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Eric Larsen

on 15 March 2013

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Transcript of Ford

"One Ford; One Big Turnaround" Case Summary Vehicle Updates SWOT Analysis Case Questions Discussion Questions Once known for bulky, gas guzzling trucks and oversized SUV's, Ford Motor Company has now gone full circle. In 2006, Alan Mullaly took over as CEO of the company. Being that the struggling Ford, unlike it's competitors GM and Chrysler, has not taken any share of government bailout money, it was clear that to stay afloat, major restructuring of product lines and brand image was needed. 2006 ford escape gas mileage 18 city 22 highway
2013 ford escape gas mileage 23 city 33 highway

2006 ford tarus gas mileage 17 city 25 highway
2013 ford tarus gas mileage 19 city 29 highway

2006 ford f150 gas mileage 14 city 19 highway
2013 ford f150 gas mileage 17 city 23 highway

Prominence in the US market.
Second largest US automaker
highest level of car brand perception in the US, at 87% according to Consumer Reports
Strong commercial vehicle sales in US
1. Does anyone have a ford or have gotten to drive a Ford? How do they drive? Do you like it?

Good comparative financial track record
Did not take any government bailout funds or declare bankruptcy
High profit margin
Recently improved credit rating
'One Ford' system
As mentioned above, Ford now uses many of the same parts and chassis across different models around the world.
Keeps costs low
Growth in China
Experienced a 48% bump in sales in China as of 2012
ECOnetic vehicles
Ford's ECOnetic program focuses on redesigning existing engines to be more fuel efficient and produce less harmful emissions. This has led to the Fiesta and Focus ECOnetic.
1. What are some of the benefits Ford has achieved through reorganizing its product line?

2. Discuss the various product modifications that Ford made to the Ford Explorer.

3. What are some examples of Ford’s product line extensions?

4. What are some examples of Ford’s product line contractions? Opportunities:
Consumer attitudes towards green vehicles
Rising gas prices and increased public concern for the environment mean a swing towards fuel efficient, low emission vehicles (ECOnetic vehicles)
Emissions Regulations
Possibility for stricter emissions regulations would increase sales of ECO vehicles
Slow return of the US auto market
His plan: To focus the brand, revamp its image, and develop clearly defined product lines for each market segment. He would start by Selling off the company's non-core brands such as Volvo, Aston-Martin, and Jaguar and by reducing their current 97 nameplates to only 25. Next: focus on existing brand loyalty. Rather than starting from scratch, Mullaly chose to bring back and redesign the well know and popular Ford Taurus. He then revamped the Fusion and Focus lines and brought in the fuel efficient Fiesta from global markets. Praise was quick to follow. The new Fusion was named 2010 Motor Trend Car of the Year and the new Fiesta was ranked number one by U.S. News Rankings and Reviews in the affordable small car category at the beginning of 2011. Ford now uses the same high quality components, parts, and chassis across several different models. This interchangeability cuts costs and allows the company to put resources towards the development of hybrid, electric, and alternative fuel source vehicles. They worked hard to make vast improvements in styling and vehicle safety in order to strengthen brand loyalty. These changes, Mullay believes, will contribute to Ford's success as the economy begins its slow rebound. Weaknesses:
Poor enviromental record
Plants ranked 7th worst as far as air pollution and have been citd for several toxic waste sites by the EPA
Employee expenses
In comparison with competitors, Ford spends a great deal on employee compensation and pension plans, driving their cost structure up.
Faltering European Sales
Reported a loss of $1.75 billion as of 2012
Losses expected to continue for at least a couple years. Threats:
The majority of automobile manufacturer have now turned their attention to producing low emissions fuel efficient vehicles, making the possibility for strong competition ever growing.
Fluctuating exchange rate
Ford attributes nearly half its sales to operations outside the US. Sizeable changes in exhange rates could lead to decreased profits.
Although Ford's credit rating has been on the rise, they still have a large amount of existing debt to pay off
Possible decrease of gas prices
If gas prices were to fall, it would possibly shift consumer interest away from economy cars.
1. Through reorganizing its product line, Ford has succeeded in cutting costs, reestablishing brand loyalty among consumers, increasing profits, and putting on a more environmentally friendly face. 2. In addition to restyling the Explorer, Ford also improved upon its safety features, adding things like curve control technology, which can automatically reduce the vehicle’s speed by 10 mph in one second if it senses the driver is taking a curve too recklessly. Given the Explorer's past reputation, this is a nice improvement. 3. Some examples of Ford's product line extensions are its decision to bring the Fiesta to the US and to initiate the "One Ford" system. This allows for several different versions of a car to be built on one chassis. For example, the Focus is offerend in four-door, hatchback, SUV, minivan, and commercial vehicle variations, but all are built from the same platform. 4. Some examples of Ford's product line contractions are the reduction of it's nameplates from nearly 100, down to between 25 and 30 nameplates as well as no longer trying to produce versions of cars specific to individual regions, but instead producing cars that will suit many different regions. 2013 Ford Focus Electric:

Powered exclusively by a lithium-ion battery system, the 2013 Ford Focus Electric has a city fuel efficiency rating of 110 MPGe.

The Focus Electric gets all of its power from an advanced state-of-the-art 23kWh liquid-cooled, high-voltage lithium-ion battery system. The all-electric motor is designed to help reduce energy loss and heat generation while reducing your carbon footprint.

starts at $39,200 2. Would you ever buy an electric car?

3. How many of you guys have a favorite car thats a Ford? Why is that?
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