Overview of Ford Motor Company

The company used to be an American icon for over a century. It faced a setback of $1.6B in
2006 at 9 % decline. But in June 30, 2007, Ford revenues increased by 6% to 87.26B. History
form the beginning is, back in 1903, Mr. Henry Ford and eleven associates started the company.
Headquartered in Dearborn, Michigan, Ford has a 17.5% market share of the auto manufacturing
industry with 300,000 employees operating about 108 plants globally. Ford is providing business
services in two areas Ford Credit Company and Genuine parts and Mortorcraft. It is providing
information regarding the vehicle part, repair, maintenance to their customers who own Ford,
Lincoln and Mercury vehicles. Further more the company is also providing the service of
Motorcraft to their customers on their web. The customer can search and obtain any of their
vehicle parts according to make, model, and year and identification numbers.
Ford is working on green marketing by making hybrid engines in joining hands with BP. Its has
opened a research and engineering center in China and also plans to provide 200 dealership in
the country for taking a competitive edge before the rivalry takes over completely. Ford is also
designing and engineering in a global light commercial vehicle that will be sold in 80 countries
of the world. Ford owns good reputed brands of vehicles.
The industry is facing a setback form the rising cost of fuel, energy and raw material adding
more burdens of expenses for the companies. To compete with the intensive rivalry, firms are
using different tactics to improve the sales level and enhance their market share. The industry
manufacturers are downsizing, laying employees off and/ or restructuring their organizational set
up. Some of the companies are either closing the manufacturing of their models or bringing one
or more back on the production lines. Ford is bringing the Taurus model to production but it is
not going well.
Ford and other companies which are in top 3, are facing an emerging competitor Toyota. Toyota
has captured a huge market share and hence becoming a major threat to all the existing
companies.

1
 Year on Year Major Event at Ford
1990 — Harold Poling succeeds Petersen as chairman and Philip Benton Jr. elected president;
Introduction of '91 Ford Explorer SUV
1992 — Introduction of Mercury Villager minivan, joint venture with Nissan
1993 — Introduction in Europe of Ford Mondeo “world car”; Alex Trotman succeeds Poling as
chairman and CEO
1994 — Introduction of '94 Ford Windstar minivan
1996 — 250-millionth Ford vehicle built
1997 — Ford sells heavy-truck business to Freightliner; Introduction of Lincoln Navigator SUV;
1998 — Lincoln-Mercury headquarters moved to Irvine, CA; Edsel Ford II resigns as president
of Ford Credit; Introduction in Europe of Focus compact car
1999 — Bill Ford Jr. becomes chairman, replacing retiring Trotman, and Jacques Nasser
becomes president and CEO; Acquisition of Volvo Cars and THINK electric car
2000 — Introduction of Lincoln LS and Jaguar S-Type models; Acquisition of Land Rover from
BMW; Visteon Corp. parts-making organization spun off
2001 — Nasser resigns as president, replaced by Nick Scheele; Bill Ford Jr. assumes active
management role as CEO, fourth generation of the founding Ford family; Introduction of retro 2-
seat Ford Thunderbird
2002 — New design unveiled for '04 Mustang, the last surviving “pony car”
2003 — F-150 redesigned; Rouge plant overhaul nears completion en route to 2004 startup with
multi-platform capability

2
 Product line offered by Ford

• Aston Martin
• Mustang
• Land Rover
• Mazda
• Mercury
• Volvo Ford
• F-150
• Thunderbird
• Jaguar

Ford also operates two services Business

1. Ford Motor Credit Company
2. Genuine Parts and Motor craft

3
 PESTEL
Political: “N/A”

Economical:
1. Prices of fuel and interest rates are increasing.
2. Decline of home construction has reduced the demand of trucks. It has effected the
industry very much.

Legal:
A strict regulation has been applied for the emission on CO2. That has increased the costs of
manufacturers.

Technological:
Innovation
Hybrid engines
E-commerce
Hydrogen fuel energy

Ecological:
The environmental protection issues are being over looked for the safety and healthy
environment.
Social:
Labor union incentive plan

4
 Proposed vision
“To be the world’s Premier brand Automobile Company”.

Proposed Mission

“We want to achieve the maximum growth level of the industry with strong brand image by
facilitating our stakeholders the maximum of our expertise .We also want to groom our
customers as financially strong participants in society by utilizing maximum innovative
environmental friendly technology in the globe.”

