Ford motor company

Ford motor company PPM-IT

1. Ford Motor Company


Founders : Henry Ford Alexander Malcomson , john W. Anderson c.w.
bennett james couzens , Horace e.dodge john f dodge Vernon c fry ,
john s gary Horace h rackham , albert strelow & Charles J Woodall.
Distinction : completely transformed the process of manufacturing.
Primary Products : Cars ,Trucks and Auto Finance.
Annual Sales : $162.558 billion.
Number of Employees : 364,550.
Major Competitors : Daimler Chrysler,General Motors,Toyota.
Chairman : William C Ford Jr.
President & CEO : Jacques A. Nasser.
HeadQuaters : Dearborn,Mich.
Year Founder : 1903.

2. History
Ford Motor Company was founded in 1903 by Henry Ford and has continuously remainedunder
family ownership since this time. The company developed and implemented assembleline
production by the release of the Model T in 1909, and produced planes and vehicles for the Allies
in World War II. Ford has operated internationally since 1904, when it opened a branch
inCanada to gain access to Commonwealth markets. For the first half of the 21 stCentury, Ford
remained the dominant car manufacturer within the market it had effectively created. In 1956,
Toyota exported its first automobile to the United States, and began acquiring market share. In
hindsight this was a turning point in the U.S. market, and as the 21 st Century drew to a close
Ford faced declining market share and had difficulty remaining competitive in the global
marketplace. Ford was particularly inhibited by substantial legacy costs—primarily from
employee pensions and healthcare benefits—and falling demand for its most profitable lines of
vehicles.In 1996 the company launched the ‘Ford 2000’ initiative to streamline supply lines
andreorganize the company’s worldwide operations into a more cohesive unit. In spite of some
important successes, including the popular Ford Focus model and a streamlined organizational
structure, costs at Ford remained higher than most of the firm’s competitors.
In 2006, Ford posted its biggest operating loss to date: $12.6 billion. This coincided with
continued deterioration in market share, with the majority of these losses being captured by
Toyota and General Motors. From 1997 to 2007, Ford’s United States market share plummeted
from 25% to 15%.
In 2006, Alan Mulally was hired as CEO and took over a company at the precipice of failure.
Mulally announced a new restructuring plan in 2006 entitled ‘The Way Forward’, designed to
“better align capacity to demand”. At its core, this plan involved the closure of seven assembly
plants and strategic reorientation towards ‘One Ford’. Championed by Mulally, this strategy
focuses on creating a standard Ford personality which is seen and felt within every automobile
produced by the company. In addition, the plan entails standardizing chassis worldwide and a
greater focus on the core Ford nameplate. As a part of this plan, Ford mortgaged all of its
assets—both physical and intellectual property—in December2006 for a $23.4 billion line of
credit. While originally seen as a risky and potentially desperate move, this timely acquisition of
capital has made Ford the most stable of the Big Three carmakers. The company also divested
some of its non-Ford brands during this time, selling Jaguar and Land Rover to Tata Motors for
$2.3 billion in 2008. Ford is also currently attempting to sell Volvo, which it purchased in 1999 for
$6.5 billion.

Business Model and Market Overview

3. Ford Motor Company currently employs approximately 213,000 workers worldwide and markets
vehicles under four primary brands: Ford, Lincoln, Mercury, and Volvo. The firm isdivided into
two departments, Automotive and Financial Services. Ford Credit offers vehicle financing to both
retail consumers and to dealers. Approximately forty percent of vehicles sold by Ford, Lincoln,
and Mercury dealerships within the United States were financed by Ford Credit in 2008, a
number which has remained stable in the past three years.
In Europe, the only other region with reported data, this figure has remained steadily
around27%. Conversely, financing for wholesale purchases by dealerships is nearly
exclusively(98%) done by Ford Credit in Europe whereas in the U.S. this number is slightly
beloweighty percent. Ford Credit also plays a role in financing dealership purchases of real
estate and other larger capital expenditures by the company and its affiliates.
Ford’s automotive segment designs, manufactures, and services cars, trucks, SUVs, and vehicle
parts. This sector is primarily broken down by region: North America, South America, Europe,
and Asia Pacific Africa. The only exception to this regional model is Volvo, which operates as a
separate subsector and manages all Volvo sales worldwide. Ford retail sales operate under a
dealership model, where dealerships sign exclusive contracts with the company to sell Ford
vehicles. At the close of 2008, Ford operated nearly 3,800 dealerships within the United

