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Ford Motor Company

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K B

on 1 July 2015

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Transcript of Ford Motor Company

Go Further with Ford
Historical Overview
Mission Statement
SWOT
Financial Analysis
Ford Motor Company
Katherine Baek
Maria Ignatiadis
Violetta Morozova
Introduction
Financial Analysis
Implementation Systems
Recommendations
Mission Statement
Company Strategies
Historical Overview
SWOT
Macro Factors
Henry Ford introduced affordable cars to the middle class.
Since then, Ford has come a long way.
However, Ford has become a
follower
rather than a
leader
.
"Any customer can have a car painted any color that he wants so long as it is black."
-Henry Ford
Leaving behind the 2009 auto crisis,
how can Ford become the leader, again?
Here are things to be wary of, along with
recommendations
and
strategies
to improve your performance.
1945
1980
2013
2000
1920
1903
History
History
History
History
History
History
1903: Founded by Henry Ford in Detroit, Michigan
The Model A was introduced
1906: Became a top-selling brand in the U.S.
1908: Introduced the Model T
1914: Introduced $5 workday minimum wage


1919: Edsel Ford, succeeds his father, Henry Ford, as president
1922: Purchased the Lincoln Motor Company
1941: Began producing “jeeps" for the U.S. military
1943: Henry Ford resumed presidency after his son, Edsel, dies at the age of 49
1941- 1945: Built 8,600 bombers, 278,000 jeeps and 57,000 aircraft engines
1947: Henry Ford passed away and Henry Ford II (his grandson) became chairman



1956: Ford Common Stock went up for sale
1970: Lee Iacocca is named president
1988: Earned the highest worldwide earnings of $5.3 billion
1989: Ford spent $2.5 billion to buy Jaguar cars
1990: The Ford Explorer became the nation's best-selling SUV model


1993: Ford began producing Flexible-Fuel vehicles
1997: Sold taxicabs to New York City
2001: Recalled 13 million tires after 271 rollover deaths in Ford Explorers
2001: Bridgestone/Firestone Corporation dumped Ford as a customer
2001: William Clay Ford Jr. stepped in as the new CEO

2005: Introduced the Mercury Mariner, a new gas-electric hybrid SUV
2005: Lost market share
2006: Alan Mulally is named the new president and CEO
2008: Sold Jaguar and Land Rover to Tata Motors
2011: Unveiled Ford Focus Electric
2013: Launched the 4th generation of Transit/ Tourneo, 2nd generation of Transit Connect and refreshed Fiesta.
One Ford Mission
One Ford Mission
ONE PLAN
Restructure to operate profitably at the current demand
Change mix modeling
Accelerate the development of new products
Finance our plan and improve our balance sheet
Work together effectively as one team

One Ford Mission
ONE GOAL
Profitable growth for all

One Ford
ONE TEAM: Working together as a global enterprise
Customer
Employee
Dealer
Investor
Supplier
Union/Council
Community Satisfaction

Addressing the Issues
Legacy Benefits
Community Outreach
Research and Development
Solvency and Liquidity
Functional Level Strategy
Global Strategy
Ford's Strategies
Strengths
Weaknesses
Opportunities
Threats
Strong position in the US market
ECOnetic initiative
Improving financial performance
Significant growth in China

Sold brands due to recession
High insurance/retiree expenses
Unprofitable European operations

Implementation Systems
Organization Structure
Strategic Control Systems
Financial Control Systems
Positive attitude towards “green” vehicles
Emerging market (China, Brazil)
Strategic partnerships

Intense competition
Increasing usage of public transportation
Economic slowdown
Potential loss of Alan Mulally to Microsoft
New emission standards

It’s a losing industry
Difficult entering into matured industry
Substantial fixed costs
Influence of recognisable brands
Extreme amount of financial capital

Threat of New Entry: Low

Thousands of suppliers
Ford holds significant buyer power over its parts’ suppliers
Stability of supply chain
Visteon bailout

Power of Suppliers: Relatively Low

Dependent on the consumers
Most of the revenue comes from buyers
Keep the consumer happy

Power of Buyers: Fairly High

Other forms of transportation
Public transportation
Biking
Walking
Customer loyalty

Threat of Substitute: High

Competitors have the same general focus
Common goal
Practice, quality and durability

Intensity of Rivalry: Very High

Survived sales downturn
Didn't need government bailout
Ability to adapt to changing economy

Macro Factors: Economic

Exchange rates of the US dollar compared to other countries
Foreign ownership regulations
Foreign laws and regulations
Labor unions

Macro Factors: Political

Increased advertising
New vehicles
Playing to all types of consumers
Targeting new drivers

Macro Factors: Sociocultural

Technological improvements in distribution
Product development
Venture with Microsoft
Smart Car

Macro Factors Technological

Ford’s making changes
People are “going green”
Environmental safety of the cars
Fuel economic engines and technology

