Introduction

Ford Motor Company is one of the largest multinational automaker in the world and part of the
Detroit Big Three, along with GM and Chrysler. Since its inception in June 16, 1903, Ford has
gone through many ups and downs. Competition from domestic and international
manufacturers, globalization, advancements of technology and the great economic downturn in
2007-2008 meant that Ford had to rethink several of its strategic decisions if it had to survive in
the marketplace.
When Henry Ford started the company, automobiles were a luxury good that could only be
afforded by the rich. He wanted to provide these vehicles to the general public at an affordable
price, because Ford believed that this product had the potential to transform society. As such,
he focused on production and supply chain efficiency related to the implementation of the
assembly line manufacturing process and Fords vertically integrated supply chain to produce
automobiles at a mass scale.
The US auto market was primarily dominated by the US Big Three, but this changed during the
early 70s and 80s. The increase in gas prices and need for fuel efficient vehicles saw consumers
seeking out for Japanese imports, which met the new fuel efficiency standards. The market
already was beginning to get competitive. In order to act, Ford tried to cut it costs by
downsizing its workers and plants, whereas the need was fuel efficient cars. Ford later regained
some of its market in 1988 by diversifying its product offerings by purchasing luxury European
brands. It tapped the Chinese market as well beating GM in 1997. Ford had to cut many of its
workforces and sell many of its plants during these periods in order to keep costs at a minimum
level. The economic downturn of 2007-2008 saw the automobile manufacturers taking a big hit.
They were reduced to a position where they needed to ask the US government for a $34 billion
bailout. Many uncertainties remained as to what had to be done to sustain in the future.
The biggest strategic change came with the decision to hire Alan Mulally in 2006. Mulally made
many effective and important changes to Fords corporate structure, such as, the ONE Ford
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plan to create a leaner, more efficient global enterprise and return the company to profitability.
Under his guidance, Ford had to restructure its entire business as it was the only way to survive
in the highly competitive market.
Every step taken by Ford has been risky, but they have yielded result. Ford has overcome
challenges of heavy competition, economic depression and threat of bankruptcy. It is a prime
example of how exceptional leadership and strategic skills can help overcome hardships despite
turbulent times.

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Situation analysis
3I Analysis
Immediate Competitors
Ford Motor Company is operating as one of the leading competitors in the US Automobile
Market with 18.4 % of the total market share. The two major competitors of Ford are Chrysler
Group LLC and General Motors (GM) with market shares of 11.4% and 20.4% respectively.
These leading players of the US Automobile market, together, are known as The Detroit Three
and are operating as the key local competitors of the US market. Among the other major global
competitors of Ford, Toyota and Honda are competing with market shares of 10.5% and 8%
respectively.

US Automotive Market, June 2011

BMW
VW

Mercedes

Subaru
Mitsubishi

Kia

Mazda

Ford Motors

Hyundai

Nissan
GM
Honda

Toyota

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Chrystler
LLC

Impending Competitors
Comparatively smaller players of the US Automobile market may pose a threat to Ford Motor
Company in near future. Competitors such as Kia (4.3%), Hyundai (5.6%), and Nissan (6.8%) are
also trying to firmly hold their position in the automobile market. Mazda, BMW, Mercedes,
Mitsubishi, Subaru, Volvo, and Suzuki are also operating as impending competitors of Ford
within the automobile market, contributing to 26.3% of the remaining market shares. These
competitors can potentially extend their business operations in future and change their
strategies that may directly or indirectly affect the operations of Ford Motor Company.

Invisible Competitors
In spite of potential risk factors, the automobile industry of US is a lucrative industry to
compete in. Hence, China and India are expected to expand their automobile business to US
very soon. China has already displayed automobiles of Brilliance, Geely, Great Wall, and BYD at
the US Auto Shows. BYD specializing on fuel efficient cars may pose a major threat to Ford
Motor Company in future. The European market can also become a potential threat by
launching new and sustainable automobiles in the US market and may succeed due to
advanced innovation and sustainable manufacturing processes.

