Ford Strama Final

8/20/2019 Ford Strama Final

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San Beda College

Mendiola, Manila

2015 - 2016

Strategic Management

TRANSPORTATION SERVICES:

FORD MOTOR COMPANY

Oyzon, Paolo

Realiza, John Belle

Tingao, Nurwayda

Tubay, Bernadeth B.

Tugade, Anna Patricia P.


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TABLE OF CONTENTS

I. INTRODUCTION

II. RESEARCH DESIGN AND METHODOLOGYIII. COMPANY’S VISION AND MISSION

Mission and VisionEvaluationRecommendationValues, Business Strategy and Objectives

IV. EXTERNAL ANALYSISSocio-cultural, Demographic, and Environmental ForcesTechnological ForcesEconomic ForcesPolitical, Governmental, and Legal Forces

V. INDUSTRY AND COMPETITIVE ANALYSISIndustry AnalysisPorter’s Five Forces Framework CompetitorsCompetitive Profile Matrix (CPM)

VI. EXTERNAL FACTOR EVALUATION (EFE)OpportunitiesThreats

VII. INTERNAL ANALYSISManagementSales and MarketingOperations/ProductionResearch and DevelopmentFinance and AccountingManagement Information Systems

VIII. INTERNAL FACTOR EVALUATION (IFE)StrengthsWeaknesses

IX. STRATEGY FORMULATIONTOWS MatrixStrategic Position and Action Evaluation (SPACE) MatrixInternal-External (IE) MatrixBoston Consulting Group (BCG) Matrix

The Grand Strategy MatrixSummary of Strategy Formulation ToolsX. QUANTITAIVE STRATEGIC PLANNING MATRIX (QSPM)XI. OBJECTIVES, STRATEGY RECOMMENDATION, AND ACTION PLANS

Strategic ObjectivesRecommended Business StrategiesThe Strategy MapDepartmental Programs


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XII. STRATEGY EVALUATION, MONITORING, AND CONTROLBalanced ScorecardFinancial PerspectiveCustomer PerspectiveInternal Business PerspectiveLearning and Growth Perspective

XIII. FINANCIAL PROJECTIONS3-Year Income Statements ProjectionREFERENCESAPPENDIX

I. INTRODUCTION

Ford Motor Company, an American multinational automaker, was established and

incorporated by Henry Ford on June 16, 1903. It manufactures and sells commercial

vehicles under the Ford brand, and mostly, luxury cars under the Lincoln brand. The

transportation-centered company spearheaded large-scale production of cars and

management of an industrial workforce through engineered manufacturing sequences as

characterized by moving assembly lines, which back then, was called Fordism in 1914.

Later that year, it ran an in-house part production in a vertical integration. During the

year 2010, Ford ranked high in different positions: 2 nd in Largest U.S.-based automaker,

5th in the World-based Vehicle Sales and in the Largest Automaker in Europe, and 8 th in

Overall American-based Company in 2010 Fortune List.


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With its fulfilling success, it has produced massively in different corners of the world.

It markets primarily in Saudi Arabia, Kuwait and in United Arab Emirates. The

corporation also operates in North America, Europe, Oceania, East and Southeast Asia,

South and West Asia, South America, and in Africa. Additionally, it has managed to

expand its business by exploring options of manufacturing not only usual automobiles,

but also trucks, buses, tractors, automotive components, and financial crediting services.

Financial reports in 2014 of Ford Motor Company, having a $7.4 billion spending,

claimed it has generated $135.8 billion automotive revenue, gaining a 3.9% automotive

operation margin, while obtaining a $3.6 billion operation-related cash flow. It stated a

$1.9 billion credit pre-tax profit, and total company pre-tax profit of $6.3 billion.

Moreover, the company discloses a total asset size amounting to $208,527,000 and totalshareholders’ equity of $24,805,000 in its 2014 financial statements. The corporation

provides benefits to approximately 187,000 employees.

Ford Motor Company is facing difficulty in furnishing return on investments, despite

having relatively high cash inflow. Its operations in Europe, Indonesia, and Japan are

ineffectively managed leading to closure and retrenchment. The organization is not only

affected by its usual external factors, but also by the nature and slow growth of the

transportation industry.

