Ford Motor Company - 2009

Case Notes Prepared by: Dr. Mernoush Banton Case Author: Alen Badal

A.

Case Abstract

Ford Motor Company (www.Ford. om! "s a omprehens"#e strate$" mana$ement ase that "n %udes the ompany&s a%endar De ember '() 200* +"nan "a% statements) ompet"tor "n+ormat"on and more. ,he ase t"me sett"n$ "s the year 2009. -u++" "ent "nterna% and e.terna% data are pro#"ded to enab%e students to e#a%uate urrent strate$"es and re ommend a three-year strate$" p%an +or the ompany. /ead0uartered "n Dearborn) M" h"$an) Ford Motor Company "s traded on the New 1or2 -to 2 3. han$e under t" 2er symbo% F. Ford operates "n two se$ments: Automot"#e and F"nan "n$. Produ ts o++ered "n %ude: Ford) Mer ury) 4"n o%n) 5o%#o and 6a$uar. Ford was +ounded "n (90' and operates wor%dw"de. ,he ompany "s %ed by C37 8"%%"am Ford 6r. and emp%oyees o#er 2*0)000. ,he +"rm&s ma9or ompet"tor "s :enera% Motors.

B.

Vision Statement (A tua%!

7ur #"s"on "s to be ome the wor%d&s %ead"n$ onsumer ompany +or automot"#e produ ts and ser#" es.

C.

Mission Statement (Proposed!

Ford Motor Company&s m"ss"on "s to ant" "pate onsumer needs and pro#"de sa+e) 0ua%"ty) re%"ab%e) and "nno#at"#e automot"#e produ ts and ser#" es to onsumers around the wor%d (() 2) '!. Meet"n$ and e. eed"n$ ustomer&s e.pe tat"ons +or e. ept"ona% 0ua%"ty) utt"n$-ed$e te hno%o$y) and super"or ustomer ser#" e w"%% enab%e us to ma."m";e returns to our shareho%ders. (<) =!. ,he ustomer "s 6ob (. 8e are pass"onate%y omm"tted to ensure we do the r"$ht th"n$ +or our ustomers) our emp%oyees) our en#"ronment) and our so "ety (>) 9!. Ford "s omm"tted to %ead"n$ a%% automot"#e +"rms "n 0ua%"ty and sa+ety "n Amer" a and abroad. A%on$ w"th our omm"tment to sa#"n$ the en#"ronment) we an ont"nue to add to our proud her"ta$e (?) *!. (. 2. '. <. =. >. Customer Produ ts or ser#" es Mar2ets ,e hno%o$y Con ern +or sur#"#a%) pro+"tab"%"ty) $rowth Ph"%osophy

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

?. -e%+- on ept *. Con ern +or pub%" "ma$e 9. Con ern +or emp%oyees

D.

External Audit

CPM Competitive Profile Matrix

Ford
Critical Success Factors #ei$% t &atin $ #ei$%te d Score &atin $

M
#ei$%te d Score

!o"ota
&atin $ #ei$%ted Score

Pr" e ompet"t"#eness :%oba% 3.pans"on 7r$an";at"ona% -tru ture 3mp%oyee Mora%e ,e hno%o$y Produ t -a+ety Customer 4oya%ty B- Mar2et -hare Ad#ert"s"n$ Produ t Cua%"ty Produ t Ama$e F"nan "a% Pos"t"on !otal

0.0< 0.0= 0.02 0.0( 0.0< 0.0< 0.20 0.(= 0.02 0.0? 0.20 0.(> '.((

' < ( ( ( ( 2 2 ' ( 2 (

0.(2 0.20 0.02 0.0( 0.0< 0.0< 0.<0 0.<= 0.0> 0.0? 0.<0 0.(> '.)*

2 2 2 2 2 2 ( < < 2 ' 2

0.0* 0.(0 0.0< 0.02 0.0* 0.0* 0.20 0.>0 0.0* 0.(< 0.>0 0.'2 +.,-

( ' ' ' ' ' < ' 2 < < <

0.0< 0.(= 0.0> 0.0' 0.(2 0.(2 0.*0 0.'0 0.0< 0.2* 0.*0 0.>< ,.,.