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General analysis
Economic:

Gas prices quadrupled during the 70s and 80s when the Middle Eastern OPEC nations
halted exports to the US and other European nations.

The global economic downturn of 2008 saw the US auto sales declining by 37%
compared to the last year. Ford, GM and Chrysler had to go to Washington DC to ask the
government for $34 billion bailout.

In 2011, the earthquake in Japan disrupted production and rising gas prices affected
consumer demand.

Political/Legal:

New vehicle sales in 2009 received support from the federal government when US
president Barack Obama signed the Cash for Clunkers bill into law in June.

Rules and regulations on vehicle mileage and emission standards are established by the
federal government.

After talks with the automakers, the Obama Administration eased the requirements to
54.5 mpg, with a 3.5 percent per year increase in fuel efficiency for light trucks through
2021, but kept the requirement for passenger cars at 5%.

Environmental:

When a massive earthquake and tsunami hit Japan in March 2011, Japanese automakers
and parts suppliers experienced major disruptions in their operations and declared that
productions would probably not reach normal levels before fall.

The increasing global focus on sustainability and need to develop alternate power
sources for vehicles, increasing population has led to increase in fuel demand, thus
leading to higher gas prices and an increased impact on the environment.

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Recently the Obama Administration and the auto manufacturers were in negotiations
over new standards that could reduce global warming emissions by millions of tons per
year and decrease oil imports by billions of barrels during the life of the program.

Technological:

Todays consumers are technology-savvy than ever before and with the vast amount of
information available on the internet they have access to an almost unlimited amount of
information to compare products to determine the vehicles that meet their needs.

An alternative to fuel known as biofuel or farm fuel E85 might reduce US dependency
on foreign oil and develop a domestic industry that supports farmers.

Hydrogen fuel cell vehicles are still in the early stages of development but have the
potential to reduce US dependency on foreign oil significantly and lower emissions that
cause climate change.

Social:

Many of the newer models of cars target the Generation Y buyers, as they are important
to automakers because they help set trends, from popularizing social media sites to
technologies.

Industry analysis
Threat of product substitutes: High.

In the 70s and 80s, the three large US automobile manufacturers which produced larger,
heavier and less fuel efficient vehicles saw decline in sales while sales of Japanese
imports, which met the new efficiency standards, increased.

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Electric/gasoline powered hybrid vehicles are the most widely used alternative powered
vehicles today and many companies offer fully electric vehicles as well.

As the population increases, roads and highways become more congested. Many urban
areas are developing or enhancing public transportation systems such as light rail
systems and subways, as well as increasing bus routes and schedules.

Intensity of rivalry: High

The US automotive industry faces heavy competition not only through domestic
companies (Ford, GM and Chrysler), but from foreign competitors as well.

In 2006, Ford, GM and Chrysler faced intense competition from foreign manufacturers
such as Toyota, Nissan and Honda.

Supplier power: Medium

The auto industry obtains resources from a wide array of firms globally. Although the
number of suppliers has decreased since the recession, some of the survivors are
growing and beginning to diversify.

Many suppliers rely heavily on the auto industry for a large part of their revenue. Some
suppliers even went out of business during the economic downturn and decline of the
US auto industry, and more were hurt by the earthquake in Japan in 2011.

It is extremely important for auto manufacturers to develop and maintain strong

relationships with their suppliers to gain access to their best technologies and receive
priority order fulfillment in case of material or product shortages.

Buyer power: High

Todays technology-savvy consumers have access to a vast amount of information to

compare products to determine the vehicles to meet their needs.

Many well-informed consumers choose to shop and negotiate pricing between

dealerships, while others prefer not to negotiate pricing at all.

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As US manufacturers lost market share to their Asian competitors, they realized the
need to revise their business plans to place a much higher priority on customer
satisfaction, thus creating customers for life.

Threat of new entrants: High

Factors such as capital requirements, economies of scale, need for distribution channel
and threat of retaliation make it unlikely for a new entrant to emerge within the US.

