SanBedaCollege

Mendiola,Manila
20152016
StrategicManagement

TRANSPORTATIONSERVICES:
FORDMOTORCOMPANY

Oyzon,Paolo
Realiza,JohnBelle
Tingao,Nurwayda
Tubay,BernadethB.
Tugade,AnnaPatriciaP.

TABLEOFCONTENTS
I.
II.
III.

IV.

V.

VI.
VII.

VIII.
IX.

X.
XI.

INTRODUCTION
RESEARCHDESIGNANDMETHODOLOGY
COMPANYSVISIONANDMISSION
MissionandVision
Evaluation
Recommendation
Values,BusinessStrategyandObjectives
EXTERNALANALYSIS
Sociocultural,Demographic,andEnvironmentalForces
TechnologicalForces
EconomicForces
Political,Governmental,andLegalForces
INDUSTRYANDCOMPETITIVEANALYSIS
IndustryAnalysis
PortersFiveForcesFramework
Competitors
CompetitiveProfileMatrix(CPM)
EXTERNALFACTOREVALUATION(EFE)
Opportunities
Threats
INTERNALANALYSIS
Management
SalesandMarketing
Operations/Production
ResearchandDevelopment
FinanceandAccounting
ManagementInformationSystems
INTERNALFACTOREVALUATION(IFE)
Strengths
Weaknesses
STRATEGYFORMULATION
TOWSMatrix
StrategicPositionandActionEvaluation(SPACE)Matrix
InternalExternal(IE)Matrix
BostonConsultingGroup(BCG)Matrix
TheGrandStrategyMatrix
SummaryofStrategyFormulationTools
QUANTITAIVESTRATEGICPLANNINGMATRIX(QSPM)
OBJECTIVES,STRATEGYRECOMMENDATION,ANDACTIONPLANS
StrategicObjectives
RecommendedBusinessStrategies
TheStrategyMap
DepartmentalPrograms

XII.

XIII.

STRATEGYEVALUATION,MONITORING,ANDCONTROL
BalancedScorecard
FinancialPerspective
CustomerPerspective
InternalBusinessPerspective
LearningandGrowthPerspective
FINANCIALPROJECTIONS
3YearIncomeStatementsProjection
REFERENCES
APPENDIX

I.

INTRODUCTION

FordMotorCompany,anAmericanmultinationalautomaker,wasestablishedand
incorporatedbyHenryFordonJune16,1903.Itmanufacturesandsellscommercial
vehiclesundertheFordbrand,andmostly,luxurycarsundertheLincolnbrand.The
transportationcentered company spearheaded largescale production of cars and
managementofanindustrialworkforcethroughengineeredmanufacturingsequencesas
characterizedbymovingassemblylines,whichbackthen,wascalledFordismin1914.
Laterthatyear,itrananinhousepartproductioninaverticalintegration.Duringthe
year2010,Fordrankedhighindifferentpositions:2ndinLargestU.S.basedautomaker,
5thintheWorldbasedVehicleSalesandintheLargestAutomakerinEurope,and8 thin
OverallAmericanbasedCompanyin2010FortuneList.

Withitsfulfillingsuccess,ithasproducedmassivelyindifferentcornersoftheworld.
It markets primarily in Saudi Arabia, Kuwait and in United Arab Emirates. The
corporationalsooperatesinNorthAmerica,Europe,Oceania,EastandSoutheastAsia,
SouthandWestAsia,SouthAmerica,andinAfrica.Additionally,ithasmanagedto
expanditsbusinessbyexploringoptionsofmanufacturingnotonlyusualautomobiles,
butalsotrucks,buses,tractors,automotivecomponents,andfinancialcreditingservices.
Financial reports in 2014 of Ford Motor Company, having a $7.4 billion spending,
claimedithasgenerated$135.8billionautomotiverevenue,gaininga3.9%automotive
operationmargin,whileobtaininga$3.6billionoperationrelatedcashflow.Itstateda
$1.9 billion credit pretax profit, and total company pretax profit of $6.3 billion.
Moreover,thecompanydisclosesatotalassetsizeamountingto$208,527,000andtotal
shareholdersequityof$24,805,000inits 2014financialstatements.Thecorporation
providesbenefitstoapproximately187,000employees.
FordMotorCompanyisfacingdifficultyinfurnishingreturnoninvestments,despite
havingrelativelyhighcashinflow.ItsoperationsinEurope,Indonesia,andJapanare
ineffectivelymanagedleadingtoclosureandretrenchment.Theorganizationisnotonly
affectedbyitsusualexternalfactors,butalsobythenatureandslow growthofthe
transportationindustry.
II.

