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A Project Report On Ford Motors: Submitted By: RAHUL KAUL Class: BBA 4 B Roll No: 118
A Project Report On Ford Motors: Submitted By: RAHUL KAUL Class: BBA 4 B Roll No: 118
CONTENTS
VISION
MISSION
ORGANISATIONAL STRUCTURE
EXECUTIVE SUMMARY
15
19
FORD PRODUCTS
27
CONCLUSION
32
STP ANALYSIS
33
SWOT ANALYSIS
37
39
CONCLUSION
51
RECOMENDATIONS
52
BIBLIOGRAPHY
53
VISION
Though Henry Ford was responsible for revolutionary advances in
manufacturing it is not as often noted that the Ford Motor Company was an
unusual leader in the establishment of American big business because of the
firm's tightly-controlled and (by general big-business standards) undercapitalized nature. Ford's decision to adapt the assembly line notion to his own
product met with enormous success and he was able to outstrip all his
competitors very rapidly. The center of Ford's vision, however, was not the use
of the assembly line but the idea that cars could belong to anyone and that he
could produce and sell a practical, affordable vehicle in mass quantities. The
combination of Ford's inventiveness and practicality with his own stubbornness
and the skill of his colleagues made the company into a big business that did
not, at first, fit the mold. The Ford company is a case study in the practicalities
of manufacturing that, when combined with the opportunity to create a major
new industry, made it possible to proceed in a different manner than many of
the big businesses that emerged in the early part of the century.
Henry Ford (1863-1947) was a trained machinist who was fascinated by the
new horseless carriages. He began to experiment with car building in the early
1890s and by 1896 he had built his first car. It was only the sixth gasolinepowered automobile to be built in America. Over the next six years Ford tried
repeatedly to get his car into production. In which he would be able to put his
own ideas to work. The Ford Motor Company was incorporated in 1903 "with
an authorized capitalization of $150,000, all common stock, of which $100,000
was issued." Malcolmson guaranteed production financing up to $3,000, which
was an important incentive to other investors. There were ten other subscribers,
most associated with Malcolmson. The Dodge brothers, John and Horace, paid
their $5,000 subscriptions with promissory notes that were later paid off by the
profits from Ford business obtained by their machine shop. James Couzens paid
$1,000 in cash and signed a promissory note for $1,500. In all, the new
company received only $28,000 in cash and, "according to a Ford publication
issued in September, 1920, this was all the cash ever paid in on its capital
stock." At the beginning the new company proceeded as all car makers did.
Foundries produced the castings which were then tooled into individual parts.
The parts were then assembled into components (such as magnetos) and finally
there was "the assembly of thousands of parts and components into the motor
vehicle." The production of parts and components was a capital-intensive
undertaking and demand for luxury cars tended to suffer.
MISSION
Ford Motor Company is a worldwide leader in automotive and automotiverelated products and services as well as in newer industries such as aerospace,
communications and financial services. Our mission is to improve continually
our products and services to meet our customers needs, allowing us to prosper
as a business and to provide a reasonable return for our stockholders, the
owners of our business. The missions can be listed as following:
Products: Our products are the end result of our efforts, and they should be
the best in serving our customers worldwide. As our products are viewed,
so are we viewed.
Customers are the focus of everything we do. Our work must be done with
our customers in mind, providing better products and services than our
competition.
Dealers and suppliers are our partners. The Company must maintain
mutually beneficial relationships with dealers, suppliers and our other
business associates.
4
ORGANISATIONAL STRUCTURE
CEO
Alan Mulally
Chairman of the Board
Bill Ford
Director
Richard Manoogian
Director
Kimberly Casiano
Director
Stephen Butler
Director
John Thornton
Director
Gerald Shaheen
Director
Ellen Marram
Director
Anthony Earley
Director
Edsel Ford
Director
5
Irvine Hockaday
Director
Richard Gephardt
Director
Homer Neal
Americas
Mark Fields
Asia Pacific Africa
John Parker
CFO
Lewis Booth
CIO
NS
Legal
DL
Global Product Development
DK
Procurement
Tony Brown
Government & Community Relat...
ZO
Human Resources & Corporate...
FF
Marketing & Communication
James Farley
Ford Europe
John Fleming
Asia Pacific & Africa
JH
Quality
BF
Sustainability & Safety
SC
Customer Service
Frederiek Toney
Government Relations
PL
Mazda Motor
PS
Volvo Cars
SO
US Sales & Marketing
KC
Ford Motor China
MWC
Ford India
MB
Ford Motor China
RG
Ford Motor Credit Company
MB
Control
PD
Control Americas
Robert Shanks
Treasurer
NS
International Governmental A...
SB
Design, Creative
JM
North America Engineering
PM
Product Programs & Product D...
JB
Research & Advanced Engineer...
Gerhard Schmidt
Labor Affairs
MM
Communication
RD
Marketing Sales & Service, E...
IS
Manufacturing Ford Europe
KM
North America Manufacturing
JT
Powertrain Operations
Barb Samardzich
Customer Service
FT
controlled company in the world, the Ford Motor Company has been in
continuous family control for over 100 years.
Corporate governance:
Members of the board as of early 2007 are: Chief Sir John Bond, Richard
Manoogian, Stephen Butler. Ellen Marram. Kimberly Casiano. Alan Mulally
(President and CEO), Edsel Ford II. Homer Neal. William Clay Ford. Jr. Jorma
Ollila. Irvine Hockaday. Jr., John L. Thomton.an William Clay Ford (Director
Emeritus).