However, new entrants can succeed in the US market, as evident by the Asian
automakers.

Automakers established in foreign markets have been able to gain a foothold by

exporting to the US and targeting a niche market.

New entrants to the US auto market will eventually come from China and India among
others.

Opportunities and Threats

Threats:

Rapid change of customer demand.

Very high competition in the market.

Many substitutes are available.

New companies will eventually come.

Opportunities:

Focus on the niche market.

Establish lean production to meet every customers demand cost effectively and
efficiently.

Design new products for the generation Y.

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Internal Analysis
Value Chain Activities
Primary Activities:
Inbound/Outbound Logistics:
Operations:
Marketing and Sales:

Ford is now focused on building only the two remaining brands Ford and Lincoln. They
now offer product mix to meet the demand of people of all classes.

They reach the customer through traditional media like radio, newspaper, TV
commercials and by also using the social sites.

They are also sponsoring famous shows and events like American Idol.

Services:

According to the J.D. Power 2011 Automotive performance, Execution and Layout study
all Fords newer vehicles have earned the fuel efficiency rating that were above the
segment average.

The F-50 truck is the only large pickup that received the award for both performance
and appeal in 2011.

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Supportive Activities:
Human Resource: Ford is best in cutting off companys employees to improve production or to face
any awkward situation like loss for example.

In 80s to cover up the loss resulting of not having fuel efficiency facility it cut off its
workforce and closed plants.

In August 2001 Ford eliminate 4500 to 5000 of its salaried employees using early
retirement incentives.

In early 2002 ford closed 3 North American assembly plants for which 35000 worldwide
jobs were cutoff.

In 2006 Ford cut 25000 to 30000 hourly jobs and 12% of management positions. It
further cut 10000 white-collar jobs.

In 2012 it closed 14 facilities as part of massive restructuring plant.

Technology development:

Ford has invested a lot in the development of fuel efficiency and currently they have 12
vehicles with best in class fuel economy. Not only in fuel efficiency, they are also
improving in initial quality and appeal (performance, execution and layout).

Though they are laggards but at last they managed to develop self-parking and blind
spot detection facility.

In 2011 they invested in hybrid and plug-in-hybrid and they also introduced
turbocharged EcoBoost V6 engine.

They are in the way to introduce intelligence vehicle technology.

Procurement: Ford signed an agreement with Azure Dynamic Corp. to install plug in hybrid
power trains in the F series super duty trucks.

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Financial analysis
Market Share (in volume):
Kia America
4%
Mitsubishi
0%
Subaru America
Mazda America
2%
2%

Total Market Share

2010

Hyundai America
6%
Nissan NA
7%

General Motors
22%

American Honda
12%

Ford Motors
19%
Toyota USA
16%
Chrysler LLC
10%

Mazda America
2%

Mitsubishi
1%

Subaru
Kia America
America
5%
2%
0%

Total Market Share 2011

Hyundai America
6%
Nissan NA
7%

General Motors
23%

American Honda
9%

Ford Motors
20%
Toyota USA
12%
Chrysler LLC
13%

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From the above two pie charts, the market winners and losers in 2011 can be interpreted
financially with the number of cars and light trucks they sold compared to the market sales as a
whole (in volume):

Market
Winners

Market
Losers

Chrysler LLC
Ford Motors
General motors
Nissan NA
Hyundai America
Mitsubishi
Kia America

Toyota USA
American Honda
Sabaru America

Change in Market Share from 2010

to 2011
General
Motors

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4.7%

Ford Motors

7.2%

Chrysler LLC

23.2%

Toyota USA

-25.3%

American

-25.5%

Honda
Nissan NA

5.5%

Hyundai

9.4%

America
Mazda America

0.2%

Mitsubishi

87.1%

Kia America

33.6%

Subaru
America

-13.3%

Profit over time:

The following data represents Ford Motors net income from year 2001 to 2010:

Net Income ($M)

10000

5000

0
Year Year Year Year Year Year Year Year Year Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
-5000

-10000

-15000

-20000

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Net Income ($M)

