Ford Case Study Paper.docx

Ford Case Study Paper.docx

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FordCaseStudyPaper

FordMotorCompanyCaseStudy

AllanBrown

CynthiaHus

ShanshanLi

ZimariPerero

GraduateBusinessEssentialsFall2013

NewJerseyCityUniversity

I.Introduction

FordwasfoundedbyHenryFordandincorporatedonJune16,1903.Nowitisthesecond-largestU.S.-basedautomakerandthefifth-largestintheworldbasedon2010vehiclesales.

1.TheChallenge-TheOpportunity

Thefinancialcrisisof2008eruptedandleftUnitedStatesandEuropetosufferintoadeeprecession.Therecessionleadtovastunemploymentratesandmanycompaniesandbusinessessoughtgovernmentbailoutstoavoidbankruptcy.Specifically,intheautomotiveindustrysalesweredown37%thanayearbeforetherecession.Inaddition,bailoutproposalsfromGM,ChryslerandFordwerebeingdeniedbyCongress,becauseCongressfelttheybroughtbankruptcyontothemselvesbynotproducingfuelefficientcarsandmovingforwardwithdevelopmenttoimprovecompetitivenessintheglobalmarket.Fordpromisedtogoforthwiththeirdevelopmentofhybridandenergyefficientcars,inadditiontoboostproductionofsmallercars,shutdownproductionplants,andsellVolvo,LandRover,JaguarandAstonMartin.AlthoughGMandChryslerbenefitfromthebailouts,Fordwasseekingabailoutforsecuritybecausein2006theyhadtheadvantageofmortgagingtheirassetsandraised$24.5billion.

II.Marketing

1.“OneFord”BusinessPlan

Thegoalofthe“OneFord”planistopositionFordMotorCompanyforfuturesuccess.Akeyingredienttoasuccessfulbusinessplanistheforecastofthebusiness.TheforecastreliedontherestructuringofFordMotorCompanyandfocusingononebrand.Theplanstartedin2006whenAlanMulallyinitiatedtheOneFordapproach.AccordingtotheFordAnnualReportof2008,theplanincluded:

•Aggressivelyrestructuretooperateprofitablyatthecurrentlowerdemandandthechangingmodelmix.

•Acceleratethedevelopmentofsafe,fuel-efficient,high-qualitynewproductsthatcustomerswantandvalue.

•Financeourplanandimproveourbalancesheet.

•Worktogetherasoneteam,leveragingourglobalassets

Byeliminatedexcessvolumesofmanufacturing,shuttingdownplants,andlowertheirworkforce.Theybegantofocusonthecustomers’needstoimproveaprofitablegrowth.In2009thenewFord-150pickupwasintroducedtoNorthAmerica.InEurope,thenewsmallcar,Fiesta,wasintroduced.

2.RestructureFordMotorCompany

Marketingstrategiesdevelopawaytoenhanceproductdurabilityandcreateanarrowfocusforcustomerstorelyon.CreativityisonefactorthatFordneededtoimplementinordertodrivethembacktothemarketaftertheeconomiccrash.Forexample,Ford’sbusinessstrategy,the“OneFord”approach,focusedondecreasingthebrandsandincreasingtheFordbrand.AlanMulallyhelpedcushionFordMotorCompanytoavoidagovernmentbailoutandpavedthewaytoasmoothertrailforFordin2009.However,thebrandsthattheysoldandplantstheyclosedrequiredanewapproachtoappealtothemassesandattractcustomerstocontinuetohaveastrongfinancialperformance.

TheFordbrandwasrisingtomanageaglobalapproachtocontinueprofitablegrowthforthecompany,employees,manufacturers,suppliersandinvestors.The“OneFord”approachwasnotaneasychangetoadapttoasmanyemployeesweregoingtolosetheirjobs.However,Mulallysoughttheopportunitytoenhancethecompanytorestructuringitandfocusingontypeofproblemandapproach.

3.BrandManagement

Brandstrategyusescreativitytoreachtoacertaindemographictoincreaseproduction.ThepowerofviralandsocialmediabegantoariseandFordsoughttheopportunitytoutilizeittoreachayoungertech-savvydemographic.Ford’sbrandstrategyfocusedonthreecampaigns:

DriveGreen,SmartDesign,andBuiltTough.TheFordMotorCompanydevoted25%oftheirearningstodigitalmediain2009toincreasesalesandfortheirBuiltToughcampaignbyusingletteranimation.Typographyisanartformusedtosaythingsagain,butinacolorfulway.Acombinationofletteranimation,voice-over,humorandtheF-150improvedtheFordbrand.

Byreachingouttothetech-savvydemographicitwasawarded“BestTruck”[getnameofaward].ThisapproachcoincideswiththeirSmartDesigncampaignbycombiningtheF-150andfactsofhowtheF-150wasmade.TheDriveGreencampaignutilizedcarpartsasastrongcomponenttoreachtheeco-friendlydemographic.TheblendofanorchestraandcarpartsconvertedtoinstrumentsdevelopedtheDriveGreencampaign.

4.InitiateGlobalOutreach

KeyworldmarketsFordfocusesonduringtheirOneFordinitiativebybuilding

AchangeinbrandmanagementreliedinthehandsofMulally.Duringhisfirstweeksofhistenure,theFordCEOsoldofLandRover,AstonMartin,andJaguar.ThisapproachwastoraiseawarenessandfocusonFordandFordalone.Thedifferentbrandswithdifferentmodels,anddifferenttargetmarketswereadistractionfromtheFordbrand.Mulally’sfocuswasonFord’slong-termsuccessandhisdecisionsresurrectedapossibleweakcompany.

