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Overview of Ford Motor Company

The company used to be an American icon for over a century. It faced a setback of $1.6B in

2006 at 9 % decline. But in June 30, 2007, Ford revenues increased by 6% to 87.26B. History

form the beginning is, back in 1903, Mr. Henry Ford and eleven associates started the company.

Headquartered in Dearborn, Michigan, Ford has a 17.5% market share of the auto manufacturing

industry with 300,000 employees operating about 108 plants globally. Ford is providing business

services in two areas Ford Credit Company and Genuine parts and Mortorcraft. It is providing

information regarding the vehicle part, repair, maintenance to their customers who own Ford,

Lincoln and Mercury vehicles. Further more the company is also providing the service of

Motorcraft to their customers on their web. The customer can search and obtain any of their

vehicle parts according to make, model, and year and identification numbers.

Ford is working on green marketing by making hybrid engines in joining hands with BP. Its has

opened a research and engineering center in China and also plans to provide 200 dealership in

the country for taking a competitive edge before the rivalry takes over completely. Ford is also

designing and engineering in a global light commercial vehicle that will be sold in 80 countries

of the world. Ford owns good reputed brands of vehicles.

The industry is facing a setback form the rising cost of fuel, energy and raw material adding

more burdens of expenses for the companies. To compete with the intensive rivalry, firms areusing different tactics to improve the sales level and enhance their market share. The industry

manufacturers are downsizing, laying employees off and/ or restructuring their organizational set

up. Some of the companies are either closing the manufacturing of their models or bringing one

or more back on the production lines. Ford is bringing the Taurus model to production but it is

not going well.

Ford and other companies which are in top 3, are facing an emerging competitor Toyota. Toyota

has captured a huge market share and hence becoming a major threat to all the existing

companies.

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Year on Year Major Event at Ford

1990 Harold Poling succeeds Petersen as chairman and Philip Benton Jr. elected president;

Introduction of '91 Ford Explorer SUV

1992 Introduction of Mercury Villager minivan, joint venture with Nissan

1993 Introduction in Europe of Ford Mondeo world car; Alex Trotman succeeds Poling as

chairman and CEO

1994 Introduction of '94 Ford Windstar minivan

1996 250-millionth Ford vehicle built

1997 Ford sells heavy-truck business to Freightliner; Introduction of Lincoln Navigator SUV;

1998 Lincoln-Mercury headquarters moved to Irvine, CA; Edsel Ford II resigns as president

of Ford Credit; Introduction in Europe of Focus compact car

1999 Bill Ford Jr. becomes chairman, replacing retiring Trotman, and Jacques Nasser

becomes president and CEO; Acquisition of Volvo Cars and THINK electric car

2000 Introduction of Lincoln LS and Jaguar S-Type models; Acquisition of Land Rover from

BMW; Visteon Corp. parts-making organization spun off

2001 Nasser resigns as president, replaced by Nick Scheele; Bill Ford Jr. assumes active

management role as CEO, fourth generation of the founding Ford family; Introduction of retro 2-

seat Ford Thunderbird

2002 New design unveiled for '04 Mustang, the last surviving pony car

2003 F-150 redesigned; Rouge plant overhaul nears completion en route to 2004 startup with

multi-platform capability

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Product line offered by Ford

Aston Martin

Mustang

Land Rover

Mazda

Mercury

Volvo Ford

F-150

Thunderbird

Jaguar

Ford also operates two services Business

1. Ford Motor Credit Company

2. Genuine Parts and Motor craft

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PESTEL

Political: N/A

Economical:

1. Prices of fuel and interest rates are increasing.

2. Decline of home construction has reduced the demand of trucks. It has effected the

industry very much.

Legal:

A strict regulation has been applied for the emission on CO2. That has increased the costs of

manufacturers.

Technological:

Innovation

Hybrid engines

E-commerce

Hydrogen fuel energy

Ecological:

The environmental protection issues are being over looked for the safety and healthy

environment.

Social:

Labor union incentive plan

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Proposed vision

To be the worlds Premier brand Automobile Company.

Proposed Mission

We want to achieve the maximum growth level of the industry with strong brand image by

facilitating our stakeholders the maximum of our expertise .We also want to groom ourcustomers as financially strong participants in society by utilizing maximum innovative

environmental friendly technology in the globe.

