Ford Project
Content
Table of Contents
Industry definition Introduction to Industry Industry at current scenario Literature review of PEST PEST analysis of Ford SWOT Analysis of Ford Porter five force analysis of Ford Competitors Analysis of Ford Strategy of Ford (IFAS & EFAS) Performance of Ford Conclusion Recommendations References
1
Executive Summary
In Global markets among different Industries we found Automobile industry because the scope of the automobile industry is high when compared to the other industries. In today’s life automobiles became necessary. In that automobile industry we choose the Ford motor company to analyze their Macro and Micro Environment. This project is focused on PEST Analysis of FORD, SWOT Analysis, Porter five force analysis, competitor analysis, strategies, and its performance in share market and sales.
We focused more on the Political, Economical, Social and Technological Factors which are playing a major role business environment of Ford.
The aim of marketing is to meet and satisfy the needs and wants of the customers. India has long-term potential to become a significant vehicle market. It has huge population of nearly one billion people (of which 150-250 million are middle class), and a current vehicle population of 3.5 million (equivalent to only 3.4 cars per 1000 people).
The global automotive car market is growing at a rate of only 4% per annum. Fortunes of the automobile industry will continue to hinge on the large, price sensitive customer, who will take time to graduate to the higher end of the market. Unite then the small car will continue to drive demand. And that is the eventuality that most of the carmanufacturers are gearing up for.
2
Automobile DefinitionAutomobile can be defined as the vehicle which runs on two, three, four or more tyres; the purpose may be to travel on the roads by people or to carry the loads from one place to another place.
Introduction to Automobile IndustryThe automobile sector has today become one of the vital areas in markets. Various upcoming features have enhanced the global competition in today's Automobile sector. Implementing new technologies, new features and considering the customers preference are the important factors for the company's existence in the competitive market. So if the company wants to face the competition, it has to have the update knowledge of the consumer tastes and preference. First Automobile is a three wheeler which was invented by Nicolas J. Cugnot. Initially invented automobile is made by steam engine and later it was designed by fuels which are currently available in the market. At present few Automobiles are running based on the renewable energies like Solar and Bio Fuels. Some cars are designed to run on Electricity. From the past records we can identify that America is dominating in automobile Industry. Currently countries like India and Brazil are presenting their growth rate in the global markets of automobile industry.
Global recession influencing most of automobile manufacturing companies to stop their production due to lack of demand in the market. This can be detailed from the following statement. In the automobile industry by 2008 the sales are declined by 8% and in 2009 sales are rapidly declined up to 20%.
3
AUTOMOBILE INDUSTRY IN INDIA
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.
Current Scenario:
The Indian automobile industry crossed a landmark with total vehicle production of 10 million units. Car sales during the year 2009 is 8, 93,934 units in March 2009 by rising 1.09% over 8, 84,313 units in March 2008.
Snippets
India, sourcing base for global auto majors. By 2012, India is expected to witness over Rs 40,000 crore of investment. Passenger car and motorcycle segment is set to grow by 8-9%. Commercial vehicle to grow by 5.2 per cent.
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Introduction to FordFord motor company is a global leader in automobile industry, Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford discontinued the Mercury brand after the 2011 model year. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the 2nd largest automaker in the U.S. and the 5th largest in the world based on annual vehicle sales in 2010. At the end of 2010, Ford was the fifth largest automaker in Europe. Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. In 2010, Ford earned a net profit of $6.6 billion and reduced its debt from $33.6 billion to $14.5 billion lowering interest payments by $1 billion following its 2009 net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three.
Ford has 15% of Market share & Net Income: - 6.6 billion.
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Ford operating its business in following continents: North America Europe Asia Pacific Latin America Middle East Africa Caribbean
Ford is partnering with some of the companies to produce better optional vehicles. Ford is partnering with companies like, BP, Microsoft, Sony, Roush, Adventure Island & Water country USA.
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VISION & MISSION OF FORD
VISION: To become the world's leading Consumer Company for automotive products and services.
MISSION:
ONE TEAM
People working together as a lean, global enterprise for automotive leadership, as measured by:
Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction.
ONE PLAN
Aggressively restructure to operate profitably at the current demand and changing model mix
Accelerate development of new products our customers want and value Finance our plan and improve our balance sheet Work together effectively as one team
ONE GOAL An exciting viable Ford delivering profitable growth for all.
7
CORPORATE GOVERNANCE:-
The relationship between the Board of directors, Top management & shareholders for improving the performance of the company to achieve its goals.
Managing Director:- Kathleen Gallagher
CEO:- Alan.R. Mulally
Executive Vice President:- Lewis Booth Executive chairman:Willian.C.Ford Director:- John.L.Thorton
8
FORD CORPORATE SOCIAL RESPONSIBILITY:-
The Ford Foundation was chartered on January 15, 1936. The Ford Foundation is a private foundation incorporated in Michigan created to fund programs that were chartered by Edsel Ford and Henry Ford. The Ford Foundation focuses on strengthening democratic values, community and human rights, education, media, arts, culture, and economic development. Ford has been a major funder of efforts to give more students access to higher education, improve the quality of public schools.