States. Approximately half of these dealerships sold only the Ford brand, with another quarter
selling Ford, Lincoln, and Mercury. 1 Production of vehicles for Ford typically takes within 20
days from point of order to shipping, meaning the firm faces little to no backlog or inventory
buildup. Production is typically higher in the first two quarters to accommodate peak seasonal
demand, which occurs in the spring and summer.
SWOT (Strengths, Weaknesses, Opportunity, Threats)

Strengths

Timely acquisition of capital makes Ford more financially sound than the other Big Three carmakers.
Product line is respected by industry experts and is qualitatively seen to be a step above many of its
competitors. Recent surveys place Ford in a tie with Toyota for greatest customer satisfaction, a
significant improvement from five years ago.
Has a global market presence, with worldwide brand recognition and a particularly strong presence in
Europe.
Is perceived to be a thoroughly “American” brand, which helps Ford among certain groups of
consumers.
U.S. market share, after years of decline, has stabilized in recent years.

4. The Ford F-series pickup remains the most respected commercial truck available; despite demand
shifts, profitability on this line should remain high.
Ford has had great success, particularly when compared to its competitors, at renegotiating labor
contracts with the UAW.

Weaknesses

Poor Profitability: Ford still loses money on many automobile lines, particularly within the United
States.
Importance of single components source (Visteon).
The automotive market is highly competitive with large fixed costs. In addition, the market demands
continual long term planning and research and development.
Very little market penetration within China and India.
Global excess capacity for the automobile industry is estimated to average 30.5 million vehicles per
year from 2009-2011.
Ford is selling a durable good during the most severe economic downturn in recent history.







Opportunities

Ford has recognized the importance of small, fuel efficient vehicles and is actively transitioning into
this market. Of particular interest is Ford’s ‘EcoBoost’ technology, which the company claims will
result in 20% greater fuel efficiency and 15% fewer CO2 emissions.
The ‘One Ford’ vision has the chance to generate significant margin increases for Ford’s smaller line
of vehicles. Of particular importance is the Ford Fiesta, which was recently released in Europe and
China and is slated for an early 2010 release in North America. The ‘One Ford’ vision appears to be a
coherent strategy for Ford to adopt given its changed role within the industry.
Ford is perceived to be the most stable ‘American’ car manufacturer because it has not been forced to
take bailout money, leading to slight increases in market share.
GM and Chrysler flexibility is limited by government involvement in their debt situation, putting Ford
as a competitive advantage.
In the event of a GM or Chrysler bankruptcy, Ford has placed itself in a position to steal market
share—at least in the short term.

5. COMPETITIVE ADVANTAGE
After many decades, the company launched a new strategy plan in 2000 to focus on the 21
century. The new strategy was aimed an in creasing the market share, increase the revenues
earned and production of smart cars with fuel efficiency. Ford implemented the centralized
decision making system. This allowed the company to concentrate on the available market
opportunities both locally and internationally. With the implementation of centralized decision
making system, the top management becomes more engaged in the development of products to
satisfy the customer expectation in various markets (porter, 1986). This strategy allowed the
company to improve the communication system from top to bottom.
Ford motors adopted the strategy that allowed it low production cost by cutting all the excessive
cost involved in this operations. The huge expenditure on raw materials was cut down and the
online manufacturing process was introducd that focus on the development of cars on one
process rather than having different segments of engineering and production. This strategy was
establishes cost advantage and give the company advantage over its competitors in terms of
lower cost (porter, 1983), in the mean while company focused on producing smart cars that were
not price sensitive and offered the functionality of traditional ford cars.