5.FordCompetitors

AutomobileIndustryMarketShare2013

GeneralMotors,leaderintheautomotiveindustryhaveintheirportfoliobrandssuchasBuick,Cadillac,Chevrolet,andGMC.Thecompanywasfoundedin1908andisbasedinDetroit,Michigan.GeneralMotorsCorporationisthe2ndlargestauto-manufactureraspertheirmarketshare.GeneralMotorswasoneofthevariouscompaniesthatfiledforbankruptcyandseekgovernmentbailoutduringthelatesteconomiccrisis.GeneralMotorscorecompetenceisthroughinnovationandtechnology.GMtrendsarealsodesigningecofriendlyvehicles.

ToyotaMotor,amongtheworld'slargestautomotivemanufacturersbyautosales,designsandmanufacturesadiverseproductline-upthat rangesfrom subcompactstoluxuryandsportsvehiclestoSUVs,trucks,minivans,andbuses. Itsvehiclesareproduced either withcombustionorhybridengines, aswith the Prius.Toyota'ssalesareconcentratedinJapanandNorthAmericabuthaveseenrapidgrowthinAsiaandSouthAmerica.Toyotamakesautomotivepartsforitsownuseandfor saleto others.PopularmodelsincludetheCamry,Corolla,LandCruiser,andluxuryLexusline,aswellastheTundratruck.

6.IndustryTrends

-FuelEfficientVehicles

Fordsiscommittedtofulfillcustomerneedsbydesigningtopqualityvehicleshavingtheenvironmentinmind

-RealtimeConnection

Customerdemandforbetterdrivingexperiencebyaccessinginformationliketrafficreportsandweathernews

-Futuristictechnology

Investmentinresearchanddevelopmentofbettervehicleshasevaluateoptionsforthefuturedrivingexperiencesuchautodrivewherevehiclesdriveandparkthemselves

III.Management

1.Leadership

AlanMulallywaselectedin2006asthePresidentandCEOofFordMotorCompany.Mr.MulallygrewupinKansasandgraduatedwithadegreeinaeronauticalengineeringattheUniversityofKansas.Mr.MulallythenwentontogethisMastersdegreeinManagementfromSloanattheMassachusettsInstituteofTechnology.AlanMulallyhasanimpressivebackgroundofbusinessandmanagementexperiencemakinghimtheperfectcandidatetorevivetheFORDbrand.In2001,Mr.MulallywastheExecutiveVPattheBoeingCompanyandthePresidentofBoeingCommercialAirplanes（Ford,2013）.BeforebecomingpresidentofBoeingMr.MulallywasanengineeratBoeingandwascreditedwithcontributingtomanyairplanesthatarestillinusetodaysuchasthe737,747,777etc（Ford,2013）.

AlanMulallyalsohasachievedmanyaccoladessuchasbeingapartoftheU.S.NationalAcademyofEngineeringandisafellowattheRoyalAcademyofEngineeringinEngland.Mr.MulallyhasalsobeenanadvisoronmanyadvisoryboardssuchasNASAandseveralprestigiousuniversities.Hewasthe“PersonoftheYear”intheFinancialTimesandconsideredasoneofthe“World’sMostInfluentialPeople”byTIMEmagazinejusttonameafew（Ford,2013）.ThisimpressedthelikesofWilliamClayFord,Jr.,whoistheExecutiveChairmanoftheBoardofDirectors.Mr.MulallyhadtheexperienceofturningtheBoeingCompanyaroundwhentheywereontheirlastlegsaftertheterroristattacksof9/11backin2001.MulallywassuccessfulinsavingBoeinganddiditbychangingthecorporatecultureandutilizingateamapproach.

2.ChangingtheCorporateCulture

OneofthefirstthingsthathedidasCEOatFordischangethecorporateculture.Hechangedtheculturebyadministeringateamconceptforthecompany.BeforethisteamconceptthecorporatecultureforFordwaseverymanforthemselves.Thetoplevelmanagementwastryingtoteareachotherdownbyblamingoneanotherandputtingthemselvesbeforethecompany.ThiskindofcultureaccomplishednothingwhichmayhavebeenalargepartofwhyFordwasfailingbeforeAlanMulally.Mr.Mulallyhadtochangethecompany’swayofthinkingsohemadehisexecutivemeetingmorefriendlyhadnotoleranceforplacingblameonothers.Mr.MulallyactuallyencouragedthemtohelpeachotherbecausethemainfocusisaboutFord.

Asaresult,Mulallytiedeachoftheexecutive’sperformancetothesuccessofthecompanyasawholesothattheywouldgetthemessage（Hoffman,2013）.Mr.Mulallyalsoheldtheexecutivesmoreaccountableandmadetheweekly“BusinessPlanMeetings”aboutthefacts.Thesefactsincludedthingssuchasthoroughupdatesoneachexecutive’sdivisionforthecompany’sturnaroundplan.AlloftheSeniorExecutiveswererequiredtoattendeveryweekandanymishapsinthenumberswereexposedalmostimmediately（Hoffman,2013）.

Mulally’snexttacticwasthecreationof“OneFord”bymakingitacompanywithaglobal