Ford Project
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Transcript of Ford Project
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
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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 car-
manufacturers are gearing up for.
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Automobile Definition-
Automobile 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 Industry-
The 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.
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In the automobile industry by 2008 the sales are declined by 8% and in 2009 sales are rapidly
declined up to 20%.
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.
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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.
Introduction to Ford-
Ford 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 5 th 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.
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Ford has 15% of Market share & Net Income: - 6.6 billion.
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
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ONE GOAL
An exciting viable Ford delivering profitable growth for all.
CORPORATE GOVERNANCE:-
The relationship between the Board of directors, Top management & shareholders for
improving the performance of the company to achieve its goals.
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Managing Director:- Kathleen Gallagher
CEO:- Alan.R. Mulally
Executive Vice President:- Lewis Booth
Executive chairman:- Willian.C.Ford
Director:- John.L.Thorton
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.
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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.
FORD PRODUCT MIX & PRODUCT LINE:-
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FORD CATEGORIES
Ford vehicle design
Ford Team Rally Sports
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Ford video games
Ford village industries
Formula Ford
Ford Times
Ford Aircraft
Ford Motor Company Lamp Factory
Ford Transmissions
Ford Fuel corporation
Ford Aerospace
Ford Platforms
FORD COMPETITORS
International National
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1
Nissan Tata
Fiat Maruti Suzuki
Honda
Range Rover & Land Rover Honda
Volkswagen Skoda
Audi Hyundai
Chevrolet General Motors
Renault Mahindra
Mitsubishi Volkswagen
Skoda
PEST Analysis-
Pest analysis represents Political, Economical, Social and Technical factors of an organization.
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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.
Ford Pest Analysis-
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Political Factors-
Exchange 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.
Economical Factors-
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Growth 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.
Social Factors
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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 ford-
Price 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. Ford’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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15%
22%11%
11%16%
25%Other 17 Co.
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 Weight Rating
Weighted
score
Strengths
Variants of models 0.05 2.6 0.13
Business Structure 0.15 4 0.6
Brand 0.2 4 0.8
Network Distribution 0.15 4.8 0.72
Weakness
Recall of Product 0.1 3 0.3
Size of company 0.15 3.5 0.52
Ageing Workforce 0.2 3.2 0.64
Total Score 1 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
Weight Ratings
Weighted Score
Opportunity
R & D Technology 0.1 4.5 0.45
Eco friendly vehicles 0.1 4.75 0.47
Demand for dual fuel 0.15 3.8 0.57
Foreign Markets 0.15 3.5 0.52
Threats
Sluggish Production 0.25 3.8 0.8
Technology 0.15 3 0.45
Imports 0.1 2.75 0.27
Total Score 1 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.
Recommendations-
Ford 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
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www.ford.com http://www.ford.com/microsites/sustainability-report-2008- 09/economy-data-market.
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