ADV425 Mid-Term Presentation on Ford

Ford Motor Company

Ford Motor Company

Lauren BuskirkLauren Buskirk

Ford’s BackgroundFord’s Background

• American car company founded by Henry Ford in 1903

• 4th largest automaker based on worldwide sales

• #2 seller of automobiles in the U.S.• Tough competitors - GM, Toyota,

Volkswagen, etc.• Based in Dearborn, MI• Largest family-controlled company in the

world

• American car company founded by Henry Ford in 1903

• 4th largest automaker based on worldwide sales

• #2 seller of automobiles in the U.S.• Tough competitors - GM, Toyota,

Volkswagen, etc.• Based in Dearborn, MI• Largest family-controlled company in the

world

Ford’s Recent HistoryFord’s Recent History

Trouble for Ford in 2006…• Toyota passed Ford in U.S. sales• Faced lower sales & declining margins• Rising spending on health care &

retirees• Lost $12.6 billion dollars• Reconstructing plan involving shedding

1/3 of labor force

Trouble for Ford in 2006…• Toyota passed Ford in U.S. sales• Faced lower sales & declining margins• Rising spending on health care &

retirees• Lost $12.6 billion dollars• Reconstructing plan involving shedding

1/3 of labor force

Ford’s Response Ford’s Response

• Raised $23.6 billion in loans– Put up many of its most cherished North

American assets up for collateral• Including the cherished Ford logo

• Economy was healthy– However, Ford believed the money would

give them “a cushion to protect for a recession or other unexpected event.”

• What was then seen as an act of desperation - Now, salvation.

• Raised $23.6 billion in loans– Put up many of its most cherished North

American assets up for collateral• Including the cherished Ford logo

• Economy was healthy– However, Ford believed the money would

give them “a cushion to protect for a recession or other unexpected event.”

• What was then seen as an act of desperation - Now, salvation.

Ford in 2007 & 2008Ford in 2007 & 2008

• Profited in 2007, but due to foreseen losses began negotiating the sale of luxury brands

• In 2008, due to biggest sales slump in decades Ford lost $14.6 billon – Worst in Ford’s history!

• Yet, they did not need federal aid

• Profited in 2007, but due to foreseen losses began negotiating the sale of luxury brands

• In 2008, due to biggest sales slump in decades Ford lost $14.6 billon – Worst in Ford’s history!

• Yet, they did not need federal aid

Ford TodayFord Today

During a time of crisis throughout the auto industry in recent years, Ford has emerged as the sole American automaker in a position to survive the steepest sales downturn in decades without a government bailout.

During a time of crisis throughout the auto industry in recent years, Ford has emerged as the sole American automaker in a position to survive the steepest sales downturn in decades without a government bailout.

Ford Today Cont’dFord Today Cont’d

• Sales by Ford grew 15.2% in 2010 - even though they sold Volvo & closed Mercury

• Increased market share for second consecutive year

• Shifting away from trucks and moving towards small cars

• Sales by Ford grew 15.2% in 2010 - even though they sold Volvo & closed Mercury

• Increased market share for second consecutive year

• Shifting away from trucks and moving towards small cars

Ford Today Cont’dFord Today Cont’d

• In February 2010, Ford outsold GM - which hadn’t happened in more than 50 years.

• Focus on core brands• Sold off luxury brands - Jaguar,

Land Rover, and Volvo

• In February 2010, Ford outsold GM - which hadn’t happened in more than 50 years.

• Focus on core brands• Sold off luxury brands - Jaguar,

Land Rover, and Volvo

Ford’s Survival Ford’s Survival

• Ford must work to convince consumers to buy Ford trucks and cars over the competition.

• How?– I evaluated how Ford can work to

survive and thrive by using the Social Marketing Theory.

• Ford must work to convince consumers to buy Ford trucks and cars over the competition.

• How?– I evaluated how Ford can work to

survive and thrive by using the Social Marketing Theory.