Major Grants and Initiatives In 1951, Ford made its first grant to support the development of the public broadcasting system. These grants continued, and in 1969 the foundation gave $1 million to the Children’s Television Workshop to help create and launch Sesame Street.
In 1952, the foundation's first international field office opened in New Delhi, India.
In 1976, the foundation helped launch the Grameen Bank, which offers small loans to the rural poor of Bangladesh. In 2006, the Grameen Bank and its founder, Muhammad Yunus, were awarded the Nobel Peace Prize for pioneering micro-credit.
In the late 1980s, the foundation began making grants to fight the AIDS epidemic, which included support for the establishment of a $4.5 million program to improve AIDS education and treatment in communities around the country.
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FORD PRODUCT MIX & PRODUCT LINE:-
Product Mix
Car’s SUV’s Trucks Tractors Vans Buses Military vehicles Rally cars
P r o d u c t
Ford Figo
Ford Fusion F-Transit F-N series F-I Max F-power master
49-B
Ford GPW Ford 3-Ton M1918
Ford GTB Ford Model-T
FocusWRC GT spec-II
Ford Fiesta Ford Taurus F-Cargo
Ford Ikon Ford G6 Ford Edge F-Ranger
F-Explorer 09-B
79-B
F-TW series
Ford Bronco F-Lobo 19-B
Ford Focus Ford Fierra
Ford Galaxy Ford Mustang
L i n e
Ford Mustang GT
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FORD CATEGORIES
ord vehicle design Ford Team Rally ports Ford video games ord village industries ormula ord Ford Times Ford Aircraft Ford Motor Company Lamp Factory Ford Transmissions Ford Fuel corporation Ford Aerospace Ford Platforms
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FORD COMPETITORS
International Nissan Fiat Honda Range Rover & Land Rover Volkswagen Audi Chevrolet Renault Mitsubishi Skoda
National Tata Maruti Suzuki
Honda Skoda Hyundai General Motors Mahindra Volkswagen
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PEST AnalysisPest analysis represents Political, Economical, Social and Technical factors of an organization. Political factors explain about taxation, employment laws, internal trade regulations and competitor trade regulations. Economical Factors explains about economic growth by industry, policy towards unemployment, inflation and influence of exchange rates Social Factors explains about income distribution, labour, life style changes, health & welfare, attitude to work and living conditions. Technical Factors explain about Technological efficiency, technological transfers, rate of spending in R&D, Energy use cost and New Inventions.
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Ford Pest Analysis-
Political FactorsExchange rates, oil prices & free trade flows which influence the consumer to invest on the vehicles.
Foreign ownership regulations and technological cooperation’s between countries helping the ford in raising the funds and building the advanced models which can cope with the current scenario.
Introduction of new business laws Impacts the ford to change its rules and regulations which are necessary to producing a quality vehicle.
Forced Groups (Labour unions) who plays a major role in the production of a vehicle in a ford manufacturing organization. The labour unions should work according to the rules and regulations amended by the business laws.
Investor’s climate- In most of the company’s investors had a premier role to play in the growth and development of the company.
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Economical FactorsGrowth potential of target market - The growth potential of target market will determine the purchasing power of the buyer. That is the major reason ford is operating in the countries like America, India and Brazil where the growth potential is high when compared to the other markets.
Based on the above geography of demand for vehicles, we can state that ford is operating its business in the potential target markets. Target Market Size – Again the sales of the ford was influenced by the Market size where it is operating its business. When the target market GDP growth is high the consumers will show more interest to have a premium or luxury vehicle. Economic Development – Economic development is the major part which will determines the development of a particular economy as a whole and which will influence on individual GDP. Oil Price Fluctuations- The oil fluctuations influence the sales of the ford company. If the oil prices are more it will difficult to sell the premium and luxury cars. Cost conscious customers may not show interest to buy the cars which provides low mileage. Altogether the mentioned economical factors will determines the growth of the potential markets, margin cost of the operations, return rate on the investment, and strategy to provide the price of the vehicle.
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Social Factors
Social factors plays a role in trend in demand based on the various factors like attitudes, demographical, beliefs of the consumers in that particular market region Some of social factors of Ford are given below
Geographical Changes - The consumers of ford had changed from one geographical region to another geographical region Eg- The US for consumers will use the cars or commercial vehicles which have large engines. But the Brittan consumers are habituated to use the cars or commercial vehicles which are designed by small engines.
Consumer Attitude – Consumer attitude plays a role in selecting car model and design, If the consumers are favour about sport they will select the sports model car for their usage. But if the consumers are cost and safety concerned them probably will choose a normal car which will provide mileage and better safety.
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Travel Habits – The ford company is designing the cars based on the travel habits of the consumers. Ford is a medium cost car which can be affordable by the medium class people. It is providing the facilities based on the travel habits of the whole family.
