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STRATEGIC

MEMO
ON
FORD INDIA LTD.
Presented By:
Group 2 – Peter Drucker
Akanksha Arora - Business Development
(8001)
Garima Singh - CEO (8014)
Utsav Shah – CMO (8045)
Pritesh Lodha – COO (8084
Vishal Shah – CFO (8107)
Ashish Trivedi – CMO (8117)
Agenda
 About Ford, India
 Industry overview
 Marketing strategies
 Positive practices adopted by Ford
 Challenges
 Brief financial analysis
 SWOT
 Competitive analysis
 Strategies for Indian market
 Recommendations
 The road ahead
Ford India Ltd
 Started in 1995 with M&M ltd.

 50 – 50 JV

 Mahindra Ford India, Limited (MIFL)

 In 1998, its stake increased to 92.18%

 Re-christened as Ford India Limited

 Has manufacturing plant at Chennai with 2100 employees

 Ford is the worlds 4th largest automaker based on sales


Automobile Industry in
India
 th
7 largest in the world
Among the fastest growing in the world
Growth rate is at the average of 10‐12%
India has the fourth largest car market in the world

Source: www.team-bhp.com
Car market in India – Major
players
Segmentation
a) Geographic Segmentation: metro cities e.g. Delhi,
Noida, Mumbai, Kolkata Bangalore, Pune etc
b) Demographic Segmentation:
3. on the basis of Age: middle age people (25-40)
4. on the basis of Income: upper middle level or the
high-level income groups
c) Psychographic Segmentation:
on the basis of the Lifestyle: segmentation is done
on the basis of the attitude, interests and lifestyle
etc of the potential customers
d) Behavioral segmentation:
2. on the basis of Benefits Provided: such as
quality, service, economy, speed comfort etc.
3. on the basis of the Readiness stage: awareness
and interest among the customers about the brand
e) Strategic Segmentation of Cars:
5. Family car segment: e.g. FORD IKON’ AND
‘FORD FUSION’
6. Premium car segment: e.g. FORD FIESTA’,
‘FORD MONDEO’
7. SUV segment: e.g. ‘FORD ENDEAVOUR’
Targeting
Ford Ikon - Entry-level middle class group

Ford fusion – Youth class

Ford Fiesta - Upper middle class group

Ford Mondeo and Endeavour – Higher


income group or premium
segment
Positioning
 Upper middle luxury brand

 Thebrand provides ‘Innovation’,


‘Advanced technology’ and ‘Best
quality’ automobiles.
Marketing Strategies -
4P’s
Product and services
 Ford India sells Ikon in five variants
 Ford fusion, ford fiesta, ford Endevour,Ford Mondeo comes in two
different variants
 Ford launched Endeavour to cater to the Sports Utility Vehicle (SUV)
market

New products
 Ford small car
 Ford electric car
 Fuel efficient vehicles
Services
 Quality care
 Ford assured
 Quick service centers
 SSP(schedule service plan)
Place
 Target metro cities
 Strategic Distribution network
vHMIL
vJai Hind
Pricing
 Ford Ikon: Rs. 5,45,200

 Ford Fusion: Rs. 6,50,000

 Ford Fiesta: Starting from Rs. 6,00,000 up to


10,00,000

 Ford Endeavour: Rs. 16,00,000


Promotion
 Hoardings, advertisements

 Website

 Dealer development

 Go green strategy

 Ford offers

 Ford marathon Ikon drive

 Community sponsorship

Selling strategy

 Corporate sale

 Field sales

 Showroom sales
Positive practices
adopted
 Excellence in manufacturing
 Constant monitoring of the supplier base
 Maintaining quality and customer satisfaction
 Degree of localization
Challenges
 Uncertainty and fluctuations in the Indian car market.

 Global increase in crude prices will impact the purchasing decision of the
potential customers to buy the petrol engine models.

 Reluctance of Indian consumers to upgrade cars. Initially, this had resulted


in lower than expected sales volume in the C-Segment.

 To combat the increasing usage of LPG fuelled or electric cars in the world.

 To come out with competitive models occasionally in order to sustain in the


market and keep up with the competitors.

