Ford Motor Company 2007

I. Background of the case

Ford Motors is one of three leading automotive manufacturing companies in

United States. Based in Michigan by Henry Ford. General Motors, Ford and

Chrysler was crunched by competition from foreign manufactures such as Toyota

and Honda. In 1999, Ford acquired the Swedish Volvo model in attempt to

compete in the foreign market and expand to other regions. Furthermore, Ford

launched a full re-engineering business process plan called Ford 2000 aiming at

reestablishing the companys infrastructure. Ford Motor Company is a

comprehensive business policy and strategic management case that includes the

companys fiscal year-end financial statements, competitor information and

more. The case time setting is 2007. In 2007 the problem for the industry have

risen, however the industry found itself to be severely over capacity and

experienced a downwards trend to its performance. Sufficient internal and

external data are provided to enable students to evaluate current strategies and

recommended a strategic plan for the company for the next three years. Ford

was founded in 1903 and operates worldwide, the company is led by CEO William

Ford Jr. and employees over 280,000. The slowing company, an increase in the

fuel price the revenues were split as automotive and financial, and the firm

major competitor is General Motors. If Ford had to live up to its founders vision

of providing the customer with the right product at the right time and at the right

price then it had to radically change its strategy and revive its legacy as a great

company. The turnaround was tough and the senior executives of Ford Motor

Company. The business strategy for Ford was to compete in the market with its

own chain multi-tiered suppliers and dealer network. With globalization and

much more nimble completion from Asian manufacturers, this approach of

 managing vertical silos was no longer an option. Ford need a strategy centered

on a newer concept that aims to take complexity out of the supply chain, and

enhance information progression in multitude of ways. Business could not viewed

as a sequential process similar to an assembly line anymore. Fords former

business model centered on coming up with ideas, studying those ideas,

obtaining full approval for the ideas, and understanding how to staff and

evaluate the business result. The speed to market and responsiveness to

consumer needs became the critical factor and success enabler. As part of its

initiative Ford realized that in order to gain benefits from its suppliers, it should

share its knowledge with its suppliers, provide suppliers with tools and

technology enable them improve supply quality at lower price. Ford initiated the

Automotive Exchange along with its competitors General Motors and Chrysler.

Ford is the most financially sound in American car manufacturer and possesses

enough cash on hand to continue operations through fiscal year 2007. Ford runs

distributions centers and warehouses, engineering research and growth facilities,

sales offices and manufacturing facilities in North America, Asia and other

countries. The company also conduct automobile rental and hiring activities, auto

funding and other relating activities.

II. Statement of the Problem

1. To gain/ improve their sales for the company to keep their customers trust.

III. Objectives

Ford Motor Companys main objective is to create an exciting and viable

profitable growth to all, anticipate consumer needs, manufacture vehicle with

 safety quality, reliable and innovative excellence automotive products and

services around the world and play a leadership role in vehicle and driver

research. Meeting and exceeding customers expectations for exceptional quality,

cutting edge technology, and superior customer service will enable us to

maximize return to our shareholders. We are passionately committed to ensure

that we do the right thing for our customers, our employees, our environment

and our society.

IV. Areas of Considerations

Strengths

Ford manufactures and distribute vehicles across six continents with a team of

about 300,000 employees, operating about 10 plants globally.

Ford is generally perceived as being an affordable brand name, catering to wide

variety of consumer wants.

Ford Company offers financing to consumer and dealership nationwide.
Ford strives to create business value without harming the environment.

Weakness

Weak financial position after financial and automobile industry crisis also result

on low stock prices.

Ford motors is not able to respond well to the competition from European and

Japanese manufacturers.
Marketing inefficiencies US markets.
Industry manufacturing facilities are downsizing, laying employees off, and

restructuring that led to decrease in overall organizational morale within the

industry.

Opportunities

Slowing global economy could lower price of oil

 Advances in technology have allowed for less engineers to be needed by auto

companies
Ford has great experience in creating strategic partnerships with other

automobile companies
Ford has a distinct opportunity to have a cleaner engine emissions

Threats

Toyota manufacturing plant in Texas are capable of producing full size pick-up

truck per year.

Co2 emission for light and heavy vehicles have become stricter in United States
Production of raw materials cost for steel and resins are rising
North American consumer shifted to more fuel-efficient and higher quality

product of European and Japanese automakers

V. Alternative Course of Action

1. Produce a hybrid and fuel efficient vehicles to be more competitive to

other foreign automakers.

Advantage
You have a competitive advantage compare to other foreign automakers.
If its become successful they regain their sales.
You can recover your losses.

Potential for decrease revenue. Disadvantage

Its too expensive because before produce this product you have to conduct a

research and development.

It takes years before you produce a hybrid and fuel efficient vehicles

Potential for decrease revenue.

2. Direct order from customer and delivery through dealership.

Advantage
Centralized control.
Potential for increase revenue.
More responsive customer.

Disadvantage

Its too expensive.

 Discretionary product purchase without physical product.
Potential for decrease revenue.

3. Stop reducing the sales of rental car agencies because it is one of the reason

why Ford Motor Company turns to a no.2 spot instead of no.1 automakers in the

world. And also to regain their sales.

Advantage
Least disruption to the business.
You can earn more profit.
You can recover your losses.

Disadvantage
Large integration efforts.
Potential for decrease revenue.
Divesting of non-core areas

VI. Recommendation

We recommend that, whenever possible, Ford should shift the production from

the US and exploit the current opportunities in China. It must also focus on

producing the highly fuel efficient engines. Given the financial position of Ford,

they cannot afford any strategic mistake. Therefore the analysis recommendation

funding for Research and Development and Market Research to determine the

best strategic alternative in producing hybrid automobiles.

VII. Conclusion

The Ford Motor Company faces significant challenges in such competitive

industry and evolving market. The key factor outline is to remain a leadership

role in vehicle and a profitable corporation. Fords strategic plan must adequately

address these issues or industry changing opportunities may overlooked leaving

 the company poorly position against its competition or worse damage their

brands value.

VIII. Plan of Action

The best solution for Ford Motor Company is to implement an integrated supply

chain that allows it to take advantage of new technologies while reducing cost.

By better planning their use of raw materials, they can avoid over stock and

under stock of vehicle. Also, but simplifying the supply chain and integrating the

purchasing process with the development of new vehicle, better decision can be

made regarding part sourcing.

Balance cost structure with revenue and market share.

Reduce time to market on cars that customer want and value.
Working together to leverage resources around the world.

Time FRAME ACTIVITY

1st Quarter Ford must focus on those countries where they are

gaining profit.

2nd Quarter Improve their services on those country where they are

not very known.

3rd Quarter Improve the environment-friendly fuel worldwide.

4th Quarter Take Advantage of new technologies to reduce cost

reaching customers.
5th
Quarter Show to customers that Ford will not going to stop

providing good qualities cars to them.

6th Quarter Improve their rental car agencies for extra profits.

7th Quarter Delivery must have a good speaking technique to gain

customers trust.
8th Quarter Use a known endorser.

9th Quarter A car that is technology related will satisfy customer.

10th Quarter Improvement of cars that is successful in the past will

be known.
11th Quarter If introducing a new model, make it related to a model

that have been successful.

12 th
Quarter Availability of models must not be too long or too

short.