Technological Factors
Technological factors of the ford motor company are very advanced when compared with their competitors. The technological factors of the automobile company will influence on most of the things like sales percentage of the cars, consumer satisfaction which leads to the automatic growth in the sales figure. Supply chain collaboration – It is the Initial and too crucial factor in the ford motor company, because the consumers of car are more concerned about the ordering and when the company is going to deliver the car. The Ford Company is having strong supply chain collaboration which is in more than thirty countries. Operations Capability – Ford Operation are more capable to provide the better service to consumers. Ford motor company is operating its manufacturing in more than 30 countries, so Ford operations are very efficient so it is able to providing quality vehicles at right time. Technological Improvements in distribution – Ford motor company is one of the automobile companies which are providing the car view and specification in online through its website named a www.ford.co.uk. One more advanced technological thing is consumer can customize the materials what he requires inside as well as outside of the car. The Customer will get the delivery after min 1 month and max 2 months. If the ford is having the booked car in the assess they will deliver within one or two weeks. Product Development – Ford Motor Company is providing the consumer to customize the car and its needs. So ford had gained a chance to innovate a new car based on the most of the customer’s selection and preferences. The ford company cars manufacturing will be influenced based on the consumer customization needs.
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SWOT Analysis of Ford Motor Company
Strengths of Ford –
Brand Image- Ford brand is well-known in automobile industry. Its brand image is well known in the global markets due to huge marketing & advertising. Online Marketing capability - Ford is one of the well-known automobile companies which is providing the online consumer selection of cars through its website. In online the consumer is allowed to customize the engine, colour, interiors and exteriors. More consumer choices – Ford is one of the automobile companies which is providing the consumer more variety of cars and commercial vehicles. Ford is manufacturing following kind of vehicles. Cars Commercial Vehicles (Jeeps, Vans, & Trucks) Heavy Vehicles.
Operations and distribution efficiency - Ford is the rich in its operations and distribution because it is operating its business more than 30 countries and it enhances its manufacturing process more than ninety plants.
Relations with high profile companies - Ford Company is maintaining the relations with high profiled companies like Suzuki and Isuzu Motors Company to develop qualitative vehicles and in the part to technological aspect for motor company is maintaining relation with Toyota and Honda motor services.
Employee are assert - Ford motor car company recruits a qualified and skilled employees in all its functions. Ford will maintain good relation with the employees by paying them better wages in automobile industry. Ford is more concerned about the working environment and safety aspects of the employees.
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Weakness of Ford –
Sales Decline - The sales figure of the ford company was declined from the year 2008 to 2009 due to global recession in the world financial market. Recession is one of the major factors for decline of sales and one more important factor is ford will manufacture the standard cars which are not able to cope up with current market automobiles.
Huge unfunded pensions and other obligations - Ford is one of the automobile company which takes more responsibilities in the health and safety of the employee. Ford invests more money on maintaining a good working environment.
Low productivity - Ford expanded its business operations in diversified geographical areas, so management is missing focus on some lines performance and it influence the ford to cause the low productivity. Weakening operations in North America – In the North America part ford operations has been declined due to the huge competitors like GM, Toyota etc. The revenue of Ford was declined by 2.4%.
Opportunities of Ford –
Production of the fuel efficient cars – At present ford is producing the cars with low mileage and pick up. Ford is having a great opportunity to produce fuel efficient cars and commercial vehicles. The automobile industry is having one more fuel efficient types like, cars which can run on renewable energies like solar power and bio fuels.
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Production of Hybrid Vehicles - Ford had one more option in designing the cars and commercial vehicles based on electric engines. If the cars are designed based on electricity engines the consumers will show more interest to buy the cars, the reason is the car maintenance charge will low when the car is run on electricity.
Opportunities in India and China markets- Ford is having the market opportunities in India and china countries because two countries are having huge geographical market and population. The most of the people in these two countries are more interested to own a four wheeler for their family. That is the reason ford fiesta is a most successful car in these two markets.
Threats to fordPrice Rise in raw material prices – Raw material prices like hard steel and rolling steel cost will influence the margin price of the car. As a whole it will influence the profit margin of the ford because of low margin price.
Rapid growth of competitors - Ford growth and development may effected by rapid growth in no of competitors in the automobile industry. From the beginning America demanded automobile industry. ord’s main competitors are General motors, Toyota, Honda, BMW, etc.
Less Capital spending - Ford is spending low on its operations and research development activities, when compared to its competitors. The competitors are spending huge amount on R&D programmes.
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Porters Five Force Analysis -
Threat of new entrants – Threat of new entrants will be low for the ford because the ford is one of automobile which is providing the best services with low cost of price, ford provides customers to choose their vehicles. Ford is having cost advantage because it is providing the vehicles with low cost when compared to the other competitors. Bargaining power of suppliers – Ford motor company enhances the relations with sixteen new suppliers to gain the bargaining power of suppliers. Ford is having good relations with suppliers for the output of quality cars. Bargaining Power of customers – Customers of Ford are comfortable with ford way of providing the vehicles customization and way of delivering the products within the specified time. The bargaining power of customer is low when compared to the other automobile.