During 2001, Ford has been in bad shape financially making a loss of $162412 million. From
before that time Ford was having a hard time to come back and had undertaken downsizing
strategy from quite a time to lower its cost as per their profit structure. This trend continued in
2001 as well but the entrant of a CEO in July 2001 made a slight change in the strategy though it
kept on with the legacy of downsizing, it also discontinued models that were unprofitable.
Hence, with this strategy profits were expected but this didnt work out, mainly because of the
unstable environment of the terrorist attack in September 11, 2001. From year 2002 onward
till 2005, Ford was making a bit of profit but still heavily relied on downsizing its employees
from time to time. But Ford started making some major losses from 2006 onwards and in order
to make this work Alan Mulally was appointed as the CEO. Hence, it came in light that Ford
needed a complete restructure in order to cut down costs, lower its debts, increase its
revenues, and earn higher profits. Hence, downsizing strategy continued as well but this time
with the introduction of new products, discontinuing the outdated ones keeping up with
changing consumer trends. With some great decisions the company was recovering and hence,
lowered its net loss by 78% in 2007 compared to 2006: however, once again unfavorable
economic conditions in 2008 with global downturn pulled the net loss deep down which was
more than the net loss made in year 2006 which resulted in the use of downsizing once again.
With this Ford applied for bailed out funds, which was rejected and was the cause for their
popularity gaining more customers. And hence, with proper planning, and complete restructure
of Ford, it earned profits during 2009 and 2010 with effective strategies.

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As seen in the graph below, Ford has definitely experienced lower sales from 2001 to 2010, but
it managed to come back in 2009 and 2010 with providing cars that customer wants, which
they didnt follow earlier.

Revenues ($ M)
200000
180000
160000
140000
120000
100000
80000
60000
40000
20000
0

Revenues ($ M)

Year Year Year Year Year Year Year Year Year Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

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Hence, Ford experienced the following net profit margin from 2001 to 2010 onwards:

Net Profit Margin

6.00%
4.00%
2.00%
0.00%
-2.00%

Year Year Year Year Year Year Year Year Year Year
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Net Profit Margin

-4.00%
-6.00%
-8.00%
-10.00%
-12.00%

It can be seen that the strategies used in the year 2009 and 2010 were effective and hence,
Ford could recover.
Return on Capital Invested (ROIC):
From 2009 to 2010, ROIC has increased playing its role in increasing shareholder value.
Year

Net Income ($M)

Year 2009

2717

Capital
Invested
16643

Year 2010

6561

20678

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ROIC
16%
32%

Conclusion:
Return of Capital
invested (double
than the year
2009)

Profitability Factors:

Effectiveness
of strategies

Adaptability to Market
needs
Changing economic and
political factors
Analysis of competitors
moves

Increased
Shareholder
Value

Brand value

Profit Over
time increased

Hence it can be said that Ford had implemented strategies that had helped Ford to increase
shareholder value. It can be said as per the current conditions in 2010, the business is viable,
moderately unstable (as it is sensitive to economic and political factors) and profitable.

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Strengths and Weaknesses

Strength:

The company is fully diversified.

They have huge amount of capital.
Tight control over the suppliers.
Company owned equipment making facility.
Huge workforce.

Weakness:

Ford is a late adopter.

In terms of using recent technology they are lagging behind.
They hardly follows recent trend.
Unappealing outlook.

Functional-level strategies:
The current corporate strategy of the business had some positive changes to the organization
and hence, restructured the entire organization accordingly. The corporate strategy is based on
ONE Plan that had the following four priorities:

Restructuring enough to operate the business profitability in context to changing model

mix and customer demands.

Offering customer the best developed customer demanded products in terms of

efficiency, high quality, safety that could create value for the company.

Improve Fords finances.

Work together as one team that has one goal.

