Ford case study: Developing a new strategy

Résumé du document

Ford Motors Company has been founded in 1903 by Henri T. Ford and 11 associates.Over the years, the company developed and expanded its automotive activities (design, development, manufacture, sale and service of cars and trucks). The Company had the credit in financing a wide variety of automotive products through automotive dealers to Europe during the 1960s and then to China between 2002-2003. But, by 2006, because of huge loss ($12.7 billion), the top management of Ford decided to start the "Way Forward Plan", which dealt with factories shut down, a focus on the main activities of the company, and also on innovations, in order to reduce costs and minimize losses.

Nowadays, Ford is still one of the Big Three Companies, i.e. the three main cars and trucks manufacturers in the US (with General Motors and DaimlerChrysler). Ford's brand portfolio has been reduced overtime: now, it comprises only Ford and Lincoln, since it stopped the production of the Mercury luxury cars in the year 2010. However, the company is still losing money: in 2009, Ford's total revenues suffered from a loss of $19 billion. That is why there is a strong need to adapt to the - then strategy of Ford, in order to be as successful as in the old times.

Extraits

[...] any customers would ask for having any extras possible. They wanted a personalized product, which means uniqueness and quality. But in the present and the close future, people want a product that is as cheapest as possible, but still a bit related to their personality. They now want price over uniqueness, in order to keep enough money to buy other commodities. But how can Ford achieve the cost advantage? We need to reduce costs, to fix lower prices, and so to have a strong competitive advantage. [...]

[...] Indeed, almost every company in this industry sells its products on a global scale. It permits first to take benefit from new markets, so more clients. Besides, because of a strongest need of movement all over the world, the demander is higher and higher. However, competitors are many in this sector, and their threat is not to be taken as weak. Some competitors in emerging markets are offering cheaper and competitive products, such as Tata Motors, in India. But, is the automotive industry a globalized one? [...]

[...] For those two, we can put in place the same strategy, being the leader of the market because to we have to sell a lot of cars. So, the automobile industry is a hybrid industry, between a volume and a specialized industry, where the attractiveness is based upon the high volume of demand. Developing the new strategy RESOURCES-BASED APPROACH The Resource-Based Approach considers the firm's resources and capabilities as the principal basis for its strategy and the primary source of its profitability. [...]

[...] Therefore, Ford had to face a loss of 10% of its revenues. Moreover, the company has several financial plans and a stock volume of more than 24 thousand shares. b. Physical resources: Ford is already present on 137 markets, and its production activities present in the countries showed by the map below. Intangible resources: a. Reputation: Ford enjoys of a very good reputation and is internationally known. Indeed, since a few years, the brand is associated to the American dream, which is very positive in the United States and allows us to enjoy a very prestigious corporate image. [...]

[...] Sport car This segment is a small niche. Just to know, the biggest market for sport cars is the German one. This segment's leader is: General Motors Corporation, with over a quarter of all sales with its Tigra Model. Family car Finally, this segment is, as well as the executive cars' segment, a very small segment, with only 10% of the market. One of the dominant players is: Citroën. STRATEGIC ENVIRONMENT This stage is to determine if our industry (the automobile one), is a fragmented, a volume, a stalemate or a specialized industry. [...]