Ford Motors 20 12 18 PDF

STRATEGIC MANAGEMENT (MBSA 1213)
GROUP ASSIGNMENT
Case Analysis for Ford Motor Company, 2015
Prepared for: Dr. Suzilawati Kamarudin
Prepared by:
MBS171174 Abdul Latif Bin Allah Pitchy
MBS171189 Arreshvhina s/o Narayanan
MBS171192 Nazim Bin Abdul Rahim
MBS171187 Priyaa Tharisiny A/P Aruldass
MBS171175 Soong Alfred
MBS161203 Taha Yasin Durmus
18th December 2018

Strategic Management MBSA 1213
Page | 2
Contents
1.0 Introduction ................................................................................................................... 6
1.1 Company Background ................................................................................................. 7
2.0 Ford Motor Company’s Vision and Mission Statement ............................................ 9
3.1 Industry Description .................................................................................................. 10
3.2 Strategic Group Map ................................................................................................. 11
3.3 PESTEL Analysis of Ford Motor Company ............................................................... 13
3.4 Industry Environment Analysis: Porter 5 Forces ........................................................ 16
3.5 Competitive Force Analysis .................................................................................. 19
3.5.1 Competitive force – General Motors (GM) Company ..................................... 19
3.5.2 Competitive force – Toyota............................................................................ 21
3.6 Summary Table of Opportunities and Threats ............................................................ 22
3.7 Prioritize Table of Opportunities................................................................................ 23
3.8 Prioritize Table of Threats ......................................................................................... 24
3.9 External Factor Evaluation (EFE) Matrix ................................................................... 25
3.9.1 Table of Opportunities ........................................................................................ 25
3.9.2 Table of Threats .................................................................................................. 27
3.10 Key Success factor .................................................................................................. 28
3.11 The Competitive Profile Matrix (CPM) ................................................................... 30
4.0 Internal Analysis ......................................................................................................... 31
4.1 Ford Motor Company Culture Assessment ................................................................ 31
4.2 Ford Motor Company Management Function Assessment ......................................... 33
4.3 Ford Motor Company Marketing Assessment ............................................................ 36
4.4 Ford Motor Company Financial and Accounting Assessment .................................... 38
4.5 Ford Motor Company Production/Operation Assessment ........................................... 41
4.6 Ford Motor Company Research and Development Assessment (R&D) ...................... 42
4.7 Ford Motor Company Management Information Systems Assessment (MIS) ............ 43
Page | 3
4.8 Summary Table of Strengths and Weakness .............................................................. 44
4.9 Prioritize Table of Strengths ...................................................................................... 44
4.10 Prioritize Table of Weakness ................................................................................... 46
4.11 Internal Factor Evaluation (IFE) Matrix ................................................................... 47
4.11.1 Table of Strength .............................................................................................. 47
4.11.2 Table of Weakness ............................................................................................ 48
4.12 Value Chain Analysis .............................................................................................. 50
5.0 Strategic in Action ....................................................................................................... 52
5.1 Long Term and Short Term Strategic Objectives ....................................................... 52
5.2 Long Term and Short Term Financial Objectives ....................................................... 52
5.3 Corporate Level Strategy ........................................................................................... 53
6.0 Strategy Formulation Process ..................................................................................... 54
6.1 SWOT & TOWS Analysis ......................................................................................... 54
6.1.1 SO Strategy ........................................................................................................ 61
6.1.3 ST Strategy ......................................................................................................... 61
6.1.2 WO Strategy ....................................................................................................... 62
6.1.4 WT Strategy ....................................................................................................... 62
6.2 Ford Motor - SPACE Matrix ..................................................................................... 63
6.3 Ford Motor - BCG Matrix ......................................................................................... 64
6.4 Ford Motor - Internal External (IE) Matrix ................................................................ 66
6.5 Ford Motor - Grand Strategy Matrix .......................................................................... 68
6.7 Quantitative Strategic Planning Matrix ...................................................................... 70
6.7.1 Strength .............................................................................................................. 71
6.7.2 Weakness............................................................................................................ 72
6.7.3 Opportunities ...................................................................................................... 73
6.7.4 Threats................................................................................................................ 74
7.0 QSPM Strategy Recommendation .............................................................................. 75
Page | 4
8.0 Corporate Level Strategy ............................................................................................ 76
8.1 Proposed Vision Statement ........................................................................................ 76
9.0 Conclusion ................................................................................................................... 77
Page | 5
1.0 Introduction
Headquartered in Dearborn, Michigan, Ford Motor Company is the second-largest U.S.

automaker behind General Motors, but only the fifth-largest in the world based on vehicle
sales. The company produces many different cars and trucks ranging from entry level to
luxury cars. Ford’s F-150 pickup truck is the most popular truck in the world for 32 years
running. Ford owns stakes in several car manufacturers around the world, including Aston
Martin, Jiangling, Troller, and FPV. In the past, Ford has owned portions of Jaguar, Land
Rover, and Volvo. In 2011, Ford discontinued its Mercury brand that had existed since 1938.
In 2015, Ford switched the body of its famous F-150 to aluminum from steel. The extra cost
was $395 per truck, but fuel economy improved with the reduced weight. (Page 508, Para 1)
Page | 6
1.1 Company Background

Company Name Ford Motor Company
Founder Sir Henry Ford (Page 508, Para 3)
Ford traces its roots back to 1896 when Henry Ford built and
marketed his first Quadricycle, a 4-wheel vehicle with a 4-
horsepower engine. It was not until 1901, however, that Ford started
his own car company, named the Henry Ford Company. He started
Ford Motor Company in 1902 with 12 investors and $28,000 in
cash. Interestingly, two of Ford’s first investors in his new company
were John and Horace Dodge, who later would start their own car
company, called Dodge. Ford had spent nearly the entire initial
investment when his first car was sold in July 1903. It did not take
Ford Motor Company long, though, to start making large profits. By
October 1903, Ford had turned a profit of $37,000, indicating just
how popular this new equipment was going to become. The
company was incorporated in 1903. (Page 508, Para 3)
Henry Ford is world famous for his assembly line, but for the
History first 10 years of the company, two to three men worked on each car,
and the parts were supplied by outside firms. Ford produced the
famous Model T in 1908 and sold over 15 million, until production
ceased in 1927. To help maintain employee morale, Ford paid
workers $5 per day in 1914, double the national average. In addition,
Ford reduced the workday from 9 to 8 hours. Many of Ford’s
workers could even afford a car they produced with the salary they
earned. (Page 508, Para 4)
In 1922, Ford acquired Lincoln Company and even began
experimenting with aircraft production. In 1925, 2 years before
selling the Model A automobile in 1927, Ford closed all plants for 6
months to retool and train employees on construction. By 1931,
despite the great depression, Ford sold over 5 million Model A’s.
Ford continued to grow over the next two decades, until its IPO in
1956, which was at the time the largest IPO in history. (Page 508,
Page | 7
Para 5)
In 2005, Ford, along with GM, had their corporate bonds
downgraded to junk status. High health-care costs, rising gas, falling
market share to foreign products, a demanding United Auto Workers
(UAW) union, and lack of strategic planning all contributed to the
downfall. In 2007, Ford reached an agreement with the UAW on
retirement benefits and other costs. The company was able to avoid
a government takeover, unlike its counterpart, General Motors. Over
the last several years, Ford has rebounded and continues to produce
quality automobiles worldwide, as well as more and more electric
and part-electric vehicles. (Page 509, Para 1)
Ford does not have a published vision statement, but does have a
stated mission statement, which is based on four key components
and paraphrased as follows:
One Ford: Align employee efforts toward a common definition of

success and optimize their collective strengths worldwide.
Vision & Mission
One team: Work together as one team to achieve automotive
(Page 509, Para 3) leadership, which is measured by the satisfaction of our customers,
employees, and essential business partners, such as our dealers,
investors, suppliers, unions/councils, and communities.
One plan: Aggressively restructure to operate profitably at the
current demand and changing model mix.
One goal: Create an exciting and viable company delivering
profitable growth for all.
Products Automobile
Operating Location Headquartered in Dearborn, Michigan, (Page 508, Para 1)
Business Segments Worldwide
Revenue (2014) Worldwide : $144,077 million (Page 511, Exhibit 3)
Page | 8
2.0 Ford Motor Company’s Vision and Mission Statement

Vision :
Ford does not have a published vision statement, but does have a stated mission statement,
which is based on four key components and paraphrased as follows: (Page 509, Para 3)
Current Mission Statement:
One Ford: Align employee efforts toward a common definition of success and optimize their
collective strengths worldwide.
One team: Work together as one team to achieve automotive leadership, which is measured
by the satisfaction of our customers, employees, and essential business partners, such as our
dealers, investors, suppliers, unions/councils, and communities.
One plan: Aggressively restructure to operate profitably at the current demand and changing
model mix.
One goal: Create an exciting and viable company delivering profitable growth for all.
Page | 9
3.0 External Analysis
3.1 Industry Description

Industry Description
Name of Industry Automobile Industry
No. of Main Player 3 companies
Revenue ($) Ford Motor Company : 144,007 M
(Page 513, Exhibit 6) General Motors (GM) : 155,929 M
Toyota : 249,472 M
Nett Income ($) Ford Motor Company : 3,187 M
(Page 513, Exhibit 6) General Motors (GM) : 3,949 M
Toyota : 17,703 M
No. of Employee Ford Motor Company : 187,000
(Page 513, Exhibit 6) General Motors (GM) : 216,000
Toyota : 339,000
Revenue per Ford Motor Company : 770,000
Employee ($) General Motors (GM) : 721,893
(Page 513, Exhibit 6) Toyota : 735,906
EPS Ratio ($) Ford Motor Company : 0.80
(Page 513, Exhibit 6) General Motors (GM) : 1.65
Toyota : 10.71
Market Cap ($) Ford Motor Company : 63.4 B
(Page 513, Exhibit 6) General Motors (GM) : 60.8 B
Toyota : 213 B
Industry Segment Ford Motor Company :
Ford derives approximately 60 percent of its revenues from the
United States, Canada, and Mexico. Virtually all the company’s
profits in 2014 came from these countries; the only other
profitable region was Asia. (Page 511, Para 2)
General Motors (GM) :
Headquartered in Detroit, Michigan, GM is the largest American
car manufacturing company, ranking second behind Toyota in
Page | 10
revenues and units of vehicles sold annually. GM brands include

GMC, Chevrolet, Buick, Cadillac, Opel, Wuling, Jie Fang, and
Alpheon, among many others. (Page 513, Para 1)
Toyota :
Headquartered in Aichi, Japan, with U.S. headquarters based in
Torrance, California, Toyota is the largest automaker in the
world in terms of revenues, and one of the largest in the U.S.
market. Toyota sells vehicles in over 170 different nations and
generated $214 billion in revenues over all operating segments
in 2013. (Page 513, Para 3)
3.2 Strategic Group Map

Ford Motor Company General Motors (GM) Toyota
Revenue $144,007,000,000.00 $155,929,000,000.00 $249,472,000,000.00
No Employee 187,000 216,000 339,000
Revenue/Employee $770,000 $721,893 $735,906
In developing the strategic group mapping for the automobile industry, total revenue and
number of employees were taken into consideration. This would allow us to compare the
efficiency of the companies on utilizing it’s manpower based Revenue per Employee; where
higher value indicates better utilized workforce. Hyundai-Kia was excluded from the
mapping due unavailability of the financial information.
Page | 11
Strategic Group Mapping for Ford Motor Company