The main corporate officers are: Lewis Booth (Executive Vice President,
Chairman (PAG) and Ford of Europe), Mark Fields (Executive Vice President,
President (The Americans),
Donat Leclair (Executive Vice President and CFO). Mark A. Schulz (Executive
Vice President, President [International Operations) and Michael E. Bannister
(Group Vice President; Chairman & CEO Ford Motor Pau1Magcaflagi
(Americas Product Development)
Ford started its innings with the Mahindra-Ford joint venture formed in 1994,
which produced the Escort out of M&M Nashik plant. After meeting initial
success, sales of the Escort was finally replaced by the Ikon in 1999.
The Icon marked a new beginning for Ford in India. It rolled out of the
Marajmalaingar plant near Chennai and by now, the company had parted ways
with M&M and was renamed Ford India Ltd in 1998. The Thon was the first
model by a multinational to be developed specifically for India. Though it was
based on the Fiesta, it had a unique body style and was offered and was offered
with an option of three engines, including a diesel. The car was a big hit. The
Ikon underwent several face-lifts and price cuts to keep demand high. However,
fresher competition and a reputation for high-maintenance saw sales gradually
decline. After the arrival of the modem and highly-capable Fiesta, another
made- for-India car, with state-of-the-art engines, the Ikon has been
marginalized. The Fiesta has picked up where the Ikon left and is selling well.
Though the Ikon and Fiesta have been the mainstays of Fords production in
India, the company has had limited success with other models. The Mondeo,
10
launched in 2001, was a very talented car by was simply not suited to Indian
conditions and earned a reputation for being exorbitant to maintain.
The Endeavour SUV was launched in early 2004 and has sold well for its niche.
The Endeavour has recently been upgraded in 2007 and this has boosted the
appeal of the big SUV. In 2004, Ford launched the Fusion, which has received a
lukewarm response though the recent diesel variant has perked up sales.
Is an authorized dealer for Ford India Limited, who are one of the leading
manufacturers of top quality cars in India, with many variants in the offering.
Fortune Ford is a 50:50% Joint Venture - up between two well known and reputed families in India Hyderabad, the Mantis and the Babu Khans.
Fortune Ford is a blend of experience and youth. The experience and good will
that Mr. Misbahuddin Babu Khan and Mr. Pramod Modi enjoy blend very well
with the youth and energy of the youngsters Bashir, Ashish, Nirav and Siraj to
make Fortune Ford a truly world class Ford Dealership.
Fortune Ford markets and services the recently launched truly European Ford
Fiesta, the ever-popular Ford I/con Flair, the No non-sense car Ford Fusion and
the macho SUV the Ford Endeavour through its sales and service outlets at
Hyderabad. The sales outlet is located strategically at Somajiguda next to
Eanadu. We have two service centers, one at Chapel Road, Abids opposite
Stanley College and other one at Fathebagh, Santhnagar. These centrally
located outlets provide convenient and easy access to both the proud owners as
well as prospective buyers. The workforce at Fortune Ford is committed to
excellence in serving all esteemed customers.
The Sales Team is made up of dedicated showroom and field executives who
are professionally trained by Ford India Limited. They are adept at guiding the
customer through the entire sales process right from assisting in the choice of
model, colour and features to lending a helping hand in providing attractive
buyback options and also arranging finance at competitive rates.
V1.
The Service Centre is armed with the state-of the art equipment and is in-line
with Fords exacting Global standards. The service team is technically qualified
and trained to analyze and provide solutions adhering to Quality Care, in order
to satisfy even the most demanding customers.
11
On September 11, 2000. Ford India launched the Ford IKON SXi the
stylish josh machine
Ford India has started exporting Ford IKON
2001 Ford India launched the Ford Mondeo.
2002
Ford India show cases a wide spectrum of exciting cars at the Auto Expo
Ford India Limited announced a strategic partnership with Hindustan Motors
Limited (HML).
Certified QS 9000: 1998, 3iIL edition on March 21, 2002 Ford India
received the QS 9000 award from TOy Sddeutschland.
New Ikon Variant 1.6 EXi was launched .
2003:
The New Ford Ikon NXT launched - The Next Level of Josh.
Adding Refinement to Josh- Ford India launches Ikon NXT Finesse.
Ford Celebrates Centennial in India.
Ford India launches Ikon NXT SXi.
Ford India Ranks Highest in J.D. Power India Sales Satisfaction Study.
Ford launches Ikon Flair at Rs. 4.95 Lakhs.
2004: Autocar SUV of the Year Winner Ford Endeavour.
2007:
FORD Motor Company of Southern Africa achieves three wins and two
seconds on this year total economy run
DOE AWARDS FORD two grants for vehicle fuel efficiency research.
FORD MONDEO is AUTO EXPRESS car of the year
LAND ROVER DISCOVERY 3 scoops catego1 win at TOWCAR AWARDS
2007
FORD MONDEO is the Caravan Club TOWCAR of the year 2008.
13
14
Executive Summary
Ford Motor Company is currently trying to increase its global market share in
automobile sales while facing slumping market share numbers in the United
States. This report examines the Ford company characteristics and how the
company uses information systems in the business climate. Ford believes that
having solid relationships with their employees, dealers, suppliers, and
stakeholders allows them to have an advantage over their competitors. Healthy
professional relationships are helpful to a companys success but being able to
attract customers to your products will increase sales. Ford has recently
introduced new vehicle architecture to try and attract new buyers. The largest
innovation for Ford has been the introduction of their Hybrid cars. Ford
reported an October sales drop of 23.5 percent as compared to a year ago. The
new measures Ford is taking with their automobile design are expected to help
those numbers reverse in the future.