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Porter Analysis

Threat of new Entrant

Determinants Defining Question Assess the power of BuyersCircle one of the following.

1 = low, 5 = high, or N/A if

it doesnt apply to your

industry.

Economies of

Scale and

experience

Does successful entry require that

companies have significant

economies of scale or experience

1 2 3 4 5

N/A

Brand Identity Do new companies need to spend

heavily on brand identification?

1 2 3 4 5

N/A

Product

Differentiation

Do new entrants need to differentiate

by spending heavily on advertising,

customer services or product

differences to over come existing

customer loyalty?

1 2 3 4 5

N/A

Switching Costs Does the buyer have to pay to switch

from one supplier product to

another?

1 2 3 4 5

N/A

Capital Required Does the new company need to

invest large financial resources?

1 2 3 4 5

N/A

Access to

Distribution

Does the new comer have access to

distribution channel for product or

services?

1 2 3 4 5

N/A

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Cost advantage Established companies have cost

advantages over new rivals.

1 2 3 4 5

N/A

Government

policies

Government policies can help to

preserve or limit competition.

1 2 3 4 5

N/A

Expected

Retaliation

If industry leaders retaliate more for

new entrants then threat for new

entrants will be high.

1 2 3 4 5

N/A

Intensity of Rivalry

Determinants Defining Question Assess the power of

Buyers

Circle one of the

following.

1 = low, 5 = high, or N/A

if it doesnt apply to your

industry.Industry growth How slowly or quickly is the

industry growing? Intense fight

among rivals for market share

1 2 3 4 5

N/A

Fixed Cost Does your business have a high

fixed cost?

1 2 3 4 5

N/A

Product Differentiation Is your product commodity? The

closer the product is to being a

commodity the higher intensity of

rivalry.

1 2 3 4 5

N/A

Switching Costs How costly is it for your buyer to

switch between providers?

1 2 3 4 5

N/A

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(In Lower Tier)

Intermittent

Overcapacity

How frequently is there a

problem of excess capacity in

your industry?

1 2 3 4 5

N/A

Brand Identity Is branding critical for your

Rivals success? Brand

identification by buyer reduces

the threat of rivals.

1 2 3 4 5

N/A

Concentration and

balance

Are there a large number of firms

of equal size and power, all

chasing after the same customer?

1 2 3 4 5

N/A

Diversity of competitors Are there competitors with

different strategies and frame of

reference? When competitors are

diverse it is more difficult to

establish the rules of game

1 2 3 4 5

N/A

Bargaining power of Buyer

Determinants Defining Question Assess the power of Buyers

Circle one of the following.

1 = low, 5 = high, or N/A if

it doesnt apply to your

industry.

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Concentration Buyer is fragmented because to

industry covers all Demographic

segments.

1 2 3 4 5

N/A

Product Cost

versus Total

Purchases

Does your product buyers purchase

represent a significant fraction of the

buyers cost? If so, buyer bargaining

power is typically high.

1 2 3 4 5

N/A

Product

Differentiation

Product is standard or

undifferentiated bargaining power is

high.

1 2 3 4 5

N/A

Switching Costs If buyer face few switching cost

there bargaining power is high.

1 2 3 4 5

N/A

Profits Profits with in the industry for

buyers are if high then buyers

power is high.

1 2 3 4 5

N/A

Backward

Integration

Can they make what you make

themselves?

1 2 3 4 5

N/A

Impact on Quality/

Performance

Is the product you offer important to

the quality of the buyers product or

services?

1 2 3 4 5

N/A

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Buyers

Information

Does the buyer have complete

information on the product he may

purchase?

1 2 3 4 5

N/A

Bargaining power of Suppliers

Determinants Defining Question Assess the power of

Buyers

Circle one of the

following.

1 = low, 5 = high, or N/Aif it doesnt apply to your

industry.

Concentration Are your supplier are fragmented

or highly concentrated?

1 2 3 4 5

N/A

Presences ofSubstitute inputs

Are there any substitutes for yoursupplier products?

1 2 3 4 5N/A

Product

Differentiation

Is the suppliers product or service

commodity ?