400000
350000
300000 GM
250000
Ford
200000
Toyota
150000
100000
50000
0
$-50,000,000,000.00 $50,000,000,000.00 $150,000,000,000.00$250,000,000,000.00$350,000,000,000.00
From the strategic mapping displayed, we can conclude that Ford Motors is better than the
other two competitiors in term of it’s manpower utilization to generate revenue. However, the
difference between these companies are only marginal. The difference between Ford and
Toyota in term of revenue/employee is only $34,094 (Ford only higher by about 5%).
However, in term of Net Income; Toyata’s income is about 4.5x higher than Ford. Thus we
can’t generalize the conclusion to say that Ford is better in managing it’s manpower
compared to Toyota.
Page | 12
3.3 PESTEL Analysis of Ford Motor Company

Political case facts Opportunity Threats
Not Mentioned in the Case -
Economics Case Facts
Midsize cars are also extremely popular, taking much of the

market share away from larger vehicles. (Page 515, Para 1)

The outlook in 2015 is for gas to remain below $3 per gallon.
(Page 516, Para 2)

As of late 2014, Chinese vehicle sales were up 8 percent over
the record year in 2013. (Page 515, Para 3)

Oil prices fell nearly 50 percent from summer 2014 to year-
end 2014. (Page 516, Para 2)

In 2014, sales of SUVs, mini-vans, and light-duty trucks
increased nearly 10 percent, whereas growth for cars was 
below 2 percent. (Page 516, Para 2)
Rates are slowly going up and currently are around 4.5 percent
for new cars and 8.8 percent for used cars as of 2014. The
lower rates and easy access to loans has been great for

automakers. (Page 516, Para 5)
Europe is starting to stabilize economically, although the euro

continues to decline, losing 25 percent of its value to the dollar
between 2008 and 2014, putting further pressure on U.S. car

manufacturers. (Page 515, Para 4)
In total, China enjoyed a 28 percent share as compared to the

U.S. 17.5 percent share in global vehicle sales in 2013; China
expects to increase its global market share lead.

(Page 515, Para 3)
Page | 13
As of August 2014, the total balance on auto loans in the

United States was $924 billion, an all-time high, and up 11 
percent from the previous year. (Page 516, Para 5)
Social and Demographics


Cross-over utility vehicles have taken much of the demand

away from SUVs, which account for only 10 percent of total 
U.S. market share. (Page 514. Para 4)
China will continue to put pressure on U.S., European, and

Japanese automakers as new Chinese-based auto companies 
are formed and grow to prominence. (Page 515, Para 3)
Demand in India has been slow, with a 3 percent decline in

2014. (Page 515, Para 3)

Eastern Europe exceeded a 9 percent decline and Russia nearly
a 13 percent decline over 2013. (Page 515, Para 4)

In 2013, GM committed to invest $16 billion in the United
States over the next 3 years and…. Kia recently spent $1.5
billion in Mexico and another $10 billion is expected to be 
spent in Mexico from BMW, Toyota, and Daimler AG.
(Page 516, Para 6)
As wage differences around the world shrink, there is

increasing attractiveness to locate manufacturing facilities 
back in the United States and Mexico. (Page 516, Para 6)
Technology
Luxury cars account for 5 percent of the total U.S. market

 -
share; popular brands include BMW, Lexus, Cadillac,
Page | 14
Mercedes, and several others. (Page 515, Para 2)
Sports cars account for only 2 percent of total U.S. market

share; they include cars such as the Mustang, Camaro, Dodge 
Charger, and Corvette. (Page 515, Para 2)

Through only half of 2014, recalls were up 70 percent over the
total recall amounts in all of 2013. (Page 516, Para 4)
In addition, over $500 billion can be saved each year in

productivity gains as people can work while commuting—if
the driver can take his or her mind off the road completely - if 
the driver can take his or her mind off the road completely.
(Page 516, Para 3)
Environment
Not Mentioned in the Case
Legal
TOTAL 11 9
Page | 15
3.4 Industry Environment Analysis: Porter 5 Forces

Key Variables Case Facts High Medium Low
Competition in the automobile
manufacturing business is intense among
Ford, GM, Toyota, BMW, Honda,
√
Volkswagen, Hyundai-Kia, Nissan,
Mercedes, and several other firms. (Page
512, Para 1)
Competition among competing models of
Rivalry among competing firms
vehicles and competing firms primarily

√
boils down to price, fuel economy,
reliability, and utility. (Page 512, Para 2)
GM is investing heavily in its electric
vehicle line, which totaled 7 vehicles in
2013, and has partnered with Honda to
√
work on hydrogen cell technologies, with a
2020 timeframe for selling vehicles. (Page
513, Para 1)
Hyundai has become the fastest-growing
automaker in the world. With extended
warranties common, Hyundai has gained √
loyalty and significantly increased its U.S.
market share. (Page 514, Para 2)
Many Japanese manufacturers are gaining
Potential entry of
new competitors
market share in the United States. There

are high barriers to entry, which
√
discourages new companies from trying to
enter the industry. (Page 512, Para 3)
GM even has plans to introduce a self-
development of
driving Cadillac model in 2017, and

substitute
Potential
products
Google claims to be in this business. √

Proponents of self-driving cars indicate
they are safer and will save $1.3 trillion
Page | 16
annually in the United States, along with

fuel savings and fewer accidents. (Page
516, Para 3)
About 75 percent of all revenue goes to
Bargaining
purchase raw materials, so the industry is

suppliers
power of
affected substantially by prices of steel, √

rubber, aluminum, and other raw materials.
(Page 512, Para 1)
Mini-vans were once super-popular
because they were considered much more
√
Bargaining power of buyers
sporty than a station wagon; however,

mini-vans and full-size vans have
experienced declining sales. (Page 515,
Para 2)
Business customers tend to focus on utility,
whether it is a construction company that
needs heavy trucks or a pharmaceutical
√
business that provides cars to its
salespeople. (Page 512, Para 2)
5 2 2
No Case Facts Industry Analysis

High Medium Low
1. Rivalry Among Existing Firms 4 0 0
2. Potential Entry of New Competitors 0 1 0
3. Potential Development of Substitute Products 0 1 0
4. Bargaining Power of Suppliers 1 0 0
5. Bargaining Power of Consumers 0 0 2
Total Result of Porters’ Five Forces 5 2 2
Page | 17
With the reference of the case facts provided, and the Porters’ Five Forces analysis; we can
conclude that the competetitive force for this particular industry is quite intense. The future of
the industry is very competitive. The technological investment and advancement in the area
of electric and self-drive vehicle is quite intense among the players; and this could be big
threat for Ford if the other two competitors able to tap into this market before Ford.
Page | 18
3.5 Competitive Force Analysis

Ford Motor Company has two major competitors; naely the General Motors (GM) company
and Toyota. The following section will focus on analysing the competitive force of each
competitor.
3.5.1 Competitive force – General Motors (GM) Company
Key
No Case Facts Opportunity Threats
Variable
GM is the largest American car
manufacturing company, ranking
second behind Toyota in revenues 
and units of vehicles sold annually.
(Page 513, Para 1)
General Motors also holds stakes in

and has joint ventures with firms in 
Korea and China. (Page 513, Para 1)
GM is investing heavily in its

electric vehicle line, which totaled 7
vehicles in 2013, and has partnered
1.0 Strengths
with Honda to work on hydrogen 
cell technologies, with a 2020
timeframe for selling vehicles. (Page
513, Para 1)
General Motors owns OnStar, which

serves 6.5 million customers across
North America with an assortment
of services, including alerting First 
Responders to your location in an
accident, as well as offering driving
directions. (Page 513, Para 2)
Page | 19
GM and Volkswagen each have 15

percent market share in China. (Page 
515, Para 3)
GM even has plans to introduce a

self-driving Cadillac model in 
2017,.. (Page 516, Para 3)
Higher commodity prices and wage

expenses forced GM…into Chapter
2.0 Weaknesses
11 bankruptcies toward the end of 
the economic recession. (Page 512,
Para 1)
A positive for American vehicle

manufacturers is that gas prices as of
November 2014 were averaging
3.0 Opportunities $2.92 in the United States and much 
less in some locales. (Page 516, Para
2)

4.0 Threats
Page | 20
3.5.2 Competitive force – Toyota
Key
No Case Facts Opportunity Threats
Variable
Toyota is the largest automaker in
the world in terms of revenues, and
one of the largest in the U.S. market.

(Page 513, Para 4)
Toyota sells vehicles in over 170

different nations and generated $214
billion in revenues over all operating 
segments in 2013. (Page 513, Para
4)
It is interesting to note that revenues

1.0 Strengths
were up 18 percent in 2013 but
operating income was up 275 
percent over the same time period.
(Page 514, Para 2)
In particular, operating revenues in

Japan increased substantially.
Toyota reported increased sales in
Europe over the same time frame

when both Ford and GM had losses
in Europe. (Page 514, Para 2)
Not Mentioned in the Case -

2.0 Weaknesses
3.0 Opportunities Not Mentioned in the Case - -
4.0 Threats Not Mentioned in the Case - -
Page | 21
3.6 Summary Table of Opportunities and Threats

External Analysis Opportunity Threat
Political, Legal and Governmental Forces 0 0
Economic Forces 6 3
Social, Cultural, Environment and Demographic Forces 2 5
Technological Forces 3 1
Competitor General Motors and Toyota 1 11
Total 12 20
After eliminating possible overlapping of opportunities and threats in PEST analysis and
competitor's analysis, below are the finalized number of opportunities & threats assessed Ford
Motor Company
Table Opportunities and Threats for Ford Motor
12 20
Company
Page | 22
3.7 Prioritize Table of Opportunities

No. Case Facts Priority
Midsize cars are also extremely popular, taking much of the market
1 2
share away from larger vehicles. (Page 515, Para 1)
The outlook in 2015 is for gas to remain below $3 per gallon. (Page
2 4
516, Para 2)
Oil prices fell nearly 50 percent from summer 2014 to year-end
3 5
2014. (Page 516, Para 2)
In 2014, sales of SUVs, mini-vans, and light-duty trucks increased
4 nearly 10 percent, whereas growth for cars was below 2 percent. 6
(Page 516, Para 2)
Rates are slowly going up and currently are around 4.5 percent for
new cars and 8.8 percent for used cars as of 2014. The lower rates
5 8
and easy access to loans has been great for automakers. (Page 516,
Para 5)
PESTEL

6 10
As wage differences around the world shrink, there is increasing
7 attractiveness to locate manufacturing facilities back in the United 9
States and Mexico. (Page 516, Para 6)
Luxury cars account for 5 percent of the total U.S. market share;
8 popular brands include BMW, Lexus, Cadillac, Mercedes, and 1
several others. (Page 515, Para 2)
Sports cars account for only 2 percent of total U.S. market share;
9 they include cars such as the Mustang, Camaro, Dodge Charger, 3
and Corvette. (Page 515, Para 2)
productivity gains as people can work while commuting—if the
10 driver can take his or her mind off the road completely - if the 7
driver can take his or her mind off the road completely. (Page 516,
Para 3)
Higher commodity prices and wage expenses forced GM…into
Competitiv
e Analysis
Chapter 11 bankruptcies toward the end of the economic recession.

