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Hamill Bassue Owen Hendershot Goran Nagradic

Overview
Company Overview
Fords brief history Mission and Vision statement Current Objectives & Strategies

Strategy Formulation

New Mission and Vision External Assessment


Industry Analysis Opportunities & Threats EFE Matrix

Strategic Plan for the Future Implementation Evaluation


EPS/EBIT Other issues Objectives Strategies

SWOT Matrix BCG Space Matrix IE Matrix Grand Strategy Matrix QSPM Matrix

Internal Assessment
Strengths & Weaknesses Financial ratios IFE Matrix

Ford 2008 Update

About the Company


Manufactures and distributes automobiles on six continents, strong presence in all 50 states. Employs approximately 224,000 people and operates 90 plants worldwide. Brands include Ford, Lincoln, Mercury, Volvo, Mazda and Ford Motor Credit Company (financial service).

Fords Brief History


1903 Ford Motor Company founded in Michigan 1908 Model T introduced 1913 first moving automobile assembly line in the world 1956 Fords stocks go on sale (10.2 million shares sold the first day) 1987 beginning of the acquisitions of other brands 1988 Ford Motor Company reached the peek

Management

Mission & Vision Statement


"To become the world's leading consumer company for automotive products and services. - Ford doesnt have vision statement

Objectives
To contribute to stabilizing the climate by considering reducing longterm emission To promote the development of an infrastructure that will expand the use of bio-fuels and help reduce our dependence on oil To cut the usage of global energy by 27% and the usage of water by 25%

Strategies
Utilizing their advance technology Building of smaller vehicle Cost reduction Market expansion through joint venture and strategic alliance

New Mission & Vision Statement


- Both mission and vision are one statement Our vision is to become the world's leading consumer manufacturing company for automotive products and services.To achieve this, we the company and all our employees are dedicated to provideall our customers and the community with safe innovative productsand services of world class standards.Through our engineering excellence, high quality and the use of our constantly upgrading technologywe limit the harm that we cause to the environment while delivering superior value to our customers. Our close knit working environment allows our employees, community and business partnerto share in our success, while achieving a substantial return on our shareholders investment.

External Assessment

Industry Analysis
Global Automobile Industry Value Global Automobile Industry Volume

Industry Segmentation

Industry Segmentation

Industry Market Share

Industry Forecast

CPM
Critical Success factors DiamlerChrysler Toyota AG Weigh Rati Weighted Rati Weighted Rati Weighted Ratin Weighted ts ng Score ng Score ng Score g Score 0.0 to 1 to 1 to 1 to 1 to 1.0 4 4 4 4 0.14 2 0.28 3 0.42 2 0.28 3 0.42 0.10 0.16 0.20 0.15 0.18 0.07 1 2 1 3 4 3 3 0.2 0.16 0.6 0.6 0.54 0.21 2.59 4 3 4 3 3 4 0.4 0.48 0.8 0.45 0.54 0.28 3.37 3 1 2 4 2 3 0.3 0.16 0.4 0.6 0.36 0.21 2.31 3 4 2 3 2 3 0.3 0.64 0.4 0.45 0.36 0.21 2.78 Ford GM

Global Expansion Financial Position Growth US Market Share Customer Loyalty Hybrid/Fuel Efficient Vehicles Management Experience Totals

Opportunities & Threats


Opportunities Consumers demand hybrid and fuel efficient vehicles Increase in consumer spending trends Consumers demand more innovative vehicles Global expansion Industry experiences slow and steady growth Threats Weak USD Increase in steel and resin pricing Increasing gasoline prices Stricter CO2 emission standards Increasing mortgage rates

EFE Matrix

Internal Assessment

Stock performance

Financial Highlights
Income Statement Balance Sheet Cash Flow Statement

Ratios

Strengths & Weaknesses


Strengths
Strong and globally positioned brand names Large employee base with highly educated engineers and good R&D department One of the largest automotive manufacturer (along with a long history) 1285% increase in net cash Huge increase in total

Weaknesses
A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls causing losing customers) Lack of management of the company EPS very bad in negative numbers (unattractive for the investors)

IFE Matrix
Key Internal Factors Weights Rating Weighted Score Internal Strengths Strong and globally positioned brand names Large employee base with highly educated engineers and good R&D department One of the largest automotive manufacturer (along with a long history) 1285% increase in net cash Huge increase in total equity Internal Weaknesses A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls - causing losing customers) Bad management of the company EPS very bad - in negative numbers (unattractive for the investors) Totals 0.0 to 1, 2, 3 or 4 1.0 3 or 4 0.13 4 0.09 3 0.06 0.09 0.11 1 or 2 0.1 0.12 0.12 0.08 0.1 1 2 1 1 2 1 0.2 0.12 0.12 0.16 0.1 2.38 3 3 4

