Ford Motor Company
Ford Motor Company
STRATEGIC MANAGEMENT
Submitted to:
Mrs. Mary Grace Mandane
Submitted By:
Beloso, Mathea Joy
Bilog, James Mark
Caringal, Kristel Imee
Delgado, Ericka
Huyo, Chasmin Angel
Manalo, Joanna Rose
Panganiban, Nina Kryztel
Tives, Shella
Group 3
BSMA 1201
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EXECUTIVE SUMMARY
Henry Ford and incorporated on June 16, 1903. Ford Motor Company's mission
mobility for people all over the world." They anticipate customer needs and offer
exceptional products and services that help people live better lives. Ford Motor
Company has long been and continues to be recognized as the king of automotive
expansion for them. They have a long history of dominating and continuing to do so in
Low sales and revenue losses are having an effect on the business. They trying to
escape financial hardships, the world was still in the midst of a financial crisis due to
unanticipated economic developments at the time. The suggested solutions for Ford
rising country's economies and manufacturing cars based on income levels. To increase
revenue and minimize general and operating expenses, studying the target market and
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gaining detailed understanding of economic surroundings, establishing distribution
succeed in the foreign and expand into new markets, the major automakers tightened
the automotive market in the 1970s due to competition from international suppliers such
as Toyota and Honda. Due to the global economic crisis and a drop in market demand
for new cars, Ford Motor Company's production in 2008 was lower than in 2007 and
2006. And the continuous competition in the market with the major competitors like
General Motors, Toyota and Chrysler, making the company in some kind of
disadvantage.
There are issues regarding the leadership and strategy style which Ford Motor
with proper leadership and arrangement of operations. On the other hand, it is long-term
problems is it is billions of loans, debts and goodwill that will take years to be paid off
since they have weak sales in the recent years. “Poor markets are an important outlet
for global innovation and for sustainable solutions, business models, and developments
that can operate through developed and emerging markets,” Boscor and Bratucu (2010)
concluded. Ford Motor Company struggled to effectively manage the opportunity, and,
as a result, the global car plan never accomplished the goal it set out to achieve.
Ford Motor Company is also in financially trouble due to a large number of loans
and debts, Ford Motor Company is still paying off a large government loan created at
the start of the Great Recession to help automakers with factory ventures, more than a
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decade after the last economic crisis. During the auto crisis that ravaged the industry
between 2008 and 2010, critics concentrated on GM and Chrysler, which both declared
Department's Troubled Asset Relief Program (TARP) to reorganize. Ford, on the other
hand, chose a different direction. But in the end, it accepted a government loan, too.
Ford believes that, despite measures taken to reduce health-care costs, the
company's costs will continue to grow for the near future. Foreign automakers, on
average, have lower healthcare and labor costs than Ford, GM, and Daimler Chrysler,
giving them an advantage. Ford seems unable to work with other automobile
manufacturers. Ford Motor Company is hoping to take steps to offset the costs of
employee benefits; however, this could also lead to negative publicity for the company.
Foreign auto makers are able to maintain lower costs with non-unionized and on
Ford’s suffering from low sales and a loss of revenue, Because of its higher cost
structure and decreased demand for automobiles, Ford faced a labor surplus. Despite
the fact that there was no work for all workers in the company, Ford paid all employees
a wage and other benefits, even if they were not contributing or involved in the
production. Due to a fall in Ford car sales, they had a surplus in their workforce.
Furthermore, they were unable to afford to pay any of the employees' salaries. They
This study evaluates Ford Motor Company's history and current issues in shifting
economic conditions, as well as issues regarding the plan of actions they believe will
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have a significant impact on their ability to expand, and which have some types of
This section covers Ford Motor Company’s causes of the problem that
its huge potential is concerned. Automobiles are very important in today's society. They
are a means of transportation and also luxury. Each and every year they come more
efficient and technically advanced for the consumers’ personal use. A company that has
been around since the first production of cars is the Ford Motor Company. Ever since,
vehicles. The company is also involved in marketing and other financial services. In
some other part, it is inevitable to have problems and issues that are involve with it.