5
Porter Analysis

Threat of new Entrant

Determinants Defining Question Assess the power of Buyers
Circle one of the following.
1 = low, 5 = high, or N/A if
it doesn’t apply to your
industry.
Economies of Does successful entry require that 1 2 3 4 5
Scale and companies have significant N/A
experience economies of scale or experience

Brand Identity Do new companies need to spend 1 2 3 4 5

heavily on brand identification? N/A
Product Do new entrants need to differentiate 1 2 3 4 5
Differentiation by spending heavily on advertising, N/A
customer services or product
differences to over come existing
customer loyalty?
Switching Costs Does the buyer have to pay to switch 1 2 3 4 5
from one supplier product to N/A
another?

Capital Required Does the new company need to 1 2 3 4 5

invest large financial resources? N/A
Access to Does the new comer have access to 1 2 3 4 5
Distribution distribution channel for product or N/A
services?

6
Cost advantage Established companies have cost 1 2 3 4 5
advantages over new rivals. N/A

Government Government policies can help to 1 2 3 4 5

policies preserve or limit competition. N/A
Expected If industry leaders retaliate more for 1 2 3 4 5
Retaliation new entrants then threat for new N/A
entrants will be high.

Intensity of Rivalry

Determinants Defining Question Assess the power of

Buyers
Circle one of the
following.
1 = low, 5 = high, or N/A
if it doesn’t apply to your
industry.
Industry growth How slowly or quickly is the 1 2 3 4 5
industry growing? Intense fight N/A
among rivals for market share

Fixed Cost Does your business have a high 1 2 3 4 5

fixed cost? N/A
Product Differentiation Is your product commodity? The 1 2 3 4 5
closer the product is to being a N/A
commodity the higher intensity of
rivalry.
Switching Costs How costly is it for your buyer to 1 2 3 4 5
switch between providers? N/A

7
 (In Lower Tier)

Intermittent How frequently is there a 1 2 3 4 5

Overcapacity problem of excess capacity in N/A
your industry?

Brand Identity Is branding critical for your 1 2 3 4 5

Rival’s success? Brand N/A
identification by buyer reduces
the threat of rivals.

Concentration and Are there a large number of firms 1 2 3 4 5

balance of equal size and power, all N/A
chasing after the same customer?

Diversity of competitors Are there competitors with 1 2 3 4 5

different strategies and frame of N/A
reference? When competitors are
diverse it is more difficult to
establish the rules of game

Bargaining power of Buyer

Determinants Defining Question Assess the power of Buyers

Circle one of the following.
1 = low, 5 = high, or N/A if
it doesn’t apply to your
industry.

8
Concentration Buyer is fragmented because to 1 2 3 4 5
industry covers all Demographic N/A
segments.

Product Cost Does your product buyer’s purchase 1 2 3 4 5

versus Total represent a significant fraction of the N/A
Purchases buyer’s cost? If so, buyer bargaining
power is typically high.

Product Product is standard or 1 2 3 4 5

Differentiation undifferentiated bargaining power is N/A
high.

Switching Costs If buyer face few switching cost 1 2 3 4 5

there bargaining power is high. N/A

Profits Profits with in the industry for 1 2 3 4 5

buyers are if high then buyer’s N/A
power is high.
Backward Can they make what you make 1 2 3 4 5
Integration themselves? N/A

Impact on Quality/ Is the product you offer important to 1 2 3 4 5

Performance the quality of the buyer’s product or N/A
services?

9
Buyers Does the buyer have complete 1 2 3 4 5
Information information on the product he may N/A
purchase?

Bargaining power of Suppliers

Determinants Defining Question Assess the power of

Buyers
Circle one of the
following.
1 = low, 5 = high, or N/A
if it doesn’t apply to your
industry.
Concentration Are your supplier are fragmented 1 2 3 4 5
or highly concentrated? N/A

Presences of Are there any substitutes for your 1 2 3 4 5

Substitute inputs supplier products? N/A

Product Is the suppliers product or service 1 2 3 4 5

Differentiation commodity ? N/A

Switching Costs How costly is it for you to switch 1 2 3 4 5

from suppliers product? N/A

10
Importance Is your industry an important 1 2 3 4 5
Relative to customer the supplier group ? N/A
Customer.

Forward Can the supplier produce the 1 2 3 4 5

Integration product you make? N/A

Impact on Is your supplier product essential 1 2 3 4 5

Quality/ to the quality or performance of N/A
Performance your business?