Macro Factors: Environmental

Pass the inspection
Safety regulations
Compliance with regulatory agencies

Macro Factors: Legal

Macro Factors
CEO Alan Mulally and Executive Chairman Bill Ford Jr. at the 2013 Annual Shareholders Meeting

Profitable growth for all
Corporate Level Strategy

Execute sustainability strategy to grow sales

Business Level Strategy

Three-pronged approach to engage with suppliers on sustainability issues:
Build capability at individual supplier facilities
Engage with strategic suppliers
Collaborate with peers in the automotive industry

Functional Level Strategy

Goals
Meet the needs of your customers
Meet the challenges of your industry
Meet the issues confronting our world

Functional Level Strategy

Focused on minimizing the environmental impacts of your vehicles and operations

Functional Level Strategy

Reducing your contribution to climate change

How can you achieve it?

105 miles per gallon
As of 2011, 100% of Ford Motor Company vehicles built in North America have soy foam in the seat cushions and backs.

What is currently done?

What is currently done?

Water strategy actions:
Minimize water use and consumption at Ford facilities
Find ways to use alternative, lower-quality water sources

What are you planning to do?

Prioritize our water technology investments
Meet either local quality standards or Ford global standards for wastewater
Ensure a stable water supply for your manufacturing facilities
Work with local communities to minimize your impact

What are you planning to do?

Use techniques like “in-mold painting”

What else can be done?

Recyclability

What else can be done?

Educate your customers on being environmentally friendly

What else can be done?

Ford’s Changing Product Segmentation
Grow small vehicles
Large vehicles including trucks remain important
Manufacturing closings

Functional Strategy

Functional Strategy

The strategic cooperation between Daimler and the Renault-Nissan Alliance forms agreement with Ford

Strategic Alliance


Expected to lead to launch of world’s first affordable, mass-market fuel cell electric vehicles as early as 2017

Strategic Alliance Benefits

Collaboration across three continents and three companies will help define global specifications and component standards

Strategic Alliance Benefits

Send clear signal to suppliers, policymakers and the industry to encourage the further development of hydrogen infrastructure worldwide

Strategic Alliance Benefits

Ford will be responsible for strategic planning, development and growth of diversified non-auto floor plan products, including:
Recreational activities
Vehicles
Marine
Power sports
Salvage
Daily rental

Diversification

A diverse offering of products is key to being an industry leader

Diversification

Backward Vertical Integration

Reduce the power of suppliers
Create subsidiaries that provided key inputs to vehicles such as rubber, glass, and metal
Ensure that Ford would not be hurt by suppliers holding out for higher prices or providing materials of inferior quality

Backward Vertical Integration

1922: Acquired Lincoln (where luxury brand Lincoln and Continental were manufactured)
1987: Austin Martin and Jaguar (luxury brands)
1999: Volvo Car
Owns 33.4% of Mazda Corporation

Mergers and Acquisitions


August 3, 2010: Ford Motor Company completed the sale of Volvo Cars to Chinese car maker, Geely, for $1.8 billion

Divestiture


Financial capital increase
Sharpen your focus on Ford brand
Continue on the “One Ford” plan

Divestiture Pros

Increase the competition in the premium market

Divestiture Cons

Ford’s changing geographic mix of volume should grow in all regions, with Asia Pacific and Africa expected to greatly exceed the overall industry growth.

Global Strategy

Global Strategy

Regardless of vehicle or region, Ford’s global vehicles should showcase your commitment to fuel efficiency
Continue with technologies like EcoBoost

Global Strategy


Pioneered the backward vertical integration model.
Functional organizational structure
Grouped with functional inputs

Organizational Structure

Organization Structure

Turned around Ford
Made the business profitable in the billions
Company politics

Lee Iacocca

Current Chairman
Moved away from inbred industry executives

William Clay Ford Jr.

“I need someone who is familiar with operating in a predominantly unionized environment and responsible for turning a major division in a major corporation.”

William Clay Ford Jr.

Current CEO
Turned around the airplanes division of Boeing.

Alan Mulally

J.D. Power and Associates and U.S. News
Year 2020 targets
Maintain and improve quality and safety
Focus on: cars, trucks and hybrid cars
Fuel emission goals
27% reduced pollution
Labor contracts
Continue peaceful negotiations with the United Auto Workers (UAW union)

Strategic Control Systems

Source: Consumer Reports

Ranking:
Best Car Brand Perception Survey

Source: Fortune

Ranking:
Fortune Global 500

Source: Data is provided by Zacks Investment Research

Financial Control Systems:
Earnings Per Share

Source: Yahoo Finance

Financial Control Systems: Stock Price

Bring down the cost of production
3-D Printing
Close down factories
Become less dependent on gas
Research and develop ways to produce
green cars
alternative ways to power cars
Bolster Brand Image
Reach out to young generations through after-school programs
Marketing initiatives online
Educate the importance of being environmentally friendly
More Efficient Operations
Reduce debt
Decrease Days Sales Outstanding
Better relationships with dealers for timely invoices
Full transcript