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Threat of substitute – Substitutes for ford motor company are less but there are some substitutes which the cars are running on the electricity and other bio fuels. Eg: – riva one small car which runs on electricity.
Rivalry among existing companies - The important competitors of Ford motor company is General motors, Toyota, Honda and BMW. All the above mentioned forces will lead to the rivalry among these companies to provide the customer with competitive advantage and provide the customer with quality cars and commercial vehicles.
Competitor Analysis –
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The Core Competencies of Ford are it is very innovative in using the high technology in the manufacturing the cars & commercial vehicles. Ford is more concerned about safety and more over ford is gave the opportunity to its customers to customize their interiors and exteriors of Cars.
The important competitive advantage is ford is the first motor company to come with active park assist, which can help the driver to park with a touch of a button.
Strategies of ford –
Ford Motor Company implements the Hybrid strategy to perform well in the automobile industry and to provide the competitor edge. As a part of Hybrid Strategy – ford motor company is providing the customers with low prizes when compared to the others. Ford is providing the small engines with high pickup and mileage.
Ford is providing the customers to choose their design of the car and their interiors through online sales. Ford attracted eleven millions people per annum
Ford manufactures cars with small engines and mostly it is for focused group like a family. Ford manufactures the some models like CRV, SUG for the people who are interested in using premium and luxury cars.
Pure battery electric vehicles - In future ford is coming with cars which will run on bio fuels and electricity to attract the cost concerned customers.
Overall we can conclude that Ford is concentrating on product approach rather than customer approach. It focuses more on new technology and innovative products.
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IFAS OF FORD MOTORS
A table that organizes internal factors into Strengths (S) & Weaknesses (W) and how well management is responding to these specific factors.
IFAS OF FORD MOTORS Strengths Variants of models Business Structure Brand Network Distribution Weakness Recall of Product Size of company Ageing Workforce Total Score 0.1 0.15 0.2 1 3 3.5 3.2 0.05 0.15 0.2 0.15 2.6 4 4 4.8 Weight Rating
Weighted score
0.13 0.6 0.8 0.72
0.3 0.52 0.64 3.71
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EFAS OF FORD MOTORS
A table that organizes external factors into opportunities (0) & Threats (T) and how well management is responding to these factors of a company.
EFAS OF FORD MOTORS Opportunity R & D Technology Eco friendly vehicles Demand for dual fuel Foreign Markets Threats Sluggish Production Technology Imports Total Score
Weight Ratings Weighted Score
0.1 0.1 0.15 0.15
4.5 4.75 3.8 3.5
0.45 0.47 0.57 0.52
0.25 0.15 0.1 1
3.8 3 2.75
0.8 0.45 0.27 3.53
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Performance of Ford:Performance of Ford in Share Market
The performance of Ford is declining in the share market due to recession in global market. But the ford performance in share market was not too declined when compared with the general motors. The performance of ford in the year 2009 was increasing, the share value of ford according to 2009 market it was increased by 12%. Now ford shares are increasing due to loyal customers and increased satisfied
27
SALES PERFORMANCE OF FORD:-
Summary of vehicle unit sales
From the above chat we can interpret that sales of ford from 2003-2007 went well some fluctuations but in the year of 2008 the sales of ford was declined due to various reasons like Recession in the global markets.
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Conclusion –
Ford automobile company is performing well in the aspects of political, economical, social, and environmental. But ford suddenly faced the problem in 2008 sales due to the economical problem (Recession).
Global economic conditions are improving but remain fragile. Recoveries in some markets are modest due to weak labour markets and tight credit.
RecommendationsFord should concentrate more on revenue growth by manufacturing premium and luxury cars and should use the focus group strategy.
Ford has the opportunity to manufacture cars which can run of electricity, solar energy and bio fuels. It will help the organization to develop in environmental factor.
References –
www.ford.com www.automobiles.com www.ford.uk.com www.fordmotorsco.com www.ford.comhttp://www.ford.com/microsites/sustainability-report-200809/economy-data-market.
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Industry definition Introduction to Industry Industry at current scenario Literature review of PEST PEST analysis of Ford SWOT Analysis of Ford Porter five force analysis of Ford Competitors Analysis of Ford Strategy of Ford (IFAS & EFAS) Performance of Ford Conclusion Recommendations References
1
Executive Summary
In Global markets among different Industries we found Automobile industry because the scope of the automobile industry is high when compared to the other industries. In today’s life automobiles became necessary. In that automobile industry we choose the Ford motor company to analyze their Macro and Micro Environment. This project is focused on PEST Analysis of FORD, SWOT Analysis, Porter five force analysis, competitor analysis, strategies, and its performance in share market and sales.
We focused more on the Political, Economical, Social and Technological Factors which are playing a major role business environment of Ford.
The aim of marketing is to meet and satisfy the needs and wants of the customers. India has long-term potential to become a significant vehicle market. It has huge population of nearly one billion people (of which 150-250 million are middle class), and a current vehicle population of 3.5 million (equivalent to only 3.4 cars per 1000 people).
