PROJECT REPORT

On
STRATEGIC MANAGEMENT OF FORD MOTORS

By
UMANG MEHRA
MBA Class of 2017
Under the Supervision of
In Partial Fulfilment of the Requirements for the Degree of
Master of Business Administration Marketing & Sales
At
AMITY BUSINESS SCHOOL
AMITY UNIVERSITY UTTAR PRADESH
SECTOR 125, NOIDA - 201301, UTTAR PRADESH, INDIA

VISION STATEMENT OF FORD

People working together as a lean, global enterprise to make peoples lives

better through automotive and mobility leadership.
VISION STATEMENT EVALUATION
The company VISION STATEMENT explains, Automotive leadership is measured
by the satisfaction of our customers, employees, investors, dealers, suppliers
and communities. Thus, Fords vision statement has the following major points:
1. Global leadership: - indicates that Ford Motor Company wants to become
the top player in the international automotive market.
2. Emphasis on stakeholders: - concentrates on HR policies, as well as
corporate social responsibility strategies for employees, customers,
investors and others.
3. Lean business: - which the company already achieved through its
assembly line methods.
Thus, based on its current condition, Ford Motor Company needs to work on
growing its sales to achieve global leadership and fulfil its vision statement.
MISSION STATEMENT OF FORD
One Team. One Plan. One Goal.
MISSION STATEMENT EVALUATION
S.
NO.
1.
2.
3.
4.
5.
6.
7.
8.
9.

ITEAM

YES/NO

CUSTOMER
PRODUCT/SERVICE
MARKET
TECHNOLOGY
CONCERN FOR SURVIVAL
PHILOSOPHY
SELF CONCEPT
PUBLIC IMAGE
EMPLOYEES

YES
YES
YES
NO
YES
NO
YES
YES
YES

PROPOSED MISSION AND VISION STATEMENT

VISION STATEMENT
FORD-INSPIRE THE WAY YOU DRIVE
MISSION STATEMENT
A TEAM WITH A PLAN TO PROVIDE UPGRADED AND TECHNOLOGICALLY SOUND
AUTOMOTIVE SERVICES TO ITS CUSTOMERS.

SWOT ANALYSIS
STRENGTHS
1. Market positioning
2. Financial resources
3. ECOnetic approach
4. One Ford approach
5. Growth in Asia Market

OPPORTUNITIES
1. Green vehicles
2. Fuel efficient cars
3. New emission standards
4. Strategic partnership
5. GST
IFE MATRIX

WEAKNESS
1. High cost structure
2. Low exposure to Asia pacific
3. Does not provide financial
incentives to its dealers.
4. Downsizing
5. Declining market share in Asia
pacific
THREATS
1. Increasing fuel cars
2. Rising Cost of raw materials
3. High level of competition
4. Purchasing and selling vehicles
through E-commerce.

KEY INTERNAL FACTORS

INTERAL STRENGTHS
1. Strong and globally positioned brand
name
2. Skilled and educated human resource
base
3. One of the largest automotive firm
4. Increase in total equity and shareholder
fund
INTERNAL WEAKNESS
1. Time lost on putting the product in
market
2. Recording continuous loss (since 2006)
3. Bad management
4. Negative EPS
5. Low quality new product
TOTAL
EFE MATRIX
KEY EXTERNAL FACTORS

EXTERNAL OPPORTUNITIES
1. Demand of hybrid cars and fuel
efficient
2. Growth in spending of middle class
family
3. Innovative cars
4. Slow and steady industrial growth
5. GST

WEIGHT
S (0.01.0)
0.11
0.10
0.10
0.12

RATIN
G (14)
(3 or
4)
4
3
3
4

WEIGHTED
SCORE

.44
.30
.30
.48

0.10
0.12
0.12
0.11
0.12
1

(1 or
2)
2
1
2
1
2

WEIGHT
S (0.01.0)

RATIN
G (14)

WEIGHTED
SCORE

0.11
0.10
0.06
0.12
0.15

3
4
3
4
2

.33
.40
.18
.48
.30

.20
.12
.24
.11
.24
2.43

EXTERNAL THREATS
1. Increase in value of raw materials
2. Increasing gasoline price
3. Pollution emission
4. Increasing mortgage rates
TOTAL

0.12
0.12
0.12
0.10
1

(1 or
2)
2
4
3
1

.24
.48
.24
.10
2.76

PORTER FIVE FORCE MODEL

Large no. of substitutes
Substitute: - public transport
capacity

BUYER
S

Travelling door to door often

purchase
Use car.