II. RESEARCH DESIGN AND METHODOLOGY

III. VISION AND MISSION STATEMENT

Vision Statement

“People working together as a team, global enterprise to make people’s lives

better through automotive and mobility leadership.”

Mission Statement

“ONE FORD: One Team. One Plan. One Goal.”


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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 demandand 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.”

One Goal: “An exciting viable Ford delivering profitable growth for all.”

Vision Statement Evaluation

Parameter Yes/No Why?

Does it clearly answer thequestion: What do we wantto become?

Yes They have clearly stated intheir vision statement whatthey want to be and how toachieve it.

Is it concise enough yetinspirational?

Yes Their vision statement isinspirational and verystraight forward.

Is it inspirational? Yes The reader is not onlyinformed on what Fordwants to become but thereader will also see that Ford


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caters the needs of thecustomers with the solidarityof the people behind thecompany.

Does it give clear indicationas to when it should beattained?

No The vision statement is nottime-bound.

Mission Statement Evaluation

Parameters Yes/No If Yes, which part of thestatement?

1. Customers Yes “People working together asa lean, global enterprise forautomotive leadership, asmeasured by: Customer...”

2. Products and Services Yes “Accelerate development of new products our customers


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want and value…”

3. Markets Yes “Accelerate development of new products our customerswant and value…”

4. Technology Yes “People working together asa lean, global enterprise forautomotive leadership…”

5. Concern for survival,growth and profitability

Yes Aggressively restructure tooperate profitably…”

“Finance our plan andimprove our balancesheet…”

“An exciting viable Forddelivering profitable growthfor all.”

6. Philosophy Yes “An exciting viable Forddelivering profitable growthfor all.”

7. Self-concept Yes “People working together asa lean, global enterprise forautomotive leadership…”

8. Concern for public image Yes “Community Satisfaction”

9. Employees Yes “People working together asa lean, global enterprise forautomotive leadership, asmeasured by:…Employee”

Recommendations

Recommended Vision

• People working together as a team, global enterprise to make people’s lives in the

millennial better through automotive and mobility leadership.


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The new vision now has a clear indication on when Ford sees itself to have a team

that works together to make people’s lives better through their automotive and mobility

leadership. The vision now mainly wants to make the current generation better.

Recommended Mission

• There is no recommended mission.

Business Strategy and Objectives

Ford works toward their vision by offering variety of products with best-in-class

quality, fuel efficiency, safety and smart design that would fit to any person’s need or

want. They also maintain a balanced portfolio of products and make sure that they haveglobal presence. More than that, they are also creating long-term consumer and employee

value by creating a “green” strategy that is aimed toward the natural environment and

taking into consideration every dimension of how a business operates in the social,

cultural, and economic environment, thus the Better World. The key elements to Ford’s

sustainability strategy include the following:

o Participation in science-based climate strategy, greenhouse gases

stabilization in the atmosphere, by making it their absolute reduction goal

that spans their products and facilities.

o Their goal is to make mobility affordable in every sense of the word –

economically, environmentally and socially – and to provide seamless

mobility for all.

o They have adopted a comprehensive water strategy that corresponds to thekey elements of the CEO Water Mandate and is based on five key

platforms designed to effect substantial, sustainable and measurable

impacts.

http://corporate.ford.com/microsites/sustainability-report-2014-15/environment-water-strategy.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/environment-water-strategy.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/environment-water-strategy.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/environment-water-strategy.html


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o They have developed policies and systems to understand and address

human rights and other social and environmental risks throughout their

operations. Their human rights strategy includes adherence to their Code

of Human Rights, Basic Working Conditions and Corporate

Responsibility (Policy Letter 24), in their own operations and in those

of their suppliers .

Ford aims to have profitable growth across geographies and product types.

Ford focuses on three strategic priorities: accelerating the pace progress of the

One Ford plan; delivering product excellence with passion; and driving innovation in

every part of the business.

Ford is accelerating the pace of progress by focusing on their mission: “ONE

FORD: One Team. One Plan. One Goal.” Ford delivers product excellence with passion

by having the best and freshest product lineup. Lastly, Ford continues to innovate in

every part of their business given that they are in an industry that is rapidly evolving and

new technology significantly affects the business.