1 2 3 4 5

N/A

Switching Costs How costly is it for you to switchfrom suppliers product?

1 2 3 4 5N/A

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Importance

Relative to

Customer.

Is your industry an important

customer the supplier group ?

1 2 3 4 5

N/A

Forward

Integration

Can the supplier produce the

product you make?

1 2 3 4 5

N/A

Impact on

Quality/

Performance

Is your supplier product essential

to the quality or performance of

your business?

1 2 3 4 5

N/A

Threat of Substitute

Determinants Defining Question Assess the power of

Buyers

Circle one of the

following.

1 = low, 5 = high, or N/A

if it doesnt apply to your

industry.

Price performance Does the substitute offer a better

price performance?

1 2 3 4 5

N/A

Switching Cost Is it costly for buyer to switch to

the substitute product?

1 2 3 4 5

N/A

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Threat Of new Entrants:

(four 4s, Three 5s, One 3)

So thethreat of new entrants is Very high.

Intensity of Rivalry:

(Three 5s, Three 4s, two 2s)

The rivalry is very intense and HIGH.

Bargaining Power of Buyer:

(Four 4s,Twos 1s,One 3s)

Thre bargaining power of the buyer is High.

Bargaining Power of Supplier:

(Three4s, Three2s)

So the Supplier power is Moderate.

Threat of Substitutes:

(Two 4s)

So the threat of substitute is High.

INDUSTRY COMMENTS:

As there are Four high forces and one Moderate force of supplier so the over all industry is very

attractive and growth is expected to be there in the industry but the intense rivalry is also the

issue for the industry.

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IFE

Internal Factors Weights Rating

Weighted

Score Comments

STRENGTHS:

1. Fords rouge centre in

Dearborn.

0.04 2 0.08 Worlds largest living roof

2. Weekly Half day

sessions to develop

strategies

0.05 3 0.15 Strong management decisions.

3. Ford as a affordable

brand name.

0.05 3 0.15 From start to now they have

there strong brand image.

4. 91% market share in

big three truck segment.

0.07 3 0.21 Ford has one of largest market

share compatitors in big three

in truck industry.

5. MAZDA, Sole

manufacturers in

gasoline, diesel and

internal combustion

engine.

0.07 3 0.21

6. Innovation 0.06 3 0.18 First time three point seat belt

was introduced by Ford.

7. Acquisitions by Ford 0.04 3 0.12 Ford acquisition with Mazda,

Volvo, Jaguar and Land Rover,

genuine parts and service,

Motor craft.

8. Faster Rate of

production

0.06 3 0.18 By cutting factory capacity

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9. Worlds largest finance

company.

0.05 3 0.15 To assist its distributors and in

real estates.

10. Providing know how

about spare parts.

0.05 3 0.15 Company owned by ford

www.genuineflmservices.com

Provides info .about spare parts

of luxury cars.

11. Car of the year

S-Max

0.04 3 0.12 European car of the year in

2006.

WEAKNESS:

1. New Taurus unable

to make lost Value

gain.

0.05 2 0.10 After purchasing stock of old

Taurus New Taurus was unable

to gain Value

2. Consumer desire

not fulfilled

0.04 2 0.08 Consumer expectations were

more makes and models in cars

which are not being fulfilled.

3. Expected customer

demand

0.04 2 0.08 Low cost and fuel efficient cars

were expected by customers.

4. Fords Revenue

from North

America.

0.06 1 0.06 Decreasing revenue from North

America $80662 to $69425

Million.

5. Financial Positions

Negative figures

0.05 1 0.05 $12.6 Billion net income, A

loss of 1.7 Billion from last

year.

6. No incentive plans

for distributers.

0.06 2 0.12 Rivals are having strong

competitive advantage over it.

7. 2nd highest

inventory level

0.07 2 0.14 Inventory taking by Ford is 2nd

highest which is not good.

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8. Decreasing bargain

power of supplier

0.05 2 0.10 As we have strong buyers so

suppliers power tends to be

low or moderate.

TOTAL 1.00 2.43

EFE

Internal Factors Weights Rating

Weighted

Score Comments

OPPORTUNITIES:

1. Hybrid energy

vehicles and

Hydrogen Power

0.04 3 0.12 Opportunity of demand in fuel

efficient engines

2. New Consortium by

Ford.

