1Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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2008 Case Study

2Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

INTRODUCTION AND BACKGROUND

PRODUCT LINE AND LOGO

ANALYSIS OF VISION AND MISSION STATEMENT

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3Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Ford Motor Company, a global automotive company based in Dearborn, Mich., manufactures

Distributes automobiles across six continents. about 213,000 employees and about 90 plants Worldwide

Wide variety of product line

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4Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

The Dream Becomes a BusinessFord Motor Company entered the business world on June 16, 1903, when Henry Ford and 11 business associates signed the company's articles of incorporation.

With $28,000 in cash, the pioneering industrialists gave birth to what was to become one of the world's largest corporations.

Ford Motor Company's beginnings were modest.The earliest record of a shipment is July 20, 1903, approximately one month after incorporation, to a Detroit physician. With the company's first sale came hope young Ford Motor Company had taken its first steps.

5Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

The StoryThe logo of FORD is the white letters “F O R D” with blue background. Its inspiration is from the founder Henry Ford, who loves little animal very much, so the logo designer has the idea to draw the FORD letter as a little rabbit accordingly

6Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Ford Motor Company offers a wealth of variety to the automotive consumer. As they start their second century of business, they are in a position to appeal to the widest range of potential customers. Each of their automotive brands has a unique personality and holds a distinct place in the Ford Motor Company family.

7Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Aston Martin

Ford

Jaguar

Land Rover

Lincoln

Mazda

Mercury

Volvo

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9Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Ford Credit

Genuine Parts

Motocraft

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Our Vision to become the world's leading Consumer Company for

automotive products and services.

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11Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

The new mission answers the following questions 1) Customers: Who are the firm’s customers?2) Products or services: What are the firm’s major products?3) Markets: Geographically, where does the firm compete?4) Technology: Is the firm technologically current?5) Concern for survival, growth, and profitability: Is the firm committed to growth

and financial soundness?6) Philosophy: What are the basic beliefs, values, aspirations, and ethical priorities

of the firm?7) Self-concept: What is the firm’s distinctive competence or major competitive

advantage?8) Concern for public image: Is the firm responsive to social, community, and

environmental concerns?9) Concern for employees: Are employees a valuable asset of the firm?

12Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

We are a global family with a proud heritage passionately committed to providing personal mobility for people around the world. We anticipate consumer need and deliver outstanding products and services that improve people's lives. Our business is driven by our consumer focus, creativity, resourcefulness, and entrepreneurial spirit. We are an inspired, diverse team. We respect and value everyone's contribution. The health and safety of our people are paramount. We are a leader in environmental responsibility. Our integrity is never compromised and we make a positive contribution to society. We constantly strive to improve in everything we do. Guided by these values, we provide superior returns to our shareholders.

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13Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

EFE MATRIX

IFE MATRIX

SWOT MATRIX

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14Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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15Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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16Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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17Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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18Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

YRC SWOT Matrix

Strengths – S 1. Large scale of operations 2. Operating leverage 3. # 3 in ground transport / #1 in LTL 4. Large range of assets / non assets 5. # 1 “Most Admired Company 6. Joint venture in China 7. Cost of purchasing synergies by

merger

Weaknesses – W 1. Driver turnover 2. Various brand names 3. Low operating margin 4. High wages to Teamster drivers 5. Underutilized trucks 6. Overlap due to mergers

Opportunities – O 1. Growing Truck Industry 2. Penetrate FedEx / UPS / DHL

market 3. Global market 4. In Position to be regional carrier

after Roadway merger 5. Increase in rail / intermodal and air

transport tonnages

SO Strategies 1. International Expansion (S1, S2,

S5, S6, O1, O3, O5) 2. Expand services to parcel, pallet,

and less than pallet (S1, S3, S5, O2, O4)

3. Do larger loads / larger trailers (S1, S2, S3, S4, S5, O1, O4, O5)

4. Acquire Conway (S1, S2, O1, O5)

WO Strategies 1. Expand Internationally (W6, O1,

O3, O5) 2. Ocean Shipping (W1, W4, W6, O5) 3. Put underutilized trucks to work in

alternative ways – i.e. hauling wood / wood chips (W5, W6, O1)

4. Driver Retention Programs (W1, O1)

Threats – T 1. Alternate shipping methods 2. Shortage of long haul drivers 3. High fuel prices 4. Regulation of trucker hours 5. Increasing toll rates 6. Competition 7. Antitrust