0.52 0.27 0.18 0.27 0.44

Strategic Formulation

SWOT Matrix
Strengths S 1.Strong globally positioned brand names 2.Large employee base with highly educated engineers and good R&D department 3.One of the largest automotive manufacturer (along with a long history) 4.1285% increase in net cash 5.Huge increase in total equity Weaknesses W 1.A lot of time spent to actually put the product on the market 2.Recording continuous losses (net income) from 2006 3.Low quality of new products (recalls - causing losing customers) 4.Lack of management of the company 5.EPS very bad - in negative numbers (unattractive for the investors)

Opportunities O 1. Consumers demand hybrid and fuel efficient vehicles 2.Increase in consumer spending trends 3.Consumers demand more innovative vehicles 4.Global expansion 5.Industry experiences slow and steady growth

SO WO 1.Developing new vehicles on alternative fuels 1.Relocate the production to cheaper country (S1, S2, S4, O1, O3. O5) with lower taxes (W2, W4, O4, O5) 2.Offer new innovative products increase market share - motorbikes (S1, S2, S3, O2, O3, O5) 3.Concentrate on making the best fuel efficient cars (S1, S2, S3, S4, O1, O4, O5)

Threats T 1.Weak USD 2.Increase in steel and resin pricing 3.Increasing gasoline prices 4.Stricter CO2 emission standards 5.Increasing mortgage rates

ST WT 1.Build eco-friendly products from alternative 1.Merge with competitors (W1, W2, W5, T2, T3, materials (S2, S3, S4, T2, T3, T4) T5) 2.Produce more cars for foreign market (S1, 2.Manufacture only parts for automobiles (W1, S2, S4, T1, T4) W2, T1, T2)

SPACE Matrix
Conservative FS
+6 +5 +4 +3 +2 +1

Aggressive

IS
-6 -5 -4 -3 -2 -1 -1 -2 -3 -4 +1 +2 +3 +4 +5 +6

Defensive

-5 -6

Competitive
28

BCG Matrix
Revenue % Profit % Profit % s Revenues Market Share NA SA Europe PAG Asia Total 69365 7585 36330 33067 8032 154379 45% 5% 24% 21% 5% 100% -4161 1172 744 -1872 206 -3911 61% 30% 81% 38% % Growth Rate -0.1 +33 -3 +10 +3 -

BCG Matrix
High 1.0 Low 0.0 Relative market share position in the industry Medium .50
S A

High +30 Medium 0 Low -3 Industry sales growth rate

AP A

NA

IE Matrix
Hold and Maintain

31

Grand Strategy Matrix


Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

Matrix Evaluation
Alternative Strategies Forward Integration BCG IE SPACE x GRAND COUNT 1 Backward Integration x 1 Horizontal Integration x 1

Market Penetration

Market Development

Product Development

Concentric Diversification

Conglomerate Diversification

Horizontal Diversification

Joint Venture

Retrenchment

Divestiture

Possible Strategies
Developing new vehicles on alternative fuels (S1, S2, S4, O1, O3, O5) SO1 Offer new innovative products increase market share (S1, S2, S3, O2, O3, O5) SO2 Concentrate on making the best fuel efficient cars (S1, S2, S3, S4, O1, O4, O5) SO3

QSPM

Strategic Plan for the Future

Objectives for the 2008 2010


Reduce manufacturing expenses by 1520% 2008 Introduce new small fuel efficient vehicles 2009 Enter Latin American and Asian market with hybrid vehicles 2010 Develop affordable electric car for US market 2009-2010 Increase market share 2009-2010 Build up strong financials (increase net income and EPS by 15%) 2009-2010

Recommendation
Manufacturing of new small fuelefficient vehicle $ 7,000,000,000 Entering the Latin American and Asian market with hybrids $ 20,000,000,000 Implementation of electric car in the US market $ 13,000,000,000 Total Cost = $ 40,000,000,000

Implementation

EPS/EBIT
Amount needed: $40,000,000,000 Stock price: $7.42 Interest rate: 7.5% Tax rate: 0% (firm is having a loss) # of shares outstanding: 2,195,000,000 # shares needed: 500,404,312

EPS/EBIT
*data in $ billion Common stock financing Recession EBIT Interest EBIT Taxes EAT #shares EPS 10 0 10 0 10 2.695 3.71 Normal 20 0 20 0 20 2.695 7.42 Boom 40 0 40 0 40 2.695 14.84 Debt financing Recession Normal 10 1.5 8.5 0 8.5 2.695 3.15 20 1.5 18.5 0 18.5 2.695 6.86 Boom 40 1.5 38.5 0 38.5 2.695 14.28

Other Issues
Laws and regulations in foreign countries Regain lost trust in the Fords brand

Evaluation

Ford 2008 Update

Industry Update

Sources

Ford Motor Company Annual Report 2007 General Motors Annual Report 2007 http://www.ford.com/about-ford/investor Datamonitor
Global Automobile Industry manufacturer 2006

Pictures taken from Web

Questions???