The global automotive car market is growing at a rate of only 4% per annum. Fortunes of the automobile industry will continue to hinge on the large, price sensitive customer, who will take time to graduate to the higher end of the market. Unite then the small car will continue to drive demand. And that is the eventuality that most of the carmanufacturers are gearing up for.
2
Automobile DefinitionAutomobile can be defined as the vehicle which runs on two, three, four or more tyres; the purpose may be to travel on the roads by people or to carry the loads from one place to another place.
Introduction to Automobile IndustryThe automobile sector has today become one of the vital areas in markets. Various upcoming features have enhanced the global competition in today's Automobile sector. Implementing new technologies, new features and considering the customers preference are the important factors for the company's existence in the competitive market. So if the company wants to face the competition, it has to have the update knowledge of the consumer tastes and preference. First Automobile is a three wheeler which was invented by Nicolas J. Cugnot. Initially invented automobile is made by steam engine and later it was designed by fuels which are currently available in the market. At present few Automobiles are running based on the renewable energies like Solar and Bio Fuels. Some cars are designed to run on Electricity. From the past records we can identify that America is dominating in automobile Industry. Currently countries like India and Brazil are presenting their growth rate in the global markets of automobile industry.
Global recession influencing most of automobile manufacturing companies to stop their production due to lack of demand in the market. This can be detailed from the following statement. In the automobile industry by 2008 the sales are declined by 8% and in 2009 sales are rapidly declined up to 20%.
3
AUTOMOBILE INDUSTRY IN INDIA
The Automotive industry in India is one of the largest in the world and one of the fastest growing globally. India's passenger car and commercial vehicle manufacturing industry is the seventh largest in the world, with an annual production of more than 3.7 million units in 2010. According to recent reports, India is set to overtake Brazil to become the sixth largest passenger vehicle producer in the world, growing 16-18 per cent to sell around three million units in the course of 2011-12. In 2009, India emerged as Asia's fourth largest exporter of passenger cars, behind Japan, South Korea, and Thailand. As of 2010, India is home to 40 million passenger vehicles and more than 3.7 million automotive vehicles were produced in India in 2010 (an increase of 33.9%), making the country the second fastest growing automobile market in the world. According to the Society of Indian Automobile Manufacturers, annual car sales are projected to increase up to 5 million vehicles by 2015 and more than 9 million by 2020. By 2050, the country is expected to top the world in car volumes with approximately 611 million vehicles on the nation's roads.
Current Scenario:
The Indian automobile industry crossed a landmark with total vehicle production of 10 million units. Car sales during the year 2009 is 8, 93,934 units in March 2009 by rising 1.09% over 8, 84,313 units in March 2008.
Snippets
India, sourcing base for global auto majors. By 2012, India is expected to witness over Rs 40,000 crore of investment. Passenger car and motorcycle segment is set to grow by 8-9%. Commercial vehicle to grow by 5.2 per cent.
4
Introduction to FordFord motor company is a global leader in automobile industry, Ford Motor Company is an American multinational automaker based in Dearborn, Michigan, a suburb of Detroit. The automaker was founded by Henry Ford and incorporated on June 16, 1903. In addition to the Ford and Lincoln brands, Ford also owns a small stake in Mazda in Japan and Aston Martin in the UK. Ford's former UK subsidiaries Jaguar and Land Rover were sold to Tata Motors of India in March 2008. In 2010 Ford sold Volvo to Geely Automobile. Ford discontinued the Mercury brand after the 2011 model year. Ford introduced methods for large-scale manufacturing of cars and large-scale management of an industrial workforce using elaborately engineered manufacturing sequences typified by moving assembly lines. Henry Ford's methods came to be known around the world as Fordism by 1914. Ford is the 2nd largest automaker in the U.S. and the 5th largest in the world based on annual vehicle sales in 2010. At the end of 2010, Ford was the fifth largest automaker in Europe. Ford is the eighth-ranked overall American-based company in the 2010 Fortune 500 list, based on global revenues in 2009 of $118.3 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000 employees at around 90 plants and facilities worldwide. During the automotive crisis, Ford's worldwide unit volume dropped to 4.817 million in 2009. In 2010, Ford earned a net profit of $6.6 billion and reduced its debt from $33.6 billion to $14.5 billion lowering interest payments by $1 billion following its 2009 net profit of $2.7 billion. Starting in 2007, Ford received more initial quality survey awards from J. D. Power and Associates than any other automaker. Five of Ford's vehicles ranked at the top of their categories and fourteen vehicles ranked in the top three.
Ford has 15% of Market share & Net Income: - 6.6 billion.
5
Ford operating its business in following continents: North America Europe Asia Pacific Latin America Middle East Africa Caribbean
Ford is partnering with some of the companies to produce better optional vehicles. Ford is partnering with companies like, BP, Microsoft, Sony, Roush, Adventure Island & Water country USA.
6
VISION & MISSION OF FORD
VISION: To become the world's leading Consumer Company for automotive products and services.
