Jiangxi, PR China

International Masters in International Business (IMIB)School of International Trade & Economics (SITE)

Presentation on:

Course Title: International Enterprise Management

Strategic Management & Competitiveness of

Ford Motor Company

3

Presented by:

1. BAY, Abdul Gafur (Mozambique) 31540047

2. RAHMAN, Mohammad Tawhidur (Bangladesh) 31540051

Presented to:

Ms. LI Yuhua

Date: 18 March, 2016

Ford History: at a glanceThe Ford Motor Company is an American multinational automaker headquartered in Dearborn, Michigan. It was founded by Henry Ford in 1903.

Type Public company

Headquarter Dearborn, Michigan, U.S.

Area served Worldwide

ProductsAutomobilesLuxury VehiclesCommercial VehiclesAutomotive parts

4

4

5

Logo Evolution

5

Old Model Vehicles

6

6

Organizational Structure7

Very Complex structure fairly mechanistic in nature Rigid departmentalization Low span of control High Centralization

ChairmanPresident & CEO

Executive V.P and

CFO

Executive V.P and

CTO

Executive V.P. of

America

Executive V.P. of Europe

Group Vice Presidents

and President of Asia Pacific

William Clay Ford, Jr., great grandson of Henry Ford, serves as the Executive Chairman at the board of Ford Motor Company.

Key Persons88

Mark Fields, serves as the President and Chief Executive Officer of Ford Motor Company.

9

9

Vision, Mission

People working together as a lean, global enterprise to make people’s lives

better through automotive and

mobility leadership.

MISSIONMISSIONVISIONVISION

Values

People

Products

Profit

Organizational Culture

10

Objectives 11

12

The Ford World Headquarters in Dearborn, Michigan, also known as the Glass House

Ford's Dunton Technical Centre in Laindon, United Kingdom, the largest automotive research and development facility in the UK

The Ford Research Center in Aachen, Germany

Ford Motor Co.’s investments in China include a plant in Nanjing.

Global Operations12

SWOT AnalysisStrengths Weaknesses1. US market position2. Financial performance3. ECOnetic approach4. ONE Ford approach5. Growth in China

1. High cost structure2. Unprofitable Europe operation3. Low exposure to Asia Pacific

Opportunities Threats1. Green vehicles2. Increasing fuel prices (hybrid

cars)3. New emission standards4. Strategic partnership

1. Decreasing fuel prices (regular vehicles)

2. Rising raw material prices3. Instances competitions4. Fluctuating exchange rates

13

US Market Share

Internal Analysis15

Internal Analysis: Strengths Producing hybrid vehicles Brand recognition Profitable financial services division

(Ford Motor Credit) Manufacturing facilities in more than

30 countries Wide range of products targeting all

customer classes

16

Internal Analysis: Weaknesses

Weakening North American automotive operations

Sales in trucks decreasing rapidly Firing of employees

17

18

New Model Vehicles

2016 Ford Escort Redesign 2016 FLEX

2016 F-150 2016 LINCOLN MKC

19

External Analysis: Opportunities

Global expansion. Brand building

o Better quality vehicleso Better safety ratingo Convenience features

Consumers demand hybrid and fuel efficient vehicles. Increase in consumer spending trends. Consumers demand more innovative vehicles. Industry experiences slow and steady growth. Exploring new alternative fuels.

20

External Analysis: Threats

Low-cost manufacturersoChinese Auto Makers (Greely, SAIC)

Increase public transportationoBusoRailway (Metro)

Weak USD Increase in steel and resin prices. Increase gasoline prices. Stricter CO2 emission standards. Increasing mortgage rates. Loss of market share.

21

External Analysis: Porter’s 5 Forces Model

Threat of Substitutes

Threat of New Entrants

Bargaining Power of Buyers

Bargaining Power of Suppliers

High:• Chinese Auto Industry

High:• To many models and

options

High:•Alternative Fuels•Modes of Transportation•Customer Loyalty

Low:• Option for Outsourcing

to low-cost destinations• Forward Integration

Industry Rivalry

High:• Numerous competitors • Low switching costs

22

Environmental Analysis• Reduce CO2 Emissions• Clean diesel fuel technology

– BLUETEC – reduce nitrogen oxide levels• Reuse of car components

23

Toyota, Honda, and Nissan have grown in market share largely as a result of their ability to deliver better products at lower prices, particularly for more fuel efficient smaller vehicles.

Toyota has High Quality, High Safety Ratings (NHTSA)-5

star ratings Streamlined operations with similar models

globally Hybrid models across all segments

Ford has been more successful than both GM and Chrysler in reducing legacy costs.

Competitive Analysis

24

General Motors (GM): Focusing on emerging markets Researching Alternative Fuels:

Chevy Equinox Fuel Cell Plans to develop 12 hybrid models

Implementing the new “Tru-Flex system”

Competitive Analysis (cont.)

25

Competitive Advantage Cost Advantages:

low production cost cut down of huge expenditure on raw materials the online manufacturing process

Differentiate Advantages: production of smart cars with fuel efficiency centralized decision making system. increased market share. Ford SYNC - fully integrated communication and

entertainment system

Value Chain Analysis

General Administration –It should use high level of information system to make strategic and routine decisions.

HR Management – Strong management with continuous evaluation process.Healthy relation with labor union.