Hence, in order to make this current strategy work, Ford made some functional changes to the
organization that helped Ford to create value. The functional strategies built were achieved by
fulfilling these four elements that in turn shaped the distinctive competencies of the
organization. The four elements are described below along with the strategies with which it
was achieved:
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 Achieving superior efficiency:

Ford had achieved superior efficiency in terms research and development,
infrastructure, information system, supply chain management, human resource,
production system and marketing.
1. In order to make the production system efficient, Ford discontinued various model
as focus on fewer model would help in greater efficiency. Plus, it made further
changes on models changing complex processes to easier ones.
2. In order to make the research and development team efficient, Ford acted as per
what the customer needed and brainstormed ideas to make it a reality making Ford
a safe car when driving, installing many other technological gadgets, as the research
said that customer wanted technological advanced car that was fuel efficient,
smooth and looked stylish at the same time.
3. In order to make the infrastructure efficient, Ford implemented the strategy to
promote one goal throughout the entire organization and hence, this helped to
restore the company commitment to efficiency. Plus, the strategy helped cooperation among functions as they lacked transparency as one function would not
disclose all the data to the other function.
4. In order to make the information system efficient, Ford heavily invested on premium
technology to better serve its customers and hence, created Ford Work Solutions
that provided and served all affordable solutions making processes more efficient
with high speed internet and wireless accessories.
5. In order to gain efficiency in supply chain management, Ford discussed its strategies
with suppliers, letting them know what they require in detail, that helped create
long term relationships and later, which was sealed with long-term contracts. Ford
maintained a positive relationship with suppliers, giving them the idea that the
suppliers works with them rather creating the idea that the suppliers work for them.
6. In order to gain efficiency in the human resource system, Ford changed positions
according to the companys goal so that the functions dont hide facts and work as a
team.
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7. In order to gain efficiency in marketing, Ford created brand to restore their company
image. Plus, they implemented strategies like Swap you Ride campaign to market
their products marketing the fact that Ford cars are created as per the customer
needs and wants.

Achieving superior quality:

In order to achieve superior quality, Ford has worked throughout its functions to keep
the car reliable and excellent making improvement in all sectors. It rationalized its
suppliers and hence, created Aligned Business Framework with long term agreements,
ensuring excellent quality of materials supplied. It made improvements focusing on
customer, launching previous or new models completely redesigned. Plus, the models
offered looked stylish and was aesthetic in every way possible that represented its
quality excellence.

Achieving superior innovation:

Ford found that the current customers are technology savvy and with that idea, it
started redesigning the model with technological products ideas that were safe and
helped ease when driving. With the help of cross-functional co-operation, data were
exchanged that helped innovation as the market information helped research and
development create ideas and work on what the customers wanted. This pushed them
to change and redesign various gadgets installed: plus, co-operation with production
team also required when designing new products and processes. And with such support,
Ford was able to work as one team can produce some various innovation installed on
Ford cars today. Such examples would be inflatable seat belts, curve control, Blind spot
information system, Active Park assist, Adaptive Cruise Control.

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Achieving superior responsiveness to its customers:

From a long time Ford suffered as they were unable to give what the customer wanted.
With the change in corporate strategy, the focus was driven back to customers and
hence, it started designing models knowing its customer well. Knowing its customer well
had helped understand Ford in what to create that customer would buy a technological
savvy product that was functional, safe, stylish, durable and fuel-efficient at the same
time. And Ford gave that to their customer and with the help of their marketing
campaign like Swap your Ride they were able to change perception about Ford and
create a stronger customer base.

Corporate Level Strategies

Early Mission
During the time when Henry Ford created Ford Motor Company, cars were considered luxury
items which only the wealthy could afford. Henry Ford wanted to change it. He wanted to make
a car which would be affordable by anyone earning a good salary. Of course that means
keeping the price of the cars down by lowering costs. But doesnt that also mean the quality of
the cars could also deteriorate? Henry Ford didnt believe so. He believed with the right
techniques they could make a car which was affordable and of great quality as well. And hence
Ford Motor Company began their journey with the mission;
To blend in quality and affordability in a car which would transform the society
As Ford progressed with time they had to adapt to different corporate strategies of which some
important ones are shortly summarized below.