IV. EXTERNAL ANALYSIS

Many governmental standards and regulations relating to safety, fuel economy,

emissions control, noise control, vehicle recycling, substances of concern, vehicle

http://corporate.ford.com/microsites/sustainability-report-2014-15/strategy-governance-directives.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/supply-conditions.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/supply-conditions.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/strategy-governance-directives.htmlhttp://corporate.ford.com/microsites/sustainability-report-2014-15/supply-conditions.html


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damage, and theft prevention are applicable to new motor vehicles, engines, and

equipment manufactured for sale in the United States, Europe, and elsewhere. In addition,

manufacturing and other automotive assembly facilities in the United States, Europe, and

elsewhere are subject to stringent standards regulating air emissions, water discharges,

and the handling and disposal of hazardous substances.

V. INDUSTRY AND COMPETITIVE ANALYSIS

Industry Analysis

In the past years, the automotive industry has been experiencing relatively strong growth

and profitability. Continuous growth is hard to achieve because there are so many challenges that

are being faced by the industry. The unevenness of global markets is considered to be the main

challenge for the industry.

The growth forecast at the global level in 2015 is a mere 2.1% compared to the growth

rate of 3.1% between 2007 and 2014. On the other hand, there is a healthier expected return in

2016 and 2017 of 5.1% and 4.7%, respectively, as crisis markets stabilizes.

Growth among different countries seems to be very different from each other. Asian

countries like the Philippines is continuously experiencing growth in sales, mainly because of

continuous attractive marketing efforts and flexible financial options while India’s auto industry

is both doing good in their domestic sales and export sales. However, growth in China has

slowed, there has been stock turmoil and rising of inventory which left financial stain on dealers

that led to factory shipments slow down. On the other hand, Europe continues on its recovery

journey – generally low credit and financing rates, low fuel prices, improving employment

expectations and onslaught of new attractive products. Meanwhile, sales in North America are hot

due to the continuance of near-historic lows in financial rates while South America continuous to

struggle through recession and sales have experienced the steepest decline in sales since 1998.

This shows that automobile in different countries have very different growth from each other andthus making it hard to stabilize the overall growth of the automotive industry.

Additionally, the worldwide automotive industry is greatly affected by general economic

conditions on which the industry has very little control over. The purchase decisions of

consumers are significantly affected by slowing economic growth, geopolitical events, and other


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factors such as the durability of vehicles in which consumers will have latitude in determining

whether and when to replace an existing vehicle, and of course, the changing preferences of

consumers, and the existence of other alternatives such as Uber, Grab Taxis, electric cars, water

fueled cars and others. While these alternatives exist, it is a low threat to the automotive industry.

The industry is undeniably huge as it consists of many producers but with no single

dominant producer. The key competitors with global presence include Ford and Lincoln, Flat

Chrysler Automobiles, General motors Company, Honda Motor Company, Hyundai-Kai

Automotive Group, PSA Peugeot Citroen, Renault-Nissan B.V., Suzuki Motor Corporation,

Toyota Motor Corporation, and Volkswagen AG Group.

Competitors

Graph 1

Ford GM Toyota0

5

1015

20

25

U.S. Sales Market S are !r"# $%&%'$%&(

20102011201220132014

Source: Wards Auto

Graph 2


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Ford GM Toyota

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

)r"ss Pr"*t Mar+in

2010

2011201220132014

Source: YCharts, Inc.

Graph 1 shows the market shares of Ford, GM and Toyota in terms of sales. GM

experienced the highest sales consistently from 2010 to 2014 whereas Toyota is consistently

earning but lower than GM and Ford. Ford, however, experienced a sequential decline from 2011

to 2014.

Ford, GM and Toyota are just few of many companies that pursue mass strategy.

Mass strategy includes the lowering of selling price, reducing the manufacturing cost per vehicle

by increasing volume.

In Graph 2, it is apparent that Toyota is the more stable one when it comes to gross

profit margin this is because Toyota is known to be the paragon of lean production and has low

inventory product demand. Ford, however, seems to be the most fluctuant and not stable while

GM is somewhat doing good even with the negative gross margin in 2012.