11 11
(Page 512, Para 1)
Page | 23
3.8 Prioritize Table of Threats

As of late 2014, Chinese vehicle sales were up 8 percent over the record
1 9
year in 2013. (Page 515, Para 3)
In total, China enjoyed a 28 percent share as compared to the U.S.
2 17.5 percent share in global vehicle sales in 2013; China expects to 15
increase its global market share lead. (Page 515, Para 3)
As of August 2014, the total balance on auto loans in the United States
3 was $924 billion, an all-time high, and up 11 percent from the previous 16
year. (Page 516, Para 5)
Cross-over utility vehicles have taken much of the demand away from
4 SUVs, which account for only 10 percent of total U.S. market share. 12
(Page 514. Para 4)
PESTEL
China will continue to put pressure on U.S., European, and Japanese

5 automakers as new Chinese-based auto companies are formed and grow 1
to prominence. (Page 515, Para 3)
Demand in India has been slow, with a 3 percent decline in 2014. (Page
6 11
515, Para 3)
Eastern Europe exceeded a 9 percent decline and Russia nearly a 13
7 2
percent decline over 2013. (Page 515, Para 4)
In 2013, GM committed to invest $16 billion in the United States over
the next 3 years and…. Kia recently spent $1.5 billion in Mexico and
8 10
another $10 billion is expected to be spent in Mexico from BMW,
Toyota, and Daimler AG. (Page 516, Para 6)
Through only half of 2014, recalls were up 70 percent over the total
9 7
recall amounts in all of 2013. (Page 516, Para 4)
GM is the largest American car manufacturing company, ranking second
Competitive Analysis
10 behind Toyota in revenues and units of vehicles sold annually. (Page 19

513, Para 1)
General Motors also holds stakes in and has joint ventures with firms in
12 20
Korea and China. (Page 513, Para 1)
13 GM is investing heavily in its electric vehicle line, which totaled 7 3
Page | 24
vehicles in 2013, and has partnered with Honda to work on hydrogen

cell technologies, with a 2020 timeframe for selling vehicles. (Page 513,
Para 1)
General Motors owns OnStar, which serves 6.5 million customers across
North America with an assortment of services, including alerting First
14 13
Responders to your location in an accident, as well as offering driving
directions. (Page 513, Para 2)
GM and Volkswagen each have 15 percent market share in China. (Page
15 4
515, Para 3)
GM even has plans to introduce a self-driving Cadillac model in 2017,..
16 8
(Page 516, Para 3)
A positive for American vehicle manufacturers is that gas prices as of
17 November 2014 were averaging $2.92 in the United States and much 14
less in some locales. (Page 516, Para 2)
Toyota is the largest automaker in the world in terms of revenues, and
18 17
one of the largest in the U.S. market. (Page 513, Para 4)
Toyota sells vehicles in over 170 different nations and generated $214
19 billion in revenues over all operating segments in 2013. (Page 513, Para 6
4)
It is interesting to note that revenues were up 18 percent in 2013 but
20 operating income was up 275 percent over the same time period. (Page 18
514, Para 2)
In particular, operating revenues in Japan increased substantially.
21 Toyota reported increased sales in Europe over the same time frame 5
when both Ford and GM had losses in Europe. (Page 514, Para 2)
3.9 External Factor Evaluation (EFE) Matrix
3.9.1 Table of Opportunities

Opportunities Weight Rating Weighted
Page | 25
Score
Luxury cars account for 5 percent of the total U.S. market
1 share; popular brands include BMW, Lexus, Cadillac, 0.07 4 0.28
Mercedes, and several others. (Page 515, Para 2)
Midsize cars are also extremely popular, taking much of
2 the market share away from larger vehicles. (Page 515, 0.06 3 0.18
Para 1)
Sports cars account for only 2 percent of total U.S. market
3 share; they include cars such as the Mustang, Camaro, 0.06 4 0.24
Dodge Charger, and Corvette. (Page 515, Para 2)
The outlook in 2015 is for gas to remain below $3 per

4 0.03 3 0.09
gallon. (Page 516, Para 2)
Oil prices fell nearly 50 percent from summer 2014 to

5 0.03 2 0.06
year-end 2014. (Page 516, Para 2)
In 2014, sales of SUVs, mini-vans, and light-duty trucks
6 increased nearly 10 percent, whereas growth for cars was 0.04 2 0.08
below 2 percent. (Page 516, Para 2)
productivity gains as people can work while
7 commuting—if the driver can take his or her mind off the 0.06 2 0.12
road completely - if the driver can take his or her mind off
the road completely. (Page 516, Para 3)
Rates are slowly going up and currently are around 4.5
percent for new cars and 8.8 percent for used cars as of
8 0.05 2 0.1
2014. The lower rates and easy access to loans has been
great for automakers. (Page 516, Para 5)
As wage differences around the world shrink, there is
9 increasing attractiveness to locate manufacturing facilities 0.07 3 0.21
back in the United States and Mexico. (Page 516, Para 6)
Europe is starting to stabilize economically, although the
euro continues to decline, losing 25 percent of its value to
10 0.03 1 0.03
the dollar between 2008 and 2014, putting further
pressure on U.S. car manufacturers. (Page 515, Para 4)
Page | 26
3.9.2 Table of Threats

Weighted
Threats Weight Rating
Score
China will continue to put pressure on U.S., European,
and Japanese automakers as new Chinese-based auto
1 0.08 4 0.32
companies are formed and grow to prominence. (Page
515, Para 3)
Eastern Europe exceeded a 9 percent decline and Russia
2 0.05 2 0.10
nearly a 13 percent decline over 2013. (Page 515, Para 4)
GM is investing heavily in its electric vehicle line, which
totaled 7 vehicles in 2013, and has partnered with Honda
3 0.06 3 0.18
to work on hydrogen cell technologies, with a 2020
timeframe for selling vehicles. (Page 513, Para 1)
GM and Volkswagen each have 15 percent market share
4 0.06 2 0.12
in China. (Page 515, Para 3)
In particular, operating revenues in Japan increased
substantially. Toyota reported increased sales in Europe
5 0.04 2 0.08
over the same time frame when both Ford and GM had
losses in Europe. (Page 514, Para 2)
Toyota sells vehicles in over 170 different nations and
6 generated $214 billion in revenues over all operating 0.03 2 0.06
segments in 2013. (Page 513, Para 4)
Through only half of 2014, recalls were up 70 percent
7 over the total recall amounts in all of 2013. (Page 516, 0.06 3 0.18
Para 4)
GM even has plans to introduce a self-driving Cadillac
8 0.04 2 0.08
model in 2017,.. (Page 516, Para 3)
As of late 2014, Chinese vehicle sales were up 8 percent
9 0.04 2 0.08
over the record year in 2013. (Page 515, Para 3)
In 2013, GM committed to invest $16 billion in the
United States over the next 3 years and…. Kia recently
10 spent $1.5 billion in Mexico and another $10 billion is 0.04 3 0.12
expected to be spent in Mexico from BMW, Toyota, and
Daimler AG. (Page 516, Para 6)
Total EFE Score 1.00 2.71
Page | 27
The EFE score of 2.71 for Ford’s indicates that the company is only responding slightly
above average the oppurtunuities and threats within the industry. The current strategies are
not well designed to take advantage of these external factors. Therefore, there is room for
Ford to improve further financially if it can re-look into its business strategies.
3.10 Key Success factor

Companies
No KSF within the Case Fact
industry
(Page 513, Exhibit 6) (Page 513, Exhibit 6) (Page 513, Exhibit 6)
 $144,007 M
Revenue ($)
 $155,929 M
1  $249,472 M
 $3,187 M
Nett Income ($)
Program($)
 $3,949 M
2
 $17,703 M
 187,000
No. of Employee
3
 216,000
 339,000

(Page 513, Exhibit
$770,000
Employee ($)
Revenue per
 $721,893
6)
 $735,906
Page | 28
(Page 513, Exhibit 6) (Page 513, Exhibit 6)

 $0.80
EPS Ratio ($)
5  $1.65
 $10.71
 $63.4 B
Market Cap ($)
Raised ($)
6  $60.8 B
 $213 B
 Ford derives approximately 60 percent of its revenues

from the United States, Canada, and Mexico. Virtually
all the company’s profits in 2014 came from these
countries; the only other profitable region was Asia.
(Page 511, Para 2)
 Headquartered in Detroit, Michigan, GM is the largest

American car manufacturing company, ranking second
Industry Segment
behind Toyota in revenues and units of vehicles sold

annually. GM brands include GMC, Chevrolet, Buick,
Cadillac, Opel, Wuling, Jie Fang, and Alpheon, among
7
many others. (Page 513, Para 1)
 Headquartered in Aichi, Japan, with U.S. headquarters
based in Torrance, California, Toyota is the largest
automaker in the world in terms of revenues, and one of
the largest in the U.S. market. Toyota sells vehicles in
over 170 different nations and generated $214 billion in
revenues over all operating segments in 2013. (Page
513, Para 3)
Page | 29
3.11 The Competitive Profile Matrix (CPM)
Ford GM Toyota
Critical Success
Weight Rating Score Rating Score Rating Score
Factors
Revenue 0.20 2 0.40 3 0.60 4 0.80
Nett Income 0.20 2 0.40 3 0.60 4 0.80
EPS Ratio 0.15 2 0.30 3 0.45 4 0.60
No. of Employee 0.10 2 0.20 3 0.30 4 0.40
Revenue per employee 0.20 4 0.80 2 0.40 3 0.60
Market Cap 0.15 3 0.45 2 0.30 4 0.60
Totals 1.00 2.55 2.65 3.80
Rating refers to strength and weakness:

4 – Major strength
3 – Minor strength
2 – Minor weakness
1 – Major weakness
Total weightage should be equals to 1.
Summary
The overall score of CPM indicates that Toyota has an upper hand in its competitive
positioning compared to Ford Motor and General Motors. Generally the CPM score is not a
direct indiation that the higher score means the company is the best. It just shows that the
company with higher CPM does well in some area compared to the competitor. Though in
this case Toyota definitely is performing better in most of the area; but Ford has it’s
advantage in revenue per employee.
Page | 30
4.0 Internal Analysis
4.1 Ford Motor Company Culture Assessment

No Item Companies within the industries Strength Weakness
Ford Motor Competitors
1 Rites Not mentioned in Not mentioned in the - -
the case case
2 Ceremonial Not mentioned in Not mentioned in the - -
the case case
3 Ritual Not mentioned in Not mentioned in the - -
the case case
4 Myth Not mentioned in Not mentioned in the - -
the case case
5 Saga
Historical
He started Ford
Motor Company in

narratives 1902 with 12
describing the investors and
unique $28,000 in cash.
accomplishments (page 508, para 3)
of a group and
its leader
By October 1903,
Ford had turned a

profit of $37,000,
indicating just how
popular this new
equipment was
going to become.
(page 508, para 3)
6 Legend Not mentioned in Not mentioned in the - -
the case case
7 Story
Narratives
- Toyota is the largest
automaker in the

usually based on world in terms of
true events revenues, and one of
the largest in the
U.S. market.
(page 513, para 3)
8 Folktale Not mentioned in Not mentioned in the - -
the case case
9 Symbol Not mentioned in Not mentioned in the - -
the case case
10 Language Not mentioned in Not mentioned in the - -
the case case
11 Metaphors Not mentioned in Not mentioned in the - -
the case case
12 Values
Life-directing
One Ford: Align
employee efforts
 -
attitudes that toward a common

