1.

History
Ford Motor Company (commonly known as Ford) is an American multinational
automobile manufacturer headquartered in Dearborn, Michigan, United
States. It was founded by Henry Ford and incorporated on June 16, 1903.
Founded in 1903 by Henry Ford and a group of 11 investors, the well-known
Ford Motors Company had its modest origins and began its history in a Detroit
factory that produced a few daily vehicles.

The company quickly made a difference by putting into practice a variety of

actions both at the production and employment levels which would transform
the automobile industry and place Ford at the forefront of technological
innovation. During the years 1980 and 1990 Ford looked for the international
expansion through the acquisition of emblematic marks like Jaguar, Aston
Martin, Land Rover and Volvo as well as a participation in Mazda. This was the
trend in the industry whereby it was tried to keep production costs low and
achieve market diversification.

From 2007 to 2010, due to the Great Recession, the company sold all its luxury
brands, closed 13 plants and fired more than 50,000 employees in order to
reduce their capacity. From that moment, Ford focused mainly on returning
profitability to the company. Under the leadership of CEO Alan Mulally was
developed the One Ford Plan began to launch more products in fewer
platforms and renewed the families of older vehicles by integrating
technological improvements to increase the number of buyers, returning the
desired profitability.

At the start of 2016 Ford began its transformation to a solid automotive and
Mobility Company, at that time Jhon Casesa was hired as Vice President of
Global Strategy of the Group, delivering the mission to defend the new mobility
strategy, known as Smart Mobility. So, the team came up with the Dynamic
Shuttle project, which consists of a bus or van that could be accessed through
the user’s mobile phone and sent to the requesting customer’s location. The
prices of the service should be located between the services of massive
transport and the services of taxi or taxi of higher level (Uber, Ola and Lyft).
The Casesa team chose India as the market that met the requirements to
implement the first Dynamic Shuttle pilot, since there is often a demand for
public transport that exceeds capacity. Casesa’s focus would then be on
evaluating the possible five partner candidates with whom Ford could partner
in order to carry out the Dynamic Shuttle in India.

2. Products and services

Automobiles:
Ford Motor Company sells a broad range of automobiles under the Ford
marque worldwide, and an additional range of luxury automobiles under the
Lincoln marque in the United States. The company has sold vehicles under a
number of other marques during its history

Trucks:
Ford has produced trucks since 1908, beginning with the Ford Model TT,
followed by the Model AA, and the Model BB. Countries where Ford
commercial vehicles are or were formerly produced include Argentina,
Australia, Brazil, Canada (also badged as Mercury), France, Germany, India,
Netherlands, Philippines, Spain (badged Ebro too), Turkey, UK (badged also
Fordson and Thames), and the United States.

Buses:
Ford manufactured complete buses in the company's early history, but today
the role of the company has changed to that of a second stage manufacturer.
In North America, the E-Series is still used as a chassis for small school buses
and the F-650 is used in commercial bus markets.

Tractors:
The "Henry Ford and Son Company" began making Fordson tractors in Henry's
hometown of Springwells (later part of Dearborn), Michigan, from 1907 to
1928, from 1919 to 1932, at Cork, Ireland, and between 1933 and 1964 at
Dagenham, England, later transferred to Basildon. They were also produced in
Leningrad beginning in 1924.
In 1986, Ford expanded its tractor business when it purchased the Sperry-New
Holland skid-steer loader and hay baler, hay tools and implement company
from Sperry Corporation and formed Ford-New Holland which bought out
Versatile tractors in 1988. This company was bought by Fiat in 1993 and the
name changed from Ford New Holland to New Holland. New Holland is now
part of CNH Global.

Financial services:
Ford offers automotive finance through Ford Motor Credit Company.
Automotive components
Ford's FoMoCo parts division sells aftermarket parts under the Motorcraft
brand name. It has spun off its parts division under the name Visteon.

