06 4 0.24
8. GMC, Chevy, Toyota and Dodge are all popular and dominate the U.S truck market. 0.06 2 0.12
9. GM and Volkswagen each have 15% market share in China. 0.06 4 0.24
10. GM committed to invest $16 billion in the US over the next 3 years. 0.06 4 0.24
TOTAL 1.00 3.01
Score

9
(EFE) MATRIX NORTH AMERICA
EXTERNAL OPPORTUNITIES
1. General Agreement on Tariffs and Trade and the North American Free Trade Agreement that lifted
many of the tariffs and taxes on trade and Europe and North America.
0.2 3 0.80
2. Consumer confidence played a key factor in high automobile sales in North America 0.15 4 0.45
3. Automotive revenue in North America has the highest revenue among all the region. 0.20 3 0.80
EXTERNAL THREATS
4. North American consumers shifted to more fuel-efficient and higher quality product of European and
Japanese automakers
0.15 2 0.30
5. Ford has staked its future on the Fiesta, and while early reviews are positive, North American
acceptance is critical.
0.10 2 0.10
6. Economic factor such as gas price pressure and increasing in interest rate will push automotive
revenues down in the region.
0.15 2 0.40
TOTAL 1.0 2.85
Weight Rating Weighted
Score

10
(EFE) MATRIX SOUTH AMERICA
1. Investing $2.5 billion in new engine and transmission plants in the Mexican states of Chihuahua and
Guanajuato. New plants could drive the revenue of the company to new heights.
0.20 3 0.60
2. Expected a global profit between $7 billion and $8 billion, with lower auto operating margins. 0.20 3 0.60
3. If the Brazilian economy on particular is able to rebound, it will increase the sales. 0.10 3 0.30
EXTERNAL THREATS
4. Inflation and political uncertainty have contributed to the ongoing depreciation in consumer
confidence in South America.
0.20 2 0.40
5. South America is in the midst of terrible economic. 0.20 1 0.20
6. South America having economic potential and an abundance of natural resources, domestic
economies have slowed down.
0.10 1 0.10
TOTAL 1.0 2.20
Score

11
(EFE) MATRIX EUROPE
1. The ‘One Ford’ vision has the chance to generate significant margin increases for Ford’s smaller line of
vehicles.
0.20 3 0.60
2. Expected a global profit between $7 billion and $8 billion, with lower auto operating margins. 0.20 4 0.60
3. Ford’s European operations resulted in the best pre-tax third quarter profit, a clear sign that post-
Brexit Europe can be a future strength for Ford.
0.10 3 0.40
EXTERNAL THREATS
4. Ford was affected by the euro crisis and the global market recession. 0.20 2 0.20
5. Declining sales due to financial crisis, recession and geopolitical events. 0.20 2 0.20
6. Britain’s decision to leave the European Union exhibits a long-term risk to both of economies. 0.10 2 0.20
TOTAL 1.0 2.20
Score

12
(EFE) MATRIX MIDDLE EAST & AFRICA
1. Saudi Arabia introduced vehicle fuel economy labeling requirements, which are likely to be extended
to other Gulf States.
0.25 4 1.0
2. Emphasizes on fuel efficient engines which give a strong competitive advantage. 0.25 3 0.75
EXTERNAL THREATS
4. Declining in market share because of competitive pressures, capacity constraints and protectionist
trade policies.
0.18 1 0.18
5. Low oil prices are hurting revenues, resulting in cutting capital and government spending. 0.14 2 0.28
6. Due to political unrest, the abundance of countries that rely on oil production to fuel their economies
are struggling with oil price.
0.18 1 0.18
TOTAL 1.0 2.39
Score

13
(EFE) MATRIX ASIA PACIFIC
1. Capitalizing on the models exclusively designed for different markets e.g. Ford Icon for India. 0.20 3 0.60
2. Ford is establishing India as a global sourcing hub to accelerate its export volume and effectively scale
in business.
0.20 3 0.60
3. Many analysts anticipate China accounting for one of every three vehicles sold globally by the end of
2020.
0.15 4 0.60
EXTERNAL THREATS
4. Many China automotive companies are expanding aggressively. there will be the potential of Chinese
automakers to export or produce vehicles for the U.S. market.
0.30 1 0.30
5. Many other brands from all over the world i.e. Asia and North America etc. has focused on their
marketing strategies and it has become the attention for majority of people.
0.15 1 0.15
TOTAL 1.0 2.25
Score