Threat of Substitute

Determinants Defining Question Assess the power of

Buyers
Circle one of the
following.
1 = low, 5 = high, or N/A
if it doesn’t apply to your
industry.
Price performance Does the substitute offer a better 1 2 3 4 5
price performance? N/A
Switching Cost Is it costly for buyer to switch to 1 2 3 4 5
the substitute product? N/A

11
 • Threat Of new Entrants:

(four 4’s, Three 5’s, One 3)

So thethreat of new entrants is Very high.

• Intensity of Rivalry:

(Three 5’s, Three 4’s, two 2’s)

The rivalry is very intense and HIGH.

• Bargaining Power of Buyer:

(Four 4’s,Twos 1’s,One 3’s)

Thre bargaining power of the buyer is High.

• Bargaining Power of Supplier:

(Three4’s, Three2’s)
So the Supplier power is Moderate.

• Threat of Substitutes:

(Two 4’s)
So the threat of substitute is High.

INDUSTRY COMMENTS:

As there are Four high forces and one Moderate force of supplier so the over all industry is very
attractive and growth is expected to be there in the industry but the intense rivalry is also the
issue for the industry.

12
 IFE

Weighted
Internal Factors Weights Rating Score Comments
STRENGTHS:

1. Ford’s rouge centre in 0.04 2 0.08 World’s largest living roof

Dearborn.

2. Weekly Half day 0.05 3 0.15 Strong management decisions.

sessions to develop
strategies
3. Ford as a affordable 0.05 3 0.15 From start to now they have
brand name. there strong brand image.

4. 91% market share in 0.07 3 0.21 Ford has one of largest market
big three truck segment. share compatitors in big three
in truck industry.
5. MAZDA, Sole 0.07 3 0.21
manufacturers in
gasoline, diesel and
internal combustion
engine.
6. Innovation 0.06 3 0.18 First time three point seat belt
was introduced by Ford.

7. Acquisitions by Ford 0.04 3 0.12 Ford acquisition with Mazda,

Volvo, Jaguar and Land Rover,
genuine parts and service,
Motor craft.
8. Faster Rate of 0.06 3 0.18 By cutting factory capacity
production

13
9. World’s largest finance 0.05 3 0.15 To assist its distributors and in
company. real estates.

10. Providing know how 0.05 3 0.15 Company owned by ford

about spare parts. www.genuineflmservices.com
Provides info .about spare parts
of luxury cars.
11. Car of the year 0.04 3 0.12 European car of the year in
S-Max 2006.

WEAKNESS:

1. New Taurus unable 0.05 2 0.10 After purchasing stock of old

to make lost Value Taurus New Taurus was unable
gain. to gain Value
2. Consumer desire 0.04 2 0.08 Consumer expectations were
not fulfilled more makes and models in cars
which are not being fulfilled.
3. Expected customer 0.04 2 0.08 Low cost and fuel efficient cars
demand were expected by customers.

4. Ford’s Revenue 0.06 1 0.06 Decreasing revenue from North

from North America $80662 to $69425
America. Million.
5. Financial Positions 0.05 1 0.05 $12.6 Billion net income, A
Negative figures loss of 1.7 Billion from last
year.
6. No incentive plans 0.06 2 0.12 Rivals are having strong
for distributers. competitive advantage over it.

7. 2nd highest 0.07 2 0.14 Inventory taking by Ford is 2nd

inventory level highest which is not good.

14
 8. Decreasing bargain 0.05 2 0.10 As we have strong buyers so
power of supplier supplier’s power tends to be
low or moderate.
TOTAL 1.00 2.43

EFE

Weighted
Internal Factors Weights Rating Score Comments
OPPORTUNITIES:

1. Hybrid energy 0.04 3 0.12 Opportunity of demand in fuel

vehicles and efficient engines
Hydrogen Power
2. New Consortium by 0.05 3 0.15 Objectives to achieve capacity
Ford. production

3. Competitive 0.07 3 0.21 Assisting new distributors in

Financing services real estates.