/pportunities (. ,he B"$ ,hree hope to $a"n +urther on ess"ons +rom the Bn"ted Auto 8or2ers re$ard"n$ %abor osts 2. ,he +ew onsumers pur has"n$ #eh" %es are do"n$ so +or pra t" a% reasons) w"th a +o us on +ue% e++" "en y) durab"%"ty) and arma2er&s susta"nab"%"ty '. A ord"n$ to C-M 8or%dw"de %"$ht #eh" %e produ t"on e. eeded the produ t"on o+ ars and tru 2s "n North Amer" a and 3urope by an est"mated (> per ent and (< per ent) respe t"#e%y <. An 200*) the B"$ ,hree be$an o++er"n$ %owered "nterest rates or ;ero per ent +"nan "n$ to %ure buyers =. ,he auto "ndustry has e.per"en ed a sh"+t +rom tru 2s and -B5s to hybr"d and sma%% +ue%-e++" "ent #eh" %es >. -pe "a%";ed "n ar parts +or bus"nessDa+termar2et ?. ConsumersDdea%ers w"%%"n$ness to "mpro#e brandDsa%es

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

!%reats (. Due to $%oba% e onom" re ess"on) onsumer demand +or new autos has p%ummeted 2. Consumer on+"den e "s the %owest "n <0 years '. Bnemp%oyment rates e. eed (0 per ent "n many areas "n the Bn"ted -tates and "s e.pe ted to rema"n h"$h +or part o+ 20(0 <. Bna#a"%ab"%"ty o+ red"t and h"$h unemp%oyment ha#e pushed automa2ers to reth"n2 methods o+ produ "n$ and se%%"n$ ars =. Automa2ers ha#e +a ed r"s"n$ osts o+ hea%th are and pens"on >. ,he B"$ three a%so su++er +rom an o#ersupp%y +or dea%ers ?. ,he $o#ernment ba"%out money "s d"m"n"sh"n$) and Ford has e.hausted "ts red"t %"nes *. Consumers are on erned o#er the B"$ ,hree&s poss"b"%"ty o+ $o"n$ out o+ bus"ness "n terms o+ #o"ded 8arrant"es 9. Many ban2s are 9ust not ma2"n$ ar %oans External Factor Evaluation 0EFE1 Matrix

2e" External Factors

/pportunities
(. ,he B"$ ,hree hope to $a"n +urther on ess"ons +rom

#ei$%t

&atin$

#ei$%ted Score

0.0? 0.0?

< '

0.2* 0.2(

the Bn"ted Auto 8or2ers re$ard"n$ %abor osts

2. ,he +ew onsumers pur has"n$ #eh" %es are do"n$ so

+or pra t" a% reasons) w"th a +o us on +ue% e++" "en y) durab"%"ty) and arma2erEs susta"nab"%"ty '. A ord"n$ to C-M 8or%dw"de %"$ht #eh" %e produ t"on e. eeded the produ t"on o+ ars and tru 2s "n North Amer" a and 3urope by an est"mated (> per ent and (< per ent) respe t"#e%y <. An 200*) the B"$ ,hree be$an o++er"n$ %owered "nterest rates or ;ero per ent +"nan "n$ to %ure buyers
=. ,he auto "ndustry has e.per"en ed a sh"+t +rom tru 2s

0.0>

0.(2

0.0? 0.0> 0.0> 0.0?

' ' 2 <

0.2( 0.(* 0.(2 0.2*

and -B5s to hybr"d and sma%% +ue%-e++" "ent #eh" %es

>. -pe "a%";ed "n ar parts +or bus"nessDa+termar2et ?. ConsumersDdea%ers w"%%"n$ness to "mpro#e

brandDsa%es

!%reats
(. Due to $%oba% e onom" re ess"on) onsumer 0.0> ' 0.(*

demand +or new autos has p%ummeted

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

2. Consumer on+"den e "s the %owest "n <0 years '. Bnemp%oyment rates e. eed (0 per ent "n many

0.0? 0.0?

