[Strategic Management]

Final Exam (Ford Case)

Name: - Hazem Ahmed Aissawy To Dr.:- Amal Asfour

4th Form Diploma A

Read carefully Pepsico case study and Ford case study choose one case then answer the following questions:

1. 2. 3. 4. 5. 6. 7.

Evaluate vision and mission statement Make the companys environmental scanning Try to put their long term objectives Try to put the best strategies to achieve their goals Find the differences between the following; Strategic plan, strategies Modern types of strategies, give examples about these modern types

FORD
Introduction:The Ford Motor Company (NYSE: F) is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford discontinued the Mercury brand at the end of 2010. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the second largest automaker in the U.S. and the fourth-largest in the world based on annual vehicle sales, directly behind Volkswagen Group. At the end of 2009, Ford was the third largest automaker in Europe (after Volkswagen and PSA Peugeot Citron). Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. Despite the adverse conditions, Ford ended 2009 with a net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker.

Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three.

-Q1 Evaluate vision & mission statement

Vision:To become the world's leading Consumer Company for automotive products and services. Mission:We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We anticipate consumer need and deliver outstanding products and services that improve people's lives. One Team: People working together as a lean, global enterprise for automotive leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier, union/Council, and Community Satisfaction. One Plan: Aggressively restructure to operate profitably at the current demand and changing model mix. Accelerate development of new products our customers want and value. Finance our plane and improve our balance sheet. Work together effectively as one team. One Goal: An exciting viable Ford delivering profitable growth for all.

-Q2 Make the companys environmental scanning

SWOT analysis:STRENGHTES
It is the fourth large automaker in the world. Ford has good market share in Europe.

WEAKNESS
Ford sold the UK based Jaguar and Land Rover companies and brands to Tata Motors of India in March 2008.

Ford occupied seventh rank American based company in 2008 Fortune 500 list. Ford received initial quality survey award from J.D Power and Associates in year 2007. Manufacturing facilities in more than 30 countries. Ford motors sales better quality vehicles. Sell vehicles in majority of countries. with Suzuki and Isuzu Motor

The company sales are dropped in 2008 as compared to year 2007. Ford fired number of employees due to outsourcing. Firestone Tire recalls caused Stock Price to bear 14.70, Lowest in Years. Due to the diversity factor, it might lose focus on some lines.

Alliances Companies

Technological Alliances with Toyota and Honda Motor Companies.

OPPORTUNITES
Produce fuel efficient Cars in the upcoming years. Produce Hybrid cars in upcoming years.

THREATS
Rapid changes in fuel prices. Government regulation outside US.

Invest on electric, hybrid and solar energy Vehicles. They have a change to become more environment friendly company. Enter into the Asian market.

Long lasting recession in majority of countries. Hard competition from other motor vehicle companies like Toyota, TATA motors and etc. Variation in currency rates. Threats of substitutes

Joint ventures with other major competitors to combat recession. Initiate manufacturing operating in low cost countries. Giving more charities

Due to the recession ford face tough time to please its investors and employees.

Q2- Prepare competitive profile Matrix for Ford Co. Competitive profile matrix is an essential strategic management tool to compare the firm with the major players of the industry. Competitive profile matrix shows the clear picture to the firm about their strong points and weak points relative to their competitors. The CPM score is measured on basis of critical success factors, each factor is measured in same scale mean the weight remain same for every firm only rating varies. The best thing about CPM that it includes your firm and also facilitates to add other competitors make easier the comparative analysis. The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue. The term automotive industry usually does not include industries dedicated to automobiles after delivery to the customer, such as repair shops and motor fuel filling stations. In 2007, worldwide production reached a peak of 73.3 million new motor vehicles. In 2009, production dropped 13.5 percent to 61 million. Sales in the U.S. dropped 21.2 percent to 10.4 million units; sales in the European Union (supported by scrapping incentives in many markets) dropped 1.3 percent to 14.1 million units. China became the world's largest motor-vehicle market, by both sales and production. Sales in China rose 45 percent in 2009 to 13.6 million units. In 2010, world markets mostly recovered. With 18,061,900 vehicles sold in 2010, China established a new world record, previously held by the U.S.A. with sales of 17.4 million units in 2000

In the US market we can detect main 4 big companies (GM, TOYOTA, FORD & CHRYSLER), the below chart shows the US market distribution.

Based upon the above SWOT analysis we can detect some important factors affect the automotive industry.

CPM:GM Factors Price Financial Position Quality Safety Weig ht 0.2 0.09 0.19 0.23 Ratin g 2 2 3 2 Scor e 0.4 0.18 0.57 0.46 TOYOTA Ratin g 3 3 4 3 Score 0.6 0.27 0.76 0.69 FORD Ratin g 4 2 3 4 Scor e 0.8 0.18 0.57 0.92 CHRYSLER Rati ng 1 2 3 2 Scor e 0.2 0.18 0.57 0.46