POWER

Over
large

HIG
H

COMPITITIVE
THREAT
OF
SUBSITU
TE

LO
W

Switching cost (high or low)

barrier
Independent supplier
investment
Common engine support
image.
Asian companies getting
Globalised.

1. MATURE
MARKET
2. PRICE WAR
3. LARGE NO. OF
COMPITITORS

MEDIUM

SUPPLIER
S POWER

LOW

high entry and exit

land, labour,
supplier and brand

THREAT
OF NEW
ENTERE
NT

PESTLE ANALYSIS OF FORD

POLITICAL and LEGAL FACTOR
The following are the political factors significantly affecting Ford:

Governmental support for technological innovation (opportunity)

Increasing international trade agreements (opportunity)
Increasing governmental effort for infrastructure in developing countries
(opportunity)
Political climate in different countries producing buying automobiles
regarding policies on import, export and manufacture of automobiles and
automobile components. This will also include policies on allowing setting
up of manufacturing plants by foreign companies.
Stability of governments. This may affect the future conditions in a
country.
Taxation policies will also affect all the firms.
Industrial policy, tariff policy will also determine the strategy of each firms
in industry.
Political and legal environment could be understood as pre liberalization
and post liberalization of economy.
Indian government coming out with GST very soon will be another factor
to be taken into consideration.

ECONOMIC FACTOR

Economic conditions prevailing in India will affect the entire firm in the
industry.
Here for a car manufacturing company, as a costlier product and target is
higher income family and middle class family with high income, income
level of India, income and assets distribution will determine the customer
base for each car making company.

Apart from it various economic policy of Indian government and RBI will
also affect all the firms in the industry in same way.
Indian government coming out with GST very soon will be another factor
to be taken into consideration.

SOCIAL FACTOR
Lifestyle and preferences of people that impact their choice of types of cars.
Social norms that impact the decision to own and use automobiles versus other
means of transport.
Socio cultural environment will have impact on the marketing Mix of the firms
also.
TECHNOLOGICAL
Increasing innovations in technology will always going to affect whole industry.
Some innovations are as following
a. Fuel efficiency
b. Hybrid cars
If Ford can comes up with above two then it will Crete pressure for other firms in
the industry.
Increasing role of innovations and improved technology is important and this
can be gained through research and development and it will affect most firms in
the industry.
Anti -Pollution Pressure and implementation of euro norms and Bharat norms
have made firms to change their technologies to which are fuel efficient and
concerned for environment.
ENIVIRONMENTAL FACTOR

Availability of natural raw materials is the major issue for auto

mobile industry and it affects all the firms in the industry.
Apart from it increasing global warming is also a major problem and
All car manufacturing have to take into account all pollution related
regulations of government which applies to all firms.
Apart from it, Anti Pollution Pressure and implementation of euro
norms and Bharat norm have created problems in auto mobile
industry.
Many technologies have been developed and due to natural factors
following new ways are developed which firms may have to adapt
with passage of time, which are as following.
i.
Use of eco friendly cars
ii.
Use of alternate bio fuels and CNG and Electricity run
automobiles.

