Ford Develops a Strategy for Competitive Advantage Case Summary: Ford is the second largest U. S. -based automaker and the fifth-largest in the world based on 2010 vehicle sales. 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 2009, Ford faced declining sales of 23. 4 percent, a change in leadership and a great possibility that it would have to file bankruptcy like other automakers such as General Motors and Chrysler.
Under new leadership, Ford embarked on a new strategy by reducing costs, placing emphasis on trendy car models and closing 16 factories and plants. Key Marketing Issues Market Opportunity – Ford took the opportunity during a economic crisis to refocus on consumers through repositioning its brands. In addition, the company created an image around a brand and gave consumers a reason to buy Ford products. Ford began to revamped their target market and specifically targeted women drivers. Marketing Objective – This objective can be accomplished through marketing activities.
As Ford started to implement its new strategy, the company targeted women. Ford aimed the new Ford Fusion at women using a unique promotional campaign, the Fusion Studio. Women were allowed to interact with the Fusion while at malls across the country and given the opportunity to test drive the car. This proved to be the break Ford needed as the new Fusion model and hybrid sales increased from 2008-2009. Corporate Strategy – This strategy determines the means for utilizing resources in various functional areas to reach an organization’s goals.
The new leadership at Ford decided to change its strategy to reduce capacity, pricing strategy, and create innovation. This was done with “The Way Forward”. This strategy was to ensure the company could reduce costs while maintaining a focus on consumers as the foundation for everything the company did. Eventually the company would implement a global strategy, the first of its kind for the company. Personal Case Analysis After reading this case analysis, I learned that innovative thinking and seriously taking a hard look at how things can be done more efficiently can mean the difference between folding and succeeding.
Ford used The Way Forward strategy to separate themselves from other automakers during a time when the economy forced a lot of companies into bankruptcy. Under this strategy, Ford was able to make its pricing more clear and simple allowing the company to reduce prices and introduce more cars and trucks into the market. Ford not only looked at domestically how to improve sales, they implemented a global strategy and introduced cars into foreign markets to attempt to make car quality, design and comfort associated with Ford products. By doing this, Ford moved itself into a position to be opportunistic in building a solid strategic foundation.
Case Questions 1. How did Ford’s “The Way Forward” strategy help to save the company during the 2008 recession? Ford’s restructuring plan “The Way Forward” called for reducing costs by maintaining focus on its customers. The company cut costs to keep the company afloat as it prepared to launch new cars and trucks. This was accomplished by closing 14-16 plants and losing 34,000 workers. This strategy lowered production costs, introduced new vehicles into the market much faster and provided Ford a global platform to ship cars to Asia and Europe. 2. How has Ford linked its domestic strategy with its global strategy to create success?
Ford linked its domestic strategy with its global strategy through an aggressive product strategy that included introducing new passenger cars such as the Ford Fiesta, SUV’s and other commercial vehicles into the global market. By standardizing the design and name of cars in the European and Asian market, Ford is able to keep costs down because it can market the same cars both domestically and globally. 3. Evaluate Ford’s strategy to focus on global markets with stronger brands and scale back or exit the luxury car market. Ford focused on taking advantage of opportunities to build a strong, strategic foundation.
The company started with closing more than 14 plants and reducing its workforce by 34,000 workers. In addition, Ford needed to stop production on vehicles that were not profitable for the company. By doing so, Ford could now make a footprint in the European, Asian and Indian market. Since the European market was in a lag, Ford focused more on China and India. The company increased output in Asia by doubling the capacity of its assembly plant in Chennai and opened a new engine factory as well. They sold Volvo to a private company and focused on gaining a greater market share in the region.