Automotive

Industry – Ford
Motor Company
BY YOUMNA NAJI
NOURHAN
NASEREDDINE
Automotive Industry
• By revenue, the automotive sector represents a significant
portion of the global economy. The main manufacturers produce
light trucks, cars, heavy equipment, heavy tracks, and
motorbike. Vehicles today are more complicated and contain
more electronic components than in the past year. It leads to
increase the number of suppliers more than manufacturers
producing components.
Ford Motor Co.
• American Automotive Company- designs, manufactures
and sells vehicles
•Found by Henry Ford in June 16, 1903
•Many product lines:
 Ford Fiesta
 Ford Escape
 Ford Ranger
 Suppliers
Value Proposition
• Autoliv
• Quality and reliability
• Flex N Gate
• Environmental sustainability
• Chaidneme
• Accountability toward stakeholders
• Webasto Rood
• Established brand name
• Valeo Electric and Electornic Systems
• Industry expertise and experience
• United States Steel Corporation/ Nippon Steel

Key Resources Products/ Services

• Inventory • Cars
• Brand • Trucks
• Distribution Center • Sport utility vehicles
• Employees • Buses
• Global Presence • Electrified vehicles

Customers Key Activities

• Ford Fiesta young people and ladies • Quality control
• Ford Mustang young people that like sports cars (19-25) • Distribution
• Ford Expedition law enforcement in the US • Networking and Branding
• Ford Escape Hybrid gas efficient customers • Research and development
• Ford E150 labor workforce • Marketing and sales
• Manufacturing and selling vehicles
Mission & Vision
Both the mission and vision of Ford centers around its product effectiveness and business
leadership in the Automotive Industry Business.

Mission: “To help build a better world, where everyone is free to move and pursue their
dreams”

Vision: “Becoming the world’s most trusted and respected corporation, developing smart
vehicles for a smart world."
 Core Values
• Do the right thing
• Be curious
• Create a tomorrow
• Put their people first
• Build ford tough

Critical Success Factors

• Innovation
• Supply chain
• Product quality
• Management of cash flow
• Operational Excellence
Generic Growth Strategy
1. Cost Leadership Strategy: Ford Motors is implementing cost leadership, which
enable the company to offer the products at a lower price in comparison to
its competitors.
2. Differentiation Strategy: To differentiate their brands, Ford invests in R&D and
places heavy focus on the latest technologies ( AI, Automated Driving
Technology and digital technology)
3. Focus Strategy: used by the company in order to offer its products and
service at the market with accuracy, knowledge, capabilities to assist is
stratgeic position in the perspective industry
Internal Environmental Analysis
Strengths Weaknesses
• Low cost structure • Low spending in R&D as compared to its competitors
• Strong distribution network with large number • Liquidity problems with low quick ratio
of outlets • High proportion of property in use by the company is
• Strong presence on social media
on rent and the rent needs to be paid
• Skilled labor force

Organizational Culture of Ford

 Is based on ideas and shared values that serve the greater good
Organizational Structure of Ford
• Is built around the requirement to regulate operations in
accordance with the local market circumstances.
1. Corporate hierarchy
2. Regional geographic division
3. Global functional group

Management Structure of Ford

• Is a dual matrix system that is quite sophisticated.
The systems are centralized and decentralized
management at the same time. The structure is made
more complex by this duality
Valuable
• Financial Resources highly valuable which help in
investing in external opportunities
• Products valuable, makes the perceived value for
customers high
• Employees valuable, workforce are highly trained
which leads to productive output
• Patents valuable, as it allows to sell its products
without competitive interference
• Distribution network helps to reaching out more
customers
Rare
• Financial Resources rare
• Products not rare, as the resource is valuable,
and the company can make use of this resource
• Employees rare, highly trained and skilled
• Patents rare, as resources are not easily available
and are not possessed by competitors
• Distribution network rare, competitors could not
come up with a better distribution network
Imitable
• Financial Resources costly to imitate, competitors
would requires similar or higher profits for a long
period of time
• Products not costly to imitate
• Employees not costly to imitate as other
competitors can train their employees in order to
improve their skills
• Patents difficult to imitate, not legally allowed to
imitate a patented product
• Distribution network costly to imitate, has been
developed over the years by Ford
Organization
• Financial Resources organized to capture values
• Products not well organized as organization is not
using patents to their full potential
• Distribution network organized, as they use this
network to reach out their customers by ensuring that
their products are available on all outlets
Value Chain Analysis Leadership/Management Style
1. Inbound Logistics  After lots of deep researches, we came to a
2. Operations conclusion that the leadership style used in
3. Outbound Logistics Ford motor Company is known as positive
4. Marketing & Sales leadership
5. Service