Technology and Systems – use the high-tech information technology to integrate suppliers.

Procurement – Minimize dependence on a single supplier. Leveraged strong buyer power into timely, low-cost, and high quality of raw materials. Strong long lasting relationships with suppliers and efficient inventory management.

Inbound Logistics•Efficient inbound warehousing system•Quality inspection at supplier level

OperationsHigh level of automation.

Outbound Logistics•Reduce delivery time•Increase efficiency of finished product warehousing

Marketing and Sales•Develop Quality•Increase brand loyalty•Increase demand creation

ServiceHigh level of service to after sales customers

Marg

in

Margin

Primary Activities

Supp

ort A

ctiv

itie s

26

Strategy Implementation ‘ONE Ford’ strategy Friendly competition ‘Less is More’ new approach Reduction of complexity Creating a new corporate culture A shift toward smaller and more fuel-

efficient cars Globalizing the Ford brand

27

‘One Ford’ Approach One team

People working together as a lean, global enterprise for automotive leadership

Measured by customer, employee, dealer, investor, supplier, council and community satisfaction

One goal An exciting viable Ford delivering profitable growth

One plan Aggressively restructure to operate profitably at the

current demand and changing model mix Accelerate development of new products customers want

and value Finance plan and improve balance sheet Work together effectively as one team

28

‘Less is More’ New Approach

The ‘Bigger is Better’ worldview defined ford for decades

Replaced with a new approach: ‘Less is More’ Cut costs Transform the way it did business than

to measure market share

29

New Corporate Culture Structural and procedural changes

Executives meet with CEO every week ‘We are actually committed to hitting the

numbers.’ Team working

Senior executive reorganization Report directly to CEO

30

Cost Advantage (A shift toward smaller and more fuel-efficient cars)

Oil prices persistently increasing over the last few years A dramatic change in consumer’s car buying habits,

reducing the demand for large vehicles Leased cars are sold for much less than their residual

values A change in products, shifting to smaller and more fuel-

efficient cars

31

Globalizing the Ford brand Globalize the Ford brand

All Ford vehicles competing in global segments would be the same in North America, Europe, and Asia within the next five years

Deliver more vehicles worldwide from fewer platforms and maximize the use of common parts and systems Reduction of costs in the purchasing and

manufacturing processes

32

Market Segmentation

Market Segment Sub segment

FORD Motor

Sports Cars

Economic vehicles

Trucks

Buses

Cars

Racing cars

Rally cars

33

Market Segmentation (cont.)Market segmentation approaches-

34

Geographic Segmentation

-Ford aims to grab the market of UK as well as India, China,

Malaysia

Physiographic Segmentation

-FORD FIESTA comes at reasonable price

Demographic Segmentation

-FORD FOCUS aims for young people,

ladies and average income consumer

Behavioral Segmentation

-With the benefit for safety and fuel

efficiency

35

Products, Sales and Revenue

Sells broad range of automobiles under different brand names.

Strong growth in sales all over the world. Ford's total revenue amounted to around 150 million

U.S. dollars in the fiscal year of 2015.

Profit Margin Profit margin represents the percentage of

revenue that a company keeps as profit after accounting for fixed and variable costs.

36

Pre-Tax Profit 2008

5.98 Billion 2009

6.23 Billion 2010

6.12 Billion 2011

6.21 Billion 2012

6.56 Billion 2013

7.20 Billion

37

Jari-Matti Latvala driving the Ford Focus RS WRC 09 in

2010.

Ford Mustang GT (racing GT car)

Ford Performance Racing Ford Falcon V8 Supercar at Eastern

Creek in Australia in 2008.38

Ford Racing Cars38

Current Strategies Ford has a strategy on new key design Ford is beginning to use Solar energy to power

their manufacturing plants Global Electrification strategy Ford has a very strong marketing strategy as

they market all of their vehicles differently Ford is making more hybrid vehicles through the

increase use of renewable and recyclable materials

Ford is developing natural-fiber composites as a potential substitute for the glass fibers traditionally used in plastic car parts to make them stronger while reducing vehicle weight

39

Future Strategies Reduce manufacturing expenses by 15-20% Introduce new small fuel efficient vehicles Develop affordable electric car for US market Increase market share Manufacturing of new small fuel-efficient

vehicle Entering the Latin American and Asian market

with hybrids $ 20 billion Implementation of electric car in the US market

$ 13 billon

40

Future Product41

2017 ESCAPE 2017 RAPTOR

2017 LINCOLN

ConclusionIn spite of having strong competition in market, Ford is still dominating the motor industry as well as their business strategies are quite strong for sustaining in this market.

Ford Motor is well positioned in worldwide market offering consumers a variety of vehicles incorporated with new levels of quality, safety, affordability, performance and luxury that meet all the needs, all while retaining Ford legacy for great value.

42

43

43

Thank youThank you!!

References www.ford.com https://en.wikipedia.org/wiki/Ford_Motor_Company https://en.wikipedia.org/wiki/ECOnetic https://ycharts.com/companies/F/profit_margin http://www.slideshare.net/luchunjin/introduction-of-ford-

case http://www.thetruthaboutcars.com/2014/09/u-s-auto-

market-share-august-2014/ http://www.statista.com/statistics/267305/total-revenue-

of-ford/

44