STRATEGIC GROUP ANALYSIS

A strategic group is in a country consists of those firms which has

similar combination of strategies to compete.
Strategic Group is likely to be more in auto mobile industries where
there is a great difference between product lines of firms, especially in
terms of pricing.
The rivalry among the firms within a Group is far greater than the intergroup rivalry.
On the customers part, there can be a shift from one group to another,
especially when upgrading to a more expensive automobile, the firms
effectively compete for customers in different market segments on
their parts.
In automobile industry following strategic groups can be formed.
i.
Strategic groups based on price competition.
Here mainly competition in same market segment takes place where
customers are more price sensitive.
For example, FORD competing with Maruti-suzuki, Fiat & Chevrolet
because their target customers in the Indian market are broadly
similar and they focus mainly upon the pricing strategy.

ii.
Strategic groups based on comfort and luxury with high pricing.
For example, Ford does not compete with Ferrari, but it does, in some
segments, with BMW, Audi & Mercedes.
This is because Fords more expensive and less mass-market range
of cars are in similar segments with BMWs lesser expensive, more
mass-market cars. So a Ford Focus would compete with a BMW 1Series and not a BMW 7-Series as the target customers.

VALUE CHAIN ANALYSIS OF FORD

Critical
Success
factors

Weight
Weight
Weight
Weight
Weig Rati ed
Rati ed
Rati ed
Rati ed
hts
ng Score ng Score ng Score ng Score
0.0 to 1 to
1.0
4

1 to
4

1 to
4

1 to
4

Global
Expansion 0.14

0.28

0.42

0.28

0.42

Financial
Position

0.10

0.2

0.4

0.3

0.3

Growth

0.16

0.16

0.48

0.16

0.64

US Market
Share
0.20

0.6

0.8

0.4

0.4

0.45

0.36

0.21

Customer 0.15 4
0.6
3
0.45
4
0.6
General Administration It should use high level of
Loyalty
information system to make strategic and routine
Hybrid/Fue
0.54
3
0.54
2
0.36
decisions.0.18 3
l Efficient
HR Management Strong management with
Vehicles
continuous evaluation process. Healthy relation
Managem
0.07
3
0.21
4
0.28
3
0.21
with labour
union.
ent
Technology and Systems use the high-tech
Experienc
einformation technology to integrate suppliers.
Procurement
dependence3.37
on a single 2.31
Totals
1 Minimize
2.59
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

Operations
High level of automation

Outbound Logistics
Reduce delivery time
Increase efficiency of finished product
warehousing

Outbound Logistics
Reduce delivery time
Increase efficiency of finished product
warehousing

Marketing and Sales

Develop Quality
Increase brand loyalty
Increase demand creation

2.78

CPM MATRIX
VOLKSWAGE
FORD
TOYOTA
GENERAL
N MOTORS

TOWS MATRIX OF FORD

FORD

OPPORTUNITIES
Customers
demand for more
fuel efficient cars
Fords investment
in the Solar Power
industry
The Way Forward
Plan
The European and
Chinese markets
Release of the
2011 Ford Fiesta
THREATS
Rising new
material prices
Increasing
competition
The war on
terrorism and its
overall threat to
the world market
and economy
The economy
Rising oil prices

STRENGTH
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
SO
Continue
marketing and
research &
development of
hybrid cars(S1,O1,
O2)
Consolidate more
in European and
Chinese markets
(S4, O4)

WEAKNESS
Weakening North
American
automotive
operations
Recalls
Sales in trucks
decreasing rapidly
Firing of
Employees

ST

WT

Continue
marketing and
research &
development of
hybrid cars
(S1,T4,T5)
Improve fuel
consumption
(S1,T4,T5 )

WO

Continue
Research and
Development of
Hybrid Cars
(S1,W2)
Reduce recalls in
newer products
(W2, O2)

Increase
incentives for
customers.
Examples:
mileage
warranties
(T2,W1)
Reduce threat of
competition by
developing
flexible product
line(T2,W3)

VRIO ANALYSIS
Valuable
The Loan 23.6$b in 2006 makes Ford
survive
Electronic-cars production plan

Rare
Fordism was the first major revolution
in process technology
Efficiency managers

Imitability
Design phase
Economies of Scale
Brand Loyalty
Network of dealer.

Organization
Ford exploit cheap markets labor and
invest for advertising in China market

STRATEGIC ADVANTAGE PROFILING OF FORD

S.NO
.

