Strategic Management & Competitiveness of Ford Motor Company

1. Jiangxi, PR China
International Masters in International Business (IMIB)
School of International Trade & Economics (SITE)

2. Presentation on:
Course Title: International Enterprise
Management
Strategic Management & Competitiveness
of
Ford Motor Company

3. 3
Presented by:
1. BAY, Abdul Gafur (Mozambique) 31540047
2. RAHMAN, Mohammad Tawhidur (Bangladesh) 31540051
Presented to:
Ms. LI Yuhua
Date: 18 March, 2016

4. Ford History: at a glance
The Ford Motor Company is an American multinational automaker
headquartered in Dearborn, Michigan. It was founded by Henry
Ford in 1903.
Type Public company
Headquarter Dearborn, Michigan, U.S.
Area served Worldwide
Products
Automobiles
Luxury Vehicles
Commercial Vehicles
Automotive parts
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5. 5
Logo Evolution
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6. Old Model Vehicles
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7. Organizational Structure
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 Very Complex structure fairly mechanistic in nature
 Rigid departmentalization
 Low span of control
 High Centralization
ChairmanChairman
President & CEOPresident & CEO
Executive
V.P and
CFO
Executive
V.P and
CFO
Executive
V.P and
CTO
Executive
V.P and
CTO
Executive
V.P. of
America
Executive
V.P. of
America
Executive
V.P. of
Europe
Executive
V.P. of
Europe
Group Vice
Presidents and
President of
Asia Pacific
Group Vice
Presidents and
President of
Asia Pacific

8. William Clay Ford, Jr.,
great grandson of Henry
Ford, serves as the
Executive Chairman at the
board of Ford Motor
Company.
Key Persons
88
Mark Fields, serves as the
President and Chief
Executive Officer of Ford
Motor Company.

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Vision, Mission
People working
together as a lean,
global enterprise to
make people’s lives
better through
automotive and
mobility leadership.
MISSIONMISSIONVISIONVISION

10. Values
 People
 Products
 Profit
 Organizational Culture
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11. Objectives
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The Ford World Headquarters in
Dearborn, Michigan, also known
as the Glass House
Ford's Dunton Technical Centre in
Laindon, United Kingdom, the largest
automotive research and development
facility in the UK
The Ford Research Center in
Aachen, Germany
Ford Motor Co.’s investments in
China include a plant in Nanjing.
Global Operations
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13. SWOT Analysis
Strengths Weaknesses
1. US market position
2. Financial performance
3. ECOnetic approach
4. ONE Ford approach
5. Growth in China
1. High cost structure
2. Unprofitable Europe operation
3. Low exposure to Asia Pacific
Opportunities Threats
1. Green vehicles
2. Increasing fuel prices (hybrid cars)
3. New emission standards
4. Strategic partnership
1. Decreasing fuel prices (regular
vehicles)
2. Rising raw material prices
3. Instances competitions
4. Fluctuating exchange rates
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14. US Market Share

15. Internal Analysis
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16. Internal Analysis: Strengths
 Producing hybrid vehicles
 Brand recognition
 Profitable financial services division (Ford
Motor Credit)
 Manufacturing facilities in more than 30
countries
 Wide range of products targeting all
customer classes
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17. Internal Analysis: Weaknesses
 Weakening North American
automotive operations
 Sales in trucks decreasing rapidly
 Firing of employees
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New Model Vehicles
2016 Ford Escort Redesign 2016 FLEX
2016 F-150 2016 LINCOLN MKC

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External Analysis:
Opportunities
 Global expansion.
 Brand building
o Better quality vehicles
o Better safety rating
o Convenience features
 Consumers demand hybrid and fuel efficient vehicles.
 Increase in consumer spending trends.
 Consumers demand more innovative vehicles.
 Industry experiences slow and steady growth.
 Exploring new alternative fuels.

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External Analysis: Threats
 Low-cost manufacturers
oChinese Auto Makers (Greely, SAIC)
 Increase public transportation
oBus
oRailway (Metro)
 Weak USD
 Increase in steel and resin prices.
 Increase gasoline prices.
 Stricter CO2 emission standards.
 Increasing mortgage rates.
 Loss of market share.