Competitive Profile Matrix

CPM is a tool that compares the firm and its rivals and reveals their relative strengths

and weaknesses.


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The CPM analysis reveals that the strongest player in the industry is Toyota with

relative strength in brand reputation, financial position, global expansion, product quality,

market share, fuel efficiency, innovative culture, and successful promotions. On the other

hand, Ford prevails in customer loyalty and is doing well with other aspects. General

Motors is the weakest of them all having only a relative strength in product design. Thecompanies should improve their ratings by creating strategies that would make their

weaknesses into strengths while maintaining their competitive advantage/s.

According to a Car-Brand Perception survey in 2014 with 1,578 participants that

had at least one car, Toyota led in the overall brand perception with Ford in the second

place and General Motors’ Chevrolet and Cadillac in the fourth and ninth place,

respectively. The result was based on factors such as quality, safety, performance, value,

fuel economy, design/style, and technology/innovation. On quality, fuel efficiency, and

innovative culture Toyota is leading while Ford and General Motors’ Chevrolet follow.

On the other hand, General Motors’ Cadillac and Chevrolet lead in product design.

CPM Table FORD TOYOTA GENERALMOTORS

Critical Success Factor Weight Rating Score Rating Score Rating Score

1. Brand Reputation 0.12 3 0.36 4 0.48 2 0.24

2. Financial Position 0.08 3 0.24 4 0.32 2 0.16

3. Global Expansion 0.11 2 0.22 4 0.44 3 0.33

4. Product Quality 0.10 3 0.30 4 0.40 2 0.20

5. Market Share 0.14 2 0.28 4 0.56 3 0.42

6. Fuel Efficient Vehicle 0.09 3 0.27 4 0.36 2 0.18

7. Customer Loyalty 0.10 4 0.40 3 0.30 2 0.20

8. Innovative Culture 0.09 3 0.27 4 0.36 2 0.18

9. Product Design 0.10 3 0.30 2 0.20 4 0.40

10. Successful Promotions 0.07 3 0.21 4 0.28 2 0.14

TOTAL 1.00 - 2.85 - 3.70 - 2.45


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In terms of financial position, global expansion, and successful promotions,

Toyota prevails given that they are operating in 170 countries and regions it is likely that

their assets, liabilities and equity are much more higher than of Ford and General Motors.

Ford and General Motors operate in 31 and 37 countries, respectively, but Ford is still a

step higher when it comes to financial position than General Motors. Toyota is also likely

to lead successful promotions than of Ford and General Motors because they are more

present globally.


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VI. EXTERNAL ,ACTOR EVELUATION -E,E MATRIX

Key External Factors Weight Rating W. Score

OPPORTUNITIES

1. Mitsubishi Motor’s Montero Sport suddenacceleration issues

.08 3 . !

. Strong dri"e o# ac$uiring a car in %hilippines .&' ! .(0

3. Reintroduced )incoln *ontinental in theexpanding *hinese +ar,et

.&0 3 .30

!. *o+bination -ith *isco -ould -or, best .&0 . 0

'. oyota discontinues Scion .08 3 . !

THREATS

&. /ggressi"e co+petiti"e ri"alry .&' & .&'

. Re"i"ing o# car brands in the Filipino do+estic+ar,et

.&0 & .&0

3. arying oil prices .& & .&

!. 1e- ad+ission o# high tech #ir+ opens *hinaFactory

.08 .&(

'. *abs +a,e car #ir+s rethin, sales plans .0' .&0

TOTAL 1.00 2.21

Ford’s External Factor Evaluation, EFE, comprises of opportunities and threats

that used to assess their current industry condition. These will help to evaluate the

different external factors such as economic, social, cultural, demographic, environmental,

political, governmental, legal, technological, and competitive factors that can affect them.