CAPABILITY NATUR
E
FACTOR
OF
IMPACT

1
2
3
4
5
6

FINANCE
MARKETING
0PERATIONS
PERSONNEL
INFORMATION
GENERAL
MANAGEMEN
T

BCG Matrix

Star

Question marks
Trucks
Cars

high

Relative market share

low

SUVs

high
Cash Cows
Ind
ustr
y
Gro
w
rate
s
low

Electric car

Dogs

Grand strategy Matrix

RapidMarket
Growth

QuadrantI

QuadrantII

Weak
Competitive
Position

Strong
Competit
ive

QuadrantIV

QuadrantIII

SlowMarketGrowth

MARKET DEVELOPMENT

This strategy emphasis on

expanding markets beyond
those in which current products
are sold.
To enhance market
development, Ford needs to
understand the requirement and
culture of the new market.
The effective cost evaluation and
perfect pricing is necessary with
reference to its competitors.
Therefore primary focus is
needed to be given on the
quality in the minimum cost, in
comparison to the competitors,
to capture newer markets like
China, India, and Hongkong etc.
The market entry risk is higher;
therefore it is necessary to
understand market behaviour.

MARKET PENETRATION

Ford with the wide range of

product portfolio can look further
penetrating its current market
with its existing products.
NEW
It is persuading strategies like
One Ford' and Global Marketing'
vision to provide high quality
communication about its product
and services.
Its can further develop cost
efficiency with quality and
innovations to penetrate market
all around the world.
Due to relatively low risk involve
in this strategy, the Ford
Company can look forward to
MARKET
increase the substantial market
portfolio by introducing new
product features, competitive
pricing and technologies.
ANSOFF MATRIX
EXISTING
NEW
EXISTING

DIVERSIFICATION

This strategy means new

product to the new market.
Ford is introducing the new
products in coming year with
global vision of One Ford'.
It is introducing new small car',
plug-in-hybrids, battery powered
vehicles and many more with
smart technologies, economical
and environmental friendly.
Therefore it must consider on
cost efficiency, reliability and its
competitors activities.
Due to high risk associated with
this strategy, a great deal of
market research is needed to be
carried out before investing in
new markets.

PRODUCT DEVELOPMENT

This strategy means absolutely

new products to make them
more suitable to known market.
Ford is investing in new smaller
fuel efficiency vehicles to
achieve more balanced global
product market.
It is applying One Ford'
marketing techniques to convey
high level communication, and
expanding licensing
merchandise all around the
world to capture new markets.
Therefore, it is very essential to
ford to enhance brand imaging
to achieve competitive success.
This includes integrating
company's marketing team
members, global agencies and
suppliers.
PRODUCTS AND SERVICES

PORTERS GENERIC STRATEGY

PRODUCT DIFFERENTIATION
Differentiation is aimed at the
bread market that involves the
creation of a product or services
that is perceived throughout,
dealers, networks or customers
and increase the loyalty of buyer
product differentiation is helpful
to complete successfully.
It creates a better barrier.
Ford motor company
combinations at auto
manufacturing and financing .It
has differentiated on vehicles
development and engineering
control.

COST LEADERSHIP
This strategy emphasizes
efficiency. The products are
produced in high or mass with
economic which is available for
consumer to a very large base.
To compete with competitors the
mass production helps to lower
the cost and lead the market.
Ford motor company have to
maintain a low cost base by
controlling production cost,
increasing their capacity
utilization, controlling material
supply or product design, work
force dedicated for low cost
production, less spending on
marketing helps a company
lower the cost .which is support
for cost leadership.

FOCUS

On this strategy business firm or company concentrates on a select few

target market .It target the certain age group, class people for the better
market.
It is also called segmentation strategy or rich strategy.
A focus strategy should target market segments that are less valuable to
substitutes or where a competition is weakest to earn above average
return on investment.
FORD Motor Company designed as the new model FORD FIESTA is target
to young people and ladies. The young people that the organization
focuses on 18-25years old which are teenagers and ladies with average
income can affordable to purchase the cars.