The market position of ford has been enchanced due to multiple factors. Firstly, since it fought
hard against bancruptcy and refused governmental funding as its competitors did, the consumer
trust has increased in the company and its brands. Secondly, its products are widely accepted by
the cunsomers and integrating with the first factor, the company has increased market share.
Lastly, the company has adopted the strategy to provide smart cars to the cunsomers it will
further benefit the company in terms of market share and increased volumes (GLG Expert,
2009). Ford can benefit from the industrial recovery by offering and focusing on the consumer-
oriented products and give value to them while generating reasonable profits.

The demand for better fuel economic cars has increased due to high energy prices with the
increasing wealth of developing world; the ford motors currently believe in providing few
automobile models to sell around the globe with some modifications; to be called world cars.
Ford fiesta is the first world car which was designed by ford europe and was produced in US and
China. The future strategy of ford company is to develop more world cars with the idea of
providing standarized products to its worldwide markets. The company developed its
competitive edge thet carried it to the future. They introduced a technology which was already in

6. use by its competitors but wich the new perspective and modification. The tech gadget called
ford SYNC. It is a science sync-equipped in the vehicles thet can connect the driver with so many
options

Ford SYNC is a company fitted, fully integrated communication and entertainment system that
connects the users with internet, through his smart phone and allows them to make telephone
calls and control music and other functions using voice commands. This system is the integrated
interface developed by ford and microsoft that operates on microsoft Windows Embedded
Automotive operating system.





Value chain

7. Information Technology
Ford is also using information technology to improve its value chain. It has teamed-up with
Caterpillar Logistics and SAP to improve warehousing and its Daily Parts Advantage network for
getting spare parts to their dealers. Their hope in partnering with Cat Logistics was “to secure a
partner with expertise in the automotive supply chain, laying a foundation for development of a
new information system. The goal was to obtain end-to-end visibility of service parts, increase
the speed of time to market, optimize inventories at each location, and do a better job serving the
customer” (Supply Chain Brain).
Along with Cat Logistics and SAP, Ford is also using an SAS platform that supports customer
relationship management (CRM). This SAS platform enhances Ford’s existing customer

8. relationship database and provides a powerful base for information analysis, data mining and
predictive modeling thus enabling highly effective reporting, trending, segmentation, customer
scoring, and customer life-cycle analysis all of which support key activities for CRM. But
according to Jim Ader, IT coordinator for analytics at Ford, “Predictive modeling is the most
important endeavor supported by SAS platform. Using data modeling to leverage your
understanding of customers and the way that you treat them is the key to customer relationship
management. In the future, one of the big challenges for any company marketing to consumers
will be to use models more and more effectively.” (SAS)
The implementation of these information technologies has enabled the Ford value chain to
become a cost savings powerhouse for the company. Ford has been able to reduce its’ supply
chain cycle by 57% to 37 days, achieve a 40% decline in inventory levels in the U.S. and an 85%
reduction in customer back order lines.
Critical Data Elements
Ford is also adopting Lean Manufacturing practices to support continual improvement in the
value chain. Studies have suggested that there is as much as 30% waste in many
manufacturing processes. In order to combat this, Ford established the Value Analysis
Center. With these two programs, critical data elements are identified in order to determine the
best approach to eliminate this waste and add greater value to all aspects of the value
chain. “Lean” uses various technological tools, data collection sensors and data manipulation
software to describe process baselines, lead times and processes in order to discover waste in
the value chain processes. Essentially, the Value Analysis Center at Ford is its’ cost
management program.
Ford’s Generic Strategy
Most companies in the auto industry are taking similar steps to gain an advantage, but Ford has
its own strategy to get the most out of their value chain. Ford is now taking steps to enhance
supplier relations. By improving these relations, Ford hopes to ensure consistent production of
parts and supplies. By reducing the number of suppliers and offering bigger and longer contracts
to the remaining suppliers, Ford hopes to be able to reduce costs while increasing quality and
consistency. “If the parts suppliers collapse, the automakers would face paralyzing production
disruptions and financial repercussions of their own.”