MISSION:
ONE TEAM
People working together as a lean, global enterprise for automotive leadership, as measured by:
Customer, Employee, Dealer, Investor, Supplier, Union/Council, and Community Satisfaction.
ONE PLAN
Aggressively restructure to operate profitably at the current demand and changing model mix
Accelerate development of new products our customers want and value Finance our plan and improve our balance sheet Work together effectively as one team
ONE GOAL An exciting viable Ford delivering profitable growth for all.
7
CORPORATE GOVERNANCE:-
The relationship between the Board of directors, Top management & shareholders for improving the performance of the company to achieve its goals.
Managing Director:- Kathleen Gallagher
CEO:- Alan.R. Mulally
Executive Vice President:- Lewis Booth Executive chairman:Willian.C.Ford Director:- John.L.Thorton
8
FORD CORPORATE SOCIAL RESPONSIBILITY:-
The Ford Foundation was chartered on January 15, 1936. The Ford Foundation is a private foundation incorporated in Michigan created to fund programs that were chartered by Edsel Ford and Henry Ford. The Ford Foundation focuses on strengthening democratic values, community and human rights, education, media, arts, culture, and economic development. Ford has been a major funder of efforts to give more students access to higher education, improve the quality of public schools.
Major Grants and Initiatives In 1951, Ford made its first grant to support the development of the public broadcasting system. These grants continued, and in 1969 the foundation gave $1 million to the Children’s Television Workshop to help create and launch Sesame Street.
In 1952, the foundation's first international field office opened in New Delhi, India.
In 1976, the foundation helped launch the Grameen Bank, which offers small loans to the rural poor of Bangladesh. In 2006, the Grameen Bank and its founder, Muhammad Yunus, were awarded the Nobel Peace Prize for pioneering micro-credit.
In the late 1980s, the foundation began making grants to fight the AIDS epidemic, which included support for the establishment of a $4.5 million program to improve AIDS education and treatment in communities around the country.
9
FORD PRODUCT MIX & PRODUCT LINE:-
Product Mix
Car’s SUV’s Trucks Tractors Vans Buses Military vehicles Rally cars
P r o d u c t
Ford Figo
Ford Fusion F-Transit F-N series F-I Max F-power master
49-B
Ford GPW Ford 3-Ton M1918
Ford GTB Ford Model-T
FocusWRC GT spec-II
Ford Fiesta Ford Taurus F-Cargo
Ford Ikon Ford G6 Ford Edge F-Ranger
F-Explorer 09-B
79-B
F-TW series
Ford Bronco F-Lobo 19-B
Ford Focus Ford Fierra
Ford Galaxy Ford Mustang
L i n e
Ford Mustang GT
10
11
FORD CATEGORIES
ord vehicle design Ford Team Rally ports Ford video games ord village industries ormula ord Ford Times Ford Aircraft Ford Motor Company Lamp Factory Ford Transmissions Ford Fuel corporation Ford Aerospace Ford Platforms
12
FORD COMPETITORS
International Nissan Fiat Honda Range Rover & Land Rover Volkswagen Audi Chevrolet Renault Mitsubishi Skoda
National Tata Maruti Suzuki
Honda Skoda Hyundai General Motors Mahindra Volkswagen
13
PEST AnalysisPest analysis represents Political, Economical, Social and Technical factors of an organization. Political factors explain about taxation, employment laws, internal trade regulations and competitor trade regulations. Economical Factors explains about economic growth by industry, policy towards unemployment, inflation and influence of exchange rates Social Factors explains about income distribution, labour, life style changes, health & welfare, attitude to work and living conditions. Technical Factors explain about Technological efficiency, technological transfers, rate of spending in R&D, Energy use cost and New Inventions.
14
Ford Pest Analysis-
Political FactorsExchange rates, oil prices & free trade flows which influence the consumer to invest on the vehicles.
Foreign ownership regulations and technological cooperation’s between countries helping the ford in raising the funds and building the advanced models which can cope with the current scenario.
Introduction of new business laws Impacts the ford to change its rules and regulations which are necessary to producing a quality vehicle.
Forced Groups (Labour unions) who plays a major role in the production of a vehicle in a ford manufacturing organization. The labour unions should work according to the rules and regulations amended by the business laws.
Investor’s climate- In most of the company’s investors had a premier role to play in the growth and development of the company.
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Economical FactorsGrowth potential of target market - The growth potential of target market will determine the purchasing power of the buyer. That is the major reason ford is operating in the countries like America, India and Brazil where the growth potential is high when compared to the other markets.
Based on the above geography of demand for vehicles, we can state that ford is operating its business in the potential target markets. Target Market Size – Again the sales of the ford was influenced by the Market size where it is operating its business. When the target market GDP growth is high the consumers will show more interest to have a premium or luxury vehicle. Economic Development – Economic development is the major part which will determines the development of a particular economy as a whole and which will influence on individual GDP. Oil Price Fluctuations- The oil fluctuations influence the sales of the ford company. If the oil prices are more it will difficult to sell the premium and luxury cars. Cost conscious customers may not show interest to buy the cars which provides low mileage. Altogether the mentioned economical factors will determines the growth of the potential markets, margin cost of the operations, return rate on the investment, and strategy to provide the price of the vehicle.
