Ford Motor Case Study

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BLB 20058 – M – MSTRA- L

MANAGING STRATEGY ASSIGNMENT

FARUK SULEIMAN
TP025329

WORD COUNT: 3694 WORDS

UCMF1103MBAIT
SCHOOL OF POSTGRADUATE

TECHNOLOGY PARK MALAYSIA
ASIA PACIFIC INSTITUTE OF INFORMATION TECHNOLOGY
UNIVERSITY OF STAFFORDSHIRE

SHARMILA A/P K. N. SETHUMADHAVAN
EXECUTIVE SUMMARY

Strategy is well explained as the effective use of well laid out plans to achieve success. It is no less of spectacle to attribute strategy to individual achievement, achievement from a company, a country or at the very least a non – financial institute to achieve strategic success. Ford Motor Company has in recent times lost its market share to emerging Asian companies such as Honda, Toyota, Hyundai and Nissan. As a new landscape of economic might surfaces, new car stereotypes are emerging. Finding a place in these segments is proving difficult for Ford Motors and hence need to change its strategies. Hyper-competition combined with tough economic times has pushed Ford to the edge of insolvency. This paper examines the issues that plague the company while using published models to make analysis on how and why the problems occur to better understand their potential impact on the company’s sustainable competitive advantage. Recommendations will seek to give strategic solutions to address the issues identified earlier. This research isn’t structured upon models to identify, analyze and solve issues but rather looks at the core of the problems within Ford Motors and provides models to analyze and solve the issues.

TABLE OF CONTENTS
Contents
INTRODUCTION1
SECTION 1: STRATEGIC ISSUES AT FORD2
Underlying Issues at Ford Motor2
1.Financial3
2.Competition4
SECTION 2: STRATEGIC MODELS AND FRAMEWORK SUITABLE FOR ISSUES IDENTIFIED6
2.1.Competitor Analysis6
2.1.1Porter’s 5 Forces Analysis7
2.1.2SWOT ANALYSIS11
2.2Financial Analysis13
SECTION 3: RECOMMENDATIONS18
3.1 Factory and Supply Chain Management19
3.2 Product Differentiation19
3.3 Expand Asian Market Share while shifting production to Mexico20
3.4 Divest Volvo and Prepare for Liquidation of Chrysler and GM21
REFERENCES22
BIBLIOGRAPHY25
APPENDIX A: COMPANY OVERVIEW26
A.1 History26
A.2 Business Model and Market Overview27
A.3 Strategic Framework of Ford Motor Company:27
APPENDIX B: NATURE OF STRATEGIC ISSUES AND HOW THEY RELATE TO FORD’S CURRENT STRATEGIES31
APPENDIX C: SWOT AND EXTERNAL ANALYSIS FOR FORD MOTORS34
C.1. SWOT34
C.2. PORTERS 5 FORCES ANALYSIS36
C.3. Balanced Score card For Ford Motor Company38
APPENDIX D: STRATEGIC RECOMMENDATION FOR FORD MOTOR39
D.1 Strategic Recommendations39

INTRODUCTION
Ford Motor Company has had its fair share of success and has positioned itself as a premier U.S brand. But as witnessed by any other company, the lifecycle of Ford has edged towards decline to reflect the realities of the factors that surround the industry in which it operates. In the years following the 2008 financial meltdown, Ford was operating in a comfortable but challenging position in the auto industry, which has since been blemished by the near collapse of the company as a result of global recession. With competition from Asian companies rife and a faltering economy, Ford is left with a huge task of formulating a strategy that will not only sustain its existence in the industry but to put it ahead of competition.

SECTION 1: STRATEGIC ISSUES AT FORD
Recent financial stand of Ford Motor Company has shown improved earnings of around $2,717,000,000 FYE 2009, sales of automotive have seen a significant fall to 4,817,000,000 units sold worldwide, a 13% fall from previous year as shown in Ford (2009) annual report. As the only automobile company not to have been a participant in the TARP program as mentioned by Grant (2010), Ford had narrowly salvaged its position as one of the most powerful brands in automobile industry. Ford faces some pressing strategic issues...
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