Social Marketing TheorySocial Marketing Theory

• Consumers decide if they should or shouldn’t buy a product by weighing the cost of the product against the benefit of the product.

• Cost < Benefit• The benefits of choosing Ford must

out weigh the costs consumers endure by choosing Ford.

• Consumers decide if they should or shouldn’t buy a product by weighing the cost of the product against the benefit of the product.

• Cost < Benefit• The benefits of choosing Ford must

out weigh the costs consumers endure by choosing Ford.

What must Ford do?What must Ford do?

Ford needs to prove to consumers they are the top choice in the automobile industry. They need to convince consumers to buy Ford trucks and cars over their steep competition in order to survive.

How will they do this?

Ford needs to prove to consumers they are the top choice in the automobile industry. They need to convince consumers to buy Ford trucks and cars over their steep competition in order to survive.

How will they do this?

Ford’s Mission StatementFord’s Mission Statement

We are a global, diverse family with a proud heritage passionately committed to providing outstanding products and services that improve people’s lives.

We are a global, diverse family with a proud heritage passionately committed to providing outstanding products and services that improve people’s lives.

QualityQuality

• Well-built• Reliable• Strong after sales customer service focus• Improving the quality control and output

of parts

Creates strong product and brand loyalty

• Well-built• Reliable• Strong after sales customer service focus• Improving the quality control and output

of parts

Creates strong product and brand loyalty

Fuel EfficiencyFuel Efficiency

• $3.56 gallon• “Redefining the Small Car”• Ford Fiesta = Best 2011, 40 hwy mpg• EcoMode, EcoRoute, EcoGuide

– Modifies driving habits to achieve maximum fuel efficiency

Creates cars that consumers need - not just want!Practical & cost effective

• $3.56 gallon• “Redefining the Small Car”• Ford Fiesta = Best 2011, 40 hwy mpg• EcoMode, EcoRoute, EcoGuide

– Modifies driving habits to achieve maximum fuel efficiency

Creates cars that consumers need - not just want!Practical & cost effective

SafetySafety

• The Ford Fiesta is the only car of its size to earn top safety ratings.

• Ford is working on making safer smaller cars.

• Great crash-test results

Creates differentiation, which holds potential to set them apart from competition

Family company looking out for the safety of families

• The Ford Fiesta is the only car of its size to earn top safety ratings.

• Ford is working on making safer smaller cars.

• Great crash-test results

Creates differentiation, which holds potential to set them apart from competition

Family company looking out for the safety of families

ValueValue

• Higher resale values for cars than other companies’ cars

• Innovative technology - loans gave them an advantage over GM to get ahead technologically

Getting more for your money!

• Higher resale values for cars than other companies’ cars

• Innovative technology - loans gave them an advantage over GM to get ahead technologically

Getting more for your money!

Ford’s Success…Ford’s Success…

A) Convince skeptical consumers that they should trust in Ford• Using the voice of the consumer to

market their products• Excellent spokesperson = Mike

Rowe• Strong advertising campaign

Building a warm, approachable and trustworthy character that exemplifies the Ford brand

A) Convince skeptical consumers that they should trust in Ford• Using the voice of the consumer to

market their products• Excellent spokesperson = Mike

Rowe• Strong advertising campaign

Building a warm, approachable and trustworthy character that exemplifies the Ford brand

Ford’s Success…Ford’s Success…

B) Building a more meaningful experience - redefining• Broader look at consumers’ lifestyles• Understand the value of technology

that’s integrated into our everyday lives Voice-activated SYNC/MyFord Touch

feature

B) Building a more meaningful experience - redefining• Broader look at consumers’ lifestyles• Understand the value of technology

that’s integrated into our everyday lives Voice-activated SYNC/MyFord Touch

feature

Ford’s Success…Ford’s Success…

C) Capitalizing on renewed American pride• Ford is smartly leveraging the

revival in American pride that is sweeping the country

• Positioning itself as an example of your pride for being American Without flag-waving