Ford sales have also under performed in the global markets although the
company is taking steps to increase sales while reducing costs. Ford has
recently entered new markets, most of which are located in the Asian-Pacific
region. To reduce costs and increase knowledge of a region Ford uses small
ERP systems that are less expensive and faster to implement than the larger
ERP systems. Failure to obtain a larger market share in foreign markets has
hurt the company. Ford got a late start entering the automobile market
15
in China, compared to competitors, and now controls less than one percent of
the market share. To add to the situation the Chinese government has high
taxes on automobiles that can increase the price up to 100 percent or more. The
future of Ford is headed towards a reported implementation of SAP throughout
its North America organization. The proper use of information systems by Ford
will increase their ability to maintain a successful business in future years
locally and globally.
The Ford Motor Company is an ever-changing business that tries to stay
ahead of its competitors in America and at the global level. Fords mission is to
build great products, strong business and a better world. To accomplish that
mission the Ford Company believes that not just quality and cost awareness are
the only things that matter, but also a solid relationship with their employees,
dealers, suppliers, and every Ford stakeholder (Ford motor company,
2004). With these ideals Ford is proud to be a company with family-based
values that allows Ford to have a competitive advantage over its
competitors. With this competitive advantage Ford believes that everything
they do affects the people they serve from quality and safety of their products to
the social and environmental impact on their customers every day lives. The
strategy for Ford will be to continue to deliver exciting new products, improve
quality and customer satisfaction, improve market share and revenue in all
regions, and improve results at all automotive operations. To accomplish this
strategy Ford has put pressure on senior leaders to develop a true family
culture. To do that the Ford company will have to cultivate a workplace
that: attracts and retains the best people, allow them to work at full potential,
encourage continuous development and mutual benefit, and promote teamwork
while embracing differences and diversity.
The keys to Fords strength are the products. There were forty new
products in one year, because of their new realigned vehicle architecture. This
allows Ford to produce a greater variety of attractive and competitive vehicles
with more shared components and less complexity (Ford motor company,
2004). But the biggest innovation for Ford is the hybrid. Ford can take
advantage of this because they have their own patented hybrid technology and
proprietary drive system and electronic controls. Many competitors have not
even considered hybrids and when they do Ford will already be a step ahead of
them. Currently, Ford offers the Escape Hybrid which has seventy-five percent
better fuel economies, especially in the city. Plus, the Escape Hybrid can do
anything the regular Escape can do and has the same features. In the next three
years Ford plans on releasing four more hybrids. Ford also has a service for
their customers, the Ford Motor Credit Company, which offers many
competitive ways for their customers to own Ford vehicles. Its the only
16
product that does not have wheels and its the finishing piece to Fords core
businesses. (Ford motor company, 2004)
Ford North America holds half of Fords volume worldwide, but their
market share was down from 20.5% in 2003 to 19.3% in 2004. Ford is
committed in the year 2005 to raise the market share in Europe, South America,
and Asia. To do this Ford must still be focused on America and Europe, and
start to set up markets in other countries like China that are just starting to make
an impact on the world market. Right now North America and Europe account
for two-thirds of todays market, but by 2014 it will only account for half of the
world markets (Ford motor company, 2004). Ford has made gains in other
areas as well; net income where Ford had an improvement of $2.992 billion
from 2003, total sales and revenue were up $7.3 billion from 2003, also
worldwide vehicle unit sales and European market share were up from 2003
(Ford motor company, 2004).
Technology and information systems are very important to the Ford
Company. Because of Fords global scale, information needs to be timely so
managers can make important decisions. With the addition of technology, Ford
can make better products at a cheaper price; meanwhile it makes the
infrastructure of Ford that much more complicated. Ford tries to introduce
new technologies so that environmental and safety features can be added to
vehicles before law requires them. One way technology and information
systems are helping Ford is in the manufacturing of the vehicles. In established
markets such as Europe, North America and Japan, Ford has plants with
flexible manufacturing, that allows Ford to produce a number of different
vehicles in a single location. It enables Ford to add a vehicle line or change
over to a new model by reprogramming, rather than retooling, the vast
machinery involved (Ford motor company, 2004). Ford continues to be a leader
in automotive technology and information systems, and will continue to forge
ahead to create better quality products.
As the Worlds second largest vehicle maker and the Worlds largest truck
producer Ford Motor Company must be able to maintain global market share
while keeping the global company connected through company intranets and
extranets. Ford Motor Company recently reported a drop in automobile sales of
23 percent. If Ford is going to turn in better numbers in car sales it will have to
be an increase in sales not only in America but globally.
While operating a business over multiple continents, in multiple
languages, and across multiple time zones Ford is trying to keep the company
focused on delivering greater value to its customers. To keep the organization
and its employees connected over large distances Ford is using a system
called eRoom. This technology allows Ford teams to work collaboratively over
17
the Web to connect resources and people. The result of Ford using this system
has lead to cost savings in the following areas: time savings, reduced IT costs,
and reduced co-location costs. Time is saved using eRoom through increased
data sharing and the ability to access documents faster. Replacing many Ford
departmental websites with eRoom will reduce IT costs by doing away with IT
overhead associated with building and maintaining those websites. Reduced
co-location costs will be made through reduced travel costs, video-conferencing
costs, and reduced information transmission costs. These reduced costs and the
increase in information accessibility are the result of one of the key ways Ford
is continuing to compete globally.
Ford is also implementing smaller ERP systems in regions where they
have just recently entered the market. Ford Chinas IT infrastructure is based
on a small ERP from QAD Inc. called Mfg/Pro. This ERP is Fords standard
program for all new markets. Extensions to the standard ERP software make it
possible for Ford to comply with foreign practices and government mandated
financial statements. Each time a system is deployed in a new market the
company gains valuable experience and knowledge that helps the company in
future deployments in other new markets. The implementation of a smaller
ERP results in quick installation, lower costs than a large ERP, and quick
knowledge into the new market. This small ERP system is another factor for
Fords global success.