0.05 3 0.15 Objectives to achieve capacity

production

3. Competitive

Financing services

0.07 3 0.21 Assisting new distributors in

real estates.

4. Divesture by Hertz 0.05 3 0.15 Opportunity taken

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5. E-commerce

facilitation

0.05 4 0.20 To enter in New global areas

6. Global lite

commercial Vehicle

0.04 2 0.08 To introduce in new market

areas.

7. 200 plus dealership

plans in China

0.06 3 0.18 Start research centres in china

to evaluate dealership plans

8. Falcon success and

development

0.03 2 0.06 Falcon success becomes

opportunity for new market

areas.

9. Weak competitionin China

0.04 3 0.12 Existing competitors were sloein growth.

10. Two tier China

market.

0.06 4 0.24 Two market segments upper

and lower.

11. Global Area 0.05 3 0.15 Africa, Asia pacific, Middle

east.

THREATS:

1. Threat by

TOYOTA to

overtake

0.08 4 0.24 High level of threat was there

from Toyota to over take

position.

2. Threat from car

rentals from brand

image.

0.05 2 0.10 High level of threat by car

rentals as they have high sales.

3. Loosing brand

image

0.06 3 0.18 Brand image threat as expected

demand was not there

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4. Gas pricing

skyrocketing

0.05 3 0.15 Govt policies were out of range

and have no control.

5. Fluctuating

currency rate

0.05 3 0.15 In current market we have

problem in with currency.

6. Market share

decline PAG

0.05 2 0.10 PAG market share in North

America was declined.

7. Intense Rivalry 0.07 3 0.21 Other competitors were taking

advantage.

8. Decrease in home

Construction

0.05 2 0.10 Truck manufacturing was

disturbed.

TOTAL 1.00 2.89

Competitive Profile Matrix

(CPM)

FORD GM TOYOTA

Key Success Factors Weight Rating Score Rating Score Rating ScoreFinancial leadership 0.15 1 0.15 3 0.45 4 0.6

Brand image 0.12 4 0.48 3 0.36 2 0.24

Incentive plan 0.1 2 0.2 3 0.3 4 0.4

Educating the customer 0.12 4 0.48 3 0.36 2 0.24

Fuel efficient, hybridengines

0.15 4 0.6 3 0.45 3 0.45

E-commerce 0.12 1 0.12 2 0.24 4 0.48

Export continual 0.08 3 0.24 4 0.32 3 0.24

Providing spare parts of old

models

0.07 3 0.21 1 0.07 1 0.07

Plant utilization 0.09 2 0.18 2 0.18 2 0.18

1

.00 2.66 2.73 2.9

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Rating

1 Major Weakness

2 Minor Weakness

3 Minor Strength

4 Major Strength

IE Matrix.

The IFE total Weighted Scores

4.0 Strong (3.0-4.0) 3.0 Average (2.0-2.99) 2.0 Weak (1.0-1.99) 1.0

High

3.0_4.0

3.0

I II III

18

Highest possible

Score 4

Lowest score 1

Average 2.5

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Medium

2.0_2.99

2.0

IV V VI

Low

1.0_1.99

1.0

VII VIII IX

IFE score 2.43

EFE score 2.89

HOLD AND MAINTAIN:

Market penetration

Product development

GRAND STRATEGY MATRIX:

19

EFE

RAPID MARKET GROWTH

SLOW MARKET GROWTH

STRONGCOMPATITIVEPOSITION

WEAKCOMPATITIVEPOSITION

QUADRANT 2 QUADRANT

QUADRANT -4QUADRANT -3

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Value Chain Analysis

Support Activities

Infrastructure:

Head office in Dearborn, Michigan USA +

Ford manufactures and distributes its vehicles to 6 continents +

Operates 108 manufacturing plants all over the globe +

Deals in two service business +

1. Ford motor Credit Company

2. Genuine Parts and Moto craft

Has the worlds largest single roof truck final assembly building +

HRM:

20

Retrenchment

Concentric diversification

Horizontal Integration

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The company has good organizational structure +

Deals with a team of 300,000 employees +

Technological Development:

Innovation regarding vehicle performance improvements +

Opened a research and engineering center in China +

Ford is designing and engineering a global light commercial vehicle in Australia. Its also plan to

sell it in 80 countries of the world. P+

Working on designing and engineering a global light commercial Vehicle that will eventually be

sold in some 80 countries +

Owns a good rang of brands in vehicles + / p-

Company produces hybrid energy vehicles and has joined force with the British Petroleum to

develop hydrogen power. +

The company did a consortium. This helped the company to cut the factory capacity and made it

capable of producing vehicles in a faster rate. +

Provides information and maintenance of vehicles on Web +

More of a production- driven - / p+

Procurement:

Acquired good brand image vehicle of the world e.g. Mazda, Volvo, etc. +

Sold some of the share of Aston Martin to gain cutting factory capacity and enabling the

company to produce vehicles at a faster rates +

The company continues to support the consortium of investors with safety, emission and other

technological need +

Primary Activities

Inbound Logistics:

Cost of raw materials (steel & resins) is rising -

Energy cost is rising as well -

Operations:

Worlds Largest single roof truck assembling building +

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Distribution of its vehicles in 6 continents of the world +

108 plants world +

Product line of vehicles have a good brand image + / p-

Having the largest single roof truck assembling building +

Providing business services in two areas +

1. Ford Credit Company

2. Genuine parts and Mortorcraft

Facing extra cost of CO2 emission by the regulatory authority -

Outbound logistics:

Offering dealerships throughout the glob +

Thinking to offer 200 dealership in China p+

Planning to sell Falcon in 80 countries p+

Marketing and sales:

Planning to give 200 dealership in china. P+

Promoting the ford brand by educating the customers. Especially those who own the Ford,

Lincoln and Mercury vehicles through providing information (parts, repair and maintenance) on

web. +

No incentive plan is shown by Ford to boost the sales - / p+

Company produces hybrid energy vehicles and has joined force with the British Petroleum to

develop hydrogen power. +

Providing competitive financing rates with flexible terms applied toward leasing and/ or

financing vehicle purchase +

Green marketing +

E-commerce -/ P+

Services:

Largest finance company +

Provides information and maintenance of vehicles on Web +

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Gives the service to provide their vehicle model parts by make, year and identification number +

Explanation:

The company has overall a good infrastructure. It is taking good attention in manufacturing and

providing the dealership throughout the world by teaming u with their 300000 employees. Ford

is providing business services in two areas Ford Credit Company and Genuine parts and

Mortorcraft. It is providing information regarding the vehicle part, repair, maintenance to their

customers who own Ford, Lincoln and Mercury vehicles. Further more the company is also

providing the service of Motorcraft to their customers on their web. The customer can search and

obtain any of their vehicle parts according to make, model, year and identification numbers.

Ford is working on green marketing by making hybrid engines by joining hands with BP. Its has

opened a research and engineering center in China and also plans to provide 200 dealership in

the country for taking a competitive edge before the rivalry takes over completely. Ford is also

designing and engineering in a global light commercial vehicle that will be sold in 80 countries

of the world. Ford made a consortium to sell out some of the share of Aston Martin in order to

gain cutting factory capacity and enabling the company to produce vehicles at a faster rates. The

company continues to support the consortium of investors with safety, emission and other

technological need.

Ford owns good reputed brands of vehicles but if it does not evaluate the customers demand

regarding making fuel efficient cars, it might lose its market more drastically. The increasing

costs of raw materials for manufacturing the vehicles are also rising. The company is not taking

any certain rock solid steps in innovation of vehicle manufacturing. On the other hand, theres

another problem rising i.e. cost of energy.

The company is seriously lacking the promotional element in enhancing the sales by giving

incentives to their dealers. Where as their competitors are doing it according to the need as how

much to give incentives to their dealers. If the company didnt took any steps in this regard, it

will surely face the defeat in the market.

