Business and Management Sample Ia

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Business and management teacher support material SL written commentary—Sample 1

Business & Management (SL) IA: Sample 1
Commentary on:

“Can Ford’s ‘Way Forward’ strategy work to rescue the company?

Candidate Name: Candidate Number:

Word Count: 1,497

© International Baccalaureate Organization 2007

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Business and management teacher support material SL written commentary—Sample 1

Contents Contents
Introduction Commentary 1 Commentary 2 Commentary 3 Conclusion Bibliography Appendix Article 1 Article 2 Article 3 Article 4 Survey 9-14 15-16 17 18-19 20-21

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3 4 5 6 7 8

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© International Baccalaureate Organization 2007

Business and management teacher support material SL written commentary—Sample 1

Introduction
• Background information: I have decided to write my commentary on the problems facing Ford PLC. This is an area that interests me as I was surprised to see such an iconic company suffering such bad press lately. Ford has found itself in need of a rescue strategy. It is has seen profits tumble and losses mount, it has seen its market share in its home market the U.S. drop continuously from 1995 onwards. However over the past few years its core market of gas guzzling SUV’s have taken a huge hit from high oil prices as well as high steel prices. Consumers are becoming more environmentally aware and environmental effect has become a major factor for a consumer when purchasing a car, which has lead them to opt for the small and efficient as well as cheaper Japanese brands. In the past Ford have had little foresight and have dug themselves a grave which they are now trying to climb out of with their new proposed rescue strategy called “Way Forward”. This is the scheme that is supposed to save Ford and bring back profitability by 2009. It is a major cost cutting scheme, whereby they plan to save $5 billion a year from axing tens of thousands of jobs and closing several production plants, in order to scale down production by 25%. They also plan to upgrade or bring out new models for 70% of Ford, Lincoln and Mercury products. This scheme has just been accelerated due to huge losses Ford is due to make this year, which could reach up to $9 billion. It was the newspaper responses to this announcement that first stirred my interest. • Procedure:

I decided to write my commentary based on the following supporting documents – 1. 2. 3. 4. 5. Ford PLC Press release - Ford Accelerates ‘way forward’ BBC News – Can Mark Fields rescue Ford motor? Ford Motor Company Annual Report 2005 Operating Highlights Daily Telegraph - Ford lays bare its financial plight Survey – What cars do Indian’s prefer (produced by author October 2006)

Note: full references for these documents can be found in the bibliography

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© International Baccalaureate Organization 2007



Business and management teacher support material SL written commentary—Sample 1

SWOT Analysis
After reading the various documents I tried to sythesise the key points by creating a SWOT analysis1 for the Ford based on the information they gave out: Strengths • World recognized car brand • One of the world's pioneers in the automobile industry Opportunities • Retrenchment of 14000 workers • Closing down of factories and non core businesses • 70% of Ford, Lincoln and Mercury products will be new or upgraded. New pickup designs • New crossover • New Mustang designs • Focus on redesigning car models to be fuel efficient Weaknesses • Cars are fuel-inefficient • Car designs are unappealing • Car companies in general in America are failing Threats • Asian cars are cheaper and more fuel efficient • Demand for pickups have fallen Declining sales • Market share dropping • Increasing oil prices • Increasing steel prices

The ‘way forward’ strategy – of cutting costs in the domestic market is a desperate measure, and this was highlighted by the fact that it firstly was a speeding up of an existing strategy and secondly by the scale...
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