There changed into a fast decline within side the production automobiles in US
marketplace at some point of 2005 which had negative consequences at the agency.
Factors which pulled down the call for are sluggish monetary boom geo-political events,
fee of fuels price of credit score and price of buying observed through the exceptional
marketplace with extra participation and with alternate in desire of clients created a
primary trouble which aren’t worthwhile are different predominant troubles confronted
through the organization. More than a decade after the final monetary crisis, Ford
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motors corporation nonetheless paying down a fat’s authorities mortgage created
manufacturing unit project. Ford is one in all the maximum iconic automakers in
America, however because the Great Recession showed, it’s now no longer too
massive to fail. There are many things which could reason the agency issues withinside
the future, and Ford is privy to lots of them. Here are multiple the largest threat
elements that Ford is facing, in accordance with its annual report. Here are the four key
headwinds holding things back: Weak earning, weak guidance, weak sale and Union
Talks. Ford inventory has entered an unfastened fall, touching 11-yr lows. The
dividends due to its economic arm. Steeply growing car mortgage delinquencies and a
vulnerable enterprise outlook will push Ford Motor Company into bankruptcy. Ford
One problem that Ford Motor Company faced is the Ford seems unable to work
with other automobile manufacturers because some foreign automakers have lower
healthcare and labor costs on average than Ford, GM, and Daimler Chrysler, giving
for North American auto makers is the employee's health care expenses. For Ford, in
2006 their health care expenses for U.S. employees and dependents were $3.1 billion,
and with $1.8 of that in postretirement health care.” Despite measures taken to reduce
health-care costs, Ford believes that the cost to the business will continue to increase in
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The 2008 Global Financial Crisis is generally regarded as one of the worst
financial crises since the Great Depression of the 1930s. The 2008 financial crisis
resulted in the failure of many major financial institutions, national government bailouts
of numerous banks, and worldwide stock market declines. This crisis also led to a global
recession and contributed to the European sovereign-debt crisis. Ford Motor Company
is in financial trouble due to a large number of loans in government and cause debts
including its obligations to retirees. Ford Motor Company had financially trouble and still
paying a government loan because they took out loans to fund automobile project
mentioned by Phoebe Wall Howard (2020), “In September 2009, Ford entered into an
agreement with the Department of Energy and borrowed $5.9 billion as part of a loan
program created to finance automotive projects designed to help vehicles built in the
U.S. meet higher mileage requirements and lessen U.S. dependence on foreign oil.”
concentrate on government bailouts, few have discussed in recent years the loan
program that gave out money specifically to help automakers during the same time
span.
Ford has been going through some tough times over the past few years. The
company's market share in the automobile industry is shrinking, and its cost structure is
contributing to financial losses. Ford lost $12.6 billion in 2006. Ford fared better in 2007,
with losses of just $2.7 billion. Ford's market share, on the other hand, begins to
dwindle. In 2007, its share was 14.8%--down from 26% in the 1990s. Ford is suffering
from low sales and a loss of revenue because of the contribution factors to Ford’s
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Large-Scale Labor Surplus and it went through that the company suffered from the labor
automobile. Ford's demand for automobiles had plummeted to the point that the
company couldn't afford to manufacture more. Profits plummeted, and they were forced
to take on more debt. It also happens that the company are still paying salaries for their
employees and other benefits, but the company has no benefits, and it leads that the
labor cost has increased but the values added in the company by those employees
were decreased. According to Bartleby “Ford Company faced the labor surplus because
of its high-cost structure and decreased in the demand of automobile. There was no
work for all employees in the company, but the ford paid salary and other benefit to all
employee even there are not contributing and involving in the production. As there was
decrease in sales of Ford automobile, they had surplus in their work force. Moreover,
they were unable to afford to keep all the employing paying their salary. They also had
to bear financial loss.” Ford has concluded that smaller is better—and necessary—to
achieve long-term success in the automotive industry, in order to balance its production
with demand for its goods and resolve concerns about its high labor costs.