Also, to visualize and prioritize the opportunities and threats that Ford’s facing. Throughidentifying opportunities and threats within the industry, Ford can measure how well they

are responding to the key factors. Each factor is assigned a weight according to

importance. Zero means not important. One means that the factor is the most significant

and critical one. The entire weights together should equal 1. Each factor is then rated


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according to how well Ford is responding to that factor. Each opportunities, must be rated

as 4 (superior response) or 3 (above average response), and each threats must be rated as

a 1 (poor response) or 2 (below average response). Multiply each factor weight with its

rating to give a weighted score, and add all weighted scores for each factor to compute

the total weighted score of Ford. Ford weighted EFE score is 2.21 which is just lower,

but adjacent, to the average weighted score of 2.5 which shows that they can exploit more

on opportunities and do more to circumvent external threats.

Ford can take advantage the strong drive of acquiring a car in the Philippines by

penetrating the market. Combination with a different company, Cisco, which specializes

in networking, may be of a great help in improving the market strategy. Despite being

one of the largest automakers in the industry, Ford lacks in competing with other players.Ford did not have public trust while other companies like GM and Toyota are gaining.

Because of varying oil prices, Ford must make a study where they will produce cars that

use non diesel fueled car.


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VII. INTERNAL ANALYSIS


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VIII. INTERNAL FACTOR EVALUATION (IFE) MATRIX

Key 2nternal Factors Weight Rating W. Score

STRENGTH

&. )i+itless i+pro"e+ent o# $uality in products and ser"ices

.&0 3 .30

. )ong lasting co++it+ent in +a,ing"ehicles sa#er #or custo+ers

.04 3 . 4

3. %rotects extended ser"ice plans .0' 3 .&'

!. Strong brand i+age .&0 ! .!0

'. E##ecti"e inno"ation de"elop+ent .&3 ! .'

(. *usto+ers )oyalty .&0 ! .!0

WEAKNESSES

&. 5npro#itable Europe operations .&0 & .&0

. 6e#ecti"e airbag in#lator .08 & .08

3. 7igh price structure .& . !

!. Retrench+ent in 2ndonesia and apan .&0 & .&0

'. 1o return on in"est+ent despite high cashin#lo-s

.0' .&0

TOTAL 1.00 2.66

Ford’s Internal Factor Evaluation, IFE, consists of 6 strengths and 5 weaknesses

in the functional areas of the business. These provide a basis for recognizing and

assessing relationships among these areas . Once strengths and weaknesses particular toFord’s company are specified, every factor is weighted according to importance. Each

strength must be rated as a 4 (major strength) or 3 (minor strength), and each weakness

must be rated as a 1 (major weakness) or 2 (minor weakness). Furthermore, to get the

weighted score, the weight is multiplied by the rating. Finally, to achieve total weighted


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score, add all the weighted score of each factor. The combined weighted score for Ford’s

IFE is 2.66. Ford’s point is marginally above the average position of 2.5

Ford being one of the largest automobile companies in the world has already built

a strong brand image in this industry. Strongest factor that contributed to make Ford awell-known automotive manufacturer is being effective in their innovation development.

Customers’ loyalty is also one of the strength of Ford because it continuously improves

their products and services. Retrenchment in Indonesia and Japan and unprofitable

operations in Europe are led to a loss to Ford. In order to recover these losses, Ford must

not stop to develop and penetrate market to new geographical areas. High quality

products means high prices, so, improving the cost structure of Ford may be difficult. The

only way that ford can improve it, is to minimize the spending and at the same timemaximize the production efficiency, to create more profit.


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IX. STRATEGY FORMULATION

A. TOWS Matrix

Strengths Weakness

Opport n!t!es 9&: Ford +ust pro+ote its"ehicles #ree o# sudden

unintended acceleration9S5/: ris, throughde"eloping; testing andcontinuously e"aluatingtheir acceleration syste+s.9S&; S ; S';

9 : Ford should i+pro"e product $uality; and designthat #its the de+ands cabe+ployers and residents.9S&; S!; S'; &; ':

9&: Ford should ad=ust their prices that correspond -ell tothe #inancial capacity o#

buyers in certain +ar,ets-hile +aintaining $uality-ithin the products; enablingthe co+pany to co+peteglobally. 9W3; W'; &; ':

9 : Ford +ust close its operationsin 2ndonesia and apan.9W3; 3:


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he SW< Matrix is an essential +atching tool that uses #actors #ro+ both the 2nternal