No matter what measures any company that competes globally uses to
increase its competitiveness there are also factors that present problems. A
couple such factors lie in the Asian market that is expected to have an increase
in the global automobile market share. Problems with Ford entering this market
share include Chinas recently flat market for automobiles, a focus on the
development in housing instead of roads, and government vehicle taxes. The
vehicle taxes are so high that they can raise the price of an automobile 100% or
more. Any shift in priorities or lift of government constraint is labeled as an
educated guess. Although Ford is now competing in the Chinese market their
late start, compared to other competitors already in the market, has left the
company with less one percent of the market share.
The recent drop in sales of 23 percent reported in October of 2005 as
compared to a year ago is, in part, a result of increased gasoline prices. The
price increase has pushed new car buyers towards buying more fuel-efficient
cars. November sales are expected to drop as much as 15 percent which would
imply that more recent drops in fuel prices have apparently failed to turn around
Fords sales numbers. On the other side of the equation the reducing market
share for Ford has been offset by an increase of U.S. market share
by Toyota. The future of Ford Motor Companys success strongly relies on the
18
company increasing market share globally while keeping their sales consistent
in the U.S.
There are many determining factors when it comes to running a
successful company. Those factors are production, management, office, and
sales/marketing. You need efficient information and knowledge to keep these
elements of the company running smoothly. It is very important to have
departments that concentrate heavily on a daily basis to improving the output to
lead to better production and marketing strategies. Sales marketing is all about
how you present your product and will it reach the public with a positive
influence. This is the key to keeping your company running and continuing to
excel and compete against others. You need knowledge and information about
what the people want to get your product out there so it will be known. People
need to be aware of the product so they have an urgency to buy it. Information
is power and is the key to running the best possible company that you can run.
With loads of information gives you an edge on the competition. Production,
management, office, and sales marketing go hand in hand you need specific and
current information to keep these departments running smoothly. Knowledge is
the key with the right information you can keep all of your departments on the
right path.
to localize their products; import substitution became the order of the day.
Though we learnt to localize, the cars we made were all outdated designs with
little or not improvements for decades. The automotive industry stagnated under
the governments stifling restrictions and the Indian car buyer was saddled with
cars of appalling quality and even then there was a waiting list that at one point
stretched to eight years!
This attempt at self-reliance failed miserably because of the industrys isolation
from the best technology. The Japanese and later Korean auto industries were
also highly protected in their formative years but they never shut the door on
technology. Instead, they relentlessly tapped the best talent pools in the world to
absorb the know-how to produce good cars.
One of the most important chapters in the Indian automotive industrys history
was written by Maruti. It marked the Indian government getting into the far
business in the early 1980s, a radical shift in thinking after decades of treating
cars with disdain. The Maruti 800 went on to become the staple car of India and
put a nation on wheels. This little car set a benchmark for price, size and quality
and structured India as small car market.
It wasnt till 1993 that things really started to change for the Indian car buyer.
With the liberalization of the economy, a host of international carmakers rushed
in. But most of them were in for a shock as Indian customers rejected their
product. Indian customers refused to allow the glitter of prestigious brands
blind them to the outdated and overpriced products they were offered. The
Indian consumer wanted super value, and rewarded the brands that delivered it,
handsomely. Hyundai and Maruti delivered, and profited.
The period also saw the emergence of the Indian players like Tata Motors and
Mahindra & Mahindra. They rose to the challenge of the MNCs and responded
brilliantly with the Indica and the Scorpio. This was ironically due to the license
raj that forced Indian car makers to be innovative and develop products frugally.
Indias frugal engineering skill has now caught the worlds imagination, and an
increasing number of carmakers are preparing to setup major capacities here.
India is changing. And changing fast. Its moving forward. Indias largestselling car is not its cheapest car, the 800. It is the Alto. Peoples aspirations are
rising and so are their mistakes, have got their finger on the pulse of the market.
Get the right product and the rewards are handsome.
The Indian auto industry is today bubbling with promise and confidence. Its
been a long journey but to see where the Indian car industry is going. We have
to see where it has been.
AUTOMOBILE INDUSTRY IN PRE-INDEPENDENCE:
The first motorcar on the streets of India was seen in 1898, Bombay had it first
taxicabs by the turn of the century. In 1903, an American company began a
20
public taxi service with a fleet of 50 cars. For about 50 years after car arrived in
India, cars were directly imported.
Before World War I, around 40,000 motor vehicles were imported. During the
years between the wars, a small start for an automobile industry was made
when assembly plant were established in Bombay, Calcutta and Madras.
The import/assembly of vehicles grew consistently after the 1920s, crossing
30,000 units by 1930. It was during the end of the war that the importance of
establishing an indigenous automobile in India was realized. Premier Motors,
Hindustan Motors and Mahindra & Mahindra set up factories in the 1 940s for
progressive manufacture rather than assembly from imported components. The
cars they chose to make were the latest in the world when they were introduced
in India in the formative years of the industry.
POST- INDEPENDENCE:
The government clamped down on imports and foreign investments. Companies
like GM and Ford packed their bags and left. Indias clock, thereafter, stood still
while the world raced on ahead. It would take nearly 50 years before the Indian
auto industry could catch up with the rest of the world again.
BROAD BANDING ERA:
In January 1985, the government announced its famous broad banding policy
which gave new licenses to broad groups of automotive products such as two
and four-wheeled vehicles.