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A Brief Timeline showing different corporate decisions taken by Ford Motor Company
since 1903
Henry Ford set the goal of minimizing costs by creating efficiency in production and supply
chain step by step. He had the vision of ultimately constructing an all in one manufacturing
plant where processing of raw materials, parts and final assembling could happen
efficiently in a single place and that is what they came up with in 1917; the Rogue Plant.
Edsel Ford who became the president in 1919 came up with slightly different corporate
strategy in terms of product offerings. He wanted to develop the cars in terms of aesthetics.
For the first time Ford stepped out of their decision to stick to a black paint jobs on their
cars with the introduction of Model T cars coming in variety of colors. Besides, the cars
were also developed with the introduction of hydraulic brakes, six cylinder engines and
development of safety glasses.
In the year 1922 Ford acquired Lincoln Motor Company and introduced the Mercury brand
that allowed them to enter the medium price market.

Henry II who retained his position as President and CEO went for further market
development by entering Europe. The Ford Motor company of Europe was established in
1967.

During the 70s and the early 80s the increase of fuel prices for various reasons created
awareness among the car manufacturers towards conservation of energy. Thus the
automobile industry embraced an important change with the newly born demand for fuel
efficient cars: - A radical change in the Industry.

In the late 80s Ford began to diversify their product offerings by purchasing Aston Martin and
Jaguar to offer luxury cars to European markets as well as the rest of the world.
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In 1997 Ford went for further related diversification by making a minibus line in China.

Ford purchased Swedish automaker Volvo in 1999 and Land Rover in 2000 to strengthen European
presence.

From 2006 the industry saw the demand for fuel efficient cars increase further. Consequently the
demand for Japanese cars outran U.S. car brands.

During 2011 the demand for smaller, more stylish and more fuel efficient cars increased and Ford
reacted by making the new version of Explorer which was a more fuel efficient crossover vehicle
compared to the previous SUVs.

Summarizing the timeline of Fords Corporate Strategies

With the course of time the strategies that Ford Motor Company formulated can be
summarized as follows:
1. One of the first corporate strategies that were phenomenal towards Fords early impressive
performance was the decision to vertically integrate their supply chain. Ford decided to be
their own suppliers of raw materials for which they set up
a. Ford owned Pits to mine iron ore
b. Fords own freight system including Ford ships and Tractors
c. Ford steel mills
2. Ford aggressively used the Horizontal integration strategies. They acquired European
automotive Brands like Aston Martin, Jaguar, Volvo and Land Rover in different times. The
main motive behind such acquisitions was to offer a diversified category of automobiles
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into Luxury and Sports utility cars lines as well as to enter Global market especially Europe
and Asia later on. Ford also diversified their product line by making a minibus line in China
in a race to grab holds in the Chinese market. Ford went for further globalization by
engaging in joint ventures with companies in
a. China- Changan Ford Mazda and Ford Lio Ho
b. Germany- Cologne Transmission plant
c. Taiwan- Ford Lio Ho Motor Co. Ltd
d. Turkey- Ford Otosan- Haiduong Assembly Factory (Ford Vietnam)
e. Russia-Ford Sollers
f. Thailand- AutoAlliance Thailand
3. Charismatic CEO Alan Mulally who took over the position in 2006 established synergistic
relationship between all business units of Ford. As he arrived he saw a significant lack of
communication and synergy between the eight Ford units. Mulally solved this problem of
unity by implementing weekly meetings with Fords management team during which each
of the businesss heads would present their results and forecast in order to maintain
complete transparency.

Current trend of Customer demand in Automotive Industry

Global recession has given us a changed world with changed trend of demands in different
industries. The automotive industry has seen radical changes in demand for vehicles. Today the
demand of vehicles is shaped by conservation of energy, environment friendliness, safety etc.
Also people are now more skeptical in spending a dollar than ever unless they are totally
convinced about the value it creates. Hence it has become extremely important to give them
every dollar worth of value for which understanding what changes and challenges are to be

embraced in the future need to be considered also ensuring profitable and sustainable
growth at the same time.