< <

0.2* 0.2*

areas "n the Bn"ted -tates and "s e.pe ted to rema"n h"$h +or part o+ 20(0 <. Bna#a"%ab"%"ty o+ red"t and h"$h unemp%oyment ha#e pushed automa2ers to reth"n2 methods o+ produ "n$ and se%%"n$ ars =. Automa2ers ha#e +a ed r"s"n$ osts o+ hea%th are and pens"on
>. ,he B"$ three a%so su++er +rom an o#ersupp%y +or

0.0=

<

0.2

0.0< 0.0? 0.0> 0.0>

' 2 2 2

0.(2 0.(< 0.(2 0.(2

dea%ers
?. ,he $o#ernment ba"%out money "s d"m"n"sh"n$) and

Ford has e.hausted "ts red"t %"nes

*. Consumers are on erned o#er the B"$ ,hreeEs

poss"b"%"ty o+ $o"n$ out o+ bus"ness "n terms o+ #o"ded 8arrant"es

0.0> 9. Many ban2s are 9ust not ma2"n$ ar %oans 2 0.(2 +.)3

!otal

'.((

Positionin$ Map

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

Pr" e (/"$h!

,oyota :M Ford Motor /onda Company

Brand 4oya%ty (4ow!

Brand 4oya%ty (/"$h!

Pr" e (4ow!

E.
(. 2. '. <. =. >. ?.

4nternal Audit
Stren$t%s Ford Cred"t D"#"s"on operates $%oba%%y Andependent amon$ Ba"%out +rom :o#ernment 5eh" %es mar2eted "n > ont"nents) o#er 200 ountr"es Ford has stron$ brand "ma$e and "s ons"dered an Amer" an " on -tron$ onsumer %oya%ty on the"r popu%ar F-(=0 D"#erse #eh" %e %"nes $"#e the ompany more +%e."b"%"ty to the"r ustomers to hoose the des"red ar mode% -a%es "n -. Amer" a and 3uropean se$ments "n reased by F'.= b"%%"on +rom 200? to 200*

#ea5nesses (. An one year) re#enue de rease by appro."mate%y F'0 b"%%"on 2. 8h"%e the ompany&s "n#entory was redu ed +rom 200? to 200*) the dea%ers are ha#"n$ h"$her "n#entory to se%% '. Current asset dropped by appro."mate%y F(* b"%%"on +rom pr"or year <. Current %"ab"%"t"es "n reased by F'0 b"%%"on +rom pr"or year

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

=. 7perat"ona% osts typ" a%%y h"$her "n a ompany w"th mu%t"-se$ment bus"ness Financial &atio Anal"sis (De ember 2009!
ro6t% &ates 7 Ford 4ndustr" S8P 9((

-a%es (Ctr #s year a$o 0tr! Net An ome (1,D #s 1,D! Net An ome (Ctr #s year a$o 0tr! -a%es (=-1ear Annua% A#$.! Net An ome (=-1ear Annua% A#$.! D"#"dends (=-1ear Annua% A#$.!
Price &atios

-2.?0 NA ?(9.'0 -2.=( NA NA

Ford

-(9.00 -2(.00 -(*.00 2.92 (.>? *.?>

4ndustr"

-<.*0 ->.00 2>.*0 (2.99 (2.>9 ((.*'

S8P 9((

Current PD3 Gat"o PD3 Gat"o =-1ear /"$h PD3 Gat"o =-1ear 4ow Pr" eD-a%es Gat"o Pr" eDBoo2 5a%ue Pr" eDCash F%ow Gat"o
Profit Mar$ins 7

NA (0.' <.9 0.'0 NA *.90

Ford

2.( 2.9 0.< 0.=? (.(' 2=.?0

4ndustr"