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External Analysis: Porter’s 5 Forces
Model
Threat of Substitutes
Threat of New Entrants
Bargaining Power of
Buyers
Bargaining Power of
Suppliers
High:
• Chinese Auto Industry
High:
• To many models and
options
High:
•Alternative Fuels
•Modes of Transportation
•Customer Loyalty
Low:
• Option for Outsourcing
to low-cost destinations
• Forward Integration
Industry Rivalry
High:
• Numerous competitors
• Low switching costs

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Environmental Analysis
• Reduce CO2 Emissions
• Clean diesel fuel technology
– BLUETEC – reduce nitrogen oxide levels
• Reuse of car components

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 Toyota, Honda, and Nissan have grown in market
share largely as a result of their ability to deliver
better products at lower prices, particularly for more
fuel efficient smaller vehicles.
 Toyota has
 High Quality, High Safety Ratings (NHTSA)-5
star ratings
 Streamlined operations with similar models
globally
 Hybrid models across all segments
 Ford has been more successful than both GM and
Chrysler in reducing legacy costs.
Competitive Analysis

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 General Motors (GM):
 Focusing on emerging markets
 Researching Alternative Fuels:
 Chevy Equinox Fuel Cell
 Plans to develop 12 hybrid models
 Implementing the new “Tru-Flex system”
Competitive Analysis (cont.)

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Competitive Advantage
 Cost Advantages:
 low production cost
 cut down of huge expenditure on raw materials
 the online manufacturing process
 Differentiate Advantages:
 production of smart cars with fuel efficiency
 centralized decision making system.
 increased market share.
 Ford SYNC - fully integrated communication and
entertainment system

26. Value Chain Analysis
General Administration –It should use high level of information
system to make strategic and routine decisions.
HR Management – Strong management with continuous evaluation process.
Healthy relation with labor union.
Technology and Systems – use the high-tech information technology to
integrate suppliers.
Procurement – Minimize dependence on a single supplier. Leveraged strong buyer
power into timely, low-cost, and high quality of raw materials. Strong long lasting
relationships with suppliers and efficient inventory management.
Inbound
Logistics
•Efficient
inbound
warehousing
system
•Quality
inspection at
supplier level
Operations
High level of
automation.
Outbound
Logistics
•Reduce
delivery time
•Increase
efficiency of
finished
product
warehousing
Marketing
and Sales
•Develop
Quality
•Increase
brand loyalty
•Increase
demand
creation
Service
High level of
service to
after sales
customers
M
argin
M
argin
Primary Activities
SupportActivities
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27. Strategy Implementation
 ‘ONE Ford’ strategy
 Friendly competition
 ‘Less is More’ new approach
 Reduction of complexity
 Creating a new corporate culture
 A shift toward smaller and more fuel-efficient
cars
 Globalizing the Ford brand
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28. ‘One Ford’ Approach
 One team
 People working together as a lean, global enterprise for
automotive leadership
 Measured by customer, employee, dealer, investor, supplier,
council and community satisfaction
 One goal
 An exciting viable Ford delivering profitable growth
 One plan
 Aggressively restructure to operate profitably at the current
demand and changing model mix
 Accelerate development of new products customers want and
value
 Finance plan and improve balance sheet
 Work together effectively as one team
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29. ‘Less is More’ New
Approach
 The ‘Bigger is Better’ worldview defined ford for
decades
 Replaced with a new approach: ‘Less is More’
 Cut costs
 Transform the way it did business than to
measure market share
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30. New Corporate Culture
 Structural and procedural changes
 Executives meet with CEO every week
 ‘We are actually committed to hitting the
numbers.’
 Team working
 Senior executive reorganization
 Report directly to CEO
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31. Cost Advantage
(A shift toward smaller and more fuel-efficient cars)
 Oil prices persistently increasing over the last few years
 A dramatic change in consumer’s car buying habits,
reducing the demand for large vehicles
 Leased cars are sold for much less than their residual
values
 A change in products, shifting to smaller and more fuel-
efficient cars
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32. Globalizing the Ford brand
 Globalize the Ford brand
 All Ford vehicles competing in global segments
would be the same in North America, Europe, and
Asia within the next five years
 Deliver more vehicles worldwide from fewer
platforms and maximize the use of common parts
and systems
 Reduction of costs in the purchasing and
manufacturing processes
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33. Market Segmentation
Market Segment Sub segment
FORD
Motor
FORD
Motor
Sports
Cars
Sports
Cars
Economic
vehicles
Economic
vehicles
TrucksTrucks
BusesBuses
CarsCars
Racing
cars
Racing
cars
Rally carsRally cars
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34. Market Segmentation (cont.)
Market segmentation approaches-
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Geographic
Segmentation
-Ford aims to grab the
market of UK as well as
India, China, Malaysia
Geographic
Segmentation
-Ford aims to grab the
market of UK as well as
India, China, Malaysia
Physiographic
Segmentation
-FORD FIESTA comes at
reasonable price
Physiographic
Segmentation
-FORD FIESTA comes at
reasonable price
Demographic
Segmentation
-FORD FOCUS aims for
young people, ladies and
average income
consumer
Demographic
Segmentation
-FORD FOCUS aims for
young people, ladies and
average income
consumer
Behavioral
Segmentation
-With the benefit for
safety and fuel efficiency
Behavioral
Segmentation
-With the benefit for
safety and fuel efficiency