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Some current trends in the automotive industry are:

Governments push for safer, cleaner transportation: Governments are focusing on three
areas to secure individual mobility:

Preservation of resources,

Environmental compatibility and

Safety

In response, OEMs will begin to build cleaner, safer and more diverse range of cars,
including a variety of zero-emission vehicles.

Shifting Mobility Needs: Consumers in developing and developed countries have different
mobility needs. Continued urbanization in developed the world for example in places like
Europe and the U.S. lead consumers to seek alternatives to car ownership even as it leads
people in the developing world such as a country like India to buy more cars.
New Entrants in the Market to take the Lead: New players will enter the market because of
advances in technology and unmet consumer needs. As mentioned in the case the U.S.
market is slowly swarming with Asian automobile companies.
New Risks Associated to Globalization: The automotive industrys globalization efforts are
facing a reality check today. Before they go global it is important to realize the risks coming
from a changed world hit with recession. Some issues to be considered are:

Supply misalignment

Volatile raw material prices

Changing regulatory policies of governments

Shortage of qualified workers in developed markets

Fast evolving technologies etc.

Fords Current Corporate Strategy

As Allan Mulally took over on the very first day he found that even the Executives working at
Ford themselves were not interested to own a Ford. Instead they all owned Jaguars, Aston
Martins, Land Rovers etc. Mulally then realized that if the companys own people didnt want to
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drive the car then why would any other customer? Mulally realized that the problem had to be
solved from scratch and he came up with the ONE Ford business transformation plan with the
goal of creating a leaner more efficient global enterprise and return the company to
profitability.
The new mission statement went like ONE Ford. ONE Team. ONE Plan .ONE Goal.
Following this ONE Ford mission the companys corporate strategies till date are discussed
below.
Ford aggressively restructured the company by consolidating dealerships, closing plants,
reducing workforce, shutting down unprofitable brands and disintegrating the supply chain
up to some extent.
Ford is now focused on developing their product offerings in terms of designs and research
and development. Some notable changes are:

Ford is coming up with higher number of fuel efficient cars like the Lincoln MKZ
Hybrid to conform to the global issue of fuel conservations and fuel price hikes. Ford
has invested about $135 million to design, engineer and manufacture hybrid
vehicles.

Ford has also considered going environmental friendly with the introduction of
EcoBoost engines which can deliver up to 15 percent fewer CO2 emission.

Besides it Ford is also developing their cars with premium features like the eight
speed automatic transmission, safety innovations like inflatable seat belts and curve
control and intelligent vehicle technology that will help to reduce accidents.

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Our Opinion about the New Corporate Strategies: How they Hold in Terms of the New Trends
of the Automotive Industry?
First of all Ford is finally on the track of considering consumer demands before designing a
product. Previously they diversified their product lines solely on the basis of their own
assumptions regarding customer demands. Over the course of time they have changed it and
are now more concerned about removing old brands and coming up with newer automobile
lines that facilitate the customers with better technology and looks that they want.
Secondly they have well reacted to the new demands of the automotive industry from changes
due to recession. They are conforming to the Governments push for safer and cleaner
transportation.
Thirdly they have reacted well with changing mobility needs differences between developing
and developed nations. They have separate types of automobile lines in terms of size, mileage,
efficiency, luxury etc. for the U.S./European markets and the Asian markets especially India.
Last but not the least successful innovation in manufacturing and fast adaptation of new
technologies has allowed them to keep up with their competitors.
In the end it can be said that so far the new corporate strategies have been reviving and seems
to take the company towards sustainable growth. It can be well proven by the fact that Ford is
back in business and has differentiated itself as the only major U.S. automaker that did not
require a government bailout.