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COMPONENT YES/NO STATEMENT
CUSTOMER YES Satisfaction of our customers
PRODUCT
YES
Work together as one team to achieve automotive leadership
MARKET YES Worldwide
TECHNOLOGY YES Changing model mix
SURVIVAL, GROWTH &
PROFITABILITY
YES
- Aggressively restructure to operate profitably at the current demand.
- Create an exciting and viable company delivering profitable growth for all.
PHILOSOPHY YES One Ford, One team, One plan and One goal
SELF CONCEPT YES Work together as one team
PUBLIC IMAGE
YES
Satisfaction of essential business partners, such as dealers, investors, suppliers,
unions/councils, and communities.
EMPLOYEES
YES
-Align employee efforts toward success.
-Satisfaction of our employees
MISSION ANALYSIS (ONE FORD, ONE TEAM, ONE PLAN & ONE GOAL)

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FINANCIAL ANALYSIS (2014)
FORD GM
Liquidity Ratios
Current Ratio 658% 127%
Quick Ratio 619% 107%
Cash Ratio 155% 45%
Profitability Ratios
Gross Margin 8% 9%
Operating Margin 0% 1%
Profit Margin 2% 3%
ROE 5% 11%
Sources: Morning star, 14 Julai 2018

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THE INTERNAL FACTOR EVALUATION (IFE) MATRIX
STRENGTHS
1. Ford operates using a divisional-by-geographic region organizational structure. 0.03 3 0.09
2. Ford derives approximately 60% of its revenues from the U.S, Canada, and Mexico. 0.06 3 0.18
3. Global market share grew to 7.6% after-tax earnings per share of 47 cents, up 7 cents from a year ago. 0.04 3 0.12
4. Ford is engaged in its largest manufacturing expansion in over 50 years by increasing capacity in
6 U.S plants and by opening 2 new plants in Asia and one each in South America and Europe.
0.08 4 0.32
5. Labor expenses were reduced after labor unions agreed to concessions. 0.05 4 0.20
6. The new F-150 comes with a 2.7-liter V6 EcoBoost engine with better fuel economy. 0.08 4 0.32
7. Ford switch the body of F-150 to aluminum from steel to reduced weight but with the same material
strength.
0.03 3 0.09
8. In 2013 Ford sold over 85,000 hybrid or all-electric, plug-in automobiles, up 150% from 2012. 0.03 3 0.09
9. Ford’s warranty repairs have declined 66% for vehicles in the first 3 months of service with average
warranty costs falling 54%.
0.06 4 0.24
10. To improve safety, Ford’s product now includes Blind Spot Information System, lane alerts, and rear
parking assistance
0.04 4 0.16
Score

17
THE INTERNAL FACTOR EVALUATION (IFE) MATRIX
WEAKNESSES
1. Net income dropped by 56% in 2014. 0.10 1 0.10
2. Ford reported 1.9% declined in sales in U. S 0.05 2 0.10
3. Ford reported EBT of negative $1.1 millions in both South America and Europe in 2014. 0.10 1 0.10
4. Poor reputation of America Auto brands compared to European and Japanese competitors. 0.10 2 0.20
5. Ford is in the midst of a $400 million restructuring program in Europe and anticipates Europe will
become profitable sometime in 2015.
0.04 1 0.04
6. Ford only have 5% market share in China. 0.07 1 0.07
7. Ford Planned to invest $6 billion to locate manufacturing in US. 0.04 2 0.08
TOTAL 1.0 2.50
Score