BLUE OCEAN STRATEGY OF FORD

Fords Model T, introduced in 1908, is a classic example of a market-creating blue ocean
strategic move that challenged the conventions of the automotive industry in the United
States. It made the automobile accessible to the mass of the market.
Until that time, Americas five hundred automakers built custom-made novelty automobiles.
Despite the number of automakers, the industry was small and unattractive with cars
unreliable and expensive, costing around $1,500, twice the average annual family income.
But Ford changed all of that with the Model T.
He called it the car for the great multitude, constructed of the best materials. Although it
only came in one colour (black) and one model, the Model T was reliable, durable, and easy
to fix. And it was priced so that the majority of Americans could afford one. In 1908 the first
Model T cost $850, half the price of existing automobiles. In 1909 it dropped to $609, by
1924 it was down to $240. A 1909 sales brochure proclaimed, Watch the Ford Go By, High
Priced Quality in a Low Priced Car.
Fords success was underpinned by a profitable business model. By keeping the cars highly
standardized and offering limited options and interchangeable parts, Fords revolutionary
assembly line replaced skilled craftsmen with ordinary unskilled labourers who worked one
small task faster and more efficiently, cutting the labour hours by 60 percent. With lower
costs, Ford was able to charge a price that was accessible to the mass market.
Sales of the Model T exploded. Fords market share surged from 9 percent in 1908 to 61
percent in 1921. So great was the blue ocean Ford created that the Model T replaced the
horse-drawn carriage as the primary means of transport in the United States.
This automotive industry case study highlights the common pattern underlying successful
blue ocean strategic moves: Value Innovation. Its the simultaneous pursuit of differentiation
and low cost that allows companies to unlock new demand and create blue oceans of
uncontested market space.

BALANCE SCORE CARD

FINACIAL FACTOR: - To measure the success of a project, Ford should expect a
return on investment with ultimate goal of creating a vehicle at lowest possible
cost in order to sell them at least price. Even though the profit margin will be
less, Ford has an obligation to their respective shareholders to create a high
return on investment.
CUSTOMERS: - Customer satisfaction is key to the continuous business growth.
Ford market research prior to the releasing of their vehicle in the market can
bring insight into what the Indian public finds as a necessity in their vehicles.
Customer relation is a driving force into a success of the company and thus
creating a need to measure customer satisfaction.
INTERNAL: - The Ford motor company has an automated assembly line that
allows them to manufacture large amount of vehicles in a shorter period of time.
By better enhancing this system of production the company can increase their
overall productivity in order to meet the demand on time. R&D department will
be a major cost in this particular segment of analysis. By keeping the vehicles
simple they can use the existing knowledge to help reduce the cost of designing.
LEARNING AND GROWTH: - Company and employees are key to success in any
organization as it allows company to grow at a faster rate. By keeping employees
happy and helping those to grow personally the company can pass the money to
its shareholders. A decrease in staff turnover and increase in staff satisfaction
and Ford provides them with good incentive plans (both monitory and nonmonitory) and safe work culture for betterment of its employees.
PROBLEMS IN MEASURING PERFORMANCE

1.
2.
3.
4.

Time consuming
Lack of detailed information of market requirement
High cost of consultancy
Lack of communication

PRESENT CORPORATE STRATEGIES OF FORD

Growth strategy

Concentration Focus on quality over quantity

Vertical integration - Consumer loans and credit to dealerships through
Ford Motor Credit Company
Horizontal integration

Related Diversification Joint Venture with Aston Martin

Renewal strategy Discontinuation of brands owing to financial debts.

They are planning to discontinue FORD FIGO as they are going to launch
FORD ASPIRE in India.
Stability strategy Focus on production of fuel efficient vehicles

INNOVATION

Their one of the priority is to drive innovation in every part of our business. The industry is
rapidly evolving, and new technology is having a significant impact on our business.
They are a technology leader, providing innovations that consumers demand today while
developing affordable, accessible solutions to help meet the needs of future transportation.
Their approach to innovation is to employ an Innovation Mindset by asking questions,
challenging customs and taking intelligent risks all across the company, in every part of the
business. Innovation is driven by individuals and teams that find new ways to approach
existing problems in a quest to make the world a better place.
They are always looking ahead and developing affordable, accessible solutions to help meet
the needs of future transportation.