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Hamill Bassue

Owen Hendershot
Goran Nagradic

Overview
Company Overview
Fords brief history
Mission and Vision
statement
Current Objectives &
Strategies

New Mission and Vision


External Assessment
Industry Analysis
Opportunities & Threats
EFE Matrix

Internal Assessment
Strengths & Weaknesses
Financial ratios
IFE Matrix

Strategy Formulation

SWOT Matrix
BCG
Space Matrix
IE Matrix
Grand Strategy Matrix
QSPM Matrix

Strategic Plan for the


Future
Objectives
Strategies

Implementation
EPS/EBIT
Other issues

Evaluation

Ford 2008 Update

About the Company


Manufactures and distributes
automobiles on six continents, strong
presence in all 50 states.
Employs approximately 224,000 people
and operates 90 plants worldwide.
Brands include Ford, Lincoln, Mercury,
Volvo, Mazda and Ford Motor Credit
Company (financial service).

Fords Brief History


1903 Ford Motor Company founded in
Michigan
1908 Model T introduced
1913 first moving automobile assembly line
in the world
1956 Fords stocks go on sale (10.2 million
shares sold the first day)
1987 beginning of the acquisitions of other
brands
1988 Ford Motor Company reached the peek

Management

Mission & Vision Statement


"To become the world's leading
consumer company for automotive
products and services.
- Ford doesnt have vision statement

Objectives
To contribute to stabilizing the climate
by considering reducing long-term
emission
To promote the development of an
infrastructure that will expand the use
of bio-fuels and help reduce our
dependence on oil
To cut the usage of global energy by
27% and the usage of water by 25%

Strategies

Utilizing their advance technology


Building of smaller vehicle
Cost reduction
Market expansion through joint
venture and strategic alliance

New Mission & Vision


Statement
- Both mission and vision are one statement
Our vision is to become the world's leading consumer
manufacturing company for automotive products and
services.To achieve this, we the company and all our
employees are dedicated to provideall our customers and
the community with safe innovative productsand services
of world class standards.Through our engineering
excellence, high quality and the use of our constantly
upgrading technologywe limit the harm that we cause to
the environment while delivering superior value to our
customers. Our close knit working environment allows our
employees, community and business partnerto share in our
success, while achieving a substantial return on our
shareholders investment.

External Assessment

Industry Analysis
Global Automobile Industry
Value

Global Automobile Industry


Volume

Industry Segmentation

Industry Segmentation

Industry Market Share

Industry Forecast

CPM

Critical Success factors

DiamlerChrysler
Ford
GM
AG
Toyota
Weigh Rati Weighted Rati Weighted Rati Weighted Rati Weighted
ts
ng
Score
ng
Score
ng
Score
ng
Score
0.0 to 1 to
1 to
1 to
1 to
1.0
4
4
4
4

Global Expansion

0.14

0.28

0.42

0.28

0.42

Financial Position

0.10

0.2

0.4

0.3

0.3

Growth

0.16

0.16

0.48

0.16

0.64

US Market Share

0.20

0.6

0.8

0.4

0.4

Customer Loyalty

0.15

0.6

0.45

0.6

0.45

Hybrid/Fuel Efficient Vehicles

0.18

0.54

0.54

0.36

0.36

Management Experience

0.07

0.21

0.28

0.21

0.21

Totals

2.59

3.37

2.31

2.78

Opportunities & Threats


Opportunities
Consumers demand
hybrid and fuel efficient
vehicles
Increase in consumer
spending trends
Consumers demand
more innovative vehicles
Global expansion
Industry experiences
slow and steady growth

Threats
Weak USD
Increase in steel and
resin pricing
Increasing gasoline
prices
Stricter CO2 emission
standards
Increasing mortgage
rates

EFE Matrix

Internal Assessment

Stock performance

Financial Highlights
Income Statement
Balance Sheet
Cash Flow Statement

Ratios

Strengths & Weaknesses


Strengths

Weaknesses

Strong and globally


positioned brand names
Large employee base with
highly educated engineers
and good R&D department
One of the largest
automotive manufacturer
(along with a long history)
1285% increase in net cash
Huge increase in total
equity

A lot of time spent to


actually put the product on
the market
Recording continuous
losses (net income) from
2006
Low quality of new
products (recalls causing
losing customers)
Lack of management of
the company
EPS very bad in negative
numbers (unattractive for
the investors)

IFE Matrix
Key Internal Factors

Internal Strengths
Strong and globally positioned brand names
Large employee base with highly educated engineers and good R&D
department
One of the largest automotive manufacturer (along with a long
history)
1285% increase in net cash
Huge increase in total equity
Internal Weaknesses
A lot of time spent to actually put the product on the market
Recording continuous losses (net income) from 2006
Low quality of new products (recalls - causing losing customers)
Bad management of the company
EPS very bad - in negative numbers (unattractive for the investors)
Totals

Weights Rating
0.0 to 1, 2, 3 or
1.0
4
3 or 4
0.13
4

Weighted
Score

0.52

0.09

0.27

0.06
0.09
0.11

3
3
4

0.18
0.27
0.44

2
1
1
2
1

0.2
0.12
0.12
0.16
0.1
2.38

1 or 2
0.1
0.12
0.12
0.08
0.1
1

Strategic Formulation

SWOT Matrix
Strengths S
1.Strong globally positioned brand names
2.Large employee base with highly educated
engineers and good R&D department
3.One of the largest automotive manufacturer
(along with a long history)
4.1285% increase in net cash
5.Huge increase in total equity