After sales Market Share Technology Customer Loyalty Entertainment Total

0.15 0.02 0.035 0.025 0.06 1

2 1 1 3 1

0.3 0.02 0.035 0.075 0.06 2.1

4 4 4 4 4

0.6 0.08 0.14 0.1 0.24 3.48

3 1 3 1 3

0.45 0.02 0.10 5 0.02 5 0.18 3.25

2 3 3 2 2

0.3 0.06 0.10 5 0.05 0.12 2.05

Q4 - Companys strategic objectives for the next five years

Our Strategy: Blueprint for Sustainability To respond to the risks and opportunities posed by the climate change issue, our long-term strategy is to contribute to climate stabilization by: 1- Continuously reducing the greenhouse gas emissions and energy usage of our operations. 2- Developing the flexibility and capability to market more lower-GHG-emission products, in line with evolving market conditions. 3- Working with industry partners, energy companies, consumer groups and policy makers to establish an effective and predictable market, policy and technological framework for reducing GHG emissions. An easy way to remember the characteristics of a good objective is the acronym, "SMART." It stands for "Specific, Measurable, Achievable, Realistic and Time-Bound." When identifying objectives as part of an exercise in preparing a project design or proposal, use the SMART acronym as a check list, to see if the objective is a good objective. (Making sure each objective begins with the word, "To.") The objectives must be derived from, and consistent with, the intention of the identified goals. The objectives of a project should be "SMART." They should be:

Specific: clear about what, where, when, and how the situation will be changed; Measurable: able to quantify the targets and benefits; Achievable: able to attain the objectives (knowing the resources and capacities at the disposal of the community); Realistic: able to obtain the level of change reflected in the objective; and Time bound: stating the time period in which they will each be accomplished. If we take a look on many different issues in the SWOT analysis for ford Co. we can see some important points (weaknesses and threats) in which the firm should take care of, so we can conclude some objectives for Ford trying to meet them along the next five years:1- Increase market share than 18%: - As we can see that Ford is number three in the US market share with 15 % only and comes after GM (18.8%) and TOYOTA (16.9%) which become to gain market share from GM & Ford in the last years , so here we can put some way to measure or compute this objective saying that Ford should gain at least 1% market share in each year in which it can equal to GM or at least gain some of TOYOTA market share. 2- Gain profit not less than 15$ Million:- Looking to the last Income statement (31/12/2009) we can see that Ford gain around 2.7$ Million as a net income comparing with the previous year (31/12/2008) with net loss around 14.7$ Million , so in order to meet this objective Ford should gain profit not less than 3$ Million in the next incoming five years.

Q5 differences between the following Strategic plan & strategies

Strategic management deals with the determination mission, vision, goals, objectives, values, roles and responsibilities of the organization. It helps the organization to determine the strategic goals which a company wants to attain in future. On the other hand, Strategic planning is the management tool and it is the process in which the organization focuses its energy to attain those goals. In the strategic planning the organization plans that how the members will attain the organization's goals for example what the organization will do and how to do. Therefore, strategic planning and strategic management are closely related.

Q6 Modern types of strategies

Stakeholder focused performance management SFPM(c) delivers a complete process for ensuring business sustainability. SFPM achieves this by providing a structured approach to strategy planning, strategy implementation, performance measurement and feedback. SFPM comprises three core components. Strategy Identification, Process design and performance measurement. SFPM is unique, because it provides a balanced scorecard in which all stakeholders are included in the strategy design, process design and performance measurement. These stakeholders include customer, shareholder, community, employees, environment, partners and vendors and the government. SFPM then establishes for each stakeholder what their expectations are and what our expectations of each stakeholder are (in the form of contributions). Once these expectations and contributions are established, performance measures can be created and actual performance measured. SFPM then goes further by linking initiatives identified from performance reviews to individual projects and from there to individual tasks.

Mulcaster's Managing Forces

identifying 11 forces that should be incorporated into the processes of decision making and strategic implementation. The 11 forces are: 1. Time 2. Opposing forces 3. Politics 4. Perception 5. Holistic effects 6. Adding value 7. Incentives 8. Learning capabilities 9. Opportunity cost 10. Risk

11. Style

Henry Mintzberg (1988) looked at the changing world around him and decided it was time to reexamine how
strategic management was done. He examined the strategic process and concluded it was much more fluid and unpredictable than people had thought. Because of this, he could not point to one process that could be called strategic planning. Instead he concludes that there are five types of strategies. They are:

Strategy as plan - a direction, guide, course of action - intention rather than actual Strategy as ploy - a maneuver intended to outwit a competitor Strategy as pattern - a consisyent pattern of past behaviour - realized rather than intended Strategy as position - locating of brands, products, or companies within the conceptual framework of consumers or other stakeholders - strategy determined primarily by factors outside the firm Strategy as perspective - strategy determined primarily by a master strategist

Also Mintzberg (1998) developed 10 schools of thought. These 10 schools are grouped into three categories. The first group is prescriptive or normative. It consists of the informal design and conception school, the formal planning school, and the analytical positioning school. The second group, consisting of six schools, is more concerned with how strategic management is actually done, rather than prescribing optimal plans or positions. The six schools are the entrepreneurial, visionary, or great leader school, the cognitive or mental process school, the learning, apative, or emergent process school, the power or negotiation school, the corporate culture or collective process school, and the business environment or reactive school. The third and final group consists of one school, the configuration or transformation school, an hybrid of the other schools organized into stages, organizational life cycles, or episodes.

Strategic Mobilization
In the Strategic Mobilization activity the team is introduced to the organization and begins the initial direction setting for the program. They also begin to take the sample deliverables and modify to reflect some of the key systems and processes. This helps the organization more easily understand the approach by conveying concepts in a familiar language.

References http://www.open-sustainability.org/wiki/Strategic_Mobilization http://www.tceq.state.tx.us/publications/pd/020/07-03/blueprintforsustainability.html http://www.google.com.eg/#hl=en&biw=1021&bih=618&q=ford+swot&aq=0sv&aqi=gsv1g-v4g-b1&aql=&oq=ford+swat&fp=aa2c31e66ea55e26

http://usnews.rankingsandreviews.com/cars-trucks/rankings/