Page | 31
serve as definition of
behavioural success and
guidelines optimize
their collective
strengths
worldwide.
One team: Work

together as one
team to achieve
automotive
leadership, which
is measured
by the satisfaction
of our customers,
employees, and
essential business
partners, such as
our dealers,
investors,
suppliers,
unions/councils,
and communities.
(page 509, para 3)
13 Belief Not mentioned in Not mentioned in the - -

Understanding the case case
of particular
phenomena
14 Heroes/
Heroines
Henry Ford is
world famous for

Individuals his assembly line,
greatly respected but for the first 10
years of the
company, two to
three men worked
on each car, and
the parts were
supplied by outside
firms.
(page 508, para 4)
Page | 32
4.2 Ford Motor Company Management Function Assessment

No Item Companies within the industries Strength Weakness
1 Planning
Planning
Ford does not have a
published vision

consists of all statement, but does
those have a stated
managerial mission statement
activities (page 509, para 3)
related to
preparing for
Higher engine
outputs with smaller

the future, such displacements are a
as forecasting, key initiative
establishing moving forward for
objectives, Ford and greatly
devising improve fuel
strategies, and economy and
developing emissions.
policies. (page 509, para 4)
Ford is in the midst
of a $400 million

restructuring
program in Europe
and anticipates
Europe will become
profitable sometime
in 2015.
(page 511, para 2)
2 Organizing
Organizing
In December 2014,
the company hired a

includes all Chief Analytics
those Officer
managerial (page 509, para 2)
activities that
result in a
structure of task
and authority
relationships,
such as
organizational
design, job
specialization,
job
descriptions,
span of control,
coordination,
job design, and
job analysis
Page | 33
3 Motivating
Motivating
Many of Ford’s
workers could

involves efforts even afford a car
directed toward they produced with
shaping human the salary they
behaviour. earned.
Specific topics (page 508, para 4)
include
leadership,
communication,
work groups,
behaviour
modification,
delegation of
authority, job
enrichment, job
satisfaction,
needs
fulfilment,
organizational
change,
employee
morale, and
managerial
morale.
4 Staffing
Staffing refers
To help maintain
employee morale,

to human Ford paid workers
resource (HR) $5 per day in 1914,
activities, such double the national
as wage and Average
salary (page 508, para 4)
administration,
employee
Ford reduced the
workday from 9 to 8

benefits, hours
interviewing, (page 508, para 4)
hiring, firing,
training,
management
development,
employee
safety, equal
employment
opportunity,
and union
relations.
Page | 34
5 Controlling
Controlling
Ford closed all
plants for 6 months

refers to all to retool and train
those employees on
managerial construction.
activities (page 508, para 5)
directed toward
ensuring that
actual results
are consistent
with planned
results. Key
areas of
concern include
quality control,
financial
control, sales
control,
inventory
control,
expense
control,
analysis of
variances,
rewards, and
sanctions.
In early 2015, Ford
started production of

two new engines—
the 2.0-liter and 2.3-
liter EcoBoost
engines—for its
plant in Cleveland
(page 517, para 1)
GM is investing
heavily in its electric

vehicle line, which
totaled 7 vehicles in
2013, and
has partnered with
Honda to work on
hydrogen cell
technologies, with a
2020 timeframe for
selling vehicles.
(page 513, para 1)
Page | 35
4.3 Ford Motor Company Marketing Assessment

No Item Competitors Within The Industries Strength Weakness
1. Customer
Analysis
Since 2005, Ford’s
warranty repairs have

declined 66 percent for
vehicles in the first 3
months of service with
average warranty costs
falling 54 percent.
(page 509, para 4)
With extended warranties
common, Hyundai has

gained loyalty and
significantly increased its
U.S. market share
(page 514, para 2)
2. Products/
Services
Ford, are recalling
products containing
BMW, Toyota, and several
other vehicle

Planning airbags manufactured by manufacturers are
Takata (page 516, para 4) recalling products
containing airbags
manufactured by Takata
(page 516, para 4)
Higher engine outputs
with smaller displacements

are a key initiative moving
forward for Ford and
greatly improve fuel
economy and emissions.
(page 509, para 4)
In 2014, Ford introduced
23 new vehicles, up from

11 in 2013, and plans to
introduce a 150 percent
new product turnover by
2018.
(page 509, para 5)
In 2013, Ford sold over
85,000 hybrid or all-

electric, plug-in
automobiles, up 150
percent from 2012 as the
company attempts to
produce, as one executive
said, a Tesla for the
average person.
(page 509, para 5)
Page | 36
Ford is unveiling a slew of

new high-performance

models, more than 12 new
go-fast models coming to
market by 2020, including
a super-hot new Focus
model, the RS. A new
high- performance
“Raptor” version of its
new F-150 pickup could
debut, and a new Ford
sports car is coming.
(page 509, para 6)
Ford reports that more

than 65 percent of those

who buy its “hot-hatch”
Focus ST and Fiesta ST
models are new to the
brand, and importantly,
often become loyal
customers “for life.”
(page 511, para 1)
3 Pricing Not mentioned in the case Not mentioned in the case - -
4 Promotion Ford reports that more

than 65 percent of those

who buy its “hot-hatch”
Focus ST and Fiesta ST
models are new to the
brand, and importantly,
often become loyal
customers “for life.”
(page 511, para 1)
Ford is unveiling a slew of

new high-performance

models, more than 12 new
go-fast models coming to
market by 2020, including
a super-hot new Focus
model, the RS. A new
high- performance
“Raptor” version of its
new F-150 pickup could
debut, and a new Ford
sports car is coming.
(page 509, para 6)
Page | 37
5 Place/ Currently, Ford is engaged

Distributio
n
in its largest
manufacturing expansion

in over 50 years by
increasing capacity in six
U.S. plants and by opening
two new plants in Asia and
one each in South America
and Europe
(page 509, para 5)
Ford has especially

experienced difficulties in

Europe recently with
pretax losses in both 2013
and 2012.
(page 515, para 4)
4.4 Ford Motor Company Financial and Accounting Assessment

No Item Case Fact Strength Weakness
1 Revenue In 2014, Ford reported
$136 billion from vehicle

sales and $8.2 billion from
financial services. Pretax
results were just over $2.5
billion, with vehicle sales
and financial services
accounting for $1.8 billion.
(page 511, para 3)
Ford derives approximately

60 percent of its revenues

from the United States,
Canada, and Mexico.
Virtually all the company’s
profits in 2014 came from
these countries; the only
other profitable region was
Asia. (page 511, para 2)
Page | 38
However, for the most

recent month (February

2015) available at the time
this case was written, Ford
reported a 1.9 percent
decline in sales in the
United States to 180,383
units. Ford brand’s sales
fell 1.7 percent to 174,219
units in the month, and
Lincoln brands dropped 7.5
percent to 6,164 units. All
total for the month, sales of
Ford cars and utility
vehicles fell 8.1 and 2.3
percent to 56,081 and
54,420 units, respectively.
(page 516, para 7)
Exhibit 6 (page 513)

Revenue :
Revenue :

Ford = $ 144,007 mil GM = $ 155,929 mil
Toyota = $ 249,472
mil
In 2013, Ford sold over

85,000 hybrid or all-

electric, plug-in
automobiles, up 150
percent from 2012 as the
company attempts to
produce, as one executive
said, a Tesla for the
average person.
(page 509, para 5)
However, Ford’s truck
sales increased 4 percent,

led by a 24.6 and 18.7
surge in sales of the Transit
Connect and heavy trucks,
respectively.
(page 517, para 1)
That niche is growing—
Ford recently reported that

sales of high-performance
models have risen 70
percent in the United States
since 2009, and 16 percent
in Europe over the same
period—but it’s still small.
Page | 39
(page 509, para 6)
2 Programs Not mentioned in the case Not mentioned in - -

expense the case
(Industry
Norm:
3 Administrative Not mentioned in the case Not mentioned in - -

expense the case
(Industry
Norm:
4 Fundraising Not mentioned in the case Not mentioned in - -

expense the case
(Industry
Norm:
5 Net income Exhibit 6 (page 513)

Net Income :
Net Income :

Ford = $ 3,187 mil GM = $ 3,949 mil
Toyota = $ 17,703
mil
Page | 40
6 Total asset Exhibit 4 (page 512)

Total Asset, 2013 :

Ford = $ 202,179 mil
Total Asset, 2014 :

Ford = $208,527 mil
7 Current ratio Exhibit 4 (page 512)

Current Ratio, 2013 = 6.74

Current Ratio, 2014 = 6.58
8 Total asset
turnover
Asset T/Over, 2013 = 0.73

Asset T/Over, 2014 = 0.69
9 Employee Not mentioned in the case Not mentioned in - -

Efficiency the case
(Industry
Norm:
10 Public Not mentioned in the case Not mentioned in - -

Education the case
Expenses
4.5 Ford Motor Company Production/Operation Assessment

No Item Case Fact Strength Weakness

1 Process In 1925, 2 years
before selling the

Model A automobile
in 1927, Ford closed
all plants for 6
months to retool and
train employees on
construction
(page 508, para 5)
2 Capacity Currently, Ford is
engaged in its

largest
Page | 41
manufacturing
expansion in over 50
years by increasing
capacity in six U.S.
plants and by
opening two new
plants in Asia and
one each in South
America and Europe
(page 509, para 5)
3 Inventory Not mentioned in Not mentioned in the - -
the case case
4 Workforce Exhibit 6 (page 513)

Employees =
GM Employees =

187,000 216,000
Toyota Employees =
339,000
4.6 Ford Motor Company Research and Development Assessment (R&D)

No Item Companies within the industry Strength Weakness
1 R&D Facilities GM is investing heavily
in its electric vehicle line,

which totaled 7 vehicles
in 2013, and
has partnered with Honda
to work on hydrogen cell
technologies, with a 2020
timeframe for
selling vehicles.
(page 513, para 1)
General Motors owns
OnStar, which serves 6.5

million customers across
North America
with an assortment of
services, including
alerting First Responders
to your location in an
accident,
as well as offering
driving directions.
(page 513, para 2)
2 Outsourced - -
R&D
3 R&D Not mentioned in Not mentioned in the - -
Page | 42
Personnel the case case

Qualification
4 Effectiveness Not mentioned in Not mentioned in the - -
of R&D the case case
Resource
Allocation
5 MIS Not mentioned in Not mentioned in the - -
the case case
6 R&D Not mentioned in Not mentioned in the - -
communication the case case
with other
departments
7 Technology of In 2013, Ford sold
the present over 85,000 hybrid

product or all-electric,
plug-in
automobiles, up
150 percent from
2012 as the
company attempts
to produce,
as one executive
said, a Tesla for
the average person.
(page 509, para 5)
4.7 Ford Motor Company Management Information Systems Assessment (MIS)

No Item Companies within the industry Strength Weakness
1 Managers use MIS Not mention in Not mention in the - -

to make decisions the case case
2 CIO/ Director of Not mention in Not mention in the - -
MIS the case case
3 MIS data updated Not mention in Not mention in the - -
regularly the case case
4 Input contributed Not mention in Not mention in the - -
by all managers the case case
5 Effectiveness of Not mention in Not mention in the - -
MIS passwords the case case
6 Familiarity with Not mention in Not mention in the - -
MIS of rivals the case case
7 User-friendliness Not mention in Not mention in the - -
the case case
8 Users understand Not mention in Not mention in the - -
competitive the case case
Page | 43
advantages of MIS
9 MIS training is Not mention in Not mention in the - -

provided the case case
10 MIS is continually Not mention in Not mention in the - -
being improved the case case
4.8 Summary Table of Strengths and Weakness