2>.? >*.0 9.9 2.2= '.<* ('.?0

S8P 9((

:ross Mar$"n Pre-,a. Mar$"n Net Pro+"t Mar$"n =1r :ross Mar$"n (=-1ear A#$.! =1r Pre,a. Mar$"n (=-1ear A#$.! =1r Net Pro+"t Mar$"n (=-1ear A#$.!
Financial Condition

?.< -2.* -'.> (0.0 -'.< -2.9

Ford

((.2 -((.= -(0.> (9.2 <.9 2.9

4ndustr"

'*.9 (0.' ?.( '*.> (>.> ((.=

S8P 9((

DebtD30u"ty Gat"o Current Gat"o Cu" 2 Gat"o Anterest Co#era$e 4e#era$e Gat"o Boo2 5a%ueD-hare
Adapted +rom www.money entra%.msn. om

NA NA NA -2'.' -2'.< -2.>2

(.<( (.( 0.9 -<.> (.* '>.0'

(.09 (.= (.' 2'.? '.< 2(.>'

;et Profit Mar$in 071

Av$ P:E

Price: Sales

Price: Boo5

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

(2D0* (2D0? (2D0> (2D0= (2D0< (2D0' (2D02 (2D0( (2D00 (2D0*

-0.*0 -=.*0 -(.(0 (2.00 9.(0 '0.=0 ?(.00 -?.90 ?.<0 -0.*0
Debt: E<uit"

0.0< 0.0* 0.09 0.09 0.(* 0.(* 0.(0 0.(* 0.2( 0.0<
&eturn on E<uit" 071

-0.'2 2.>2 -<.09 (.0? (.=< 2.=( '.0= '.>= 2.'( -0.'2
&eturn on Assets 071

-(0.0 -(.> -?.9 0.9 (.* 0.< 0.2 -'.' '.2 -(0.0
4nterest Covera$e

Boo5 Value: S%are

(2D0* (2D0? (2D0> (2D0= (2D0< (2D0' (2D02 (2D0( (2D00 (2D0*

-F?.(* F2.=> -F(.*< F?.2( F9.=2 F>.'> F'.0= F<.'( F(0.(< -F?.(*

-*.9( 29.9< -<9.=9 ((.<0 9.'( (=.<< '0.0' 2(.=( *.9' -*.9(

*<.* -<9.( '><.= (2.( (*.' =.= >.< ->*.? 29.' *<.*

->.? -(.0 -<.= 0.> (.( 0.2 0.( -(.9 (.9 ->.?

-(.< -0.= -(.9 -0.2 0.' NA (.( -<.' >.0 -(.<

Adapted +rom www.money entra%.msn. om

4nternal Factor Evaluation 04FE1 Matrix

2e" 4nternal Factors
Stren$t%s (. Ford Cred"t D"#"s"on operates $%oba%%y 2. Andependent amon$ Ba"%out +rom :o#ernment '. 5eh" %es mar2eted "n > ont"nents) o#er 200
ountr"es
0.0* 0.0* 0.0? 0.0* 0.0* < ' ' ' ' 0.'2 0.2< 0.2( 0.2< 0.2< #ei$%t &atin$ #ei$%ted Score

<. Ford has stron$ brand "ma$e and "s ons"dered

an Amer" an " on

=. -tron$ onsumer %oya%ty on the"r popu%ar F-(=0

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

>. D"#erse #eh" %e %"nes $"#e the ompany more

+%e."b"%"ty to the"r ustomers to hoose the des"red ar mode% ?. -a%es "n -. Amer" a and 3uropean se$ments "n reased by F'.= b"%%"on +rom 200? to 200*

0.0*

'

0.2<

0.09

<

0.'>

#ea5nesses (. An one year) re#enue de rease by 2. '. <. =.

appro."mate%y F'0 b"%%"on 8h"%e the ompanyEs "n#entory was redu ed +rom 200? to 200*) the dea%ers are ha#"n$ h"$her "n#entory to se%% Current asset dropped by appro."mate%y F(* b"%%"on +rom pr"or year Current %"ab"%"t"es "n reased by F'0 b"%%"on +rom pr"or year 7perat"ona% osts typ" a%%y h"$her "n a ompany w"th mu%t"-se$ment bus"ness
0.09 0.0* ( ( 0.09 0.0*

0.( 0.( 0.0? '.((

( ( (

0.( 0.( 0.0? +.+)

!otal

F.