Through a liberal move, the licensing system was very much intact. A
manufacturer had to submit a phased-manufacturing programme to the Ministry
of Industry specifying the indigenization progress and allowing for almost
complete indigenization within five to seven years. The biggest hurdle was the
foreign-exchange clearance required for these projects. Except for MUL, which
had direct access to policy-makers, every other manufacturer still faced a series
of obstacles.
Several new products were launched during this period. All three traditional
carmakers added new models to their ranges Standard Motors returned to the
car business after 10 years, when in 1985 it introduced the Standard 2000, a
Rover SD1 body with the old two-litre Vanguard engine. HM bought in a 1972
Vauxhall Victor in 1985, transplanted its ageing Ambassador engine into it and
the Contessa was born.
THE BIRTH OF THE AMBASSADOR:
In 1957, a small tail fin was added on either side of the rear fenders, along with
a new, dimpled hood, and the car was re-christened the Ambassador Mark L
The car cost Rs.17,000. In 1963, it underwent a frontal facelift with a closely
checkered grille and was named the Ambassador Mark IL It would be another
12 years before the Ambassador got a facelift. In 1975, another minor facelift to
21
the same grille and a much bigger frontal facelift turned out as the Mark III. The
Mark IV, launched in 1979, was the last of the Mark cars.
The Ambassador Nova was launched in 1990, followed by Ambassador 1800
ISZ three years later. The Nova was the last Ambassador powered by the
1489cc petrol engine. In 2004, HM launched the cosmetically-revised
Ambassador under the Avigo name. Designed by Mavendra Singh, the retro
look Avigo had classic touch internals like a centrally mounted console, beigecolored seats and wood finish interiors.
THE CONTESSA YEARS:
The Hindustan Contessa, launched in 1982, was one of the few luxury cars
manufactured in the country in the 1980s and 1990s. It was based on the
1970s vintage Vauxhall victor. While it was initially launched with the
1489cc engine found in the Ambassador, the Contessa was soon given the
Isuzu engines. There were three versions of this car - 1.8GLX (Isuzu petrol),
2.ODLX (Isuzu diesel) and the rare 2.OT (Isuzu diesel, turbo). The last
Contessa rolled out in 2002, phased out by the demand for cheap Japanese
cars.
Some of the leading Indian auto players in Indian automobile industry are:
Premier,
Tata
Mahindra and Mahindra
Maruti
Hindustan motors
the story of premier is the story of one mans vision, Seth Walchand
Hirachand. He not only give India its first car factory but also the countrys
first aircraft factory Hindustan Aeronautics Limited and the countrys
first modem ship yard, Hindustan Shipyard Limited
Building Indias first auto factory
Seth Walchand Hirachand has first started the trails to establish an Indian car
manufacturing plant in Indian for which he went to U.S.A. where three
largest car manufacturing companies are located. He wants Indian company
to be completely independent, with Indian management capital and
employees, paying royalty or technology transfer payment to western
countries.
After approaching General Motors they insisted on part ownership. Seth
Walchand then moved to second largest automaker Ford; Henry agreed, but
delegated the project to Ford of Canada, which refused. Finally the third
largest automaker Chrysler agreed and singed in an agreement in Bombay in
1940.
22
The story starts some time in the 1940s. Pandit Nehru has a dream of building
a modern, industrially advanced nation. And inspired by Nehrus vision are two
brothers, Kailash Chandra Mahindra and Jagadish Chandra Mahindra.
K.C.Mahindra during his tenure in the United States had met Berney Roos.
Roos was the inventor of rugged General Purpose vehicle or the Jeep. The Jeep
had earned reputation in the battle fields of World War II. On October 2nil
1945, the Mahindra brothers joined hands with Ghulam Mohammed to set up a
company to assemble American Willys Jeeps in India. The collaboration
between M&M and its original partner Kaiser Jeep Corporation and later
American Motor Corporation is for the phased manufacture of CJ3B Jeep. The
company is named Mahindra and Mohammed.
But after Independence Ghulam Mohammed migrates to Pakistan. With his
departure Mahindra & Mohammed is renamed by Mahindra & Mahindra in
13January 1948. The first vehicles are assembled in Mazaogaon in Bombay.
The first M&M built Willys Overland Jeep rolled out of the Mazaogaon plant on
3 June 1949. Five years later, in 1954, the first completely indigenous Jeep
rolled out of the factory floor. At one point 70 per cent of the sales were assured
by army and government.
Vehicle model Year of launching
Mahindra MM 340 1985
Commander 1991
Mahindra Armada 1993
Voyager van 1996
Escort (M&M-ford) 1996
Bolero 1996
Scorpio 2002
Scorpio launched in 2002, a completely indigenous product that took Mahindra
& Mahindra
6 long years to design and develop. The Scorpio has played a critical role in
changing the
perception and brand image of the country. The 2.6 litre turbo-diesel engine
developed
109bhp. The Scorpio has been the vehicle of M&Ms change, from a utility
vehicle-maker to
a lifestyle SUV manufacturer.
It began with the promise of being the Peoples Car. The car never went into
production and the company went belly-up in 1977. Six years later, it rose like a
phoenix from the ashes and changed the Indian automotive sector forever. The
company Maruti Udyog Limited. The story of Maruti dates back to the
1970s. Indira Gandhi was the prime minister of India. Her son, Sanjay Gandhi,
24
25
learning some very hard truths. While the economic reforms process was kicked
of finance.
1991, it was only in 1993 that the automobile industry was finally delicensed
and the restrictions were removed.
Between 1993 and 95, government regulations limited a foreign companys
stake to a maximum of 51 percent of the equity. Hence the only method of entry
for an MNC then was through a joint venture with a local partner. The most
preferred partner was an existing automaker. In 1994-95 saw the announcement
of quite a few JVs.
Premier and Peugeot to form PAL-Peugeot.