Ford has weak leadership and policies in the face of changing economic
conditions and it leads many problems like overcoming failure and having billion of
loans, debt, and obligations that will take years to pay it off since they have low sales.
Over the years, the Ford Motor Company has faced a variety of obstacles that have put
its long-term viability in the highly competitive automotive industry to the test. In 2006,
the company was on the brink of bankruptcy, with an impending loss of $12.7 billion due
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maintain its second place as the automobile sector with the highest sales in the United
According to Hanawalt & Rouse (2010) “In 2006, Ford was about to make a loss of
$12.7 billion before the leadership of its new CEO, Alan Mulally, rescued the American
automaker. Earlier, the company experienced poor leadership, owing to the family
approach to running the multinational company. The leadership of the new CEO
accounted for the revitalization of the company since it edged its competition with
Toyota. Interestingly, the company realized profits exceeding $6 billion in 2010 amid the
global financial crisis that affected economies between 2007 and 2008.” Further, a few
between executives. The executives engaged in turf wars while in meetings, thereby
failing to reach decisions concerning key issues that affect the performance of the
thus undermining the spirit of teamwork in the management of the company. Therefore,
This part pertains about the decision criteria and alternative solutions for the
The Ford Motor Company is one in all the most important car corporations
withinside the world, with a record of extra than one hundred years. The agency has
effectively negotiated thru numerous troughs and crests in its checkered past. The case
recounts a number of the restructuring efforts made through the agency withinside the
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Nineties and 2000s. It then discusses the 'One Ford' approach in element and presents
data on how the approach changed into applied among 2006 and 2012. The case ends
strategy, ‘Way Forward’ plan, Global Growth Plan, Global product strategy, One Ford
Auto industry, Emerging markets, Recession. Since every area become running as a
separate organization, that they'd their very own production turning processes, product
improvement systems, suppliers, etc. This shape could have made feel all through the
different infrastructures have been now no longer developed. But persevering with to
perform withinside the identical way even after the trends in verbal exchange and
organization as huge as Ford, the employer had additionally did not recognize the
advantages of scale that might were made to be had through going global.
manufacturers. In that case, Ford must have manufacturing innovation because it has
an impact in every aspect of the manufacturing businesses, from design, research and
marketing and even end of life management. These innovations will create highly
respond rapidly to change and deliver entirely new customized smart products and
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forms, from new technology and changes in the supply chain to product and process
key to outperforming the competition.” The next possible solution is that Ford should
implement new strategy. To increase the effectiveness of new business ideas, you need
to have efficient business implementation strategies. George N. Root III stated that
“Formulating creative business ideas does you little good if you do not have a plan in
strengthened when management spends time analyzing different ways to efficiently put
new plans into place.” Analyzing your current marketing and sales strategy to implement
new strategies for boosting conversion will have a very positive effect on your revenue
stream.
for the owner, but one of the most frequent issues relates to financing problems. Ford
Motor Company is in financial trouble due to a large number of loans and debts. With
the business world being more dynamic and fast-paced than ever before, it's all too
common for unforeseen gaps to appear in the budgeting and corporate strategy
execution. When such financial losses arise, there are things you can take to help you
manage them and retain your market position. One solution is the Cash Flow. Plan
when and where your cash will be coming from for the next quarter, to ensure you have
contingencies in place for more pressing payments. If you are struggling to pay those
prioritized, finding alternative lenders could be the boost you need to get you out of this
cash slump. According to the Business 2 Community (2017) “Getting a short-term loan,
to get your feet back on the ground can provide some support and stability to the
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company’s financial structure whilst you work all your efforts on making improvements
to prevent this situation from reoccurring.” Next solution is the organize and prioritize
payments. Differentiate between the essential and less important costs over the next
quarter, this will allow you to project where you need to be injecting your cash flow.