RESEARCHDESIGNANDMETHODOLOGY

III.

VISIONANDMISSIONSTATEMENT

VisionStatement
People working together as a team, global enterprise to make peoples lives
betterthroughautomotiveandmobilityleadership.
MissionStatement
ONEFORD:OneTeam.OnePlan.OneGoal.

OneTeam:Peopleworkingtogetherasalean,globalenterpriseforautomotive
leadership, as measured by: Customer, Employee, Dealer, Investor, Supplier,
Union/Council,andCommunitySatisfaction.
OnePlan:Aggressivelyrestructuretooperateprofitablyatthecurrentdemand
andchangingmodelmix;Acceleratedevelopmentofnewproductsourcustomerswant
andvalue;Financeourplanandimproveourbalancesheet;Worktogethereffectivelyas
oneteam.
OneGoal:AnexcitingviableForddeliveringprofitablegrowthforall.

VisionStatementEvaluation
Parameter

Yes/No

Why?

Does it clearly answer the Yes

question:Whatdowewant
tobecome?

They have clearly stated in

their vision statement what
theywanttobeandhowto
achieveit.

Is it concise enough yet Yes

inspirational?

Their vision statement is

inspirational and very
straightforward.

Isitinspirational?

The reader is not only

informed on what Ford
wants to become but the
readerwillalsoseethatFord

Yes

caters the needs of the

customerswiththesolidarity
of the people behind the
company.
Doesitgiveclearindication No
as to when it should be
attained?

The vision statement is not

timebound.

MissionStatementEvaluation
Parameters

Yes/No

If Yes, which part of the

statement?

1. Customers

Yes

Peopleworkingtogetheras
alean,globalenterprisefor
automotive leadership, as
measuredby:Customer...

2. ProductsandServices

Yes

Acceleratedevelopmentof
newproductsourcustomers

wantandvalue
3. Markets

Yes

Acceleratedevelopmentof
newproductsourcustomers
wantandvalue

4. Technology

Yes

Peopleworkingtogetheras
alean,globalenterprisefor
automotiveleadership

5. Concern for survival, Yes

growthandprofitability

Aggressively restructure to
operateprofitably
Finance our plan and
improve our balance
sheet
An exciting viable Ford
deliveringprofitablegrowth
forall.

6. Philosophy

Yes

An exciting viable Ford

deliveringprofitablegrowth
forall.

7. Selfconcept

Yes

Peopleworkingtogetheras
alean,globalenterprisefor
automotiveleadership

8. Concernforpublicimage

Yes

CommunitySatisfaction

9. Employees

Yes

Peopleworkingtogetheras
alean,globalenterprisefor
automotive leadership, as
measuredby:Employee

Recommendations
RecommendedVision

People working together as a team, global enterprise to make peoples lives in the
millennialbetterthroughautomotiveandmobilityleadership.

ThenewvisionnowhasaclearindicationonwhenFordseesitselftohaveateam
thatworkstogethertomakepeopleslivesbetterthroughtheirautomotiveandmobility
leadership.Thevisionnowmainlywantstomakethecurrentgenerationbetter.
RecommendedMission

Thereisnorecommendedmission.