Internal Analysis Strength Weakness
Cultural 4 1
Management 8 2
Operations 2 1
Marketing 9 3
Finance 4 7
R&D 1 2
MIS - -
Total 28 16
After eliminating possible overlapping of strength and weakness,
and to streamline to 10 each based on importance, below is the
summary number of strength and weakness assessed for Ford
Motor Company
Table strength and weakness for Ford Motor Company 10 10
4.9 Prioritize Table of Strengths

Ford is unveiling a slew of new high-performance models, more
than 12 new go-fast models coming to market by 2020, including a
super-hot new Focus model, the RS. A new high- performance
1 7
“Raptor” version of its new F-150 pickup could debut, and a new
Ford sports car is coming.
(page 509, para 6)
Since 2005, Ford’s warranty repairs have declined 66 percent for
2 vehicles in the first 3 months of service with average warranty costs 3
falling 54 percent.
Page | 44
(page 509, para 4)

Higher engine outputs with smaller displacements are a key
initiative moving forward for Ford and greatly improve fuel
3 economy and emissions. 2
(page 509, para 4)
Currently, Ford is engaged in its largest manufacturing expansion in

over 50 years by increasing capacity in six U.S. plants and by
4 1
opening two new plants in Asia and one each in South America and
Europe (page 509, para 5)
In 2013, Ford sold over 85,000 hybrid or all-electric, plug-in

automobiles, up 150 percent from 2012 as the company attempts to
5 5
produce, as one executive said, a Tesla for the average person.
(page 509, para 5)
In 2014, Ford introduced 23 new vehicles, up from 11 in 2013, and

6 plans to introduce a 150 percent new product turnover by 2018. 6
(page 509, para 5)
However, Ford’s truck sales increased 4 percent, led by a 24.6 and
7 18.7 surge in sales of the Transit Connect and heavy trucks, 4
respectively. (page 517, para 1)
That niche is growing—Ford recently reported that sales of high-
performance models have risen 70 percent in the United States
8 8
since 2009, and 16 percent in Europe over the same period—but it’s
still small. (page 509, para 6)
Ford reports that more than 65 percent of those who buy its “hot-
hatch” Focus ST and Fiesta ST models are new to the brand, and
9 10
importantly, often become loyal customers “for life.” (page 511,
para 1)
Ford is in the midst of a $400 million restructuring program in
10 Europe and anticipates Europe will become profitable sometime in 9
2015. (page 511, para 2)
Page | 45
4.10 Prioritize Table of Weakness

In 2014, Ford reported $136 billion from vehicle sales and $8.2
billion from financial services. Pretax results were just over $2.5
1 billion, with vehicle sales and financial services accounting for $1.8 2
billion. (page 511, para 3)
Ford has especially experienced difficulties in Europe recently with

2 3
pretax losses in both 2013 and 2012. (page 515, para 4)
Eastern Europe exceeded a 9 percent decline and Russia nearly a 13

3 10
percent decline over 2013. (page 515, para 4)
Retail sales of the F-series fell 1.2 percent in February. Even Ford’s
4 two most popular two vehicles, the Focus and the Fusion, recorded 9
a year-over-year decline in sales. (page 517, para 1)
However, for the most recent month (February 2015) available at
the time this case was written, Ford reported a 1.9 percent decline
in sales in the United States to 180,383 units. Ford brand’s sales fell
5 1.7 percent to 174,219 units in the month, and Lincoln brands 4
dropped 7.5 percent to 6,164 units. All total for the month, sales of
Ford cars and utility vehicles fell 8.1 and 2.3 percent to 56,081 and
54,420 units, respectively. (page 516, para 7)
Ford, BMW, Toyota, and several other vehicle manufacturers are

6 recalling products containing airbags manufactured by Takata (page 8
516, para 4)
7 Ford does not have a published vision statement (page 511, para 3) 7
Ford derives approximately 60 percent of its revenues from the
United States, Canada, and Mexico. Virtually all the company’s
8 profits in 2014 came from these countries; the only other profitable 1
region was Asia. (page 511, para 2)

9 5
downgraded to junk status. (page 509, para 1)
South America pretax profits were slightly negative and are
10 6
expected to remain so the next several years. (page 511, para 2)
Page | 46
4.11 Internal Factor Evaluation (IFE) Matrix
4.11.1 Table of Strength

Weighted
Strengths Weight Rating
Score
Currently, Ford is engaged in its largest manufacturing
expansion in over 50 years by increasing capacity in six
1 0.05 4 0.20
U.S. plants and by opening two new plants in Asia and one
each in South America and Europe (page 509, para 5)
Higher engine outputs with smaller displacements are a
2 key initiative moving forward for Ford and greatly 0.06 4 0.24
improve fuel economy and emissions. (page 509, para 4)
Since 2005, Ford’s warranty repairs have declined 66
3 percent for vehicles in the first 3 months of service with 0.06 3 0.18
average warranty costs falling 54 percent. (page 509, para 4)
However, Ford’s truck sales increased 4 percent, led by a
4 24.6 and 18.7 surge in sales of the Transit Connect and 0.05 3 0.15
heavy trucks, respectively. (page 517, para 1)
In 2013, Ford sold over 85,000 hybrid or all-electric, plug-
in automobiles, up 150 percent from 2012 as the company
5 0.05 4 0.20
attempts to produce, as one executive said, a Tesla for the
average person. (page 509, para 5)
In 2014, Ford introduced 23 new vehicles, up from 11 in
6 2013, and plans to introduce a 150 percent new product 0.06 4 0.24
turnover by 2018. (page 509, para 5)
Ford is unveiling a slew of new high-performance models,
more than 12 new go-fast models coming to market by
2020, including a super-hot new Focus model, the RS. A
7 0.06 4 0.24
new high- performance “Raptor” version of its new F-150
pickup could debut, and a new Ford sports car is coming.
(page 509, para 6)
Page | 47
That niche is growing—Ford recently reported that sales

of high-performance models have risen 70 percent in the
8 0.04 3 0.12
United States since 2009, and 16 percent in Europe over
the same period—but it’s still small. (page 509, para 6)
Ford is in the midst of a $400 million restructuring
9 program in Europe and anticipates Europe will become 0.03 3 0.09
profitable sometime in 2015. (page 511, para 2)
Ford reports that more than 65 percent of those who buy
its “hot-hatch” Focus ST and Fiesta ST models are new to
10 0.04 3 0.12
the brand, and importantly, often become loyal customers
“for life.” (page 511, para 1)
4.11.2 Table of Weakness

Weighted
Weaknesses Weight Rating
Score
Ford derives approximately 60 percent of its revenues
from the United States, Canada, and Mexico. Virtually all
1 0.05 1 0.05
the company’s profits in 2014 came from these countries;
the only other profitable region was Asia. (page 511, para 2)
In 2014, Ford reported $136 billion from vehicle sales and
$8.2 billion from financial services. Pretax results were
2 0.06 2 0.12
just over $2.5 billion, with vehicle sales and financial
services accounting for $1.8 billion. (page 511, para 3)
Ford has especially experienced difficulties in Europe
3 recently with pretax losses in both 2013 and 2012. (page 0.05 2 0.10
515, para 4)
However, for the most recent month (February 2015)
available at the time this case was written, Ford reported a
1.9 percent decline in sales in the United States to 180,383
4 units. Ford brand’s sales fell 1.7 percent to 174,219 units 0.07 1 0.07
in the month, and Lincoln brands dropped 7.5 percent to
6,164 units. All total for the month, sales of Ford cars and
utility vehicles fell 8.1 and 2.3 percent to 56,081 and
Page | 48
54,420 units, respectively. (page 516, para 7)

5 0.04 1 0.04
downgraded to junk status. (page 509, para 1)
South America pretax profits were slightly negative and
6 are expected to remain so the next several years. (page 0.05 2 0.10
511, para 2)
Ford does not have a published vision statement (page
7 0.05 2 0.10
511, para 3)
Ford, BMW, Toyota, and several other vehicle
8 manufacturers are recalling products containing airbags 0.03 2 0.06
manufactured by Takata (page 516, para 4)
Retail sales of the F-series fell 1.2 percent in February.
Even Ford’s two most popular two vehicles, the Focus and
9 0.05 1 0.05
the Fusion, recorded a year-over-year decline in sales.
(page 517, para 1)
Eastern Europe exceeded a 9 percent decline and Russia
10 0.05 1 0.05
nearly a 13 percent decline over 2013. (page 515, para 4)
Total IFE Score 1.00 2.52
Based on the table of strength and weaknessses above, Ford scored 2.52 out of a
possible 4.00 score. This indicates that Ford has more strength than weaknesses within,
largely thanks to the production scale of Ford, propped up by the slew of new vehicle models
being introduced into the market. From the findings, its biggest weakness lies in it depending
60% of its revenue on US, Canada and Mexico market. It needs to diversify its source of
revenue from other continent by developing new business in them. Ford’s strength lies in its
ability to produce cars that are powerful. However, this could also be its drawback as not all
consumers look solely at powerful fast cars. Some markets, consumers prefer agile car which
are fuel efficient over power, especially in Asia market and to a certain extend Europe.
Page | 49
4.12 Value Chain Analysis

Cultural To help maintain employee morale, Ford paid workers $5 per
day in 1914, double the national average. In addition, Ford
reduced the workday from 9 to 8 hours. Many of Ford’s
workers could even afford a car they produced with the salary
they earned. (page 508, para 3)
Management The company was able to avoid a government takeover, unlike
its counterpart, General Motors. Over the last several years,
Ford has rebounded and continues to produce quality
automobiles worldwide, as well as more and more electric and
part-electric vehicles. (page 509, para 1)
Currently, Ford is engaged in its largest manufacturing

Support Function
expansion in over 50 years by increasing capacity in six U.S.

plants and by opening two new plants in Asia and one each in
South America and Europe (page 509, para 4)
Financial Ford derives approximately 60 percent of its revenues from

the United States, Canada, and Mexico. Ford is in the midst of
a $400 million restructuring program in Europe and anticipates
Europe will become profitable sometime in 2015
(page 511, para 2)
A bright spot was the Ford Explorer had a 31.8 percent surge
in sales in February 2015. Ford Mustang was the company’s
only car that reported higher sales during the month,
increasing 31.9 percent to 8,454 units in February, making it
the Mustang’s best February sales since 2007.
(page 517, para 1)
Production/Operation Product/Service Marketing Distribution
Ford is especially Ford is unveiling The U.S. plants
Main Function
In 2014, Ford
launched more proud of offering its a slew of new alone are expected
vehicles than ever Mustang for the high-performance to enjoy $6 billion
before in a single first time ever in models, more of improvements.
calendar year, select markets in than 12 new go- In 2013, Ford sold
Page | 50
including a new Europe and Asia, fast models over 85,000 hybrid
Mustang and F-150. and the F-150 coming to market or all-electric,
(page 509, para 5) moving to an by 2020, plug-in
aluminum body will including a super- automobiles, up
save over 700 hot new Focus 150 percent from
pounds on weight model, the RS. A 2012 as the
with the same new high company attempts
material strength. performance to produce, as one
(page 509, para 5) “Raptor” version executive said, a
of its new F-150 Tesla for the
pickup could average person.
debut, and a new (page 509, para 5)
Ford sports car is
coming.
(page 509, para 6)
Page | 51
5.0 Strategic in Action
5.1 Long Term and Short Term Strategic Objectives
No. Long Term Objectives Short Term Objectives Remarks:

Successful/Un
successful
1 Plans to introduce a 150 percent • Currently, Ford is engaged
new product turnover by in its largest manufacturing
2018(page 509,para 5) expansion in over 50 years
by increasing capacity in
six U.S. plants and by
Successful
opening two new plants in
Asia and one each in South
America and Europe.(page
509, para 5)
• Global market share grew to 7.6

percent, up one-tenth
Successful
percent from a year
ago.(page 508, para 2)
5.2 Long Term and Short Term Financial Objectives

No. Long Term Objectives Short Term Objectives Remarks:
Successful/un
successful
Not mentioned in the case • Net income of $1.9 billion, up
$574 million or 44 percent
from a year ago (page 508, Successful
para 2)
• After-tax earnings per share of

47 cents, up 7 cents from a
Successful
year ago. (page 508, para
2)
• Pre-tax profit of $2.9 billion, up
$269 million or 10 percent
Successful
from a year ago. (page 508,
para 2)
Page | 52
5.3 Corporate Level Strategy

No. Strategy Case Facts
• In 1922, Ford acquired Lincoln Company (page 508, para 5)
1 Integration Strategies
4 Market Penetration Not mentioned in the case

5 Market Development Not mentioned in the case
• Twelve of 16 planned global new product launches are
6 Product Development completed; the remainder is on track (page 508, para 2)
• In 2014, Ford introduced 23 new vehicles, up from 11 in

2013(page 509, para 5)
• Ford is especially proud of offering its Mustang for the first

time ever in select markets in Europe and Asia (page 509,
para 5)
• Ford is unveiling a slew of new high-performance models,

more than 12 new go-fast models coming to market by
2020, including a super-hot new Focus model, the RS.(page
509, para 6)
Not mentioned in case

7 Related Diversification
Unrelated
8 Not mentioned in case
Diversification
9 Retrenchment Not mentioned in case
10 Divestiture Not mentioned in case
11 Liquidation Not mentioned in case
Page | 53
6.0 Strategy Formulation Process
6.1 SWOT & TOWS Analysis
Strength Weakness
S1 - Currently, Ford is engaged W1 - Ford derives
in its largest manufacturing approximately 60 percent of its
expansion in over 50 years by revenues from the United
increasing capacity in six U.S. States, Canada, and Mexico.
plants and by opening two new Virtually all the company’s
plants in Asia and one each in profits in 2014 came from these
South America and Europe countries; the only other
(page 509, para 5) profitable region was Asia.
(page 511, para 2)
S2 - Higher engine outputs with
smaller displacements are a key W2 - In 2014, Ford reported
initiative moving forward for $136 billion from vehicle sales
Ford and greatly improve fuel and $8.2 billion from financial
economy and emissions. (page services. Pretax results were just
509, para 4) over $2.5 billion, with vehicle
sales and financial services
S3 - Since 2005, Ford’s accounting for $1.8 billion.
warranty repairs have declined (page 511, para 3)
66 percent for vehicles in the
first 3 months of service with W3 - Ford has especially
average warranty costs falling experienced difficulties in
54 percent. (page 509, para 4) Europe recently with pretax
losses in both 2013 and 2012.
S4 - However, Ford’s truck (page 515, para 4)
sales increased 4 percent, led by
a 24.6 and 18.7 surge in sales of W4 - However, for the most
the Transit Connect and heavy recent month (February 2015)
trucks, respectively. (page 517, available at the time this case
para 1) was written, Ford reported a 1.9
Page | 54
percent decline in sales in the

S5 - In 2013, Ford sold over United States to 180,383 units.
85,000 hybrid or all-electric, Ford brand’s sales fell 1.7
plug-in automobiles, up 150 percent to 174,219 units in the
percent from 2012 as the month, and Lincoln brands
company attempts to produce, dropped 7.5 percent to 6,164
as one executive said, a Tesla units. All total for the month,
for the average person. (page sales of Ford cars and utility
509, para 5) vehicles fell 8.1 and 2.3 percent
to 56,081 and 54,420 units,
S6 - In 2014, Ford introduced respectively. (page 516, para 7)
23 new vehicles, up from 11 in
2013, and plans to introduce a W5 - In 2005, Ford, along with
150 percent new product GM, had their corporate bonds
turnover by 2018. (page 509, downgraded to junk status.
para 5) (page 509, para 1)
S7 - Ford is unveiling a slew of W6 - South America pretax

new high-performance models, profits were slightly negative
more than 12 new go-fast and are expected to remain so
models coming to market by the next several years. (page
2020, including a super-hot new 511, para 2)
Focus model, the RS. A new
high- performance “Raptor” W7 - Ford does not have a
version of its new F-150 pickup published vision statement
could debut, and a new Ford (page 511, para 3)
sports car is coming. (page 509,
para 6) W8 - Ford, BMW, Toyota, and
several other vehicle
S8 - That niche is growing— manufacturers are recalling
Ford recently reported that sales products containing airbags
of high-performance models manufactured by Takata (page
have risen 70 percent in the 516, para 4)
Page | 55
United States since 2009, and

16 percent in Europe over the W9 - Retail sales of the F-series
same period—but it’s still fell 1.2 percent in February.
small. (page 509, para 6) Even Ford’s two most popular
two vehicles, the Focus and the
S9 - Ford is in the midst of a Fusion, recorded a year-over-
$400 million restructuring year decline in sales. (page 517,
program in Europe and para 1)
anticipates Europe will become
profitable sometime in 2015. W10 - Eastern Europe exceeded
(page 511, para 2) a 9 percent decline and Russia
nearly a 13 percent decline over
S10 - Ford reports that more 2013. (page 515, para 4)
than 65 percent of those who
buy its “hot-hatch” Focus ST
and Fiesta ST models are new
to the brand, and importantly,
often become loyal customers
Opportunity SO Strategies WO Strategies
O1 - Luxury cars account for 5 (Product development) (Market Penetration)

percent of the total U.S. market 1. Luxury and High 1. Ford already having 60% of
share; popular brands include Performance cars has its revenue derived from
BMW, Lexus, Cadillac, contributed 70% and 16% US; thus accelerating the
Mercedes, and several others. increase in sales relocation of manufacturing
(Page 515, Para 2) respectively in US and plants back to US and
Europe. Therefore Ford Mexico will account for
O2 - Midsize cars are also should focus on expanding better revenue for Ford
extremely popular, taking much and producing more luxury while able to keep the cost
of the market share away from and high performance range low (close to market
larger vehicles. (Page 515, Para of cars. (S2, S7, S8, O1, O3) approach). (W1, O9)
Page | 56
1)
O3 - Sports cars account for (Market penetration) (Unrelated Diversification)

only 2 percent of total U.S. 2. Despite being active in 2. Integrating the financing
market share; they include cars Europe market, Ford was package is a proven way for
such as the Mustang, Camaro, unable to get bigger share. automobile sellers to attract
Dodge Charger, and Corvette. Ford could penetrate into and keep customers. Ford
(Page 515, Para 2) Europe market by providing could diversify into credit
better and hassle free offering service or through
O4 – The outlook in 2015 is for financing package for 1st partnership with 3rd party
gas to remain below $3 per time Ford owners. (S9, O10) credit facility provider. (W2,
gallon. (Page 516, Para 2) W1, W9, O8)
O5 – Oil prices fell nearly 50

percent from summer 2014 to
year-end 2014. (Page 516, Para
2)
O6 – In 2014, sales of SUVs,

mini-vans, and light-duty trucks
increased nearly 10 percent,
whereas growth for cars was
below 2 percent. (Page 516,
Para 2)
O7 – In addition, over $500

billion can be saved each year
in productivity gains as people
can work while commuting—if
the driver can take his or her
mind off the road completely -
if the driver can take his or her
mind off the road completely.
Page | 57
(Page 516, Para 3)
O8 – Rates are slowly going up

and currently are around 4.5
percent for new cars and 8.8
percent for used cars as of 2014.
The lower rates and easy access
to loans has been great for
automakers. (Page 516, Para 5)
O9 – As wage differences
around the world shrink, there is
increasing attractiveness to
locate manufacturing facilities
back in the United States and
Mexico. (Page 516, Para 6)
O10 – Europe is starting to

stabilize economically, although
the euro continues to decline,
losing 25 percent of its value to
the dollar between 2008 and
2014, putting further pressure
on U.S. car manufacturers.
(Page 515, Para 4)
Threat ST Strategies WT Strategies
T1 – China will continue to put

pressure on U.S., European, and
Japanese automakers as new
Chinese-based auto companies
Page | 58
are formed and grow to

prominence. (Page 515, Para 3)
(Market Penetration) (Market Penetration)
T2 – Eastern Europe exceeded a 1. Continue the expansion in
9 percent decline and Russia Asia (S1, T1, T9, T10, T4) 1. Offer “free” after sales
nearly a 13 percent decline over service for Europe market to
2013. (Page 515, Para 4) capture the market and keep
(Market Penetration) them (W10, T2, W3)
T3 – GM is investing heavily in 2. Continue and improve the
its electric vehicle line, which quality of the cars to keep
totaled 7 vehicles in 2013, and the after sales cost low (S3,
has partnered with Honda to T7) (Focus best value)
work on hydrogen cell 2. Establish a new vision
technologies, with a 2020 statement to reflect the
timeframe for selling vehicles. (Product Development) Ford’s direction in
(Page 513, Para 1) 3. Develop and produce more sustainable fleet solution
hybrid and electric cars (S5, (W7, T3, T8)
T4 – GM and Volkswagen each T3, T8)
have 15 percent market share in
China. (Page 515, Para 3)
T5 – In particular, operating
revenues in Japan increased
substantially. Toyota reported
increased sales in Europe over
the same time frame when both
Ford and GM had losses in
Europe. (Page 514, Para 2)
T6 – Toyota sells vehicles in

over 170 different nations and
generated $214 billion in
revenues over all operating
Page | 59
segments in 2013. (Page 513,