4. Divesture by Hertz 0.05 3 0.15 Opportunity taken

15
 5. E-commerce 0.05 4 0.20 To enter in New global areas
facilitation

6. Global lite 0.04 2 0.08 To introduce in new market

commercial Vehicle areas.

7. 200 plus dealership 0.06 3 0.18 Start research centres in china

plans in China to evaluate dealership plans

8. Falcon success and 0.03 2 0.06 Falcon success becomes

development opportunity for new market
areas.
9. Weak competition 0.04 3 0.12 Existing competitors were sloe
in China in growth.

10. Two tier China 0.06 4 0.24 Two market segments upper
market. and lower.

11. Global Area 0.05 3 0.15 Africa, Asia pacific, Middle

east.

THREATS:

1. Threat by 0.08 4 0.24 High level of threat was there

TOYOTA to from Toyota to over take
overtake position.
2. Threat from car 0.05 2 0.10 High level of threat by car
rentals from brand rentals as they have high sales.
image.
3. Loosing brand 0.06 3 0.18 Brand image threat as expected
image demand was not there

16
 4. Gas pricing 0.05 3 0.15 Govt policies were out of range
skyrocketing and have no control.

5. Fluctuating 0.05 3 0.15 In current market we have

currency rate problem in with currency.

6. Market share 0.05 2 0.10 PAG market share in North

decline PAG America was declined.

7. Intense Rivalry 0.07 3 0.21 Other competitors were taking

advantage.

8. Decrease in home 0.05 2 0.10 Truck manufacturing was

Construction disturbed.

TOTAL 1.00 2.89

Competitive Profile Matrix

(CPM)

FORD GM TOYOTA
Key Success Factors Weight Rating Score Rating Score Rating Score
Financial leadership 0.15 1 0.15 3 0.45 4 0.6
Brand image 0.12 4 0.48 3 0.36 2 0.24
Incentive plan 0.1 2 0.2 3 0.3 4 0.4
Educating the customer 0.12 4 0.48 3 0.36 2 0.24
Fuel efficient, hybrid
0.15 4 0.6 3 0.45 3 0.45
engines
E-commerce 0.12 1 0.12 2 0.24 4 0.48
Export continual 0.08 3 0.24 4 0.32 3 0.24
Providing spare parts of old
0.07 3 0.21 1 0.07 1 0.07
models
Plant utilization 0.09 2 0.18 2 0.18 2 0.18
1
.00 2.66 2.73 2.9

17
 Highest possible
Score 4
Lowest score 1
Average 2.5
Rating
1 Major Weakness
2 Minor Weakness
3 Minor Strength
4 Major Strength

IE Matrix.
The IFE total Weighted Scores
IFE

4.0 Strong (3.0-4.0) 3.0 Average (2.0-2.99) 2.0 Weak (1.0-1.99) 1.0
High I II III

3.0_4.0

3.0

18
 Medium IV V VI
EFE
2.0_2.99

2.0

Low VII VIII IX

1.0_1.99

1.0

IFE score 2.43

EFE score 2.89

HOLD AND MAINTAIN:

• Market penetration
• Product development

GRAND STRATEGY MATRIX:

QUADRANT 2 QUADRANT
RAPID MARKET GROWTH
-1

STRONG
WEAK COMPATITIVE
COMPATITIVE 19
POSITION
POSITION

QUADRANT -3 SLOW MARKET GROWTH QUADRANT -4

 • Retrenchment

• Concentric diversification

• Horizontal Integration

Value Chain Analysis

Support Activities
Infrastructure:
Head office in Dearborn, Michigan USA +
Ford manufactures and distributes its vehicles to 6 continents +
Operates 108 manufacturing plants all over the globe +
Deals in two service business +
1. Ford motor Credit Company

2. Genuine Parts and Moto craft

Has the world’s largest single roof truck final assembly building +

HRM:

20
The company has good organizational structure +
Deals with a team of 300,000 employees +

Technological Development:
Innovation regarding vehicle performance improvements +
Opened a research and engineering center in China +
Ford is designing and engineering a global light commercial vehicle in Australia. Its also plan to
sell it in 80 countries of the world. P+
Working on designing and engineering a global light commercial Vehicle that will eventually be
sold in some 80 countries +
Owns a good rang of brands in vehicles + / p-
Company produces hybrid energy vehicles and has joined force with the British Petroleum to
develop hydrogen power. +
The company did a consortium. This helped the company to cut the factory capacity and made it
capable of producing vehicles in a faster rate. +
Provides information and maintenance of vehicles on Web +
More of a production- driven - / p+

Procurement:
Acquired good brand image vehicle of the world e.g. Mazda, Volvo, etc. +
Sold some of the share of Aston Martin to gain cutting factory capacity and enabling the
company to produce vehicles at a faster rates +
The company continues to support the consortium of investors with safety, emission and other
technological need +

Primary Activities
Inbound Logistics:
Cost of raw materials (steel & resins) is rising -
Energy cost is rising as well -
Operations:
World’s Largest single roof truck assembling building +

21
Distribution of its vehicles in 6 continents of the world +
108 plants world +
Product line of vehicles have a good brand image + / p-
Having the largest single roof truck assembling building +
Providing business services in two areas +
1. Ford Credit Company

2. Genuine parts and Mortorcraft

Facing extra cost of CO2 emission by the regulatory authority -

Outbound logistics:
Offering dealerships throughout the glob +
Thinking to offer 200 dealership in China p+
Planning to sell Falcon in 80 countries p+

Marketing and sales:

Planning to give 200 dealership in china. P+
Promoting the ford brand by educating the customers. Especially those who own the Ford,
Lincoln and Mercury vehicles through providing information (parts, repair and maintenance) on
web. +
No incentive plan is shown by Ford to boost the sales - / p+
Company produces hybrid energy vehicles and has joined force with the British Petroleum to
develop hydrogen power. +
Providing competitive financing rates with flexible terms applied toward leasing and/ or
financing vehicle purchase +
Green marketing +
E-commerce -/ P+

Services:
Largest finance company +
Provides information and maintenance of vehicles on Web +

22
Gives the service to provide their vehicle model parts by make, year and identification number +

Explanation:
The company has overall a good infrastructure. It is taking good attention in manufacturing and
providing the dealership throughout the world by teaming u with their 300000 employees. Ford
is providing business services in two areas Ford Credit Company and Genuine parts and
Mortorcraft. It is providing information regarding the vehicle part, repair, maintenance to their
customers who own Ford, Lincoln and Mercury vehicles. Further more the company is also
providing the service of Motorcraft to their customers on their web. The customer can search and
obtain any of their vehicle parts according to make, model, year and identification numbers.
Ford is working on green marketing by making hybrid engines by joining hands with BP. Its has
opened a research and engineering center in China and also plans to provide 200 dealership in
the country for taking a competitive edge before the rivalry takes over completely. Ford is also
designing and engineering in a global light commercial vehicle that will be sold in 80 countries
of the world. Ford made a consortium to sell out some of the share of Aston Martin in order to
gain cutting factory capacity and enabling the company to produce vehicles at a faster rates. The
company continues to support the consortium of investors with safety, emission and other
technological need.
Ford owns good reputed brands of vehicles but if it does not evaluate the customers demand
regarding making fuel efficient cars, it might lose its market more drastically. The increasing
costs of raw materials for manufacturing the vehicles are also rising. The company is not taking
any certain rock solid steps in innovation of vehicle manufacturing. On the other hand, there’s
another problem rising i.e. cost of energy.
The company is seriously lacking the promotional element in enhancing the sales by giving
incentives to their dealers. Where as their competitors are doing it according to the need as how
much to give incentives to their dealers. If the company didn’t took any steps in this regard, it
will surely face the defeat in the market.