Factor E"aluation 92FE: and the External Factor E"aluation 9EFE: to e"aluate both

internal and external aspects o# doing business. SW< is the #irst stage o# planning and

supports decision +a,ers to concentrate on ,ey +atters. 2t is a graphical depiction o# the

SW< #ra+e-or,. 2t de"elops #our types o# strategies> S< 9strengths opportunities:

Strategies; W< 9-ea,ness opportunities: Strategies; S 9strengths threats: Strategies; and

W 9-ea,ness threats: Strategies. Strengths and -ea,nesses are ta,en #ro+ the 2FE

-hile opportunities and threats are ta,en #ro+ the EFE. Fro+ there; -e can co+e up #our

di##erent types o# strategies by +atching together the di##erent internal and external

#actors.

S< Strategies chase opportunities that are appropriate to the co+pany’s strength.


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a##ecting categories o# in"est+ent. here#ore; +ar,et de"elop+ent could be attracti"e

W< strategy to sho- out.

S strategies detect -ays that the #ir+ can utili?e its strength to di+inish it susceptibility

to external threats. Second threat to Ford is the unstable prices o# oil. Since generationsha"e been change and +any ad"anced technologies no- are being disco"ered and

released; Ford started #or inno"ating cars that -on’t a##ect by oil’s unstable price. Ford

has actually adding +ore plug in hybrid all electric cars to their port#olio. So i# oil

decreases; Ford -ill be little less a##ected and "ise "ersa. Further+ore; Ford had already

anticipated that gas prices -ill e"entually increase; so Ford’s target is to ha"e the best

#uel econo+y in e"ery di"ision it’s in. /nother threat is the tight co+petition in the

auto+oti"e industry. Since Ford does not doing -ell in co+petition in the industry; the

group suggests; Ford +ust #ocus on i+pro"ing +ore products $uality and design that #its

the de+and cab e+ployers and residents. 2n these t-o cases; product de"elop+ent can be

stri,e S strategy.

)astly; W Strategies are #ocused at lessening internal -ea,nesses and pre"enting

external threats.


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ans-er and de#end their co+pany. 2n a -orld that change is the only constant; it is

essential that SW< Matrix should #re$uently be exa+ined and i+pro"ed.

B. SPACE Matrix


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Internal Strategic Position External Strategic Position

Financial Strength (FS)

Asset Turnover

Cash Flow

Receivables Turnover

Return on Investment

Inventory Turnover

Return on Asset

Working Capital

TOTAL

AVERAGE

Rating

+2+3

+3

+2

+2

+1

+3

+18

+2.57

Environmental Stability (ES)

Inflation Rate

Taxation

Technological Changes

Barriers to Entry

Price range of competingproducts

Competitive Pressure

Rating

-3-4

-1

-1

-1

-3

-13

-2.17

Competitive Advantage(CA)

Market Share

Product Quality

Brand & Image

Product Life Cycle

Customer Loyalty

TOTAL

AVERAGE

-2

-1

-1

-1

-1

-6

-1.2

Industry Strength (IS)

Growth Potential

Profit Potential

Financial Stability

Resource Utilization

Ease of Entry into Market

+4

+4

+3

+6

+6

+23

+4.6


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CA IS

FS


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ES

Conclusion

Directional Vector Coordinates: x-axis: -1.20 + (+4.60) = +3.40

y-axis: -2.17 + (+2.57) = +.40

As shown in the Matrix, Ford Motor Company should pursue Aggressive

Strategies. Ford should continue to develop its market by expanding to different

countries, thus, will help in improving Ford’s market share. They must continually

improve their products or develop new products.


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C. IE Matrix

IFE SCORE

STRONG AVERAGE WEAK

4 3 2 1

4

HIGH

3

EFE SCORE

MEDIUM

2

LOW

1

The Internal-External (I/E) Matrix uses both the IFE and EFE total weighted

scores. This tool is used to examine working situations and strategic position of Ford. The

weighted scores are taken directly from the IFE and EFE. The IFE total weighted score is

plotted on the x- axis which is 2.66, while the EFE total weighted score plotted on the y

axis is 2.21. Therefore, the plot on the matrix would be (2.66, 2.21). To understand this,

with 2.66 as their IFE total weighted score, Ford is considered average internal position

because it is between score of 2.0 to 2.99. In addition, with 2.21 as their EFE total

weighted score, Ford is considered medium, between a score of 2.0 to 2.99.