Weaknesses W
1.A lot of time spent to actually put the product
on the market
2.Recording continuous losses (net income)
from 2006
3.Low quality of new products (recalls - causing
losing customers)
4.Lack of management of the company
5.EPS very bad - in negative numbers
(unattractive for the investors)

Opportunities O
1. Consumers demand hybrid and fuel efficient
vehicles
2.Increase in consumer spending trends
3.Consumers demand more innovative vehicles
4.Global expansion
5.Industry experiences slow and steady growth

SO
1.Developing new vehicles on alternative
fuels (S1, S2, S4, O1, O3. O5)
2.Offer new innovative products increase
market share - motorbikes (S1, S2, S3, O2,
O3, O5)
3.Concentrate on making the best fuel
efficient cars (S1, S2, S3, S4, O1, O4, O5)

WO
1.Relocate the production to cheaper country
with lower taxes (W2, W4, O4, O5)

Threats T
1.Weak USD
2.Increase in steel and resin pricing
3.Increasing gasoline prices
4.Stricter CO2 emission standards
5.Increasing mortgage rates

ST
1.Build eco-friendly products from
alternative materials (S2, S3, S4, T2, T3,
T4)
2.Produce more cars for foreign market
(S1, S2, S4, T1, T4)

WT
1.Merge with competitors (W1, W2, W5, T2,
T3, T5)
2.Manufacture only parts for automobiles
(W1, W2, T1, T2)

SPACE Matrix
FS

Conservative

Aggressive

+6
+5
+4
+3
+2
+1

IS
-6

-5

-4

-3

-2

-1

-1

+1

+2 +3

+4

+5

+6

-2
-3
-4

Defensive

-5
-6

Competitive
28

BCG Matrix
Revenu
es

%
Revenue
s

Profit

%
Profit

%
Market
Share

%
Growth
Rate

NA

69365

45%

-4161

61%

-0.1

SA

7585

5%

1172

30%

+33

Europe

36330

24%

744

81%

-3

PAG

33067

21%

-1872

+10

Asia

8032

5%

206

38%

+3

Total

154379

100%

-3911

BCG Matrix

High +30
Medium 0
Low -3
Industry sales growth
rate

High 1.0

Relative market share position in the


industry
Medium .50
Low 0.0
S
A

APA

NA

IE Matrix
Hold and
Maintain

31

Grand Strategy Matrix


RapidMarketGrowth
QuadrantII

QuadrantI

Weak
Competitive
Position

Strong
Competitive
Position

QuadrantIII

QuadrantIV
SlowMarketGrowth

Matrix Evaluation
Alternative Strategies

BCG

IE

SPACE

GRAND

COUNT

Forward Integration

Backward Integration

Horizontal Integration

Market Penetration

Market Development

Product Development

Concentric Diversification

Conglomerate Diversification

Horizontal Diversification

Joint Venture

Retrenchment

Divestiture

Liquidation

Possible Strategies
Developing new vehicles on
alternative fuels (S1, S2, S4, O1, O3,
O5) SO1
Offer new innovative products
increase market share (S1, S2, S3, O2,
O3, O5) SO2
Concentrate on making the best fuel
efficient cars (S1, S2, S3, S4, O1, O4,
O5) SO3

QSPM

Strategic Plan for the Future

Objectives for the 2008 2010


Reduce manufacturing expenses by 15-20%
2008
Introduce new small fuel efficient vehicles
2009
Enter Latin American and Asian market with
hybrid vehicles 2010
Develop affordable electric car for US market
2009-2010
Increase market share 2009-2010
Build up strong financials (increase net
income and EPS by 15%) 2009-2010

Recommendation
Manufacturing of new small fuelefficient vehicle $ 7,000,000,000
Entering the Latin American and
Asian market with hybrids $
20,000,000,000
Implementation of electric car in the
US market $ 13,000,000,000
Total Cost = $ 40,000,000,000

Implementation

EPS/EBIT

Amount needed: $40,000,000,000


Stock price: $7.42
Interest rate: 7.5%
Tax rate: 0% (firm is having a loss)
# of shares outstanding:
2,195,000,000
# shares needed: 500,404,312

EPS/EBIT
*data in $ billion
Common stock financing

Debt financing

Recession

Normal

Boom

Recessio
n

Normal

Boom

EBIT

10

20

40

10

20

40

Interes
t

1.5

1.5

1.5

EBIT

10

20

40

8.5

18.5

38.5

Taxes

EAT

10

20

40

8.5

18.5

38.5

#shar
es

2.695

2.695

2.695

2.695

2.695

2.695

EPS

3.71

7.42

14.84

3.15

6.86

14.28

Other Issues
Laws and regulations in foreign
countries
Regain lost trust in the Fords brand

Evaluation

Ford 2008 Update

Industry Update

Sources
Ford Motor Company Annual Report
2007
General Motors Annual Report 2007
http://www.ford.com/about-ford/investorrelations
Datamonitor
Global Automobile Industry manufacturer
2006

Pictures taken from Web

Questions???