18
(IFE) MATRIX NORTH AMERICA
INTERNAL STRENGTHS
1. 65% of automotive revenues coming from North America. 0.20 4 0.80
2. 14 manufacturing facilities to be idled, resulting in significant cost savings and reduced employment. 0.15 3 0.45
3. Ford’s largest distribution channel is through North America. 0.15 4 0.60
INTERNAL WEAKNESSES
4. Heavy reliance on pickup truck sales. 0.20 1 0.20
5. Many consumers from all over the world, especially North Americans have shifted to more fuel
efficient cars.
0.18 1 0.18
6. market share decrease was attributed to the impact of discontinued products such as Ranger and
Crown Victoria.
0.12 1 0.12
TOTAL 1.0 2.35
Score

19
(IFE) MATRIX SOUTH AMERICA
INTERNAL STRENGTHS
1. Possess a significant share in emerging markets, provide immense growth as the middle class in these
countries grow and earn money to spend on automobiles.
0.14 3 0.42
2. Ford opened a new engine plant in Camaçari, Brazil. We invested 400 million Brazilian real in the plant,
which will create 300 new direct jobs.
0.12 3 0.36
3. Ford Argentina increased its market share to 14.1 percent – 1.5 percentage points higher than in 2013
and the highest market share in the country in seven years.
0.20 4 0.80
INTERNAL WEAKNESSES
4. South America went from a $33 million loss in 2013 to a whopping $1.1 billion loss in 2014. 0.20 2 0.40
5. 60% decrease in automobile sales. 0.15 1 0.15
6. Since entering the recession, South America has continued to see GDP contraction. 0.19 1 0.19
TOTAL 1.0 2.32
Score

20
(IFE) MATRIX EUROPE
INTERNAL STRENGTHS
1. ECOnatic initiative. It is an effort to improve existing engines instead of new hybrid engines to
producing highly fuel-efficient engines.
0.30 4 0.70
2. General Agreement on Tariffs and Trade and the North American Free Trade Agreement that lifted
many of the tariffs and taxes on trade and Europe and North America.
0.20 3 0.60
3. The biggest manufacturer of automaker in Europe. 0.20 4 0.80
INTERNAL WEAKNESSES
4. The Ford Fiesta currently the lowest emitting lowest mass-produces car in Europe. 0.10 2 0.20
5. Large operation when car sales have been stagnant in recent years. 0.10 1 0.10
6. Ford lost a total $4.3 billion in Europe operations from the beginning of 2012 through 2014.
Management expects to lose less in 2015 and break even in 2016.
0.10 1 0.10
TOTAL 1.0 2.50
Score

21
(IFE) MATRIX MIDDLE EAST & AFRICA
INTERNAL STRENGTHS
1. Accelerate the rollout of technologies that enhance the sustainability of vehicles, including the fuel-
efficient EcoBoost range of engines, SYNC in-car connectivity, and vehicle safety technologies such as
inflatable rear seat belts, MyKey and other driver assist technologies.
0.15 3 0.45
2. Launch 25 vehicles in the region – including 17 in South Africa and Sub-Saharan Africa 0.15 3 0.45
3. Implemented major water recycling initiatives and are now recycling about five times more water
than in previous years, increasing recycled water from 7 percent to 40 percent.
0.20 3 0.60
INTERNAL WEAKNESSES
4. Global demand still low and supply remains stable due to non-OPEC countries increasing production. 0.17 1 0.17
5. Decreasing in sales and growth. 0.15 1 0.15
6. Have the lowest automotive revenue in Middle east & Africa compared to other region. 0.18 1 0.18
TOTAL 1.0 2.00
Score

22
(IFE) MATRIX ASIA PACIFIC
INTERNAL STRENGTHS
1. In 2013, ford sold out 935,813 cars in china, which increased by 49% from year 2012 which is 626,616
cars. The huge success in China and Asian-pacific region gave ford a strong financial support.
0.15 3 0.45
2. Ford has formed strong partnerships with local Chinese automotive manufacturing companies 0.20 4 0.80
3. Ford experiences significant success in China with its luxury Lincoln brand. Sales of its luxury vehicles
tripled in China in 2016. The Lincoln brand is recognized for its quality, style and customer satisfaction.
0.18 4 0.72
4. Most of the manufacturing is nowadays done in China because of cheap labor and Chinese
government has decreased automotive sales to increase automobiles sales.
0.20 3 0.60
INTERNAL WEAKNESSES
4. Low contact business in Asia Pacific. Only 15.82% of Ford’s volume was derived from 2011 sales. 0.15 2 0.30
5. The Chinese government provides limited incentives for the purchase of “new energy vehicles”
(including plug-in electric vehicles) that are made in China.
0.12 2 0.24
TOTAL 1.0 3.11
Score