9. Supplier Power
Supplier power is a significant threat to auto companies and manifests itself in severaldifferent
ways. While the primary raw materials used in vehicles (metals and resins) have many suppliers
around the globe, intermediate parts pose a greater problem. Currently, Ford wields significant
buying power over its parts suppliers. Many parts suppliers rely on contracts with only one or
two automotive firms, meaning changes in production at Ford can dramatically impact the
stability of its supply chain. In the past few years Ford has made a concerted effort to reduce the
number of suppliers it contracts with.
Since 2004, the number of parts suppliers has fallen from 3,300 to 1,600, and the company has
set a target of 750 suppliers. The goal of this process is to solidify supplier viability during
difficult economic times and combat one of the biggest threats posed to Ford: the potential for
failure or unexpected bankruptcy of a critical parts supplier The United Auto Workers Union
(UAW) is the single greatest source of supplier power vis- à-vis Ford, GM, and Chrysler. This
union controls the majority of the U.S. labor supply for the Big Three, which leads to higher costs
per worker. Ford has been particularly successful recently in reaching cost concessions with the
union, however, lowering the average wage from approximately $70 per hour to $55 per hour in
an agreement reached in March 2009.
The largest difficulties, however, are with co-called legacy costs: retirement, benefits, and
healthcare costs. In the past, these costs have been significantly higher than its international
competitors such as Honda and Toyota. Ford has again been more successful than both GM
and Chrysler in reducing these costs, successfully renegotiating multiple contracts by swapping
equity contributions for cash infusions. In the long run, we believe that these recent negotiations
may finally have turned the tide against this strategic disadvantage. Of particular importance is
the structural changes which have been made regarding healthcare benefits and other legacy
costs.

Ford India Private Limited


Anurag Mehrotra - Executive Director of Marketing,
Sales & Service at Ford India

Anurag Mehrotra is the executive director of Marketing, Sales &
Service at Ford India. Anurag leads the responsibility for all aspects of

10. MS&S operations of Ford India including revenue, sales volume,
market share, marketing strategy & launches as well as dealer
development, after sales service and overall customer satisfaction.
Anurag previously served as vice president, Sales at Ford India and
was responsible for looking after Ford’s growing sales network in
India. Earlier, he also served as the vice president Marketing at the
company and was instrumental in designing and implementing
successful marketing campaigns for Ford’s product range in India.
Before joining Ford India, Anurag was vice president – Corporate
Marketing at WNS Global Services, a leading business process
outsourcing company, where he was responsible for lead generation
and brand building in North America and Europe.
Before WNS, he worked as vice president with Accenture India where
he was responsible for marketing and communication for Accenture's
delivery centers for Technology and the India consulting business.
Anurag has a degree in Electronics Engineering and a diploma in
marketing management.


Rahul Gautam - Vice President, Marketing, Ford India
Rahul Gautam was appointed Vice President, Marketing, Ford India
effective August 2015 and reports to Anurag Mehrotra, Executive
Director of Marketing, Sales and Service at Ford India. He is based
out of the Ford India office in Gurgaon.
In this role, Rahul drives all product strategy and brand building efforts
being undertaken by the company as it strengthens its product
portfolio and undertakes several benchmark consumer experience
initiatives.
With Ford since 2003, Rahul has held several responsibilities across
product strategy, sales and marketing in India as well as Asia Pacific
region. With immense experience in conceptualising and executing
brand launch campaigns, Rahul has been involved in development
and launch of some of Ford’s most successful nameplates i.e. Ford
Figo, Ford EcoSport, Ford Aspire and Ford Endeavour in India till
date. Rahul has also served as B-Car product marketing lead for Ford
Asia Pacific, based in Shanghai during 2010-2013 contributing
towards development of Ford EcoSport and All-New Figo & Aspire.