Para 4)
T7 – Through only half of 2014,

recalls were up 70 percent over
the total recall amounts in all of
2013. (Page 516, Para 4)
T8 – GM even has plans to

introduce a self-driving Cadillac
model in 2017,.. (Page 516,
Para 3)
T9 – As of late 2014, Chinese

vehicle sales were up 8 percent
over the record year in 2013.
(Page 515, Para 3)
T10 – In 2013, GM committed

to invest $16 billion in the
United States over the next 3
years and…. Kia recently spent
$1.5 billion in Mexico and
another $10 billion is expected
to be spent in Mexico from
BMW, Toyota, and Daimler
AG. (Page 516, Para 6)
Page | 60
6.1.1 SO Strategy
SO Strategies
1 Product Development: Luxury and High Performance cars has contributed 70% and 16%
increase in sales respectively in US and Europe. Therefore Ford should focus on expanding
and producing more luxury and high performance range of cars. (S2, S7, S8, O1, O3)
2 Market Penetration: Despite being active in Europe market, Ford was unable to get bigger
share. Ford could penetrate into Europe market by providing better and hassle free
financing package for 1st time Ford owners. (S9, O10)
6.1.3 ST Strategy
ST Strategies
1 Market Penetration: Asia (especially China) has been and will continue to be the uptrend
market. Thus making a strong presence through expansion in those region will definetliy
increase Ford’s market share (close to market approach-first to deliver). In current market,
whether your manufacturing plant is located in US, Europe, South America; the majority of
the raw materials are still coming from Asia region (especially China). Hence, by putting
the plant in Asia, it will benefit Fords in term capitalizing its supply chain. Furthermore, it
create oppurtunuities for Ford to look into other strategies once already have strong
physical base in China. (S1, T1, T9, T10, T4)
2 Market Penetration: Keeping the after sales cost (warranty servicing) low is an important
factor in ensuring positive growth. Not only it will increase the profit; it will also helps in
building the brand integrity. (S3, T7)
3 Product Development: The future of automobile is leaning towards hybrid and electric cars.
Therefore, Ford should step up and accelerate it’s development of hybrid and electric cars.
(S5, T3, T8)
Page | 61
6.1.2 WO Strategy
WO Strategies
1 Market Penetration: Ford already having 60% of its revenue derived from US; thus
accelerating the relocation of manufacturing plants back to US and Mexico will account for
better revenue for Ford while able to keep the cost low (close to market approach). W1, O9
2 Unrelated Diversification: Integrating the financing package is a proven way for automobile
sellers to attract and keep customers. Ford could diversify into credit offering service or
through partnership with 3rd party credit facility provider. W2, W1, W9, O8
6.1.4 WT Strategy
WT Strategies
1 Market Penetration: Offer “free” after sales service for Europe and Asia market to capture
the market and keep them. (W10, T2, W3)
2 Corporate Strategy: Establish a new vision statement to reflect the Ford’s direction in
sustainable fleet solution. (W7, T3, T8)
Page | 62
6.2 Ford Motor - SPACE Matrix

Internal Analysis: External Analysis:
Financial Position (FP) Stability Position (SP)
Return on Equity (ROE) 4 Rate of Inflation -4
Debt-to-Equity Ratio 5 Technological Changes -2
Liquidity (Current Ratio) 7 Price Elasticity of Demand -4
Fixed Assest Turnover 6 Competitive Pressure -5
Operating Margin (%) 2 Barriers to Entry into Market -1
-
Financial Position (FP) Average 4.8 Stability Position (SP) Average 3.2
Internal Analysis: External Analysis:

Competitive Position (CP) Industry Position (IP)
Market Share -4 Growth Potential 5
Product Quality -2 Financial Stability 6
Customer Loyalty -2 Ease of Entry into Market 6
Technological know-how -1 Resource Utilization 7
Control over Suppliers and Distributors -2 Profit Potential 5
-
Competitive Position (CP) Average 2.2 Industry Position (IP) Average 5.8
Conservati 7.0 Aggressive

5.0
Toyota
3.0
For
1.0 GM
C
P I
-7.0 -5.0 -3.0 -1.0
-1.0 1.0 3.0 5.0 7.0
-3.0
-5.0
Defensive -7.0 Competitiv

SP
From the SPACE matrix analysis; Ford Motor falls under quadrant. Any organization
that falls under aggreaisve quadrant in SPACE matrix, is in fact in a very strong position of
using its internal strengths to take advantage the external oppurtuinies. These organizations
also would be good in overcoming their internal weakness while avoiding the external
threats. Therefore, for Ford Motors, some of the strong potential strategies would be market
development, market penetration, product development, backward integration.
Page | 63
6.3 Ford Motor - BCG Matrix
For the purpose this case; we analysed the geographical positioning of Ford Motor under
BCG Matix divisioning. BCG Matrix is normally used to portray the organzition’s divisional
positioning interm of relative market share position against industry growth rate. The market
share position reveals the organizations own market share against the largest competitor in
the same industry. The industry growth rate shows the potential annual increase in revenue
for all firms in comparison.
Each quadrant reflects the position of the organization’s division in the market that it
operates; and therefore the corresponding actionable strategies also depends on which
quadrant the division falls.
As in the case Ford Motor; the divisions in consideration falls within two quadrant.
The division that operates in region of Asia Pacific and Others falls under Question Marks
quadrant, which reflects that these two divisions has relatively low market share position but
competing in potential high growth region. Due to low market share these divisions generally
needs larger investment to strengthen its position but can only expect marginal return. Ford
could plan strategies for market penetration, market development, or product
development.
Page | 64
The other two division that operates in North America and Europe falls under Start
quadrant, which reflects its best long-run oppurtunuities. These two divisions within Ford
already has significant market share in these regions; therefore it needs continual investment
to maintain as well strengthen the dominat positions. Ford could look into Forward,
Backward, and Horizontal Integration, while also looking into market penetration,
market development, and product development.
Page | 65
6.4 Ford Motor - Internal External (IE) Matrix
Summary of Potential Strategies for Ford Motor
Ford Motor
IE Region Potential Strategies
Division
Asia Pacific, Market Penetration
1 Hold and Maintain
Europe, Product Development
Page | 66
Page | 67
6.5 Ford Motor - Grand Strategy Matrix
Grand strategy is another tool that is used in formulating the business strategies for
Ford Motor Company. Geneally, the Grand strategy will be used to compare between the
organisation that playing within the same industry. However, Grand strategy method also can
be applied for divisions within the single organization.
In the case of Ford Motor, the North America and South America division falls under
Quandrant 1. This shows that these two division within Ford Motor is in excellent strategic
position. Therefore, these divisions should just focus on strategies for continual
domination/excellence. The primary strategic option would be the market penetration, market
development, and product development. However, once these divisions are in cash rich
position, then it could look into potential integration (backward, forward, horizontal).
As for Asia Pacific division, it sits in Quadrant 2 within the Grand Strategy matrix.
This reflects the Ford’s position in these region; which puts them in high growth area but
without competitive advantage. Ford shall re-assess it’s strategies in these division and focus
more on gaining competitive advantage. These could be done through market development or
product development. However, if they are not in position to do that, then Ford should look
Page | 68
into Horizontal integration as another potential strategy to strengthen its market share in Asia
Pacific.
Europe and Other division (which include middle east, Africa, and etc) falls under
Quadrant 3; which puts Ford in slow-growth area and at the same time having a weak
competitive advantage. The primary aim should be to keep the operating expenses low; thus
pushing Ford to look into retrenchment option is a good strategy.
Page | 69
6.7 Quantitative Strategic Planning Matrix
We have identified the following two strategies for Ford Motor to consider from our SWOT-
TOWS analysis. However, every strategy in consideration has its own advantages and
potential benefit for the business growth of Ford Motor. Implementing both strategy will
require Ford Motor to allocate extensive amount resources. Therefore, QSPM analysis will
give us indiation as to which strategy shall be focused first. It doesn’t mean that the other
strategy is not relevant or beneficial. QSPM analysis will work as yardstick for the
organization to decide on which strategy to be pursued first. The two strategies that
considerations for QSPM analysis are:
Startegy 1:
Market Penetration: Asia (especially China) has been and will continue to be the uptrend
market. Thus making a strong presence through expansion in those region will definetliy
increase Ford’s market share (close to market approach-first to deliver). In current market,
whether your manufacturing plant is located in US, Europe, South America; the majority of
the raw materials are still coming from Asia region (especially China). Hence, by putting the
plant in Asia, it will benefit Fords in term capitalizing its supply chain. Furthermore, it create
oppurtunuities for Ford to look into other strategies once already have strong physical base in
China. (S1, T1, T9, T10, T4)
Strategy 2:
Product Development: Luxury and High Performance cars has contributed 70% and 16%
increase in sales respectively in US and Europe. Therefore Ford should focus on expanding
and producing more luxury and high performance range of cars. (S2, S7, S8, O1, O3)
Page | 70
6.7.1 Strength
Strategy 1 - Market Strategy 2 - Product
Weight
Strengths Penetration Development
AS TAS AS TAS
Currently, Ford is engaged in its largest
manufacturing expansion in over 50 years
by increasing capacity in six U.S. plants and
1 0.05 4 0.20 1 0.05
by opening two new plants in Asia and one
each in South America and Europe (page
509, para 5)
Higher engine outputs with smaller
displacements are a key initiative moving
2 0.06 2 0.12 4 0.24
forward for Ford and greatly improve fuel
economy and emissions. (page 509, para 4)
Since 2005, Ford’s warranty repairs have
declined 66 percent for vehicles in the first
3 0.06 0 0.00 0 0.00
3 months of service with average warranty
costs falling 54 percent. (page 509, para 4)
However, Ford’s truck sales increased 4
percent, led by a 24.6 and 18.7 surge in
4 0.05 0 0.00 0 0.00
sales of the Transit Connect and heavy
trucks, respectively. (page 517, para 1)
In 2013, Ford sold over 85,000 hybrid or

all-electric, plug-in automobiles, up 150
5 percent from 2012 as the company attempts 0.05 3 0.15 1 0.05
to produce, as one executive said, a Tesla
for the average person. (page 509, para 5)
In 2014, Ford introduced 23 new vehicles,
up from 11 in 2013, and plans to introduce a
6 0.06 4 0.24 3 0.18
150 percent new product turnover by 2018.
(page 509, para 5)
Ford is unveiling a slew of new high-
performance models, more than 12 new go-
fast models coming to market by 2020,
including a super-hot new Focus model, the
7 0.06 2 0.12 4 0.24
RS. A new high- performance “Raptor”
version of its new F-150 pickup could
debut, and a new Ford sports car is coming.
(page 509, para 6)
That niche is growing—Ford recently
reported that sales of high-performance
models have risen 70 percent in the United
8 0.04 1 0.04 4 0.16
States since 2009, and 16 percent in Europe
over the same period—but it’s still small.
(page 509, para 6)
Ford is in the midst of a $400 million
9 restructuring program in Europe and 0.03 0 0.00 0 0.00
anticipates Europe will become profitable
sometime in 2015. (page 511, para 2)
Ford reports that more than 65 percent of
those who buy its “hot-hatch” Focus ST and
10 Fiesta ST models are new to the brand, and 0.04 0 0.00 0 0.00
importantly, often become loyal customers
Page | 71
6.7.2 Weakness
Weight
Weaknesses Penetration Development
AS TAS AS TAS
Ford derives approximately 60 percent of its
revenues from the United States, Canada,
and Mexico. Virtually all the company’s
1 0.05 4 0.20 1 0.05
profits in 2014 came from these countries;
the only other profitable region was Asia.
(page 511, para 2)
In 2014, Ford reported $136 billion from
vehicle sales and $8.2 billion from financial
services. Pretax results were just over $2.5
2 0.06 0 0.00 0 0.00
billion, with vehicle sales and financial
services accounting for $1.8 billion. (page
511, para 3)
Ford has especially experienced difficulties

3 0.05 0 0.00 0 0.00
in Europe recently with pretax losses in both
2013 and 2012. (page 515, para 4)
However, for the most recent month
(February 2015) available at the time this
case was written, Ford reported a 1.9 percent
decline in sales in the United States to
180,383 units. Ford brand’s sales fell 1.7
4 percent to 174,219 units in the month, and 0.07 0 0.00 0 0.00
Lincoln brands dropped 7.5 percent to 6,164
units. All total for the month, sales of Ford
cars and utility vehicles fell 8.1 and 2.3
percent to 56,081 and 54,420 units,
respectively. (page 516, para 7)
In 2005, Ford, along with GM, had their