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Space matrix

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Total axis X score= -0.75

Total axis Y score= -2

25

Internal strategic

position

External strategic position

X-

Axis

Competitive analysis Industry strength

-3 Product quality

-4 Market capital share

-3 Competitors capacity

utilization

-4 Control over

distributors

+4 Profit potential

+3 Growth potential

+2 Financial stability

+2 Ease of entry into market

Average= -3.5 Average= 2.75

Axis Y Financial Strengths Environmental Strengths

+2 Cash flow from

operations

+2 Liquidity

+1 Leverage

+1 ROA

-5 Inflation

-4 Technology

-3 Barriers to Exit

-2 Risk involved in business

Average= 1.5 Average= -3.5

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Defensive Strategies:

The results and vector of the space matrix is showing that strategies will be defensive, which are:

Retrenchment

Divesture

Liquidation

FINANCIAL RATIOS

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Ratios Ratio

2004

Ratio

2005

Ratio

2006 Comments

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Liquidity ratios

Current ratio

0.94 1.17 0.94

The current ratio of 2006 shows the weekposition of company. The value of 0.94shows that firm is in week position tyomeet its short term obligations.

Quick ratio

0.72 0.98 0.73

0.72 in 2006 shows t6he extent to which afirm can meet its short term obligationswithout relying on the sales of itsinventories that is less than previous year.

Leverage ratios

Debt to totalassets ratio(times) 0.62 0.56 0.59

Company is more relaying on fundsprovided by creditors rather on their oninvestments according 2006.

Debt to equityratio (times)

-49.65 11.40 10.78

This ratio shows that either company isgoing towards more borrowing or severedepreciation in currency positions

according to 2006.Long term debt to

equity ratio(times) -49.65 11.33 10.78

There is no balance between debt andequity. Company is borrow more rather toinvest.

Times interestearnedratio(times)

-0.71 1.13 1.69

The 2006 ratio shows that (0.71) is theextent to which firms earning can declinewithout the firm becoming unable to meetits annual interest costs.

Activity ratio

Inventory

turnover(times) 13.83 17.22 15.94

This ratio shows that company is selling itsinventory 13.83 times in 2006.

Total assetsturnover(times)

0.57 0.64 0.59

Firm is not generating a sufficient volumeof business for the size of its assetinvestment compare to previous years.

Accountsreceivableturnover NA NA NA NA

Averagecollectionperiod NA NA NA NA

Profitabilityratio

Gross profitmargin %

7.03 18.07 20.85

The 2006 ratio shows that Firmsmanagement is not efficiently use its laborand raw material in the process ofproduction.

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Operating profitmargin

-0.04 5.37 6.95

The low profit margin shows the poorcondition of Firm. It shows firm is notkeeping its cost under control.Management of firm is not efficiently usethe business operations to generate profit.

Net profit margin

-7.88 0.81 2.03

Its not satisfactory according 2006. Itshows a bad performance of managers andoperations.

Return on totalassets

-0.05 0.52 1.19

This ratio shows that business is moreasset-intensive means company needsmore money for reinvesting to generateprofit.

Return onshareholder'sequity

3.64 10.00 21.73

The higher the ROE ratio is better for firm.But here its too low than previous yearsshowing week financial position of firm.

Earning per share N.A NA NA NA

Price earningratio NA NA NA NA

GRAPHS OF FINANCIAL POSITION

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0.94

1.17

0.94

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1 2 3

current ratio

current ratio

0.72

0.98

0.73

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1 2 3

quick rati

quick ratio

0.62

0.56

0.59

0.52

0.540.56

0.58

0.60

0.62

0.64

1 2 3

debt to totalassets ratio (times)

debt to total

assets ratio (times)

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-49.65

11.40 10.78

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

1 2 3

debt to equityratio (times)

debt to equity

ratio (times)

-49.65

11.33 10.78

-60.00

-50.00

-40.00

-30.00

-20.00

-10.00

0.00

10.00

20.00

1 2 3

long term debt to equity ratio(times)

long term debt to

equity ratio (times)

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-0.71

1.13

1.69

-1.00

-0.50

0.00

0.50

1.00

1.50

2.00

1 2 3

times interestearned ratio(times)

times interest

earned ratio(times)