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Social Factors
Social factors plays a role in trend in demand based on the various factors like attitudes, demographical, beliefs of the consumers in that particular market region Some of social factors of Ford are given below
Geographical Changes - The consumers of ford had changed from one geographical region to another geographical region Eg- The US for consumers will use the cars or commercial vehicles which have large engines. But the Brittan consumers are habituated to use the cars or commercial vehicles which are designed by small engines.
Consumer Attitude – Consumer attitude plays a role in selecting car model and design, If the consumers are favour about sport they will select the sports model car for their usage. But if the consumers are cost and safety concerned them probably will choose a normal car which will provide mileage and better safety.
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Travel Habits – The ford company is designing the cars based on the travel habits of the consumers. Ford is a medium cost car which can be affordable by the medium class people. It is providing the facilities based on the travel habits of the whole family.
Technological Factors
Technological factors of the ford motor company are very advanced when compared with their competitors. The technological factors of the automobile company will influence on most of the things like sales percentage of the cars, consumer satisfaction which leads to the automatic growth in the sales figure. Supply chain collaboration – It is the Initial and too crucial factor in the ford motor company, because the consumers of car are more concerned about the ordering and when the company is going to deliver the car. The Ford Company is having strong supply chain collaboration which is in more than thirty countries. Operations Capability – Ford Operation are more capable to provide the better service to consumers. Ford motor company is operating its manufacturing in more than 30 countries, so Ford operations are very efficient so it is able to providing quality vehicles at right time. Technological Improvements in distribution – Ford motor company is one of the automobile companies which are providing the car view and specification in online through its website named a www.ford.co.uk. One more advanced technological thing is consumer can customize the materials what he requires inside as well as outside of the car. The Customer will get the delivery after min 1 month and max 2 months. If the ford is having the booked car in the assess they will deliver within one or two weeks. Product Development – Ford Motor Company is providing the consumer to customize the car and its needs. So ford had gained a chance to innovate a new car based on the most of the customer’s selection and preferences. The ford company cars manufacturing will be influenced based on the consumer customization needs.
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SWOT Analysis of Ford Motor Company
Strengths of Ford –
Brand Image- Ford brand is well-known in automobile industry. Its brand image is well known in the global markets due to huge marketing & advertising. Online Marketing capability - Ford is one of the well-known automobile companies which is providing the online consumer selection of cars through its website. In online the consumer is allowed to customize the engine, colour, interiors and exteriors. More consumer choices – Ford is one of the automobile companies which is providing the consumer more variety of cars and commercial vehicles. Ford is manufacturing following kind of vehicles. Cars Commercial Vehicles (Jeeps, Vans, & Trucks) Heavy Vehicles.
Operations and distribution efficiency - Ford is the rich in its operations and distribution because it is operating its business more than 30 countries and it enhances its manufacturing process more than ninety plants.
Relations with high profile companies - Ford Company is maintaining the relations with high profiled companies like Suzuki and Isuzu Motors Company to develop qualitative vehicles and in the part to technological aspect for motor company is maintaining relation with Toyota and Honda motor services.
Employee are assert - Ford motor car company recruits a qualified and skilled employees in all its functions. Ford will maintain good relation with the employees by paying them better wages in automobile industry. Ford is more concerned about the working environment and safety aspects of the employees.
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Weakness of Ford –
Sales Decline - The sales figure of the ford company was declined from the year 2008 to 2009 due to global recession in the world financial market. Recession is one of the major factors for decline of sales and one more important factor is ford will manufacture the standard cars which are not able to cope up with current market automobiles.
Huge unfunded pensions and other obligations - Ford is one of the automobile company which takes more responsibilities in the health and safety of the employee. Ford invests more money on maintaining a good working environment.
Low productivity - Ford expanded its business operations in diversified geographical areas, so management is missing focus on some lines performance and it influence the ford to cause the low productivity. Weakening operations in North America – In the North America part ford operations has been declined due to the huge competitors like GM, Toyota etc. The revenue of Ford was declined by 2.4%.
Opportunities of Ford –
Production of the fuel efficient cars – At present ford is producing the cars with low mileage and pick up. Ford is having a great opportunity to produce fuel efficient cars and commercial vehicles. The automobile industry is having one more fuel efficient types like, cars which can run on renewable energies like solar power and bio fuels.
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Production of Hybrid Vehicles - Ford had one more option in designing the cars and commercial vehicles based on electric engines. If the cars are designed based on electricity engines the consumers will show more interest to buy the cars, the reason is the car maintenance charge will low when the car is run on electricity.
Opportunities in India and China markets- Ford is having the market opportunities in India and china countries because two countries are having huge geographical market and population. The most of the people in these two countries are more interested to own a four wheeler for their family. That is the reason ford fiesta is a most successful car in these two markets.
Threats to fordPrice Rise in raw material prices – Raw material prices like hard steel and rolling steel cost will influence the margin price of the car. As a whole it will influence the profit margin of the ford because of low margin price.