BusinessStrategyandObjectives
Fordworkstowardtheirvisionbyofferingvarietyofproductswithbestinclass
quality,fuelefficiency,safetyandsmartdesignthatwouldfittoanypersonsneedor
want.Theyalsomaintainabalancedportfolioofproductsandmakesurethattheyhave
globalpresence.Morethanthat,theyarealsocreatinglongtermconsumerandemployee
valuebycreatingagreenstrategythatisaimedtowardthenaturalenvironmentand
taking into consideration every dimension of how a business operates in the social,
cultural,andeconomicenvironment,thustheBetterWorld.ThekeyelementstoFords
sustainabilitystrategyincludethefollowing:
o Participation in sciencebased climate strategy, greenhouse gases
stabilizationintheatmosphere,bymakingittheirabsolutereductiongoal
thatspanstheirproductsandfacilities.
o Theirgoalistomakemobilityaffordableineverysenseoftheword
economically, environmentally and socially and to provide seamless
mobilityforall.
o Theyhaveadoptedacomprehensivewaterstrategythatcorrespondstothe
key elements of the CEO Water Mandate and is based on five key
platforms designed to effect substantial, sustainable and measurable
impacts.

o They have developed policies and systems to understand and address

humanrightsandothersocialandenvironmentalrisksthroughouttheir
operations.TheirhumanrightsstrategyincludesadherencetotheirCode
of Human Rights, Basic Working Conditions and Corporate
Responsibility (Policy Letter 24), intheir own operationsand in those
oftheirsuppliers.
Fordaimstohaveprofitablegrowthacrossgeographiesandproducttypes.
Fordfocusesonthreestrategicpriorities:acceleratingthepaceprogressofthe
OneFordplan;deliveringproductexcellencewithpassion;anddrivinginnovationin
everypartofthebusiness.
Fordisacceleratingthepaceofprogressbyfocusingontheirmission:ONE
FORD:OneTeam.OnePlan.OneGoal.Forddeliversproductexcellencewithpassion
byhavingthebestandfreshestproductlineup.Lastly,Fordcontinuestoinnovatein
everypartoftheirbusinessgiventhattheyareinanindustrythatisrapidlyevolvingand
newtechnologysignificantlyaffectsthebusiness.

IV.

EXTERNAL ANALYSIS

Manygovernmentalstandardsandregulationsrelatingtosafety,fueleconomy,
emissions control, noise control, vehicle recycling, substances of concern, vehicle

damage, and theft prevention are applicable to new motor vehicles, engines, and
equipmentmanufacturedforsaleintheUnitedStates,Europe,andelsewhere.Inaddition,
manufacturingandotherautomotiveassemblyfacilitiesintheUnitedStates,Europe,and
elsewherearesubjecttostringentstandardsregulatingairemissions,waterdischarges,
andthehandlinganddisposalofhazardoussubstances.
V.

