Ford Motor Solution
IBM4811 International Strategic Management
Case: Ford Motor Company
I. Strategic Profile Company overview: Ford Motor Company is one of the largest automobile manufacturers in the world which Henry Ford is the founder. The company manufactures and distributes automobiles in over 200 markets across six continents. The company’s strong brand portfolio gives it a significant competitive advantage. However, less vehicle production in developed markets would reduce demand for the company’s products, and have negatively impacting its financial performance.
The Situation Analysis The US auto market was saturated, faced the decrease in product demand and increased competition from foreign manufacturers. Japanese cars such as Toyota, Nissan, and Honda had come and took market share in US market. Because of the rising gasoline price, the demand of customers had shifted from US manufacturers to more fuel efficient car like Japanese car. The economic downturn in US had also affected Ford to face loss. These made Ford sales decrease. Then, Ford has to reduce the cost. Ford has lay off workers, close assembly plants, reduce vehicle models, and restructuring plan. Ford reduced the number of retail outlets from almost 4,400 to 3,424. GM reduced its dealer to 4,500 and Chrysler reduced to 2,311. Most of Ford’s cuts were from larger metropolitan markets and the elimination of the Mercury brand. Also, cut approximately 35% of its Lincoln dealers. Ford also implements ONE Ford plan and its mission is ONE Ford, ONE Team, ONE Plan, and ONE Goal. In order to increase sale, Ford has develop marketing strategy by provide large amount of information about the car such as price, quality and style on the internet for the customers to access to those unlimited information to compare products and choose the vehicles that meet their needs.
The General environment
Economic: Economic crisis in 2006 that affected all the auto industry. Many of the company had to bankruptcy or close the
Case: Ford Motor Company
I. Strategic Profile Company overview: Ford Motor Company is one of the largest automobile manufacturers in the world which Henry Ford is the founder. The company manufactures and distributes automobiles in over 200 markets across six continents. The company’s strong brand portfolio gives it a significant competitive advantage. However, less vehicle production in developed markets would reduce demand for the company’s products, and have negatively impacting its financial performance.
The Situation Analysis The US auto market was saturated, faced the decrease in product demand and increased competition from foreign manufacturers. Japanese cars such as Toyota, Nissan, and Honda had come and took market share in US market. Because of the rising gasoline price, the demand of customers had shifted from US manufacturers to more fuel efficient car like Japanese car. The economic downturn in US had also affected Ford to face loss. These made Ford sales decrease. Then, Ford has to reduce the cost. Ford has lay off workers, close assembly plants, reduce vehicle models, and restructuring plan. Ford reduced the number of retail outlets from almost 4,400 to 3,424. GM reduced its dealer to 4,500 and Chrysler reduced to 2,311. Most of Ford’s cuts were from larger metropolitan markets and the elimination of the Mercury brand. Also, cut approximately 35% of its Lincoln dealers. Ford also implements ONE Ford plan and its mission is ONE Ford, ONE Team, ONE Plan, and ONE Goal. In order to increase sale, Ford has develop marketing strategy by provide large amount of information about the car such as price, quality and style on the internet for the customers to access to those unlimited information to compare products and choose the vehicles that meet their needs.
The General environment
Economic: Economic crisis in 2006 that affected all the auto industry. Many of the company had to bankruptcy or close the