23
SWOT MATRIX
Strengths Weaknesses
Opportunities SO Strategies
Strong Brand Names
Demand for Hybrid Vehicles
WO Strategies
Unattractive for investors
Pickup Trucks remain popular in US
Threats ST Strategies
Control of US market
Decreasing fuel prices
WT Strategies
High cost structure
Euro continues decline

24
Internal Factors
FINANCIAL POSITION (FP)
External Factors
STABILITY POSITION (SP)
Liquidity
Profit Margin
Current ratio
ROE
Cash Flow
1 Technological changes
Demand variability
Competitive pressure
Rate of inflation
Risk involved in business
-3
1 -3
2 -3
2 -2
2 -3
Total Score +8 Total Score -14
Average FP +1.6 Average SP -2.8
COMPETITIVE POSITION (CP) INDUSTRY POSITION (IP)
Market share
Customer loyalty
Product quality
Product life cycle
Use of technology
-2 Growth potential
Financial stability
Ease of entry into market
Profit potential
Resource utilization
+4
-2 +3
-2 +5
-2 +4
-2 +4
Total Score -10 Total Score +20
Average CP -2.0 Average IP +4.0
SPACE MATRIX
Y = FP + SP
= 1.6 + (-2.8)
= -1.2
x = IP + CP
= 4.0 + (-2.0)
X = 2.0 , Y = -1.2

25
SPACE MATRIX
CONSERVATIVE AGGRESSIVE
DEFENSIVE COMPETITIVE
-7
+7
+7
-7 X = 2.0 , Y = -1.2

26
BCG MATRIX
SEGMENT REVENUE % PROFIT % TOYOTA RMS IGR
1 NORTH AMERICA 86500 62.95 8809 116.03 52161 1.66 -5
2 SOUTH AMERICA 8800 6.4 -33 -0.43 17382 0.51 23
3 EUROPE 27300 19.87 -1442 -18.99 17290 1.58 8
4 MIDDLE EAST
&AFRICA
4500 3.28 -69 -0.91 36399 0.12 -2
5 ASIA 10300 7.5 327 4.31 106414 0.10 4
137400 7592 229646

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BCG MATRIX
2 1 0
0
-25
+25
-15
+15
NORTH
AMERICA
SOUTH
AMERICA
MIDDLE EAST
&
AFRICA
ASIA PACIFIC
EUROPE

28
BCG MATRIX
SEGMENT POSITION IN BCG STRATEGIES
North America Cash Cow • Compete in low growth industry. In this segment, they
generate cash in excess of their needs, they are often milked.
• Retrenchment
Europe Star • Compete in a potential growth industry and have a strong
financial position.
• Should receive substantial investment to maintain or
strengthen their dominant position.
Middle East &
Africa
Dogs • Compete in slow or no market growth industry because of
their weak internal and external position.
• Retrenchment strategies should be implement in order to
become viable and profitable division.
South America Question Mark • Compete in a high growth industry. Firm’s cash needs are high
and their cash generation is low.
• Strengthen them by pursuing an intensive strategy.Asia Pacific

29
IE MATRIX
SEGMENT REVENUE % PROFIT % EFE IFE
1 NORTH AMERICA 86,500 62.95 8,809 116.03 2.85 2.35
2 SOUTH AMERICA 8,800 6.4 -33 -0.43 2.20 2.32
3 EUROPE 27,300 19.87 -1442 -18.99 2.20 2.50
4 MIDDLE EAST
&AFRICA
4,500 3.28 -69 -0.91 2.39 2.0
5 ASIA 10,300 7.5 327 4.31 2.25 3.11
137,400 7592