GM and CK Birla to form GM India.
Mercedes-Benz and Tata Motors.
M&M and Ford to form Mahindra-Ford India.
In 1995, the government announced its decision to allow foreign auto
companies to enter with a 100% stake or wholly-owned subsidiaries. This
changed the dynamics of joint ventures in India.
The other automobile industries which play a crucial role in the Indian
automobile industry are:
Daewoo Motors India.
General Motors India
Mercedes-Benz
Hyundai Motors
Honda SIEL
Toyota
Skoda India
FORD PRODUCTS
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FORD IKON
SPECIFICATIONS
Engine
4-In-line
4 in-Line
Fuel System
SEFI
Displacement (cc)
1297
1399
Compression Ratio
10.2 : 1
18.0 : 1
Max. Power
(ps/rpm)
70PS/5500
68PS/4000
Max. Torque
(nm/rpm)
105/2500
160/2000
Emission Stage
Transmission type
5 Speed manual
5 Speed manual
Type
FORD ENDEAVOUR
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Engine
Type
Displacement (cc)
2953
2499
Max. Power
(ps/rpm)
Max. Torque
(nm/rpm)
Valve
Fuel System
Transmission
DOHC, 16 Valves
DOHC, 16 Valves
Direct injection
common rail
Direct injection
common rail
Transmission
5 speed Automatic
5 speed manual
4x4 Transfer
N/A
FORD FIESTA
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Front
Rear
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springs &
springs &
springs &
springs &
seperate twin seperate twin seperate twin seperate twin
tube dampers. tube dampers. tube dampers. tube dampers.
Dual-path
Dual-path
Dual-path
Dual-path
body mounts. body mounts. body mounts. body mounts.
Shock
absorbers
(Front & Rear)
Gas Filled
Gas Filled
Gas Filled
Gas Filled
Ventilated
Discs
Ventilated
Discs
Ventilated
Discs
Ventilated
Discs
Rear
Self
Adjusting
Drums
Self
Adjusting
Drums
Self
Adjusting
Drums
Self
Adjusting
Drums
FORD FIGO
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ENGINE
Displacement
(cc)
Type
Fuel system
1.2
1.2
1.2
1.2 Duratec
Duratec Duratec Duratec
Petrol
Petrol LXI Petrol EXI Petrol ZXI Titanium
1196
1196
1196
1196
SEFI
SEFI
SEFI
Front
Rear
Hydraulic
power
assisted
Hydraulic
power
assisted
Hydraulic
power
assisted
Hydraulic
power
assisted
Ventilated
Disc
Ventilated
Disc
Ventilated
Disc
Ventilated
Disc
Rear
Drum
Drum
Drum
Drum
CONCLUSION
FORD HAS PROVIDES A WIDE RANGE OF CARS IN THE INDIAN
MARKETS AS MENTIONED ABOVE, IT HAS TARGETTED THE
INDIAN MARKET WITH A PURCHASING POWER OF APPROX. 4.75
LAKHS.
CONSIDERING THE INDIAN MARKET TYPE WHERE
THE CONSUMERS CAN BE SUB- DIVIDED IN VARIOUS
CATEGORIES DEPENDING ON THEIR INCOME BRACKETS
STARTING ROM APPROX 1 LAKH TO ANY AMOUNT. BUT THE
CONSUMERS ARE MAINLY CONCENTRATED IN THE 2.75 TO 20
LAKHS BRACKET WHICH HAS BEEN PAID A SERIOUS AMOUNT
OF ATTENTION BY THE FORD MARKETING TEAM THUS,
FOCUSING ON THE CUSTOMERS DESIRED WANTS AND
RELATED PRODUCTS IN THE INDIAN MARKET SCENARIO.
The main reason why we have Segmentation is because we have so many types
of customers.
The reason why Segmentation has become important in teaching and learning
about marketing is because these groups of different customers have:
1. become more numerous, we have many more types of segments
2. The differences among groups have become more distinct
3. The groups have become large in number
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Sommers 10th Ed. suggests that a company should target segments "where the
number of competitors and their size are such that the firm is able to compete
effectively"
example
- some people buy trucks, some SUVs and some cars and some mini-vans
- some companies have a product segment devoted to truck buyers, like Ford
- car companies, like Nissan and Toyota might be advised to avoid selling trucks in
North America because the competition is intense and they might not make a
profit.
5. Resources
Sommers 10th Ed. suggests that a company should make sure the segment relates
to the resources of the company. If the company can mfg. variations to fit its key
demographics, great, but it should not take on additional demographics if it does
not have the capability
example
- a lingerie company taking on plus sizes - which would mean reconfiguring the
fabric pattern cut-out which would effect fabric cost, waste amounts, etc.
.
Targeting
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Ford Motor Company President and CEO Alan Mulally revealed the
much-anticipated new car to be produced in India. Called the new Ford
Figo, the car was unveiled at a press event in Delhi as a major addition to
the Ford India brand portfolio.
The Ford Figo, a new nameplate and a fresh face on the Indian market, signals
Fords intention to compete in Indias largest and most important small car
market segment.
Ford Figo is the result of a significant Ford investment commitment to expand
its plant near Chennai for volume production as a small-car centre of excellence
regionally. Fords $500 million investment has doubled the plants production
capacity to 200,000 units per year and introduces major advances in highquality automation and innovative, eco-friendly production techniques.
Our exciting new Ford Figo shows how serious we are about India, Mulally
said. It reflects our commitment to compete with great products in all segments
of this car market. We are confident the Ford Figo will be a product that Indian
consumers really want and value.
