Ford Motor Company 2007

I. Time of context/period
1903 Present
II. Summary
Ford Motors is one of three leading automotive manufacturing companies in the
United States. Based in Michigan by Henry Ford. General Motors, Ford and Chrysler was
crunched by competition from foreign manufacturers such as Toyota and Honda. In 1999,
Ford acquired the Swedish Volvo model in an attempt to compete in the foreign market and
expand to other regions. Furthermore, Ford launched a full re-engineering business
process plan called Ford 2000 aiming at reestablishing the companys infrastructure. Ford
Motor Company is a comprehensive business policy and strategic management case that
includes the companys fiscal year-end financial statements, competitor information and
more. The case time setting is 2007. In 2007 the problem for the industry have risen,
however the industry found itself to be severely over capacity and experienced a downward
trend in its performance. Sufficient internal and external data are provided to enable
students to evaluate current strategies and recommended a strategic plan for the company
for the next three years. Ford founded in 1903 and operates worldwide, the company is led
by CEO William Ford Jr. and employees over 280,000. The slowing company, an increase
in the fuel price the revenues were split as automotive and financial, and the firm major
competitor is General Motors. If Ford had to live up to its founders vision of providing the
customer with the right product at the right time and at the right price, then it had to
radically change its strategy and revive its legacy as a great company. The turnaround was
tough and the senior executives of Ford Motor Company. The business strategy for Ford
was to compete in the market with its own chain multi-tiered suppliers and dealer network.
With globalization and much more nimble completion from Asian manufacturers, this
approach of managing vertical silos was no longer an option. Ford needs a strategy
centered on a newer concept that aims to take the complexity out of the supply chain, and
enhance information progression in a multitude of ways. Business could not viewed as a
sequential process similar to an assembly line anymore. Fords former business model
centered on coming up with ideas, studying those ideas, obtaining full approval for the
ideas, and understanding how to staff and evaluate the business result. The speed to
 market and responsiveness to consumer needs became the critical factor and success
enabler. As part of its initiative Ford realized that in order to gain benefits from its suppliers,
it should share its knowledge with its suppliers, provide suppliers with tools and technology
enable them improve supplier quality at lower prices. Ford initiated the Automotive
Exchange along with its competitors General Motors and Chrysler. Ford is the most
financially sound in American car manufacturer and possesses enough cash on hand to
continue operations through fiscal year 2007. Ford runs distribution centers and
warehouses, engineering research and growth facilities, sales offices and manufacturing
facilities in North America, Asia and other countries. The company also conducts
automobile rental and hiring activities, auto funding and other relating activities.
Mission
Ford motor company describes itself as a company that is passionately committed
to providing personal mobility for people around the world. We anticipate consumer need
and deliver outstanding procedures and services that improve peoples lives.
Vision
To become the worlds leading consumer company for automotive products and
services
II. Objective/s
To stabilize the climate by considering reducing long-term emission
To develop an infrastructure that expands the use of biofuels and reduce dependence on oil
To develop, implement and operate a centralized logistics network for Ford
To provide Ford with real-time supply chain and financial visibility
III. Central problem
How would the Ford Motor Company to gain more or improve their sales for the
company to keep their customers trust?
IV. Areas of Consideration (SWOT Analysis)
Weakness
Strength 1. High cost structure
1. Producing hybrid vehicles 2. Low quality of new products
2. Brand recognition 3. Bad management of the company
3. Profitable financial services division (Ford 4. Low exposure to Asia Pacific
Motor Credit) 5. Weakening North American automotive
4. Manufacturing facilities in more than 30 operations
countries 6. Sales of trucks decreasing rapidly
 5. Wide range of products targeting all
customer classes
Opportunities Threats
1. Global expansions 1. Competitions
2. Consumers demand hybrid and fuel efficient 2. Public transportation
vehicles 3. Increase in steel and resin prices
3. Increase in consumer spending trends 4. Increase gasoline prices
4. Consumers demand more innovative 5. Increasing mortgage rates
vehicles 6. Loss of market share
5. Industry experiences slow and steady growth 7. Fortuitous events
6. Exploring new alternative fuels

V. Alternative courses of action

ACA Advantage Disadvantage
1. Produce a hybrid and More competitive to other Additional research and
fuel efficient vehicles foreign automakers. development cost
Regain their sales in the future. Decrease in revenue
Recovery of losses. Its too expensive.

2. Direct order from Centralized control. Discretionary product

customer and Increase in revenue. purchase w/o physical
delivery through More responsive customer. product.
dealership. Decrease in revenue.

Less disruption to the business. Large integration efforts.

3. Stop reducing the Decrease in revenue.
Earn more profit
sales of rental car Divesting of non-core areas
Recovery of losses.
agencies

VI. Recommendation/Strategy formulation

I, therefore, conclude that the best solution to the problem is the alternative course
of action #1 which is the produce a hybrid and fuel efficient vehicles in the Ford motor
company to be more competitive to other foreign automakers. The price of fuel has been
rising, which has encouraged the adoption of hybrid and other fuel-efficient models. This
alternative course of action may result to regain their sales in the future and may recover
their losses. It may cause an additional research and development cost and because it is
too expensive, it may decrease their revenue. And they must also focus on producing the
highly fuel efficient engines of other car models.

VII. Plan of Action

 1. In the 1st quarter the Ford motor company must focus on those countries where they
are gaining profit.
2. On the other hand, in the 3rd quarter the Ford motor company should improve their
services in those countries where they are not very known and improve also the
environment-friendly fuel worldwide.
3. Next, in the 5th quarter they must take advantage of new technologies to reduce cost
reaching customers.
4. Then, in 6th quarter the Ford motor company should show to customers that they will
not go to stop providing good qualities cars to them.
5. Afterwards, in the 8th quarter the Ford company should also improve their rental car
agencies for extra profits.
6. And lastly, in the 10th quarter they should use a known endorser and the delivery must
have a good speaking technique to gain customers trust.
VIII. Potential problem
1. What if the Ford motor company instead of gaining and improving their sales it happens
contrary?
2. What if producing a hybrid and fuel efficient vehicles did not satisfy the taste and
preference of the customers?
3. What if other companies are already offering the hybrid and fuel efficient vehicles in the
market?
IX. Contingency plan
1. The Ford motor company should increase effective and high-profile advertisements to
attract the consumers.
2. The Ford motor company should continue to invest in its producing products that shows
that the company is being social responsibility to the community and the environment that
may satisfy the consumers to the future.
3. The Ford motor company should in innovating and creating new ideas and continue to
improve and develop new products that other competitors have not done to meet
consumer demands.