S#/! Strate$ies
Stren$t%s (. Ford Cred"t D"#"s"on operates $%oba%%y 2. Andependent amon$ Ba"%out +rom :o#ernment '. 5eh" %es mar2eted "n > ont"nents) o#er 200 ountr"es <. Ford has stron$ brand "ma$e and "s ons"dered an Amer" an " on =. -tron$ onsumer %oya%ty on the"r popu%ar F-(=0 >. D"#erse #eh" %e %"nes $"#e the ompany more +%e."b"%"ty to the"r ustomers to hoose the des"red ar mode% ?. -a%es "n -. Amer" a and 3uropean se$ments #ea5nesses (. An one year) re#enue de rease by appro."mate%y F'0 b"%%"on 2. 8h"%e the ompany&s "n#entory was redu ed +rom 200? to 200*) the dea%ers are ha#"n$ h"$her "n#entory to se%% '. Current asset dropped by appro."mate%y F(* b"%%"on +rom pr"or year <. Current %"ab"%"t"es "n reased by F'0 b"%%"on +rom pr"or year =. 7perat"ona% osts typ" a%%y h"$her "n a ompany w"th mu%t"se$ment bus"ness

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

"n reased by F'.= b"%%"on +rom 200? to 200* /pportunities (. ,he B"$ ,hree hope to $a"n +urther on ess"ons +rom the Bn"ted Auto 8or2ers re$ard"n$ %abor osts 2. ,he +ew onsumers pur has"n$ #eh" %es are do"n$ so +or pra t" a% reasons) w"th a +o us on +ue% e++" "en y) durab"%"ty) and arma2er&s susta"nab"%"ty '. A ord"n$ to C-M 8or%dw"de %"$ht #eh" %e produ t"on e. eeded the produ t"on o+ ars and tru 2s "n North Amer" a and 3urope by an est"mated (> per ent and (< per ent) respe t"#e%y <. An 200*) the B"$ ,hree be$an o++er"n$ %owered "nterest rates or ;ero per ent +"nan "n$ to %ure buyers =. ,he auto "ndustry has e.per"en ed a sh"+t +rom tru 2s and -B5s to hybr"d and sma%% +ue%e++" "ent #eh" %es >. -pe "a%";ed "n ar parts +or bus"nessDa+termar2et ?. ConsumersDdea%ers w"%%"n$ness to "mpro#e brandDsa%es !%reats (. Due to $%oba% e onom" re ess"on) onsumer demand +or new autos has p%ummeted S=/ Strate$ies (. 3.pand "nto -. Amer" an and 3uropean ountr"es by o++er"n$ better "n ent"#es and +"nan "n$ (-() -?) 7') 7=) 7?!) 2. Produ e more +ue% e++" "ent and sma%%er mode%s and promote them w"th %ower +"nan "n$ opt"ons (-() -') -<) 72) 7<H 7=! #=/ Strate$ies (. Ampro#e operat"ons by be"n$ more %ean and utt"n$ ba 2 e. ess"#e e.e ut"#e spend"n$ (8') 8<) 8=) 7(! 2. -e%% o++ bus"ness un"ts to "mpro#e ash "n+us"on to the ompany (82) 8') 8<) 8=) 7>!