expenses eating into your budget, these are key issues to business’ routinely
overspending as you will be surprised at how much you are spending on operations
when you take a closer look.” Revise ways that you can be more cost savvy with
replacements of equipment or requesting extensions from your suppliers until you have
Ford is suffering from low sales and a loss of revenue. So, the possible solution
is that it should develop strategies to grow them, without increasing costs. Making your
business more profitable involves looking at ways to increase sales revenue as well as
decreasing your costs and benchmarking your business to see where you can save
money. The one solution to improve the low sales and loss of revenue that Ford have is
to have strategy to increase sales revenue and it is the Increase productivity of your
staff. Recognize and reward staff contributions with staff performance reviews and
teach them sales skills and how to upsell products so customers make multiple
purchases at one time. Ellie Collier (2018) stated that “If your workforce is productive
and dedicated to their work, both the quality and quantity of their work will improve. This
means a greater output and you will achieve your goals as a result.” The other one
solution that has been issued of the Ford where they have been become low sales and
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have a loss of revenue is to have strategies to decrease cost which is the decrease
indirect cost. Try to minimize waste and errors in the business by training staff or reduce
defined as influence, that is, the art of influencing people so that they will strive willingly
and enthusiastically toward the achievement of group goals. Ford has weak leadership
and policies in the face of changing economic conditions. The one solution is that you
should know how to trust your employees. The best approach is not to micromanage
every detail of what has to be done but to focus on specific outcomes and trusting your
team to follow through. Having periodic checkups is best to ensure progress is being
made, rather than wanting to be on every single email or requiring your team to provide
daily status reports. Heather Monahan stated that, "Deciding to share key pieces of
information and watching how your team manages the information is a good recipe for
would rather be instructed on what to do than be left with questions and uncertainty.
Providing directions and outlining missions will motivate your team and keep them on
track. According to Freschi "When a leader does not set expectations, their direct
reports often limp through their day with no clear direction. Direct reports want to be
productive; they want to know their work has meaning and is contributing to a bigger
picture. Without expectations or goals, they are not able to prioritize the workload."
While it's important to trust your workers with their tasks, this doesn't mean you
shouldn't delegate assignments and highlight objectives to get the ball rolling. Leaders
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should set individual goals for workers and explain how they align with the broader work
of the organization.
The company is one of the world's oldest and largest manufacturers and
distributors of automobiles and auto parts. Even though the company is doing well in the
market, there are a few suggestions that can be implemented to ensure the company's
long-term success. From its core product lines, the company offers a variety of services,
such as insurance and financing, that are beneficial to customers. Base on the industry
and company analysis, some suggestions have been provided which can be applied for
To reach a larger and more diverse audience, social media marketing is rapidly
becoming the primary form of communication. Even though the organization uses a
popular social media site, other means of communication, such as blogging, can be
expanded to reach a larger audience. The reasoning behind this is that people are
becoming more reliant on bloggers, so Ford can find someone with a large following
Middle East, and Asia so as to reduce over reliance of the U.S market. This would
expand its market share and meet new demand in new market segments. The company
needs to diversify its products to meet the demands and expectations of consumers in
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the 21st century. Ford needs to carry out market and consumer demand research to
determine the major emerging market trends and patterns. Product diversification can
be achieved through the production of more fuel efficient and environmentally clean
This would meet the demand in the new segment of environmentally sustainable
and green fuel motor vehicles. Ford can adopt the strategy adopted by Toyota of
producing a variety of cars annually which fit different market segments. For example, it
can design cars that meet the income capacity of consumers in developing nations.