3. Fords MISSION statement

Ford’s corporate mission is “to make people’s lives better by
making mobility accessible and affordable.” This mission
statement focuses on moving people, which is a basic function expected in
automobiles and the transportation sector. Such emphasis on mobility
indicates the purpose of Ford’s business in society. As one of the biggest
players in the international market, the company aims to make people’s
transportation more effective. The following are the main components of
Ford’s corporate mission statement:
1. Make people’s lives better
2. Make mobility accessible
3. Make mobility affordable

Fords VISION statement

Ford’s corporate vision is “to become the world’s most trusted
company, designing smart vehicles for a smart world.” This
vision statement reflects the multinational company’s strategic goal of
becoming a leader in the automotive industry. Ford’s focus on smart vehicles is
pertinent to current market conditions and customers’ preferences. The
company aims to maximize its profitability and relevance to the market, where
more efficient technologies are preferred. The following are the main
components of Ford’s corporate vision statement:
1. Worldwide scale
2. Most trusted company
3. Designing smart vehicles for a smart world

4. STRATEGIC BUSINESS UNIT

MULTI DIVISIONAL STRUCTURE

The organisational structure has large geographic divisions that cover the
company around the world. The effect of this organisational structure is the
ease of integration of business strategies into geographical divisions.

5. Corporate level strategy

Ford's primary intensive growth strategy is market penetration. This intensive
strategy entails selling more products to current customers to grow the
business. Ford applies this intensive growth strategy by increasing the number
of its dealerships and increasing sales volume. This intensive growth strategy is
linked to the strategic objectives of increasing customer retention and
increasing sales to existing customers. This intensive strategy is linked to Ford’s
generic competitive strategy by highlighting the benefits of low costs and
increasing differentiation to gain a bigger market share.

Business level strategy

There are two basic business-level strategies which Ford Motor Company has
followed for the whole period of its performance. The company started with
realizing a low-cost strategy, which allowed it to gain market share due to the
lowest costs as compared with its competitors:
The founder, Henry Ford, created a mass market for automobiles by driving the
price of a car down to the point where the average man could afford one. To
do this, Ford limited the product model in one color and set up a production
line to produce large numbers of cars very efficiently.
This resulted in the company’s complete domination of the automobile markets
of the United States in the 20th century.
The matter is that since 1927, the leader of the U.S. automobile market is
General Motors which uses a differentiation strategy; this made it impossible
for Ford to compete with it using only the cost leadership strategy (Adcock,
Halborg, & Ross, 2001). Such a course is more beneficial for Ford Motor for the
reason that differentiation offers an extremely secure basis for competitive
advantage, which low cost is unable to do. Cost advantage does not allow
resisting external forces, especially at the global market where Ford has been
successful over the past several decades. Therefore, differentiation is going to
assist Ford Motor Company in gaining sustained high profitability, which will
improve the company’s performance at the global market.
 6. BCG MATRIX

Trucks
SUVs
Vans

Autonomous Vehicles
Luxury Vehicle

Mid-size Vehicles
Small Vehicles

7. MICHEAL 5 PORTALS ANALYSIS

COMPETITION:
The following are the external factors that contribute to the strong force of
competitive rivalry against Ford:
High aggressiveness of firms (strong force)
High exit barriers (strong force)
Moderate number of firms (moderate force)
Ford needs to compete against top players (e.g., Toyota) that aggressively
innovate and market their products. Also, the automotive industry has high exit
barriers, which means that firms would rather keep competing with Ford than
to close their business, because of the high costs and investments. Such a
condition exerts a strong force of competition against Ford. In addition, Ford
must compete against a moderate number of firms, especially a few large ones
like General Motors. Based on this aspect of the Five Forces analysis, Ford must
maximize its competitive advantage to address the external factors linked to
competition.

CUSTOMER:
Ford’s customers significantly influence the business. This aspect of the Five
Forces analysis pertains to the effects of buyers on businesses and the industry
environment. The external factors that contribute to the moderate bargaining
power of Ford’s customers are as follows:
Moderate switching costs (moderate force)
Moderate size of individual purchases (moderate force)
Moderate availability of substitutes (moderate force)
Ford Motor Company’s customers face moderate switching costs, which are
the consequences of moving from one firm to another. In this case, customers
can easily transfer to other firms, although infrequently because automobiles
are big-ticket items. Also, each purchase of Ford’s products is moderate in
terms of its price and contribution to the company’s revenues. Thus, even a
small change in customer’s demand can have significant consequences on
Ford. In addition, the moderate availability of substitutes gives customers the
option to move away from Ford. Thus, Ford Motor Company must maximize
customer satisfaction to address the external factors in this aspect of the Five
Forces analysis.