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Products, Sales and
Revenue
 Sells broad range of automobiles under different brand names.
 Strong growth in sales all over the world.
 Ford's total revenue amounted to around 150 million U.S.
dollars in the fiscal year of 2015.

36. Profit Margin
Profit margin represents the percentage of revenue that
a company keeps as profit after accounting for fixed and
variable costs.
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37. Pre-Tax Profit
 2008
 5.98 Billion
 2009
 6.23 Billion
 2010
 6.12 Billion
 2011
 6.21 Billion
 2012
 6.56 Billion
 2013
 7.20 Billion
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38. Jari-Matti Latvala driving
the Ford Focus RS WRC 09 in
2010.
Ford Mustang GT (racing GT car)
Ford Performance Racing Ford
Falcon V8 Supercar at Eastern Creek in
Australia in 2008.
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Ford Racing Cars
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39. Current Strategies
 Ford has a strategy on new key design
 Ford is beginning to use Solar energy to power their
manufacturing plants
 Global Electrification strategy
 Ford has a very strong marketing strategy as they
market all of their vehicles differently
 Ford is making more hybrid vehicles through the
increase use of renewable and recyclable materials
 Ford is developing natural-fiber composites as a
potential substitute for the glass fibers traditionally used
in plastic car parts to make them stronger while reducing
vehicle weight
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40. Future Strategies
 Reduce manufacturing expenses by 15-20%
 Introduce new small fuel efficient vehicles
 Develop affordable electric car for US market
 Increase market share
 Manufacturing of new small fuel-efficient vehicle
 Entering the Latin American and Asian market with
hybrids $ 20 billion
 Implementation of electric car in the US market $ 13
billon
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41. Future Product
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2017 ESCAPE 2017 RAPTOR
2017 LINCOLN

42. Conclusion
In spite of having strong competition in market, Ford is
still dominating the motor industry as well as their
business strategies are quite strong for sustaining in this
market.
Ford Motor is well positioned in worldwide market
offering consumers a variety of vehicles incorporated
with new levels of quality, safety, affordability,
performance and luxury that meet all the needs, all while
retaining Ford legacy for great value.
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Thank youThank you!!

44. References
 www.ford.com
 https://en.wikipedia.org/wiki/Ford_Motor_Company
 https://en.wikipedia.org/wiki/ECOnetic
 https://ycharts.com/companies/F/profit_margin
 http://www.slideshare.net/luchunjin/introduction-of-ford-case
 http://www.thetruthaboutcars.com/2014/09/u-s-auto-market-share-
august-2014/
 http://www.statista.com/statistics/267305/total-revenue-of-ford/
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