1 2 3

4 5 6

7 8 9


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Ford Motors Internal-External Matrix (IE) shows that we are in hold and maintain

strategy. The IFE is 2.66 which lie in 5 th box and EFE is 2.21 which also lie in the same

box.

Hold and Maintain strategies are –

Market Penetration

Product Development

Market Development

Ford Motor Company has global operations, which means that market

development is not as significant as it has been for the business in its early years. But

Ford should still expand in small and medium countries or entering new markets or

market segments in places that have strong desire to buy automobile. This expansion will

power the company’s One Ford global portfolio and aims growth opportunities for small,

midsize and large vehicles. Develop new products or improve existing products that offer

superior modification, unique design and advanced technologies. Ford plans to accelerate

obtainability of innovative technologies there as well, including Eco Boost engines, Sync

in-car connectivity and inflatable rear safety belts. Ford experienced slow market growth

in Europe and downfall in its market share in some countries in Asia. Ford must penetrate

more market since this is ford’s main intensive growth strategy. It involves selling more

products to existing customers to grow business, increase the market share of a current

product or promote more new product, through advertising, volume discounts or lower

prices. This scheme is associated to Ford’s common competitive strategy by emphasizing

the benefits of low costs and increasing diversity to gain a bigger market share.


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D. BCG Matrix

Relative Market ShareHigh Low

Low

Operating

Segments

Revenue

2014 (in

millions)

% Revenue Income % Income Relative

Market

Share

Industry

Growth Rate

NorthAmerica

$ 82,376 61% $ 6,898 132% 14.2% 5.8%

SouthAmerica

8,799 6% (1,162) -22% 8.9% 9.4%

Europe 29,475 22% (1,062) -20% 7.2% 6.3%

Middle East& Africa

4,406 3% (20) -0.4% 4.7% 5%

Asia Pacific 10,744 8% 589 11% 3.5% 7.9%

TOTAL 135,800 100% 5,243 100% - -

EUAP

SA

A

MEA

Industry)r"/

STARS QUESTION MARKS

CASH COWS DOGS


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As shown in the matrix, Asia Pacific is a question mark because even though theygenerate revenue and have manages to gain profit, the Asia Pacific segment compete in avery high-growth industry. This just means that the automotive industry in Asia Pacific isa very competitive industry. To improve this, the segment should pursue intensivestrategies like market penetration, market development, or product development; ordivesture.

Middle East & Africa segment, however, has the lowest revenue generation andhas also incurred a negative profit. It also has a low market share but the automotiveindustry in Middle East & Africa is a high-growth industry.

Meanwhile, North America, South America, and Europe are all stars. NorthAmerica Segment has the highest revenue and profit. It also has a high relative marketshare and is competing in a high-growth industry. While South America and Europe havenot been profitable, they still manage to generate high revenues and have high marketshares and are also competing in a high-growth industry. To strengthen the segments theyshould purse strategies like forward, backward, horizontal integration; marketpenetration; market development; and product development.

E. Grand Strategy Matrix

Quadrant II Quadrant I

Ra0id Market)r"/t

Sl"/ Market)r"/t

Str"n+

C"#0etit

i1eP"siti"n

2eak

C"#0etit

i1eP"siti"n


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Quadrant III Quadrant IV

Summary of Strategy Formulation Tools

Strategies SPACE IE BCG GRAN

D

Total

Backward, forward, horizontalintegration

! ! 2

Market Penetration ! ! ! ! 4

Market Development ! ! ! ! 4

Product Development ! ! ! 3

Diversification (related/unrelated) ! 1

Divestiture ! ! 2


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Liquidation ! 1

X. QUANTITAIVE STRATEGIC PLANNING MATRIX (QSPM)

XI. OBJECTIVES, STRATEGY RECOMMENDATION, AND ACTION PLANS

XII. STRATEGY EVALUATION, MONITORING, AND CONTROL

XIII. FINANCIAL PROJECTIONS

REFERENCES

APPENDIX


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Documents

Ford Strama Final