Ford Figo is designed and engineered to compete in Indias small car segment,
which accounts for more than 70 percent of the new vehicle market. It leverages
Fords small-car platform architecture, sharing underlying technology with the
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Positioning
Ford unveiled its 2010 product lineup, which includes the return of
the Taurus sedan, a restyled Ford Flex crossover with its patented
EcoBoost engine, a high-performance version of its popular F-150
pickup truck, and restyled Lincoln MKS and MKT vehicles.
On his blog, www.autoextremist.com, Detroit-based automotive
industry analyst Peter DeLorenzo wrote about Fords unveiling of its
product mix to a group of automotive journalists.
It became quickly apparent to everyone that this company is more
than just on the move, they are aggressively boosting their presence in
the market with an array of impressive products that will transform
the company, DeLorenzo wrote. Over the next 18 months, Ford will
have the freshest, most contemporary lineup in the business and the
newest fleet of vehicles in terms of age on the road.
That product lineup is going to pay off big-time for Ford,
DeLorenzo wrote.
They also have scaled back manufacturing operations to align supply
with demand and have taken steps to create a global manufacturing
platform that will allow the company to use common technology and
suppliers for vehicle offerings worldwide.
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Ford reported that it had a profit of $2.3 billion in the second quarter,
compared with a loss of $8.7 billion a year earlier.
Revenue for the period declined 40 percent, to $27.2 billion from
$41.1 billion a year earlier.
Ford and its competitors must aim at a moving target in trying to
figure out what will sell. Consumer demands shift continuously,
depending on the state of the economy and changes in fuel prices.
The days of selling 400,000 or 500,000 units of any vehicle, except
maybe the F-150, are over, Hinrichs said. Now we need to figure
out how to make the same money selling lower volumes. The best
way to do that is to go after a number of smaller niches.
Fords in a pretty good position, both from a product standpoint and
a reputation standpoint,
SWOT ANALYSIS
Strengths
-4th on the Fortune 500 List (U.S. only)
-4th on the Global 500 List
-39th on the Best Companies for Minorities List
-One of worlds best known brands
-Their Web strategy has cut car build costs by as much as $380 per car
-Have already invested heavily in alternate fuel sources
-Ford are seen as supportive eg
- Gave Generously after the September 11 Attacks
- Give Generously to Help Fight Breast Cancer
- Support Racing Teams, NASCAR, Formula One Etc
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Weaknesses
-Firestone Tire recalls caused Stock Price to Suffer--$14.70, Lowest
In Years
-CEO Jacques Nasser and Chairman Bill Ford Jr. could not get along
Leading to Bill Ford taking over as CEO
-Cash Reserves Have Sunk to $4.1 Billion
-$13 Billion on Acquisitions
-$3.5 Billion to Cover Tire Recalls
-Sometimes seen as "safe", "boring"
Opportunities
-Have a chance to become more environmentally friendly with cleaner
engine emissions and by working with environmental groups to help
clean the environment
-Ford have already started investing in Solar Power ,and have a chance
to become a market leader
-They can use their Web strategy to cut costs further
-They can take advantage of their perceived generosity by giving to
more charities and using the fact in their targeted advertising.
Threats
-Competition is huge.
-Internal strife will hurt the company.
-Threat of substitute products such as Natural gas, Electricity,
Ethanol, Vegetable oil, Sunlight, Water
-Intensity of Rivalry among competitors worldwide
-Worldwide markets threatened due to the "War on Terrorism"
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40
41
42
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that matters. This choice of product category will decide the nature of the
competition the product is going to face. Once product category positioning is
decided, the position for the new entrant against competing brands in the chosen
product category has to be analyzed and fixed.
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PRODUCT REPOSITIONING:
Products do undergo repositioning as they go along their life cycle. In some
cases, even products that are fairing well are repositioned. This is done mainly
to enlarge the reach of the product offer and to increase the sale of the product
by appealing to a wider target
market. The product is provided with some new features or it is associated with
some new target segments.
PROMOTIONAL DECISIONS:
Promotion has been defined as the coordination of all seller initiated efforts to
set up channels of information and persuasion in order to sell goods and
services or promote an
idea. While implicit communication occurs through the various elements of the
marketing mix, most of an organizations communications with the market The
basic tools used to
Accomplish an organizations communication objectives are often referred to as
the
Promotional mix.
The promotional mix
Advertise in Direct Interactive Sales Publicity/ marketing promotion Public
internet facilities
Advertising:
Personal selling
Advertising is defined as any paid form of non personal communication about an
organization, product, service, or idea by an identified sponsor. The paid aspect of this
definition reflects the fact that the space or time for an advertising message generally must be
bought. An occasional exception to this is the public service announcement, whose
advertising space or time is donated by the media.
Advertising is the best-known and most widely discussed form of promotion, probably
because of its pervasiveness. It is also very important promotional tool, particularly for
companies, whose products and services are targeted at mass consumer markets.
It is a very cost-effective method for communicating with large audiences. It can be used to
create brand images and symbolic appeals for a company or brand.
Direct Marketing:
One of the fastest-growing sectors of the U.S. economy is direct marketing, in
which organizations communicate directly with target customers to generate a
response and a transaction. It has become such an integral part of the IMC
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Interactive/Internet Marketing:
Interactive media allow for the back-and-forth flow of information whereby
users can participate in and modify the form and content of the information they
receive in real time. Unlike traditional forms of marketing communications
such as advertising, which are one-way in nature, the new media allow users to
perform a variety of functions such as receive and alter information and images,
make inquiries, respond to questions and of course make purchases. In addition
to the Internet, other forms of interactive media include CD ROMs, Kiosks, and
interactive television.