INDUSTRY AND COMPETITIVE ANALYSIS

Industry Analysis
Inthepastyears,theautomotiveindustryhasbeenexperiencingrelativelystronggrowth
andprofitability.Continuousgrowthishardtoachievebecausetherearesomanychallengesthat
arebeingfacedbytheindustry.Theunevennessofglobalmarketsisconsideredtobethemain
challengefortheindustry.
Thegrowthforecastatthegloballevelin2015isamere2.1%comparedtothegrowth
rateof3.1%between2007and2014.Ontheotherhand,thereisahealthierexpectedreturnin
2016and2017of5.1%and4.7%,respectively,ascrisismarketsstabilizes.
Growthamongdifferentcountries seemstobe verydifferent fromeachother.Asian
countrieslikethePhilippinesiscontinuouslyexperiencinggrowthinsales,mainlybecauseof
continuousattractivemarketingeffortsandflexiblefinancialoptionswhileIndiasautoindustry
is both doing good in their domestic sales and export sales. However, growth in China has
slowed,therehasbeenstockturmoilandrisingofinventorywhichleftfinancialstainondealers
thatledtofactoryshipmentsslowdown.Ontheotherhand,Europecontinuesonitsrecovery
journey generally low credit and financing rates, low fuel prices, improving employment
expectationsandonslaughtofnewattractiveproducts.Meanwhile,salesinNorthAmericaarehot
duetothecontinuanceofnearhistoriclowsinfinancialrateswhileSouthAmericacontinuousto
strugglethroughrecessionandsaleshaveexperiencedthesteepestdeclineinsalessince1998.
Thisshowsthatautomobileindifferentcountrieshaveverydifferentgrowthfromeachotherand
thusmakingithardtostabilizetheoverallgrowthoftheautomotiveindustry.
Additionally,theworldwideautomotiveindustryisgreatlyaffectedbygeneraleconomic
conditions on which the industry has very little control over. The purchase decisions of
consumersaresignificantlyaffectedbyslowingeconomicgrowth,geopoliticalevents,andother

factorssuchasthedurabilityofvehiclesinwhichconsumerswillhavelatitudeindetermining
whetherandwhentoreplaceanexistingvehicle,andofcourse,thechangingpreferencesof
consumers,andtheexistenceofotheralternativessuchasUber,GrabTaxis,electriccars,water
fueledcarsandothers.Whilethesealternativesexist,itisalowthreattotheautomotiveindustry.
Theindustryisundeniablyhugeasitconsistsofmanyproducersbutwithnosingle
dominantproducer.ThekeycompetitorswithglobalpresenceincludeFordandLincoln,Flat
Chrysler Automobiles, General motors Company, Honda Motor Company, HyundaiKai
Automotive Group, PSA Peugeot Citroen, RenaultNissan B.V., Suzuki Motor Corporation,
ToyotaMotorCorporation,andVolkswagenAGGroup.

Competitors
Graph1

U.S. Sales Market Share from 2010-2014

25

2010

20

2011

15

2012

10

2014

2013

5
0

Source:WardsAuto

Graph2

Ford

GM

Toyota

Gross Profit Margin

30.00%
25.00%

2010

20.00%

2011

15.00%

2012

10.00%

2013
2014

5.00%
0.00%

Ford

-5.00%

GM

Toyota

-10.00%
Source:YCharts,Inc.

Graph1showsthemarketsharesofFord,GMandToyotaintermsofsales.GM
experiencedthehighestsales consistentlyfrom2010to2014whereas Toyotaisconsistently
earningbutlowerthanGMandFord.Ford,however,experiencedasequentialdeclinefrom2011
to2014.
Ford,GMandToyotaarejustfewofmanycompaniesthatpursuemassstrategy.
Massstrategyincludestheloweringofsellingprice,reducingthemanufacturingcostpervehicle
byincreasingvolume.
InGraph2,itisapparentthatToyotaisthemorestableonewhenitcomestogross
profitmarginthisisbecauseToyotaisknowntobetheparagonofleanproductionandhaslow
inventoryproductdemand.Ford,however,seemstobethemostfluctuantandnotstablewhile
GMissomewhatdoinggoodevenwiththenegativegrossmarginin2012.

CompetitiveProfileMatrix

CPMisatoolthatcomparesthefirmanditsrivalsandrevealstheirrelativestrengths
andweaknesses.