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4P Framework:
1. Position:
Goal: ONE FORD goal is to create an exciting and viable company with profitable growth for
all.
Value: Ford's business is driven by consumer focus, creativity, resourcefulness, and
entrepreneurial spirit. They are an inspired, diverse team. We respect and value everyone's
contribution. They constantly strive to improve in everything they do. Guided by their values
and provide superior returns to our shareholders.

2. Priorities:
1. Aggressively restructure to operate profitability at the current demand and the changing
model mix.
2. Accelerate the development of high quality, fuel-efficient, safe new products that
customers want and value.
3. Finance the plan and improve the balance sheet.
4. Work together as one team to leverage Fords Global assets.
Analysis:
Ford Motor Company wants to offer the most innovative high quality, fuel efficient and safe car
to the customer for which they need to invest more in R&D to improve their designs and build
the best innovative car. They didnt hire effective and efficient employee people that would
help ford to achieve its goals. Ford wasted a good amount of money earlier in acquisition. There
was no unity in the company earlier, the CEO changed this later on and created ONE FORD plan.
There wasnt any strong interrelation between the employees, workers, and manager. Ford
didnt focus in consumer demand, need, & satisfaction rather they focused production only.

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3. Payments:
1. Invest in R&D.
2. Invest in hiring talented efficient people.
3. Using assets as collateral for loan.
Analysis:
Ford is a giant company in USA. Thus, although it may go against their cost minimization
strategy by their old method of employee downsizing to cope with the balance sheet figures to
benefit the company. Fords dealings with R&D is not enough, as they wants to give most
innovative high quality safe cars to the consumers which they wants, its not possible to build
most effective and innovative designed cars without having a strong R&D department. Ford
didnt have efficient& effective staff, which would help them come up with sophisticated ways
to reduce costs. Technology is the driving factor in the success of any business whether a small
one or a big conglomerate. Ford was not technologically advanced to beat the new
competitors in the market. During the economic downfall when all companies were getting
bankrupt that time ford used their assets and ford logo as collateral security and took loan from
bank, they took $23.6 billion to survive in the economic downturn and its adverse effects on
the auto industry.

4. Performance:
1. Brand lineup.
2. Increased Customers.
3. Increased Revenues.
4. Diversified product lineup.
5. Boost up financial results.
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Analysis:
Ford did brand line up by acquiring brands like Mazda, Land Rover etc. but they were not able
to manage the brand lineup. It was one of the big mistakes in the past now but later on the
recent CEO has reduced the brand lineup& Ford has developed a highly competitive product
line with a positive brand image. After the changes now they have a diversified brand lineup. To
boost up the financial results ford did a lot of employee downsizing. They have increased their
revenues by employee cut. They have successfully targeted lots of new consumers and also the
Generation Y people by their cutting edged innovative designed cars and bring lots of changes
in the style and design. Ford can continue providing their customers with the most innovative
products with high technology then it will bring them higher returns of profit in long run. Also,
by hiring the right employees, Ford can ensure that cost reduction is achieved and thus they
would enjoy the benefits of economies of scale.

Recommendation
Ford must consider major alterations for European operations. Europeans today are largely
shifting towards alternatives to car ownership due to crucial economic conditions. Under these
circumstances in order to stay in the European market Ford must focus on introducing smaller
and more energy efficient cars in the future that have extremely low maintenance costs.
One of the future prospects in the automobile industry is the introduction of vehicles that
facilitate people with car sharing facility. Ford may slowly dip into this unique market segment
and explore the possibilities.
Car ownership is increasing in many emerging third world economies for example Brazil but
Ford has not been performing well in the Brazilian market which stays a huge prospect.
The future of the Car industry will be all about Hybrid and Electric Vehicles. Ford currently has
only three lines of Hybrid and Electric Vehicles which must increase. Automobile companies will
shift more operations towards the energy efficient sectors in the future and so should Ford.

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Ford must bring major aesthetic improvements. Most of Fords cars are considered unappealing
compared to their competitors. With adequate amount of funds available there is plenty of
scope for Ford to invest in looks and designing department in order to differentiate themselves
from their major competitors in terms of aesthetic appeal.

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