ST Strategies 1. Ocean shipping (S1, S2, S5, T1,

T2, T4, T5) 2. Air shipping (S1, S2, S5, T1, T2,

T4, T5) 3. Expand services to parcel, pallet,

and less than pallet (S1, S3, S5, O2, O4)

4. Acquire Conway (S1, S2, T6)

WT Strategies 1. Put underutilized trucks to work in

alternative ways – i.e. hauling wood / wood chips (W5, W6, T2, T6)

2. Air Shipping (W1, W4, T1, T2, T4, T5, T6)

3. Ocean Shipping (W1, W4, T1, T2, T4, T5, T6)

4. Driver Retention Programs (W1, T2)

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20Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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SPACE MATRIX

BCG MATRIX

BALANCE SCORE CARD

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22Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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FINANCIAL STRENGTHS (FS) ENVIRONMENTAL STABILITY (ES)

Return on Asset (ROA) 1 Rate of Inflation -4

Leverage 1 Technological Changes -3

Net Income 2 Price Elasticity of Demand -3

Net Asset 2 Competitive Pressure -6

Return on Equity 1 Barrier to entry into the Market -2

Financial Strengths (FS) 1.4 Environmental Stability (ES) -3.6

COMPETITIVE ADVANTAGE (CA) INDUSTRY STRENGTH (IS)

Market Share -3 Growth Potential 5

Product Quality -2 Financial Stability 3

Customer Loyalty -2 Ease of entry into the market 6

Technological know-how -1 Resources Utilization 3

Control over supplier & Distributors -2 Profit Potential 4

Competitive Advantage (CA) -2 Industry Strength (IS) 4.2

X-axis: -2 + 4.2 = 2.2Y-axis: 1.4+ -3.6 =- 2.2

23Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Financial Strength rating is 1 (worst) to 6 (best) Ratings1 Operating revenue 5.02 Operating income 5.03 Net income 5.04 Debt-asset ratio 4.05 Cash flows 5.0

Industry Strength rating is 1 (worst) to 6 (best) 24.01 Growth Potential 5.02 International expansion 5.03 Wages 3.04 Insurances and benefits 3.0

Environmental Stability rating is -1 (best) to -6 (worst) 16.01 Competitive Pressure -5.02 Increase in Fuel Prices -5.03 Rate of Inflation -3.04 Exchange rates -3.05 Antitrust -3.06 Increased regulation of working hours for truck drivers -3.07 Increase in the number of toll road and rates on existing ones -3.08 Technological advance -2.0

Competitive advantage rating is -1 (best) to -6 (worst) -27.01 Large scale of operation -2.02 #3 ground transport provider -2.03 #1 single LTL (less-than-truckload) provider -1.04 Ranked #1 “America’s Most Admired Companies” by Fortune for

3 consecutive years in early 2000s -1.05 Joint venture with China’s conglomerate (Jin Jiang) -2.06 Cost and purchasing synergies by merger -2.0

-10.0

ES average -3.57CA average -1.67IS average 4.00FS average 4.80

X Coordinate 2.33Y Coordinate 1.23

Strategy ->>>>Aggressive

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Ford motor credit & financingVehicle Brands

Genuine parts and

25Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

1. FINANCIAL Ford company is continuously facing loss Ford has high debt ratios. Low return on investment.

2. CUSTOMER Customers loyalty with ford Strong customer service Comparatively low market share.

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26Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

3. PROCESS Focusing on product approach rather than customer approach Efficient supply chain management Ineffective employment policy

4. LEARNING AND GROWTH Focusing on new technology Innovate their products Strong in learning hybrid products

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27Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

CPM

FINANCIAL RATIOS

BLUE OCEAN STRATEGY

CONCLUSION

RECOMMENDATIONS

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28Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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Current ratio = 1.3

Quick ratio = 1.3

Receivable turnover =1.3

Inventory turnover = 12.4

ROI = -20%

ROA = -6.7%

Leverage ratio = 12%

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30Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Ford’s electrifications strategy

• Pure battery electric vehicles

• affordability

•Fuel economy solution

Planning to invest in new, smaller, fuel efficient vehicles

Blue ocean strategy

31Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

All operation results are worse in 2008

Volvo caused the huge loss

Global recession has adversely affected dealers and suppliers

Lower oil and raw material price offset the weak demand condition

Exchange rates involment

The delays in new models

Conclusion

32Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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33Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

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35Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher

Reducing salary personnel and achieving additional efficiency

Reducing inventory cost

Long-term restructuring action

Developing incremental source funding, including sale of non core assets

Increase warranty cost

Recommendation

36Takifumi Kawahara, Matt Bouchard, Darius Parker, Danielle Boucher