Two core businesses of Ford were:

AUTOMOTIVE

Core Businesses of Ford

FINANCIAL SERVICES

Encompassed design, development, manufacture, sales & services of cars & trucks

Comprised of Ford Motor Credit Company- wholly owned subsidiary of Ford and Hertz- an indirect wholly owned subsidiary. Ford credit provided leasing, insurance & vehicle-related financing & Hertz rented cars, light trucks & industrial equipments.

Ford in 1999 An era of new strategy

Jacques Nasser took over as chief executive officer. Pursued an ambitious diversification strategy. In which ford had to deal with all aspects of car business, not just making cars.

What did Ford do to implement the strategy?

MOVES MADE INTENTIONS 1) Acquired Kwik-Fit, a chain To improve Fords operation. of 20,000 auto services centres in Great Britain @ $1.6 billion. 2) Bought dealerships in selected U.S markets. 3) Swedish automaker Volvo was acquired @ $6.47 billion. To protect distribution network base. To substantially increase luxury car segment division.

4) Created Premier Automotive Because luxury brand segment Group (PAG) to manage luxury was expected to contribute onebrands business. third of global profits by 2005.

Failure of Diversification Strategy

Due to aggressive competition during that period. GMs Silverado and Sierra pickups overtook Fords division top-selling F-series in 2001. New pickups by Toyota and Dodge also cut into F-series sales and profits. Issue with Firestone over the Wilderness AT tires.

Results of Failure
Nasser was replaced by Bill Ford in 2001. Used to be a profitable automaker till 1999, Ford in 2001 incurred loss of $500 million. Overall, the company incurred loss of $5.5 billion. Market share and quality ratings dropped.