S=! Strate$ies (. Ampro#e promot"on on se%e ted %ower pr" ed mode%s w"th ;ero or #ery %ow rate +"nan "n$ to

#=! Strate$ies (. -"n e dea%ers are not ab%e to turn around the"r "n#entory +ast enou$h) o++er o-op ad#ert"s"n$ w"th more

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

2. Consumer on+"den e "s youn$er $enerat"on the %owest "n <0 years throu$h Anternet us"n$ '. Bnemp%oyment rates Fa eboo2) ,w"tter) and e. eed (0 per ent "n other networ2"n$ many areas "n the hanne%s (-2) -') -<) Bn"ted -tates and "s ->) ,() ,<) ,>) ,*) ,9! e.pe ted to rema"n h"$h 2. 7++er IFreeJ e.tended +or part o+ 20(0 warrantee +or add"t"ona% <. Bna#a"%ab"%"ty o+ red"t 2 years to $a"n and h"$h unemp%oyment ustomer %oya%ty and ha#e pushed brand "ma$e (-<) ->) automa2ers to reth"n2 ,() ,*! methods o+ produ "n$ and se%%"n$ ars =. Automa2ers ha#e +a ed r"s"n$ osts o+ hea%th are and pens"on >. ,he B"$ three a%so su++er +rom an o#ersupp%y +or dea%ers ?. ,he $o#ernment ba"%out money "s d"m"n"sh"n$) and Ford has e.hausted "ts red"t %"nes *. Consumers are on erned o#er the B"$ ,hree&s poss"b"%"ty o+ $o"n$ out o+ bus"ness "n terms o+ #o"ded 8arrant"es 9. Many ban2s are 9ust not ma2"n$ ar %oans

"n ent"#es +or mo#"n$ the ars +aster (8() 8') ,<) ,>!

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

SPACE Matrix FConservative

? > = < ' 2 (

A$$ressive

C-

A-? -> -= -< -' -2 -( -( -2 -' -< -= -> ( 2 ' < = > ?

Defensive

-?

Competitive

3-

Financial Stabilit" 0FS1 Geturn on An#estment 4e#era$e 4"0u"d"ty 8or2"n$ Cap"ta% Cash F%ow Financial Stabilit" 0FS1 Avera$e Competitive Stabilit" 0CS1 Mar2et -hare Produ t Cua%"ty Customer 4oya%ty Compet"t"on&s Capa "ty Bt"%";at"on

( ( ( ( ( '

Environmental Stabilit" 0ES1 Bnemp%oyment ,e hno%o$" a% Chan$es Pr" e 3%ast" "ty o+ Demand Compet"t"#e Pressure Barr"ers to 3ntry Environmental Stabilit" 0ES1 Avera$e 4ndustr" Stabilit" 04S1 :rowth Potent"a% F"nan "a% -tab"%"ty 3ase o+ Mar2et 3ntry Gesour e Bt"%";at"on

-= -' -2 -< -= =,..

-2 -' -2 -'

< 2 < '

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

,e hno%o$" a% Know-/ow Competitive Stabilit" 0CS1 Avera$e 1-a."s: F- L 3- M (.0 L (-'.*! M -2.* N-a."s: C- L A- M (-(.*! L ('.>! M (.*

-2 =+.-

Pro+"t Potent"a% 4ndustr" Stabilit" 04S1 Avera$e

' ,.+

>.

rand Strate$" Matrix

&apid Mar5et Quadrant II ro6t% Quadrant I

#ea5 Competitive Position

Stron$ Competitive Position

Quadrant III

Slo6 Mar5et

ro6t%

Quadrant IV

(. Mar2et de#e%opment 2. Mar2et penetrat"on '. Produ t de#e%opment <. Forward "nte$rat"on =. Ba 2ward "nte$rat"on >. /or";onta% "nte$rat"on ?. Ge%ated d"#ers"+" at"on

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

4.

!%e 4nternal=External 04E1 Matrix

!%e 4FE !otal #ei$%ted Score -tron$ '.0 to <.0 A A#era$e 2.0 to 2.99 AA 8ea2 (.0 to (.99 AAA

/"$h '.0 to '.99

A5

A5

5A

!%e EFE !otal #ei$%ted Score

Med"um 2.0 to 2.99

Ford Motor Compan"

5AA

5AAA

AN

4ow (.0 to (.99

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

BC

Matrix
&elative Mar5et S%are /"$h (.0 /"$h L20 Med"um .=0 4ow 0.0

Stars 4ndustr" Sales ro6t% &ate Percent Med"um 0

Question Marks

Cash Cows

Dogs

4ow -20

?.