5 corporate bonds downgraded to junk status. 0.04 0 0.00 0 0.00
(page 509, para 1)
South America pretax profits were slightly
6 negative and are expected to remain so the 0.05 0 0.00 0 0.00
next several years. (page 511, para 2)
7 Ford does not have a published vision 0.05 0 0.00 0 0.00

statement (page 511, para 3)
Ford, BMW, Toyota, and several other
8 vehicle manufacturers are recalling products 0.03 0 0.00 0 0.00
containing airbags manufactured by Takata
(page 516, para 4)
Retail sales of the F-series fell 1.2 percent in
February. Even Ford’s two most popular two
9 vehicles, the Focus and the Fusion, recorded 0.05 0 0.00 0 0.00
a year-over-year decline in sales. (page 517,
para 1)
Eastern Europe exceeded a 9 percent decline
10 and Russia nearly a 13 percent decline over 0.05 0 0.00 0 0.00
2013. (page 515, para 4)
Page | 72
6.7.3 Opportunities
Weight
Opportunities Penetration Development
AS TAS AS TAS
Luxury cars account for 5 percent of the
total U.S. market share; popular brands
1 0.07 2 0.14 4 0.28
include BMW, Lexus, Cadillac, Mercedes,
and several others. (Page 515, Para 2)
Midsize cars are also extremely popular,
2 taking much of the market share away from 0.06 3 0.18 1 0.06
larger vehicles. (Page 515, Para 1)
Sports cars account for only 2 percent of
3 total U.S. market share; they include cars 0.06 2 0.12 4 0.24
such as the Mustang, Camaro, Dodge
Charger, and Corvette. (Page 515, Para 2)
4 The outlook in 2015 is for gas to remain 0.03 0 0.00 0 0.00

below $3 per gallon. (Page 516, Para 2)
Oil prices fell nearly 50 percent from
5 summer 2014 to year-end 2014. (Page 516, 0.03 0 0.00 0 0.00
Para 2)
In 2014, sales of SUVs, mini-vans, and
light-duty trucks increased nearly 10
6 0.04 0 0.00 0 0.00
percent, whereas growth for cars was below
2 percent. (Page 516, Para 2)
In addition, over $500 billion can be saved
each year in productivity gains as people
can work while commuting—if the driver
7 can take his or her mind off the road 0.06 0 0.00 0 0.00
completely - if the driver can take his or her
mind off the road completely. (Page 516,
Para 3)
Rates are slowly going up and currently are
around 4.5 percent for new cars and 8.8
8 percent for used cars as of 2014. The lower 0.05 0 0.00 0 0.00
rates and easy access to loans has been
great for automakers. (Page 516, Para 5)
As wage differences around the world
shrink, there is increasing attractiveness to
9 locate manufacturing facilities back in the 0.07 0 0.00 0 0.00
United States and Mexico. (Page 516, Para
6)
Europe is starting to stabilize economically,
although the euro continues to decline,
1 losing 25 percent of its value to the dollar
0.03 0 0.00 0 0.00
0 between 2008 and 2014, putting further
pressure on U.S. car manufacturers. (Page
515, Para 4)
Page | 73
6.7.4 Threats
Weight
Threats Penetration Development
AS TAS AS TAS
China will continue to put pressure on
U.S., European, and Japanese automakers
1 as new Chinese-based auto companies are 0.08 4 0.32 1 0.08
formed and grow to prominence. (Page
515, Para 3)
Eastern Europe exceeded a 9 percent
2 decline and Russia nearly a 13 percent 0.05 0 0.00 0 0.00
decline over 2013. (Page 515, Para 4)
GM is investing heavily in its electric
vehicle line, which totaled 7 vehicles in
2013, and has partnered with Honda to
3 0.06 2 0.12 4 0.24
work on hydrogen cell technologies, with a
2020 timeframe for selling vehicles. (Page
513, Para 1)
4 GM and Volkswagen each have 15 percent 0.06 4 0.24 1 0.06
market share in China. (Page 515, Para 3)
In particular, operating revenues in Japan
increased substantially. Toyota reported
5 increased sales in Europe over the same 0.04 4 0.16 1 0.04
time frame when both Ford and GM had
losses in Europe. (Page 514, Para 2)
Toyota sells vehicles in over 170 different
nations and generated $214 billion in
6 0.03 4 0.12 1 0.03
revenues over all operating segments in
2013. (Page 513, Para 4)
Through only half of 2014, recalls were up
7 70 percent over the total recall amounts in 0.06 0 0.00 0 0.00
all of 2013. (Page 516, Para 4)
GM even has plans to introduce a self-
8 driving Cadillac model in 2017,.. (Page 0.04 0 0.00 0 0.00
516, Para 3)
As of late 2014, Chinese vehicle sales
9 were up 8 percent over the record year in 0.04 4 0.16 1 0.04
2013. (Page 515, Para 3)
In 2013, GM committed to invest $16
billion in the United States over the next 3
years and…. Kia recently spent $1.5
10 billion in Mexico and another $10 billion 0.04 0 0.00 0 0.00
is expected to be spent in Mexico from
BMW, Toyota, and Daimler AG. (Page
516, Para 6)
STAS 2.63 1.74
Page | 74
7.0 QSPM Strategy Recommendation
From the case presented; Ford actually already has its brand presence in every major regions.
However, the issue is that the revenue and profit growth in other regions are not as
encouraging as in their home ground. On top of that the current market and economic outlook
also doesn’t seem to be favoring the automotive industry in general. Therefore, we are
recommending following stratgy based on the QSPM analysis.
We recommend Market Penetration strategy (Startegy 1):
We strongly believe that Asia currently is and will be the next world market for any kind of
products and automobiles are no exception. So making a strong presence in Asia region is a
must for Ford. Therefore the manufacturing plant expansion in Asia region shall be
accelerated. Not only this would help Ford to be close the market, it will also support its
supply chain. In current market, whether your manufacturing plant is located in US, Europe,
South America; the majority of the raw materials are still coming from any of Asia region
(especially China). Hence, by putting the plant in Asia, it will benefit Fords in term
capitalizing its supply chain.
Page | 75
8.0 Corporate Level Strategy

Establish a new vision statement to reflect the Ford’s direction in sustainable fleet solution.
(W7, T3, T8)
8.1 Proposed Vision Statement

There was no established vision statement for Ford Motor; therefore we proposing a new
vision statement for Ford Motor:
“To re-ignite and lead the automobile innovation culture in the field of
sustainable automobile solution. Ford will strive to become the market leader in
US as well other region in providing fuel efficient consumer vehicles.”
8.2 Proposed Mission Statement
Innovation is in our DNA
• We will continue to innovate to add value to our customers and

environment.
Close to Market
• We will and continue to support the global sustainable effort by

increasing effort in development of hybrid and electric vehicle.
Sustainability
• We will and continue to support the global sustainable effort by

increasing effort in development of hybrid and electric vehicle
Ford Family
• Our people are the pillar behind our success and growth. We will
continue to provide the support and motivation for them to deliver
their best towards achieving our vison together.
Page | 76
9.0 Conclusion
Since the time of Sir Henry Ford, innovation has been the lifeline for Ford Motor Company.
In the past they have suscessfully conquered and dominated the automobile industry around
the world. However, after the era of rapid globalization; Ford had experienced some serious
setbacks in its market positioning as well as the revenue. It has almost lost its grips in certain
part of the world.
We strongly recommend the company to implement the proposed strategy that we

have presented here. Ford Motor shall take the recommendation seriously if it really wants to
regain and increase its market share in Asia region.
Page | 77

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STRATEGIC MANAGEMENT (MBSA 1213)

Case Analysis for Ford Motor Company, 2015

Prepared for: Dr. Suzilawati Kamarudin

18th December 2018

1.0 Introduction ................................................................................................................... 6

1.1 Company Background ................................................................................................. 7

2.0 Ford Motor Company’s Vision and Mission Statement ............................................ 9

3.1 Industry Description .................................................................................................. 10

3.2 Strategic Group Map ................................................................................................. 11

3.3 PESTEL Analysis of Ford Motor Company ............................................................... 13

3.4 Industry Environment Analysis: Porter 5 Forces ........................................................ 16

3.5 Competitive Force Analysis .................................................................................. 19

3.5.1 Competitive force – General Motors (GM) Company ..................................... 19

3.5.2 Competitive force – Toyota............................................................................ 21

3.6 Summary Table of Opportunities and Threats ............................................................ 22

3.7 Prioritize Table of Opportunities................................................................................ 23

3.8 Prioritize Table of Threats ......................................................................................... 24

3.9 External Factor Evaluation (EFE) Matrix ................................................................... 25

3.9.1 Table of Opportunities ........................................................................................ 25

3.9.2 Table of Threats .................................................................................................. 27

3.10 Key Success factor .................................................................................................. 28

3.11 The Competitive Profile Matrix (CPM) ................................................................... 30

4.0 Internal Analysis ......................................................................................................... 31

4.1 Ford Motor Company Culture Assessment ................................................................ 31

4.2 Ford Motor Company Management Function Assessment ......................................... 33

4.3 Ford Motor Company Marketing Assessment ............................................................ 36

4.4 Ford Motor Company Financial and Accounting Assessment .................................... 38

4.5 Ford Motor Company Production/Operation Assessment ........................................... 41

4.8 Summary Table of Strengths and Weakness .............................................................. 44

4.9 Prioritize Table of Strengths ...................................................................................... 44

4.10 Prioritize Table of Weakness ................................................................................... 46

4.11 Internal Factor Evaluation (IFE) Matrix ................................................................... 47

4.11.1 Table of Strength .............................................................................................. 47

4.11.2 Table of Weakness ............................................................................................ 48

4.12 Value Chain Analysis .............................................................................................. 50

5.0 Strategic in Action ....................................................................................................... 52

5.1 Long Term and Short Term Strategic Objectives ....................................................... 52

5.2 Long Term and Short Term Financial Objectives ....................................................... 52

5.3 Corporate Level Strategy ........................................................................................... 53

6.0 Strategy Formulation Process ..................................................................................... 54

6.1 SWOT & TOWS Analysis ......................................................................................... 54

6.1.1 SO Strategy ........................................................................................................ 61

6.1.3 ST Strategy ......................................................................................................... 61

6.1.2 WO Strategy ....................................................................................................... 62

6.1.4 WT Strategy ....................................................................................................... 62

6.2 Ford Motor - SPACE Matrix ..................................................................................... 63

6.3 Ford Motor - BCG Matrix ......................................................................................... 64

6.4 Ford Motor - Internal External (IE) Matrix ................................................................ 66

6.5 Ford Motor - Grand Strategy Matrix .......................................................................... 68

6.7 Quantitative Strategic Planning Matrix ...................................................................... 70

6.7.1 Strength .............................................................................................................. 71

6.7.3 Opportunities ...................................................................................................... 73

7.0 QSPM Strategy Recommendation .............................................................................. 75

8.0 Corporate Level Strategy ............................................................................................ 76

8.1 Proposed Vision Statement ........................................................................................ 76

9.0 Conclusion ................................................................................................................... 77

Headquartered in Dearborn, Michigan, Ford Motor Company is the second-largest U.S.

1.1 Company Background

Founder Sir Henry Ford (Page 508, Para 3)

One Ford: Align employee efforts toward a common definition of

Operating Location Headquartered in Dearborn, Michigan, (Page 508, Para 1)

Business Segments Worldwide

Revenue (2014) Worldwide : $144,077 million (Page 511, Exhibit 3)