SUPPLIER:
Suppliers exert moderate influence on Ford Motor Company. The impact of
suppliers and their demands on firms are considered in this aspect of the Five
Forces analysis. In Ford’s case, the following external factors contribute to the
moderate bargaining power of suppliers:
Moderate overall supply (moderate force)
Moderate population of suppliers (moderate force)
Low forward vertical integration (weak force)
The moderate overall supply and moderate population of suppliers give
suppliers significant but limited bargaining power on firms like Ford. Also, most
of these suppliers have low forward vertical integration, which means that they
do not own or control the distribution and sale of their products to Ford. The
suppliers’ bargaining power is further weakened because of Ford’s backward
vertical integration through the Ford River Rouge Complex. Through the
Complex, Ford produces some of the materials it uses to manufacture cars and
related finished products. Thus, this aspect of the Five Forces analysis shows
that Ford must consider the significant but limited external factors linked to
suppliers’ effect on the business.

SUSTITUTE PRODUCT:
Ford Motor Company experiences the effects of the substitutes to its products.
This aspect of the Five Forces analysis refers to the extent substitution
threatens firms and the industry environment. The following external factors
contribute to the moderate threat of substitution against Ford:
Moderate availability of substitutes (moderate force)
Moderate switching costs (moderate force)
Low performance of substitutes (weak force)
There are considerable substitutes to Ford’s products, including public
transportation and bicycles. However, these substitutes are not always
available or appropriate in certain areas or situations. In addition, the
switching costs are moderate because, even though Ford’s customers can shift
to using these substitutes, they cannot easily do so when they are still paying
for their car loans. Also, in many instances, these substitutes have lower
performance than Ford’s products in terms of convenience and safety. Based
on this aspect of the Five Forces analysis, Ford needs to address suppliers as a
second-priority external threat.
THREAT OF NEW ENTRANCE:
Ford Motor Company feels the effects of new entrants on its industry
environment. The impact of new firms is considered in this aspect of the Five
Forces analysis. The external factors that contribute to the weak threat of new
entrants against Ford are as follows:
High capital costs (weak force)
High cost of doing business (weak force)
High cost of brand development (weak force)
Companies like Ford commit to huge spending to set up and maintain their
businesses and facilities. These costs are a barrier to entry that weakens the
threat of new entrants. In addition, it is costly to develop a strong brand
comparable to Ford’s, thereby making it difficult for new entrants to effectively
compete against industry giants. Based on this aspect of the Five Forces
analysis, external factors present only a weak threat against Ford.

8. STRATEGY IMPLEMENTATION
An implementation strategy is a process in which the implementation of the
strategy is defined. The implementation plan outlines the activities that are
needed to execute the organisations' strategic objectives. (Eby, 2017)

Ford needs to restructure its strategic objectives due to the impact the global
pandemic has had on its business. The new objectives are:

Taking actions to better serve customers and improving accountability.

Standardising of commercial vehicle platforms to improve global costs.
Increase innovative initiatives and update and expand current offerings to meet
customer demands.
Source talented and diverse leaders to grow a higher margin business.
Re-Organisation of the company organisational structure to continue to drive
transformation. (Ford Media, 2020)
The implementation plan will be completed in four phases consisting of
incremental blocks. Incremental blocks have a shorter time frame, a reduced
cost, are more urgent, more flexible and do not have an interdependency. The
flexibility comes with the ability to swop incremental blocks around inside of
the phase as they do not have interdependency.
The major tasks required for the overall execution of the plan are as follows:

Establish annual objectives

The purpose of defining the annual objectives is that it will be used as a
monitoring yardstick to gauge the progress. It also gives guidance to the
allocation of resources as well as organisational planning.

Allocate resources
Ø Financial Resources

Allocating financial resources is the process of drawing the budget for each
block and then the complete phase.

Ø Physical Resources

Allocating physical resources is the process of dedicating resources such as

office buildings, warehouses, vehicles, lifting equipment etc.

Ø Human resources

Allocating of human resources is the sourcing of talented individuals both

internally and externally that will lend value to the plan.

Ø Technological resources

The allocation of technological resources such as software required, upgrading

of hardware, training of staff etc.