30
IE MATRIX
4 3 2 1
3
2
1
NORTH
AMERICA
SOUTH
AMERICA
MIDDLE EAST
&
AFRICA
ASIA PACIFIC
EUROPE

31
SUMMARY OF THE ANALYSIS
NO TOOLS OF ANALYSIS FINDING STRATEGIES
1 EFE 3.01 Ford is performing better than average
addressing external issues. Two key areas
for improvement identified by the EFE, is
Ford need to focus increasingly on the
Chinese market and work to secure
cheaper raw materials so that it would
not affect the price of steel.
2 IFE 2.50 Ford is performing average on addressing
internal issues as well. The firm had a
advantage of being the most popular
truck in the world , F-150 , and comes
with new technology that is better fuel
economy. Ford should do more
advertising in Asia to increase high profit.

32
SUMMARY OF THE ANALYSIS
NO TOOLS OF ANALYSIS FINDING STRATEGIES
3 SWOT Positive outcomes Demand for hybrid vehicles.
4 SPACE Competitive • Integration Strategy
• Intensive Strategy
5 BCG Question Mark, Star,
Cash cow, Dogs
• Intensive Strategy
• Integration strategy
• Retrenchment strategy
6 IE • Hold and
maintain
• grow and build.
• Market Penetration
• Product development
• Integration Strategy

33
GRAND STRATEGY MATRIX
QUADRANT
II
QUADRANT
I
QUADRANT
III
QUADRANT
IV

34
QSPM
Divert Increased
Resources to
North America
Divert Increased
Resources to China
OPPORTUNITIES Weight AS TAS AS TAS
1. Ford reached an agreement with the UAW to avoid a government
takeover, unlike its counterpart, GM.
0.03
0.00 0.00 0.00 0.00
2. China expects to increase its global market share lead. 0.06 1 0.06 4 0.24
3. Lower rates and easy access to loans has been great for automakers. 0.05 0.00 0.00 0.00 0.00
4. Most consumers focused with styling and price, but there are many
exceptions and subsets of each population.
0.04
0.00 0.00 0.00 0.00
5. Factories are closer to the market which reduces shipping costs and
there is more control over operations.
0.04
4 0.16 2 0.08
6. Automakers started applying hybrid technology. 0.07 0.00 0.00 0.00 0.00
7. Recalls continued their upward trend, resulting in billion-dollar
penalties, including $1.2B penalty on Toyota and that will give an
opportunity to ford.
0.04
0.00 0.00 0.00 0.00
8. Oil prices fell nearly 50% from summer 2014 to year – end 2014. 0.06 0.00 0.00 0.00 0.00
9. In 2014, sales of SUVs, mini-vans and light-duty trucks increased
nearly 10%.
0.04
3 0.12 1 0.04
10. Pickup trucks remain popular in the U.S, with the F-150 the best
seller.
0.07
4 0.28 1 0.07

35
QSPM
Divert Increased
Resources to North
America
Divert Increased
Resources to China
THREATS Weight AS TAS AS TAS
1. Rising gas, falling market share to foreign products, a demanding United
Auto Workers (UAW) union that contributed to downfall.
0.05
0.00 0.00 0.00 0.00
2. Europe remains a laggard in the world vehicle market, experiencing
reduced sales for both Ford and GM.
0.04
4 0.16 3 0.12
3. Europe is starting to stabilize economically, although the euro continues
decline, losing 25% of its value. (putting further pressure on US Car
manufactures).
0.05
4 0.2 3 0.15
4. Mini-vans and full-size vans have experiencing declining sales. 0.02 0.00 0.00 0.00 0.00
5. Wages, the second-largest expense, have been about $70,000 per
employee in the US and account for 5 % of total revenue expenses.
0.05
0.00 0.00 0.00 0.00
6. In 2017, GM plans to introduce a self-driving car that are safer, fuel
savings and fewer accidents.
0.05
0.00 0.00 0.00 0.00
7. About 75% of all revenue goes to purchase raw materials, so the industry
affected by prices of steel.
0.06
0.00 0.00 0.00 0.00
8. GMC, Chevy, Toyota and Dodge are all popular and dominate the U.S
truck market.
0.06
4 0.24 1 0.06
9. GM and Volkswagen each have 15% market share in China. 0.06 1 0.06 4 0.24
10. GM committed to invest $16 billion in the US over the next 3 years. 0.06 4 0.24 1 0.06