Sales Promotion:
The next variable in the promotional mix is sales promotion, which is generally
defined as those marketing activities that provide extra value or incentives to
the sales force, the distributors, or the ultimate consumer and can stimulate
immediate sales, sales promotion is generally broken into two major categories:
Consumer-oriented and
Trade-oriented activities
Consumer-oriented sales promotion is targeted to the ultimate user of a product
or service and includes couponing, sampling, premiums, rebates, contests,
sweepstakes, and various point-of-purchase materials.
Trade-oriented sales promotions are targeted towards marketing intermediaries
such as wholesalers, distributors and retailers.
Publicity/Public Relations:
Publicity refers to non personal communications regarding an organization,
product, service, or idea not directly paid for or run under identified
sponsorship. It usually comes in the form of a news story, editorial or
announcement about an organization and its products and services. Like
advertising, publicity is not directly paid for by the company.
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Personal Selling:
It is a form of person-to-person communication in which a seller attempts to
assist and persuade prospective buyers to purchase the companys product or
service or to act on an idea. Unlike advertising, personal selling involves direct
contact between buyer and seller, either face-to-face or through some form of
telecommunications such as telephone sales. Personal selling involves more
immediate and precise feedback because the impact of the sales presentation
can generally be assessed from the customers reactions.
Assembling the marketing mix means assembling the four Ps of marketing in
the best possible combination. Involved in this process are the choice of the
appropriate marketing activities and the allocation of the appropriate marketing
effort/resources to each one of them. The firm has to find out how it can
generate the targeted sales and profit. It considers different marketing mixes
with varying levels of expenditure on each marketing activity and tries to figure
out the effectiveness of different combinations in terms of the possible sales and
profits. It then chooses the combination/mix of products, price, place and
promotion that is best according to its judgment.
Since marketing is essentially an interaction between the marketing mix and
environmental variable, and since the latter and non-controllable, marketing
becomes synonymous with assembling and managing the marketing mix. Of
course, while assembling the marketing mix, the marketing manager will take
due note of the environmental variables.
Not only will he take due note of them, he will ensure that his marketing mix
suits the environmental variables. And, its factors that renders that task much
more complex.
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It can be easily seen that all activities and programmes, which a marketer
designs and caries out in his effort at winning customers, relate to one or the
other of the above four elements- product, place, promotion and pricing. It can
also be seen that in each of these elements, there are several sub-elements. For
example, packaging is one of the sub-elements of product and warehousing is
one of the sub-elements of distribution.
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scrutiny will reveal that all these strategies can be fitted into two broad
categories
1. PRICE ORIENTED MARKETING STRATEGY
2. DIFFERENTIATION ORIENTED MARKETING STRATEGY
In other words; there are only two broad routes available for forging marketing
strategies: any strategy has to be ultimately either a price-oriented strategy or a
differentiation-oriented strategy.
Firms taking to the price route in marketing strategy compete on the strength of
pricing. They use price as their competitive lever. They juggle the price of their
product to suit the prevailing competitive reality. They can afford to offer lower
prices and still make
the targeted profits, they elbow out competition with the cushion they enjoy in
the matter of pricing.
Price route requires cost leadership; evidently, a firm opting for the price route
will have to have a substantial cost advantage in their operations. It should be
enjoying an overall cost leadership in the given industry and its lower cost
should enable it to secure above average returns in spite of strong competition.
The cost advantage can emanate from different factors like, scale economies,
early entry, a large market share built over a period of time, locational
advantage, or synergy among the different businesses. The firms whole strategy,
in fact will revolve around building such cost advantage.
To successfully practice a price-led strategy, a firm should have consciously
taken to the idea sufficiently early in its evolutionary process and prepared itself
for adopting such a strategy.
The differentiation route of strategy revolves around aspects other than price. It
works on the principle that a firm can make its offer distinctive from all
competing offers and win through the distinctiveness. And, a firm adopting such
route can price its product on the perceived value of the attributes of the offer
and not necessarily on competition-parity basis.
Maximum scope for exploiting differentiation remains with the product. While
all the 4Ps of marketing are important elements from the point of view of
strategy, the other Ps normally go as elaborations of the offer, while the product
forms its core.
Product differentiation is of vital importance in product management and has
great potential in forgoing successful marketing strategies.
The product can be differentiated along two major planks:
1. Tangible product attributes and functions,
2. Intangible characteristics and emotional associations.
The tangible product attributes and functions are
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50
promotional strategy of motivating the sale force, the dealer and the consumer in transacting
a sale.
Price-off offers refers to offering the product at lower than the normal price. This encourages
immediate sales, attracts non-users, induces product trail and counters competition.
Premium refers to the offer of an article of merchandise as an incentive in or to sell the
product.
CONCLUSION
51
decreased in 1995. There are several possible causes for this change in
the
trend. In 1995, Ford acquired 20% equity in a major Chinese truck
manufacturer,
and launched several new vehicles; including the Ford Contour, Ford
Mondeo,
Mercury Mystique, Ford F-150, and Ford Taurus. These additional
investments and
expenses help explain the decrease in net income in 1995. Overall, the
company
has done well, and with reorganization in 1996 to decrease spending
and increase
efficiency, Ford is striving for future periods of growth.
RECOMENDATIONS
52
BIBLIOGRAPHY
WWW.GOOGLE.COM
WWW.WIKIPEDIA.COM
WWW.FORD.COM
WWW.ASKNOW.COM
NEWSPAPERS: HINDUSTAN TIMES, TIMES OF
INDIA
WORD OF MOUTH INFORMATION
BOOKS: HENRY FORD A LEGEND, MASS
PRODUCTION AND FORD MOTORS
MAGAZINES: OVERDRIVE
PERIODICALS: STONE AGE RACING
THE SHELBY 530
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