23
Space matrix

24
 Internal strategic External strategic position
position

X- Competitive analysis Industry strength

Axis
-3 Product quality +4 Profit potential

-4 Market capital share +3 Growth potential

-3 Competitor’s capacity +2 Financial stability

utilization
+2 Ease of entry into market

-4 Control over
distributors

Average= -3.5 Average= 2.75

Axis Y Financial Strengths Environmental Strengths

+2 Cash flow from -5 Inflation

operations
-4 Technology
+2 Liquidity
-3 Barriers to Exit
+1 Leverage
-2 Risk involved in business
+1 ROA

Average= 1.5 Average= -3.5

Total axis X score= -0.75

Total axis Y score= -2

25
Defensive Strategies:
The results and vector of the space matrix is showing that strategies will be defensive, which are:
• Retrenchment

• Divesture

• Liquidation

FINANCIAL RATIOS

26
Ratios Ratio Ratio Ratio
2004 2005 2006 Comments

27
Liquidity ratios
Current ratio The current ratio of 2006 shows the week
position of company. The value of 0.94
shows that firm is in week position tyo
0.94 1.17 0.94 meet its short term obligations.
Quick ratio 0.72 in 2006 shows t6he extent to which a
firm can meet its short term obligations
without relying on the sales of its
0.72 0.98 0.73 inventories that is less than previous year.
Leverage ratios
Debt to total Company is more relaying on funds
assets ratio provided by creditors rather on their on
(times) 0.62 0.56 0.59 investments according 2006.
Debt to equity This ratio shows that either company is
ratio (times) going towards more borrowing or severe
depreciation in currency positions
-49.65 11.40 10.78 according to 2006.
Long term debt to
There is no balance between debt and
equity ratio equity. Company is borrow more rather to
(times) -49.65 11.33 10.78 invest.
Times interest The 2006 ratio shows that (0.71) is the
earned extent to which firms earning can decline
ratio(times) without the firm becoming unable to meet
-0.71 1.13 1.69 its annual interest costs.
Activity ratio
Inventory
turnover This ratio shows that company is selling its
(times) 13.83 17.22 15.94 inventory 13.83 times in 2006.
Total assets Firm is not generating a sufficient volume
turnover(times) of business for the size of its asset
0.57 0.64 0.59 investment compare to previous years.
Accounts
receivable
turnover NA NA NA NA
Average
collection
period NA NA NA NA
Profitability
ratio
Gross profit The 2006 ratio shows that Firms
margin % management is not efficiently use its labor
and raw material in the process of
7.03 18.07 20.85 production.

28
Operating profit The low profit margin shows the poor
margin condition of Firm. It shows firm is not
keeping its cost under control.
Management of firm is not efficiently use
-0.04 5.37 6.95 the business operations to generate profit.
Net profit margin It’s not satisfactory according 2006. It
shows a bad performance of managers and
-7.88 0.81 2.03 operations.
Return on total This ratio shows that business is more
assets asset-intensive means company needs
more money for reinvesting to generate
-0.05 0.52 1.19 profit.
Return on
The higher the ROE ratio is better for firm.
shareholder's
But here it’s too low than previous years
equity
3.64 10.00 21.73 showing week financial position of firm.
Earning per share N.A NA NA NA
Price earning
ratio NA NA NA NA

GRAPHS OF FINANCIAL POSITION

29
 currentratio
1.40
1.17
1.20
1.00 0.94 0.94

0.80
0.60 current ratio
0.40
0.20
0.00
1 2 3

quick ratio
1.20
0.98
1.00

0.80 0.72 0.73

0.60
quick ratio
0.40

0.20

0.00
1 2 3

debttototal
assetsratio(times)
0.64
0.62
0.62
0.60 0.59
0.58 debtto total
0.56
0.56 assets ratio (times)
0.54
0.52
1 2 3

30
 debtto equity
ratio (times)
20.00 11.40 10.78
10.00
0.00
-10.00 1 2 3
debt to equity
-20.00
ratio (times)
-30.00
-40.00
-50.00
-60.00 -49.65

longtermdebt to equity ratio

(times)
20.00 11.33 10.78
10.00
0.00
-10.00 1 2 3
longterm debt to
-20.00
equity ratio (times)
-30.00
-40.00
-50.00
-60.00 -49.65

31
 timesinterest
earnedratio(times)
2.00 1.69
1.50
1.13
1.00
times interest
0.50
earned ratio(times)
0.00