7.03

18.07

20.85

0.00

5.00

10.00

15.00

20.00

25.00

1 2 3

gross profit margin %

gross profit margin

%

32

8/7/2019 FORD FINAL

33/38

-0.04

5.37

6.95

-2.00

0.00

2.00

4.00

6.00

8.00

1 2 3

operating profitmargin

operating profit

margin

-7.88

0.81

2.03

-10.00

-8.00

-6.00

-4.00

-2.00

0.00

2.00

4.00

1 2 3

net profit margin

net profit margin

33

8/7/2019 FORD FINAL

34/38

-0.05

0.52

1.19

-0.20

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1 2 3

return on total assets

return on total assets

3.64

10.00

21.73

0.00

5.00

10.00

15.00

20.00

25.00

1 2 3

return onshareholder's equity

return on

shareholder's equity

34

8/7/2019 FORD FINAL

35/38

HOW TO SELECT STRATEGY:

ALTERNATIVE

STRATEGIES

SWOT SPACE BCG IE GRAND TOTAL

Forward

Integration

Backward

Integration

Horizontal

Integration

1

Market

Penetration

1

Market

Development

Product

Development

1

Related

Diversification

1

Unrelated

Diversification

1

Retrenchment 2

Divesture 1

Liquidation 2

35

8/7/2019 FORD FINAL

36/38

(QUANTITATIVE STRATEGIC PLANNING MATRIX)

(QSPM for FORD)

36

8/7/2019 FORD FINAL

37/38

Retrenchment Divesture

WEAKNESS: Weight AS TAS AS TAS

New Taurus unable to make lost Value

gain.

0.05 1 0.05 3 0.15

Consumer desire not fulfilled 0.04 3 0.12 1 0.04

Expected customer demand 0.04 3 0.12 1 0.04Fords Revenue from North America. 0.06 1 0.06 3 0.18

Financial Positions Negative figures 0.05 3 0.15 2 0.10

No incentive plans for distributers. 0.06 - - - -

2nd highest inventory level 0.07 2 0.14 1 0.07

Decreasing bargain power of supplier 0.05 2 0.10 1 0.05

TOTAL 1.00 1.51 1.02

37

Key External Factors Retrenchment Liquidation

Opportunities Weight AS TAS AS TASHybrid energy vehiclesand Hydrogen Power

0.04 - - - -

New Consortium byFord.

0.05 3 0.15 1 0.05

Competitive Financingservices

0.07 4 0.28 1 0.07

Divesture by Hertz 0.05 3 0.15 1 0.05

E-commerce facilitation 0.05 4 0.20 2 0.10

Global lite commercial

Vehicle

0.04 2 0.08 1 0.04

200 plus dealership plansin China

0.06 3 0.18 1 0.06

Falcon success anddevelopment

0.03 2 0.06 1 0.03

Weak competition inChina

0.04 - - - -

Two tier China market. 0.06 2 0.12 0.06

Global Area 0.05 - - - -

THREATS: Retrenchment Divesture

AS TAS AS TAS

Threat by TOYOTA toovertake

0.08 3 0.24 1 0.08

Threat from car rentalsfrom brand image.

0.05 2 0.10 1 0.05

Loosing brand image 0.06 3 0.18 1 0.06

Gas pricing skyrocketing 0.05 3 0.10 1 0.10

Fluctuating currency rate 0.05 2 0.10 1 0.05

Market share declinePAG

0.05 - - - -

Intense Rivalry 0.07 3 0.21 1 0.07

Decrease in homeConstruction

0.05 3 0.15 1 0.05

TOTAL 1.00 2.3 0.92

Key Internal Factors Retrenchment Liquidation

STRENGTH: Weight AS TAS AS TAS

Fords rouge centre in Dearborn. 0.04 - - - -

Weekly Half day sessions to developstrategies

0.05 - - - -

Ford as an affordable brand name. 0.05 2 0.10 1 0.0591% market share in big three trucksegment.

0.07 3 0.21 1 0.07

MAZDA, Sole manufacturers in gasoline,diesel and internal combustion engine.

0.07 - - - -

Innovation 0.06 3 0.18 1 0.06

Acquisitions by Ford 0.04 - - - -

Faster Rate of production 0.06 3 0.18 1 0.06

Worlds largest finance company. 0.05 2 0.10 3 0.15

Providing know how about spare parts. 0.05 - - - -Car of the year S-Max 0.04 - - - -

8/7/2019 FORD FINAL

38/38

QSPM STRATEGY:

Retrenchment will be the optimal strategy for the Ford motors.

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