36
QSPM
Divert Increased
Resources to North
America
Divert Increased
Resources to China
STRENGTH Weight AS TAS AS TAS
1. Ford operates using a divisional-by-geographic region organizational
structure.
0.03 0.00 0.00 0.00 0.00
2. Ford derives approximately 60% of its revenues from the U.S, Canada,
and Mexico.
0.06 4 0.24 3 0.18
3. Global market share grew to 7.6% after-tax earnings per share of 47
cents, up 7 cents from a year ago.
0.04 4 0.16 3 0.12
4. Ford is engaged in its largest manufacturing expansion in over 50
years by increasing capacity in 6 U.S plants and by opening 2 new
plants in Asia and one each in South America and Europe.
0.08 0.00 0.00 0.00 0.00
5. Labor expenses were reduced after labor unions agreed to
concessions.
0.05 0.00 0.00 0.00 0.00
6. The new F-150 comes with a 2.7-liter V6 EcoBoost engine with better
fuel economy.
0.08 0.00 0.00 0.00 0.00
7. Ford switch the body of F-150 to aluminum from steel to reduced
weight but with the same material strength.
0.03 0.00 0.00 0.00 0.00
8. In 2013 Ford sold over 85,000 hybrid or all-electric, plug-in
automobiles, up 150% from 2012.
0.03 4 0.12 1 0.03
9. Ford’s warranty repairs have declined 66% for vehicles in the first 3
months of service with average warranty costs falling 54%.
0.06 1 0.06 4 0.24
10. To improve safety, Ford’s product now includes Blind Spot Information
System, lane alerts, and rear parking assistance.
0.04 4 0.08 1 0.04

37
QSPM Divert Increased
Resources to North
America
Divert Increased
Resources to China
WEAKNESSES Weight AS TAS AS TAS
1. Net income dropped by 56% in 2014. 0.10 0.00 0.00 0.00 0.00
2. Ford reported 1.9% declined in sales in U. S 0.05 4 0.2 3 0.2
3. Ford reported EBT of negative $1.1 millions in both South America
and Europe in 2014.
0.10 4 0.8 3 0.30
4. Poor reputation of America Auto brands compared to European and
Japanese competitors.
0.10 0.00 0.00 0.00 0.00
5. Ford is in the midst of a $400 million restructuring program in Europe
and anticipates Europe will become profitable sometime in 2015.
0.04 0.00 0.00 0.00 0.00
6. Ford only have 5% market share in China. 0.07 0.00 0.00 0.00 0.00
7. Ford Planned to invest $6 billion to locate manufacturing in US. 0.04 0.00 0.00 0.00 0.00
TOTAL 3.33 2.73

38
QSPM
Building two new plants in Mexico along with the six plants in the USA
is a better alternative than building plants in China. However, China
and the Asian region offer high growth opportunities moving forward.
Ford only controls 5% of the China market and should implement both
strategies, at the expense of divesting resources from Europe.

39
RECOMMENDATION OF STRATEGY
Market Penetration
Product Development
Horizontal Integration
Appoint Celebrity Ambassador
Enter F1 competition
Produce more hybrid and hi-tech vehicles
Introduce fancy, small, innovative and fuel
efficient cars. Increase R&D.
Enter Asian Market
Increase Market Share

40
RECOMMENDATION ACTION TO BE EXECUTED
1. Invest in reducing emissions across all vehicle classes.
2. Build two manufacturing plants in Monterrey, Mexico.
3. Shift European-based resources to North America.
4. Invest in Chinese dealerships and advertising.
5. Build an additional two plants in the US.
6. Increase advertising on the F-150.
7. Invest in efficiencies that will lead to cheaper electric car
production.
8. Invest in inventory control and negotiating better terms on raw
materials.

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