@SPM
Ampro#e promot"on on se%e ted %ower pr" ed mode%s w"th ;ero or #ery %ow rate +"nan "n$ to youn$er $enerat"on throu$h Anternet us"n$ Fa eboo2) ,w"tter) and other networ2"n$ hanne%s

3.pand "nto -. Amer" an and 3uropean ountr"es by o++er"n$ better "n ent"#es and +"nan "n$

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

2e" Factors /pportunities (. ,he B"$ ,hree hope to $a"n +urther on ess"ons +rom the Bn"ted Auto 8or2ers re$ard"n$ %abor osts 2. ,he +ew onsumers pur has"n$ #eh" %es are do"n$ so +or pra t" a% reasons) w"th a +o us on +ue% e++" "en y) durab"%"ty) and arma2erEs susta"nab"%"ty '. A ord"n$ to C-M 8or%dw"de %"$ht #eh" %e produ t"on e. eeded the produ t"on o+ ars and tru 2s "n North Amer" a and 3urope by an est"mated (> per ent and (< per ent) respe t"#e%y <. An 200*) the B"$ ,hree be$an o++er"n$ %owered "nterest rates or ;ero per ent +"nan "n$ to %ure buyers =. ,he auto "ndustry has e.per"en ed a sh"+t +rom tru 2s and -B5s to hybr"d and sma%% +ue%-e++" "ent #eh" %es >. -pe "a%";ed ar parts bus"nessDa+termar2et ?. ConsumersDdea%ers w"%%"n$ness to "mpro#e brandDsa%es !%reats (. Due to $%oba% e onom" re ess"on) onsumer demand +or new autos has p%ummeted 2. Consumer on+"den e "s the %owest "n <0 years '. Bnemp%oyment rates e. eed (0 per ent "n many areas "n the Bn"ted -tates and "s e.pe ted to rema"n h"$h +or part o+ 20(0 <. Bna#a"%ab"%"ty o+ red"t and h"$h unemp%oyment ha#e pushed automa2ers to reth"n2 methods o+ produ "n$ and se%%"n$ ars =. Automa2ers ha#e +a ed r"s"n$ osts o+ hea%th are and pens"on >. ,he B"$ three a%so su++er +rom an o#ersupp%y +or dea%ers ?. ,he $o#ernment ba"%out money "s d"m"n"sh"n$) and Ford has e.hausted "ts red"t %"nes *. Consumers are on erned o#er the B"$ ,hreeEs poss"b"%"ty o+ $o"n$ out o+ bus"ness "n terms o+ #o"ded 8arrant"es 9. Many ban2s are 9ust not ma2"n$ ar %oans !/!AA Stren$t%s

#ei$%t
0.0?

AS ' <

!AS 0.2( 0.2*

AS < 2

!AS 0.2* 0.(<

0.0?

0.0>

'

0.(*

<

0.2<

0.0?

------' < 2 2 2

------0.2( 0.2< 0.(< 0.(< 0.(0

------< ' ' < <

------0.2* 0.(* 0.2( 0.2* 0.2

0.0>

0.0> 0.0?

0.0>

0.0? 0.0?