Rapid growth of competitors - Ford growth and development may effected by rapid growth in no of competitors in the automobile industry. From the beginning America demanded automobile industry. ord’s main competitors are General motors, Toyota, Honda, BMW, etc.
Less Capital spending - Ford is spending low on its operations and research development activities, when compared to its competitors. The competitors are spending huge amount on R&D programmes.
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Porters Five Force Analysis -
Threat of new entrants – Threat of new entrants will be low for the ford because the ford is one of automobile which is providing the best services with low cost of price, ford provides customers to choose their vehicles. Ford is having cost advantage because it is providing the vehicles with low cost when compared to the other competitors. Bargaining power of suppliers – Ford motor company enhances the relations with sixteen new suppliers to gain the bargaining power of suppliers. Ford is having good relations with suppliers for the output of quality cars. Bargaining Power of customers – Customers of Ford are comfortable with ford way of providing the vehicles customization and way of delivering the products within the specified time. The bargaining power of customer is low when compared to the other automobile.
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Threat of substitute – Substitutes for ford motor company are less but there are some substitutes which the cars are running on the electricity and other bio fuels. Eg: – riva one small car which runs on electricity.
Rivalry among existing companies - The important competitors of Ford motor company is General motors, Toyota, Honda and BMW. All the above mentioned forces will lead to the rivalry among these companies to provide the customer with competitive advantage and provide the customer with quality cars and commercial vehicles.
Competitor Analysis –
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The Core Competencies of Ford are it is very innovative in using the high technology in the manufacturing the cars & commercial vehicles. Ford is more concerned about safety and more over ford is gave the opportunity to its customers to customize their interiors and exteriors of Cars.
The important competitive advantage is ford is the first motor company to come with active park assist, which can help the driver to park with a touch of a button.
Strategies of ford –
Ford Motor Company implements the Hybrid strategy to perform well in the automobile industry and to provide the competitor edge. As a part of Hybrid Strategy – ford motor company is providing the customers with low prizes when compared to the others. Ford is providing the small engines with high pickup and mileage.
Ford is providing the customers to choose their design of the car and their interiors through online sales. Ford attracted eleven millions people per annum
Ford manufactures cars with small engines and mostly it is for focused group like a family. Ford manufactures the some models like CRV, SUG for the people who are interested in using premium and luxury cars.
Pure battery electric vehicles - In future ford is coming with cars which will run on bio fuels and electricity to attract the cost concerned customers.
Overall we can conclude that Ford is concentrating on product approach rather than customer approach. It focuses more on new technology and innovative products.
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IFAS OF FORD MOTORS
A table that organizes internal factors into Strengths (S) & Weaknesses (W) and how well management is responding to these specific factors.
IFAS OF FORD MOTORS Strengths Variants of models Business Structure Brand Network Distribution Weakness Recall of Product Size of company Ageing Workforce Total Score 0.1 0.15 0.2 1 3 3.5 3.2 0.05 0.15 0.2 0.15 2.6 4 4 4.8 Weight Rating
Weighted score
0.13 0.6 0.8 0.72
0.3 0.52 0.64 3.71
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EFAS OF FORD MOTORS
A table that organizes external factors into opportunities (0) & Threats (T) and how well management is responding to these factors of a company.
EFAS OF FORD MOTORS Opportunity R & D Technology Eco friendly vehicles Demand for dual fuel Foreign Markets Threats Sluggish Production Technology Imports Total Score
Weight Ratings Weighted Score
0.1 0.1 0.15 0.15
4.5 4.75 3.8 3.5
0.45 0.47 0.57 0.52
0.25 0.15 0.1 1
3.8 3 2.75
0.8 0.45 0.27 3.53
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Performance of Ford:Performance of Ford in Share Market
The performance of Ford is declining in the share market due to recession in global market. But the ford performance in share market was not too declined when compared with the general motors. The performance of ford in the year 2009 was increasing, the share value of ford according to 2009 market it was increased by 12%. Now ford shares are increasing due to loyal customers and increased satisfied
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SALES PERFORMANCE OF FORD:-
Summary of vehicle unit sales
From the above chat we can interpret that sales of ford from 2003-2007 went well some fluctuations but in the year of 2008 the sales of ford was declined due to various reasons like Recession in the global markets.
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Conclusion –
Ford automobile company is performing well in the aspects of political, economical, social, and environmental. But ford suddenly faced the problem in 2008 sales due to the economical problem (Recession).
Global economic conditions are improving but remain fragile. Recoveries in some markets are modest due to weak labour markets and tight credit.
RecommendationsFord should concentrate more on revenue growth by manufacturing premium and luxury cars and should use the focus group strategy.
Ford has the opportunity to manufacture cars which can run of electricity, solar energy and bio fuels. It will help the organization to develop in environmental factor.
References –
www.ford.com www.automobiles.com www.ford.uk.com www.fordmotorsco.com www.ford.comhttp://www.ford.com/microsites/sustainability-report-200809/economy-data-market.
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