Ford must execute the ‘One Ford’ vision and continue to differentiate itself from
its competitors even as the economic crisis unfolds. The failure of ‘One Ford’ or the
Ford Fiesta model would be disastrous for the company. In recent years, Ford has
redeveloped a coherent corporate strategy. Ford has avoided the need for government
however, to continue these positive trends with the end goal being global profitability
and recapturing market share. Ford should not lose sight of the bigger picture while
critical that Ford continue to prepare and execute longer term growth strategies. Ford’s
viability hinges on its ability to successfully differentiate itself from its competitors, both
through price and quality. We believe that the ‘One Ford’ vision currently being pursued
is a sound and cogent strategy, but it does have its risks. First and foremost, we are
concerned that the ‘One Ford’ strategy may be over-pursued. Regional product
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differentiation is necessary to ensure that products are sufficiently geared towards
significant pressure to affect change, Ford should never again stake so much of its
future on one line of vehicles. The Ford Fiesta “World Car” will determine the future of
Ford, and while early reactions and sales are positive Ford should create high end
EXTERNAL SOURCING
This section contains some of the sources that will back-up the recommendation
Ford is one of the world's largest automakers, with a current market capitalization
of approximately $10.16 billion. However, the last five years have been particularly
unkind to shareholders of American automakers, with both General Motors and Ford
$4.00 on April 17th, 2009, after trading above $14.00 per share in February of 2005.
Ford suffered record losses in 2008, depleting cash reserves at an unprecedented rate.
Ford will most likely continue to lose money through the 2009 fiscal year, and even
optimistic forecasts predict that the company will not return to profitability until 2011.
Ford Motor Company's sales are declining, which is one of the company's problems.
According to CNBC, in 2021, “Ford previously stated that it expected the shortage to
reduce its earnings by $1 billion to $2.5 billion.” Without providing new guidance, the
company stated that it "will provide an update on the financial impact of the
semiconductor shortage" when it reports first-quarter earnings on April 28. Due to a chip
shortage, Ford Motor Company is reducing production at several North American
plants.Ford needs to find a balance between high quality and low
price of products, on the one hand, it needs to positively understand what consumer
need, in addition to what the young needs, what the elderly and women need must also
be taken into consideration, actively integrating consumer demand into the production
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and service process of cars to create high-quality products that consumers need. Then,
it
can use its vertical integration strategy and other strategies to control the cost of
production of products, and through the use of advantages of its diverse business to
provide consumers with quality services in order to reduce consumers’ costs for car
purchase and use
Ford needs to find a balance between high quality and low
price of products, on the one hand, it needs to positively understand what consumer
need, in addition to what the young needs, what the elderly and women need must also
be taken into consideration, actively integrating consumer demand into the production
and service process of cars to create high-quality products that consumers need. Then,
it
can use its vertical integration strategy and other strategies to control the cost of
production of products, and through the use of advantages of its diverse business to
provide consumers with quality services in order to reduce consumers’ costs for car
purchase and use
Ford needs to find a balance between the high quality and low price of its products, on
the one hand, while also taking into consideration the needs of the consumers.
Ford has to find a balance between the needs of the consumers and the prices of
its products. It has to also consider the various factors that affect the quality of its
products. Then, they can use its vertical integration strategy and other strategies to
control the cost of production of products, and through the use of advantages of its
When we compare Ford's revenue, we can see that the company's revenue is
revenue in 2016 is $151,800, and it will be $127,144 in 2020. We can see that Ford's
According to the findings, Ford Motors has built its goodwill in the global market
electric motor and a gas-saving engine. In accordance with the recent worldwide report,
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it has been observed that Ford Motors is the 5th largest automaker in the global market
in terms of production, while the company has captured 2nd largest position in United
States market (Schmitt, 2011). In light of the above case scenario, it has been
determined that The Xerox 914 can be considered synonymous with consistency
consumer demands, and strong patents, as well as, most importantly, leadership with
the help of a quality. The emphasis on total quality management activities, including the
production and revenue. The economy is a significant factor that influences a company
or business. Ford's operational planning recognizes the impact of the business cycle on
buyers' money management strategies. Shopper spending rises during expansion and
policies. Ford was required to survey and review the compensation package of its top
executives through austerity measures such as reward suspension and leader travel
restrictions. On the legal front, the organization seeks to achieve the quality edges
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