11. Rahul is an MBA from Faculty of Management Studies, Delhi
University. He did his Bachelors in Mechanical Engineering from Delhi
College of Engineering.

George Elisseou- HR Director, Ford India

George Elisseou is the HR Director, Ford India and is based in
Chennai. With Ford in India since April 2015, George is responsible
for spearheading employee initiatives spanning across talent
acquisition, training and development, HR technology deployment
along with diversity and inclusion.
In his previous assignments, George was the Asia Pacific HR
Director, Finance and Business Strategy Group. George started his
career with Ford in Australia gaining experience across a variety of
profiles in the field of Human Resource across Ford Credit and other
domains. In January 2010, he was appointed General Manager
Human Resources for Ford Thailand where he led the development,
establishment and launch of the new Ford Thailand Manufacturing
Plant.
George has a Bachelor’s Degree in Arts (History and Sociology) from
La Trobe University, Melbourne.

David Schock - Chief Financial Officer, Ford India

David Allan Schock, has been with the Ford Motor Company for more
than 26 years. He joined the company as an audit analyst and has
held numerous position across geographies including North America,
Europe and Asia Pacific. Before being appointed as the Chief
Financial Officer of Ford India, David worked with Ford Asia Pacific
operations as a product development controller, overseeing resource
allocation and investments on new products for markets across the
region.

12. Go further
Type Subsidiary
Industry Automotive
Founded October 1995 (as Mahindra Ford India
Limited)
Headquarters Maraimalai Nagar, Chennai,Kanchipuram
district, Tamil Nadu
[1]

Key people Nigel Harris - President, Ford India
Products Automobiles
Number of
employees
10,000
Parent Ford Motor Company


Sales and service Network
Presently, Ford has more than 376 sales and service outlets in 209 cities across
India.

Sales performance
In the year 2010, FIPL recorded sales of 83,887 vehicles against 29,488 vehicles
sold during the year 2009 and registered a sales growth of 172%.

13. Exports
Ford India currently exports 40 percent of its engine production and 25
percent of its car production to 35 countries, some of them are, South
Africa, Nepal, Mexico, Kenya, Bahrain, Angola, Bermuda, Ghana, Iraq,
Liberia, Lebanon, Malawi, Madagascar, Mauritius, Nigeria, Senegal,
Tanzania, UAE, Zambia and Zimbabwe

Corporate social responsibility

Ford India’s CSR activities are focused primarily in four key areas: road
safety, education, healthcare, and environment.

Manufacturing facilities
FIPL's main manufacturing plant located in Maraimalai Nagar, 45 km
from Chennai has a capacity to produce 150,000 cars on a two-shift
basis and 200,000 with three shifts. In 2010-11, the company's
production crossed the 100,000 mark.
[5]

As its new hatchback Figo was launched in March 2010,
[6]
Ford Motor
Company has invested $500 million to double capacity of the plant to
200,000 vehicles annually and setting up a facility to make 250,000
engines annually.
[7][8]
The engine plant opened for operations in January
2010.
[9]

To meet the growing domestic demand and with an eye on engine
exports, the company has invested $72 million to raise engine
production capacity to 330,000 units.
[10]

The company is rolling out the urban SUV Ford EcoSport in June 2013.
It had announced a $142-million investment on this. With Ford EcoSport,
the Chennai plant will ramp up to full capacity (200,000 units). Last year,
production touched 127,000 units.
[11]

As part of its plan to launch 8 new vehicles by 2015, the car maker is
pumping in an investment of $1 billion for a new state-of-the-art
manufacturing plant at Sanand, Gujarat. The plant is coming up on 460
acre site. It will have an initial installed capacity to manufacture 2,70,000
engines and 2,40,000 vehicles a year. Coming up alongside the plant is
the supplier park spread across 150 acres and the company has

14. attracted 19 world-class supplier manufacturers to date. The plant is
expected to commence production by 2014.
[12]

Once the Sanand plant is fully operational, Ford India will have a
cumulative capacity to make 440,000 cars and 610,000 engines
annually