-0.50 1 2 3

-1.00 -0.71

grossprofitmargin%
25.00
20.85
20.00 18.07

15.00
grossprofit margin
10.00 7.03 %

5.00

0.00
1 2 3

32
 operatingprofit
margin
8.00 6.95

6.00 5.37

4.00
operating profit
margin
2.00

0.00
-0.04
1 2 3
-2.00

netprofitmargin
4.00
2.03
2.00 0.81
0.00

-2.00 1 2 3
netprofit margin
-4.00

-6.00

-8.00
-7.88
-10.00

33
 returnon total assets
1.40
1.19
1.20
1.00
0.80
0.52 return on total assets
0.60
0.40
0.20
0.00
-0.20 -0.05
1 2 3

returnon
shareholder'sequity
25.00 21.73
20.00

15.00
10.00 returnon
10.00
shareholder'sequity
5.00 3.64

0.00
1 2 3

34
HOW TO SELECT STRATEGY:

ALTERNATIVE SWOT SPACE BCG IE GRAND TOTAL

STRATEGIES
Forward
Integration
Backward
Integration
Horizontal 1
Integration
Market 1
Penetration
Market
Development
Product 1
Development
Related 1
Diversification
Unrelated 1
Diversification
Retrenchment 2

Divesture 1

Liquidation 2

35
(QUANTITATIVE STRATEGIC PLANNING MATRIX)

(QSPM for FORD)

36
Key Internal Factors Retrenchment Liquidation
STRENGTH: Weight AS TAS AS TAS
Ford’s rouge centre in Dearborn. 0.04 - - - -
Weekly Half day sessions to develop 0.05 - - - -
Key External Factors
strategies Retrenchment Liquidation
FordOpportunities
as an affordable brand name. Weight AS
0.05 TAS 2 AS
0.10 1 TAS 0.05
91%Hybrid
marketenergy
share vehicles
in big three truck0.04 0.07
- 3- 0.21 - 1 0.07
-
and
segment. Hydrogen Power
New Consortium
MAZDA, by
Sole manufacturers in gasoline, 0.07 - - - -
0.05 3 0.15 1 0.05
Ford.
diesel and internal combustion engine.
Competitive Financing
Innovation 0.06 3 0.18 1 1 0.06
0.07 4 0.28 0.07
services
Acquisitions
Divesture byby Ford
Hertz 0.05 0.04
3 -
0.15 - 1 - -
0.05
Faster Rate of production
E-commerce facilitation 0.05 0.06
4 3
0.20 0.18 2 1 0.06
0.10
World’s largest finance company. 0.05 2 0.10 3 0.15
Global lite commercial
0.04 2 0.08 1 0.04
Vehicleknow how about spare parts.
Providing 0.05 - - - -
200 plus dealership plans
CarinofChina
the year S-Max 0.06 3
0.04 0.18
- - 1 - 0.06
-
Falcon success and
0.03 2 0.06 1 0.03
development
Weak competition in Retrenchment Divesture
0.04 - - - -
China
WEAKNESS: Weight AS TAS AS TAS
New Two tier China
Taurus unablemarket. 0.06
to make lost Value 2
0.05 10.12 0.05 3 0.06
0.15
Global Area
gain. 0.05 - - - -
Consumer desire not fulfilled 0.04 3 0.12 1 0.04
Expected customer demand
THREATS: 0.04 3
Retrenchment 0.12Divesture
1 0.04
Ford’s Revenue from North America. 0.06 1 0.06 3 0.18
Financial Positions Negative figures 0.05
AS 3
TAS 0.15AS 2 0.10
TAS
Threat by TOYOTA to
0.08 3 0.24 1 0.08
No incentiveovertake
plans for distributers. 0.06 - - - -
Threatinventory
2nd highest from car rentals
level 0.07 2 0.14 1 0.07
0.05 2 0.10 1 0.05
frombargain
Decreasing brand image.
power of supplier 0.05 2 0.10 1 0.05
TOTAL Loosing brand image 0.06 3
1.00 0.18 1.51 1 0.06
1.02
Gas pricing skyrocketing 0.05 3 0.10 1 0.10

Fluctuating currency rate 0.05 2 0.10 1 0.05

Market share decline
0.05 - - - -
PAG
Intense Rivalry 0.07 3 0.21 1 0.07
Decrease in home
0.05 3 0.15 1 0.05
Construction
TOTAL 1.00 2.3 0.92

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QSPM STRATEGY:
• Retrenchment will be the optimal strategy for the Ford motors.

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