Minimize the resistance to change

Manage the resistance to change by reducing the interdependency for
resources and the efficient dissipation of information.

Develop the organisational culture

The organisational structure of the company has to be restructured to match
the strategic objectives and prevent the decline of organisational performance.

Additional tasks that need to be addressed include:

Match managers to a task.

Develop an organisational culture.
Adapt production and operation processes
Restructure the employment fabric by removing redundant staff, promoting
staff to more effective positions and the acquiring of talented employees.
Adapt reimbursement policies to match the strategic objectives.
Create a scheduled that is achievable and includes milestones. Develop a
monitoring performance management system to gauge progress.

9. STRATEGIC EVOLUTION:
Initially, Ford’s generic strategy was cost leadership. This generic strategy
supports business competitive advantage on the basis of cost reduction and
low prices to attract customers. In the early 1900s, Ford’s vision was to make
its automobiles affordable for working-class Americans. To apply this generic
strategy, the firm developed the assembly line method to minimize costs and
maximize productivity. Ford succeeded in attracting customers based on this
generic strategy. A strategic objective for competitive advantage based on this
generic strategy is cost minimization through process streamlining.
However, Ford Motor Company’s generic strategy did not protect the business
from competition with General Motors. By 1927, GM overtook Ford to become
the largest American automobile manufacturer. GM used its generic strategy
of broad differentiation to offer a wider array of products. Americans were
gaining higher wages and started valuing style and design, and not just low
prices. Today, given its current One Ford plan, Ford Motor Company has been
moving its generic strategy to emphasize differentiation for competitive
advantage. Ford still maintains its cost leadership generic strategy. However,
the firm is moving toward the broad differentiation generic strategy to
compete against firms like GM and Toyota. Thus, a strategic objective based on
Ford’s current generic strategy adjustment is product innovation to gain
stronger competitive advantage.

10. SYNERGY
Mahindra and Mahindra (MM IN, BUY) and Ford (F US, REDUCE) have
announced that they will form a 51:49 JV. The JV will house Ford’s India
manufacturing business. MM will be responsible for running the JV in India. We
believe that the key positives from this deal are:
Improved model cycle at lower cost – MM and Ford will jointly develop multiple
products. This, in our view, will bring down capex requirements and improve
the model cycle (C-SUV platform – joint platform; B-SUV – Ford platform; MPV
platform – MM’s platform; and BEV – Ford’s Aspire platform).
Synergy from joint sourcing – the joint sourcing requirements would be $7 bn
($5.6 bn for MM and $1.4 bn for Ford). There is scope for cost savings for both
companies.
Export opportunity – Ford’s global network would support MM’s and the JV’s
exports.
Profit contribution from JV – MM management plans to make the JV more
profitable, which should contribute positively to MM’s earnings.
With combined capacity of 1.2 mn and utilisation at 65%, there would be no
need to expand capacity for a few years.

11. CHANGE MANAGEMENT

In order to introduce change, Ford Motor Company should develop a leadership
approach which meets the needs of the industry and modern business
environment. The three leadership styles applied to the car industry will be
situational, transformational and charismatic leadership (“Capitalism and the
auto crisis” 2008). Situational leadership will be the best approach to transform
and redesign car industry. Situational leadership is influenced by motivational
factors and intellectual capital. Shifting leadership function can often lead to
confusion, which should be avoided with the effective management of team
communications. Effective communication ensures that the team will know
who is in charge and glues the team together.

As a result, in an economy of abundance a heavy burden moves from the

physical production of goods to their marketing. It must be expected that costs
of marketing products will increase relative to the costs of physically producing
them. Marketing opportunities, innovations, research and development, and
other progressive activities stem from imperfections in the marketplace. In
reality, our competitive scene is often one of price confusion and not of price
clarity, as is assumed by the idea of perfect competition (“Capitalism and the
auto crisis” 2008). Perfect knowledge does not exist, non-price competition is
important, and there are fewer and bigger buyers and sellers, contrary to the
assumptions of the economist’s hypothetical competitive matrix. Technological
advances, the growth of mass national markets, and the increasing resource
requirements of research and development have an inevitable outcome —
mass-marketing organizations. In such a setting, innovation, research and
development, and advertising become significant variables; and intensely
competitive situations erode even short-run monopolies (Ford Motor Company
2009).