IFE Matrix Key internal factors Weights

1. to
Rating
1,2,3 or
Weighted
score
2. 4
Internal Strengths 3 or 4
Strong and globally positioned brand names 0.13 4 0.52
Large employee base with highly educated engineers and good R&D
department 0.09 3 0.27
One of the largest automotive manufacturer (along with a long history) 0.06 3 0.18
1285% increase in net cash 0.09 3 0.27
Huge increase in total equity 0.11 4 0.44

Internal Weaknesses 1 or 2
A lot of time spent to actually put the product on the market 0.1 2 0.2
Recording continuous losses (net income) from 2006 0.12 1 0.12
Low quality of new products (recalls- causing losing customers) 0.12 1 0.12
Bad management of the company 0.08 2 0.16
EPS very bad- in negative numbers (unattractive for the investors) 0.1 1 0.1

Totals 1 2.38
External Environmental Analysis

Threats
• Aggressive competitive rivalry
• New entry of high –tech firms
• Fluctuating oil prices

Opportunities
• Global expansion through market penetration
• Growth through product development
• Cost reduction through strategic supply chain
management
Political Factors
• Ford sold its millionth car in the Asia Pacific area
in 2016. This is due, in part, to the stable political
environment. In Europe, it's not like this. And
Ford's sales performance in this country hasn't
been as high as it has been in Asia.
Economical Factors
• Emerging economies like India have seen a
decline in the number of vehicles sold.
Open trade agreements between
developing nations promise to enhance
sales, but they also run the risk of
escalating competition and saturation.
Social Factors
• Ford has already started taking moves to introduce
hybrid car variations because there has been an
increase in demand for them across the globe. Ford can
position itself as a key participant in the hybrid car
category given the growing demand for
environmentally friendly and fuel-efficient vehicles, say
analysts at Credit Suisse.
Technological Factors
• Ford has a wonderful potential to use its knowledge
to develop a new model and fill the holes in the
market that have been waiting for driverless cars, as
well as fuel-efficient, affordable hybrid automobiles.
The business has partnered with Holoride and
Universal Pictures to offer a virtual reality-based
ride using standard technologies.
Legal Factors
• These include labor laws, intellectual property
rights, and international environmental and
safety requirements. Ford can comply with these
rules by making superior product designs and a
safe workplace a priority.
Environmental Factors
• There is an increase in demand for eco-friendly
automobiles, particularly electric and hybrid
models. Ford's Focus Electric and Fusion Hybrid
models have already achieved a great deal in this
area. Given the growth potential of this new
market, the company is undoubtedly
concentrating on it.
Five Forces Analysis
1. Competitive Rivalry or Competition
• High aggressive of firms
• High exist barriers
• Moderate number of firms
4. Threat of Substitutes or Substitution
• Moderate availability of substitutes
• Moderate switching costs
• Low performance of substitutes

2. Bargaining Power of Buyers or Customers

• Moderate switching costs
• Moderate size of individual purchases 5. Threat of New Entrants or New Entry
• Moderate availability of substitutes • High capital costs
• High cost of doing business
• High cost of brand development
3. Bargaining Power of Suppliers
• Moderate overall supply
• Moderate population of suppliers
• Low forward vertical integration
 EFE Matrix Partners
Key External factors Weights Rating Weighted
1. to 1,2,3 or score • Ford Motor Company must assess many
2. 4
Opportunities 3 or 4
value chain elements, including value
 Expectation on European Market that would be more 0.10 3 0.30 chain flexibility, efficiency, and agility. Ford
successful and profitable in the future
 The chance to enter the Asian market 0.10 3 0.30 Motor Company may be able to
 Manufacturing in Low-cost countries. 0.10 3 0.20
 Manufacture fuel efficient cars 0.15 3 0.45 strengthen the effectiveness of its supply
 A sustainability system is being developed that will
benefit both customers and products.
0.15 4 0.60 chain and increase control over it through
Threats 1 or 2 vertical integration. To make the best
 Global competitions are increasing 0.07 2 0.14
 Increasing Competitors’ market share in USA 0.08 2 0.16 choice, Ford Motor Corporation must
 High labor cost in USA comparing to other countries 0.05 2 0.15
 Instability of fuel prices worldwide 0.10 1 0.10 comprehend the actions, interactions,
 Increasing of interest rate 0.05 2 0.10
 Instability in costs of Suppliers’ stabilization and raw 0.05 2 0.10 decisions, goals, and context of its
Totals
material
1 2.6
partners.
IE Matrix

Ford Motors Matrix (IE) shows that they

are in hold and maintain strategy
• Market Penetration
• Product Development
• Market Development
Recommendation
• Ford needs to expand its market operations in
emerging economies in different areas like Africa,
Middle East, and Asia this helps to reduce
overreliance of the U.S market. Ford needs to
carry out more market and consumer demand
research to determine the major emerging
market trends and patterns.