• Strong consumer focus

C) Capitalizing on renewed American pride• Ford is smartly leveraging the

revival in American pride that is sweeping the country

• Positioning itself as an example of your pride for being American Without flag-waving

• Strong consumer focus

Ford’s Use of Social MediaFord’s Use of Social Media

• People trust corporations less - use other people through word of mouth creating trust

• Run competitions getting consumers involved– Ex: Selected 100 “socially vibrant” individuals

to drive a Ford Fiesta for 6 months

• Implement multiple Social Media channels to create digital buzz

• People trust corporations less - use other people through word of mouth creating trust

• Run competitions getting consumers involved– Ex: Selected 100 “socially vibrant” individuals

to drive a Ford Fiesta for 6 months

• Implement multiple Social Media channels to create digital buzz

Got Any Major Issues?Got Any Major Issues?

• Ford deals with steep competition daily - both national and foreign

• Consumers reality of fuel economy– Perceptions aren’t always accurate

• Selling luxury brands decreases brand diversity

• Ford deals with steep competition daily - both national and foreign

• Consumers reality of fuel economy– Perceptions aren’t always accurate

• Selling luxury brands decreases brand diversity

Communications ImplicationsCommunications Implications

If Ford does not succeed at convincing consumers to buy their products over the competition they will…

If Ford does not succeed at convincing consumers to buy their products over the competition they will…

Communications ImplicationsCommunications Implications

• Sell less cars– Less profit & revenue

• Competition will prosper– Loss of loyalty to American/Ford cars

• Loss of jobs• Decrease in market share• Inability to advance

– Lack of new technology/cars (can’t keep up with competition)

• Extinction of the Ford brand

• Sell less cars– Less profit & revenue

• Competition will prosper– Loss of loyalty to American/Ford cars

• Loss of jobs• Decrease in market share• Inability to advance

– Lack of new technology/cars (can’t keep up with competition)

• Extinction of the Ford brand

StrengthsStrengths

• Great reputation as an American company - easily recognizable

• Known for having reliable vehicles• Lack of need for government bailout

helped company improve reputation and gain new customers

• Sales grew in 2010 - hope!• Strong social media presence• Family brand

• Great reputation as an American company - easily recognizable

• Known for having reliable vehicles• Lack of need for government bailout

helped company improve reputation and gain new customers

• Sales grew in 2010 - hope!• Strong social media presence• Family brand

WeaknessesWeaknesses

• Competition doesn’t have to pay as much for insurance or retirees

• Having to sell some of their brands due to recession

• Consumers’ impression/mindset that Ford may be less reliable or fuel efficient than foreign cars

• Competition doesn’t have to pay as much for insurance or retirees

• Having to sell some of their brands due to recession

• Consumers’ impression/mindset that Ford may be less reliable or fuel efficient than foreign cars

OpportunitiesOpportunities

• Toyota’s recalls• Improved image due to not taking

bailout money• Invest in and produce cars with new

technology - fuel efficient/hybrids• Joint ventures with other major

competitors to combat recession• Showcase/broadcast their community

involvement more

• Toyota’s recalls• Improved image due to not taking

bailout money• Invest in and produce cars with new

technology - fuel efficient/hybrids• Joint ventures with other major

competitors to combat recession• Showcase/broadcast their community

involvement more

ThreatsThreats

• Rapids changes in fuel prices• Government regulations outside of

the U.S.• Strict competition• Due to economy it’s tough to

please their investors and employees

• Rapids changes in fuel prices• Government regulations outside of

the U.S.• Strict competition• Due to economy it’s tough to

please their investors and employees

Ford’s StrategyFord’s Strategy

• Innovation– Rise above the competition– New ideas/technology - Be the first!– Create added value to consumers

• Lineage– Family-owned company– Years of experience– Stuck by their employees and shareholders

• Innovation– Rise above the competition– New ideas/technology - Be the first!– Create added value to consumers

• Lineage– Family-owned company– Years of experience– Stuck by their employees and shareholders