 To keep up with the technological advancements taking place in countries


like Japan and Korea in the companies like Hyundai, Honda, etc.
SWOT
Strength
 One of the world best known brands
 Investment in alternate fuel
 Web strategy
Weakness
 Limited product portfolio
 Limited reach to metro cities
Opportunity
 Small car segment and electric car
 Govt. initiative
Threat
 High import subsidies
 Rising prices of steel and other raw materials
 Rising fuel prices
 Competitive rivalry
Financial Analysis
Current Ratio
Asset Turnover Ratio
Operating Profit Margin
Ratio
Debt-Equity Ratio
Competitive Analysis

 Porters five force analysis


 Competitive Profile Matrix (CPM)
Porter’s 5 Force Analysis :
FORD India
Potential
Entrants

H
igh

Low Existing
Supplier Industry Buyer
Competitors
H
Modera
igh te

Low

Substitute
Competitive Profile
Matrix

Ford ranks alarmingly low amongst its competitors

Ford has to work upon certain factors where it is ranking less and has
to develop strategies in order to have an edge over its competitors.
Choosing the type of
strategy to adopt
 No strategy is right or wrong
 Depends on the goals, present situation, resources, intents and
vision of the company

 Four types of strategy


 Aggressive

 Competitive

 Defensive

 Conservative
SPACE matrix (Strategy Position ACtion
Evaluation)
 A four quadrant matrix to determine the type of strategy to
be adopted

SCALE
+1 +2 +3 +4 +5 +6 -6 -5 -4 -3 -2 -1
Poor Best Poor Best
Continued…

SCALE
+1 +2 +3 +4 +5 +6 -6 -5 -4 -3 -2 -1
Poor Best Poor Best
Calculations for SPACE
 Financial Strengths: 19/5 = 3.8
 Environmental Stability (ES): -22/9 = -2.44
 Competitive Advantage (CA): 23/7= 3.29
 Industry Strength (IS): -17/6 = -2.83

Y Axis
FS + ES = 3.8 + (-2.44) = 1.36
X Axis
CA + IS = 3.29 + (-2.83) = .46
SPACE Matrix

Adopt AGGRESSIVE Strategies


Ansoff’s Model
Applying Ansoff’s Model for
FORD
1. Market Penetration
 Economic Downturn
 Not followed market penetration, but increased prices.
○ ‘Ikon’ price up by 1.5% from April ’09
○ Rising component import bills due to rupee depreciation

 Believes in premium quality products

○ Target customers : upper middle class, who wont mind the price
hike if they get good quality
 Maintain or increase share of current products through
promotions and providing quality product.
 Introducing loyalty schemes
2. Market Development
 Increasing its market share through
Expanding dealer and service center networks
○ Availability

○ Tier II & III cities

Limited editions providing more at the same costs

Raising local contents of its vehicles


○ Outsourcing aluminum cylinder blocks from Pune instead of

Europe
○ Local content in Ford Fiesta & Ikon are 85% & 90% resp.
3. Product Development
 New version of Ford Fiesta for the younger
generation
Based on customer experience, it appeals the
young, suave and style-oriented professionals
It surrounds its occupants with eye-catching
luxury and comfort and sumptuous interiors
4. Diversifications
 Vertical diversification
Setting up integrated and flexible engine manufacturing
plant in India
Current capacity of 60K units per annum to be increased
to 2.5 Lakhs

 Concentric Diversification
Launching new crossover cars in the long term in India
Recommendations
 Launch A Small Car before its too late
 Networking with suppliers and Localization
 Effective media campaign for India
Ford India: The Proposed
Roadmap
Enter into SMALL CAR market, which is the highest selling
(70%) market in India.
 (Petrol version) prized small car  High fuel efficiency approved by ARAI
 Prized at 3.5 – 4.0 Lacs  Stylish international design
 1100 CC Engine  3 year service warranty
(Less govt duty for engines less than  Availability of options such as ABS,
1200 cc)
Airbags for consumers who want to give
 A whole new design and R&D for the car premium price for safety
customized to the Indian market
 Effective and Innovative media
 BS Stage IV emission norms
campaign bundled with a good PR work
 Following the Industry and category
for the car
benchmarks in offerings of comfort,
safety and performance  Availability of Nationwide ford service
Ford India: The Proposed
Roadmap
Enter into ELECTRIC & HYBRID CAR market, which is growing

Why? How?
 Environmental Concerns  A strong R & D
 Fuel Price  Develop a Hybrid vehicle
 Seen as NEXT Era of  Develop an Electric Powered
Automobiles car
 Lower Running Cost  Lobbying with Industry
associations & Govt. of India to
reduce the taxes and duties.
 Effective Marketing
Suggestions to FORD
India
Suggestions to FORD
India (cont)
Thank You..!

Thank You..!