0.0=

0.0< 0.0? 0.0>

< ( -------

0.(> 0.0? ------'.*,

2 < -------

0.0* 0.2* ------+.'*

0.0>

0.0>

'.((

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

(. Ford Cred"t D"#"s"on operates $%oba%%y 2. Andependent amon$ Ba"%out +rom :o#ernment '. 5eh" %es mar2eted "n > ont"nents) o#er 200 ountr"es <. Ford has stron$ brand "ma$e and "s ons"dered an Amer" an " on =. -tron$ onsumer %oya%ty on the"r popu%ar F(=0 >. D"#erse #eh" %e %"nes $"#e the ompany more +%e."b"%"ty to the"r ustomers to hoose the des"red ar mode% ?. -a%es "n -. Amer" a and 3uropean se$ments "n reased by F'.= b"%%"on +rom 200? to 200* #ea5nesses (. An one year) re#enue de rease by appro."mate%y F'0 b"%%"on 2. 8h"%e the ompanyEs "n#entory was redu ed +rom 200? to 200*) the dea%ers are ha#"n$ h"$her "n#entory to se%% '. Current asset dropped by appro."mate%y F(* b"%%"on +rom pr"or year <. Current %"ab"%"t"es "n reased by F'0 b"%%"on +rom pr"or year =. 7perat"ona% osts typ" a%%y h"$her "n a ompany w"th mu%t"-se$ment bus"ness SBB!/!AA SBM !/!AA A!!&AC!4VE;ESS SC/&E

0.0* 0.0* 0.0? 0.0* 0.0* 0.0*

----2 ' --2 '

----0.(< ----0.(> 0.2?

----< < --' <

----0.2* ----0.2< 0.'>

0.09

0.09 0.0*

< 2 -------

0.'> 0.(> ------'.() +..+

( ' -------

0.09 0.2< ------'.+' ,.,.

0.( 0.( 0.0?

'.((

2.

&ecommendations
3.pand sa%es "n -. Amer" an and 3uropean ountr"es when the #a%ue o+ the money "s h"$her) e onomy "s better and unemp%oyment "s %ower than B.-. by promot"n$ better pr" "n$ strate$"es) promot"ona% ampa"$n and o++er"n$ more "n ent"#es.

L.

EPS/EBIT Analysis
F Amount Needed: F*0 m"%%"on -to 2 Pr" e: F(0.00 ,a. Gate: (0.<O! +or 200* and '(.(O +or 200? Anterest Gate: >.=O P -hares 7utstand"n$: '.' b"%%"on
Common Stoc5 Financin$ Recession Normal Boom F'00)000)000 F>00)000)000 F()000)000)000 Recession F'00)000)000 Debt Financin$ Normal Boom F>00)000)000 F()000)000)000

3BA,

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.

Anterest 3B, ,a.es 3A, P -hares 3P-

0 '00)000)000 0 '00)000)000 ')'0()<><)'9? (.()

0 >00)000)000 0 >00)000)000 ')'0()<><)'9? (.'.

0 ()000)000)000 0 ()000)000)000 ')'0()<><)'9? (.,(

=)200)000 29<)*00)000 0 29<)*00)000 ')'00)000)000 (.() *( Percent Debt = ,( Percent Stoc5 Recession F'00)000)000 ()0<0)000 29*)9>0)000 0 29*)9>0)000 ')'00)<'9)'(9 (.()

=)200)000 =9<)*00)000 0 =9<)*00)000 ')'00)000)000 (.'.

=)200)000 99<)*00)000 0 99<)*00)000 ')'00)000)000 (.,(

3BA, Anterest 3B, ,a.es 3A, P -hares 3P-

*( Percent Stoc5 = ,( Percent Debt Recession F'00)000)000 <)(>0)000 29=)*<0)000 0 29=)*<0)000 ')'0()02=)0?* (.()

Normal F>00)000)000 <)(>0)000 =9=)*<0)000 0 =9=)*<0)000 ')'0()02=)0?* (.'.

Boom F()000)000)000 <)(>0)000 99=)*<0)000 0 99=)*<0)000 ')'0()02=)0?* (.,(

Normal F>00)000)000 ()0<0)000 =9*)9>0)000 0 =9*)9>0)000 ')'00)<'9)'(9 (.'.

Boom F()000)000)000 ()0<0)000 99*)9>0)000 0 99*)9>0)000 ')'00)<'9)'(9 (.,(

M.

Epilo$ue

Copyr"$ht @ 20(( Pearson 3du at"on) An . pub%"sh"n$ as Prent" e /a%%.