FORD

CPMTable
CriticalSuccessFactor

TOYOTA

GENERAL
MOTORS

Weight

Rating

Score

Rating

Score

Rating

Score

1.BrandReputation

0.12

0.36

0.48

0.24

2.FinancialPosition

0.08

0.24

0.32

0.16

3.GlobalExpansion

0.11

0.22

0.44

0.33

4.ProductQuality

0.10

0.30

0.40

0.20

5.MarketShare

0.14

0.28

0.56

0.42

6.FuelEfficientVehicle

0.09

0.27

0.36

0.18

7.CustomerLoyalty

0.10

0.40

0.30

0.20

8.InnovativeCulture

0.09

0.27

0.36

0.18

9.ProductDesign

0.10

0.30

0.20

0.40

10.SuccessfulPromotions

0.07

0.21

0.28

0.14

TOTAL

1.00

2.85

3.70

2.45

TheCPManalysisrevealsthatthestrongestplayerintheindustryisToyotawith
relativestrengthinbrandreputation,financialposition,globalexpansion,productquality,
marketshare,fuelefficiency,innovativeculture,andsuccessfulpromotions.Ontheother
hand,Fordprevailsincustomerloyaltyandisdoingwellwithotheraspects.General
Motorsistheweakestofthemallhavingonlyarelativestrengthinproductdesign.The
companies should improve their ratings by creating strategies that would make their
weaknessesintostrengthswhilemaintainingtheircompetitiveadvantage/s.
AccordingtoaCarBrandPerceptionsurveyin2014with1,578participantsthat
hadatleastonecar,ToyotaledintheoverallbrandperceptionwithFordinthesecond
place and General Motors Chevrolet and Cadillac in the fourth and ninth place,
respectively.Theresultwasbasedonfactorssuchasquality,safety,performance,value,
fueleconomy,design/style,andtechnology/innovation.Onquality,fuelefficiency,and
innovativecultureToyotaisleadingwhileFordandGeneralMotorsChevroletfollow.
Ontheotherhand,GeneralMotorsCadillacandChevroletleadinproductdesign.

In terms of financial position, global expansion, and successful promotions,

Toyotaprevailsgiventhattheyareoperatingin170countriesandregionsitislikelythat
theirassets,liabilitiesandequityaremuchmorehigherthanofFordandGeneralMotors.
FordandGeneralMotorsoperatein31and37countries,respectively,butFordisstilla
stephigherwhenitcomestofinancialpositionthanGeneralMotors.Toyotaisalsolikely
toleadsuccessfulpromotionsthanofFordandGeneralMotorsbecausetheyaremore
presentglobally.

VI.

EXTERNAL FACTOR EVELUATION (EFE) MATRIX

Key External Factors

Weight

Rating

W. Score

1. Mitsubishi Motors Montero Sport sudden .08

acceleration issues
2. Strong drive of acquiring a car in Philippines
.15

.24

.60

3. Reintroduced Lincoln Continental in

expanding Chinese market
4. Combination with Cisco would work best

the .10

.30

.10

.20

.08

.24

.15

.15

2. Reviving of car brands in the Filipino domestic .10

market
3. Varying oil prices
.12

.10

.12

4. New admission of high tech firm opens China .08

Factory
5. Cabs make car firms rethink sales plans
.05

.16

.10

OPPORTUNITIES

5. Toyota discontinues Scion

THREATS
1. Aggressive competitive rivalry

TOTAL

1.00

2.21

FordsExternalFactorEvaluation,EFE,comprisesofopportunitiesandthreats
that used to assess their current industry condition. These will help to evaluate the
differentexternalfactorssuchaseconomic,social,cultural,demographic,environmental,
political,governmental,legal,technological,andcompetitivefactorsthatcanaffectthem.
Also,tovisualizeandprioritizetheopportunitiesandthreatsthatFordsfacing.Through
identifyingopportunitiesandthreatswithintheindustry,Fordcanmeasurehowwellthey
are responding to the key factors. Each factor is assigned a weight according to
importance.Zeromeansnotimportant.Onemeansthatthefactoristhemostsignificant
andcriticalone.Theentireweightstogethershouldequal1.Eachfactoristhenrated

accordingtohowwellFordisrespondingtothatfactor.Eachopportunities,mustberated
as4(superiorresponse)or3(aboveaverageresponse),andeachthreatsmustberatedas
a1(poorresponse)or2(belowaverageresponse).Multiplyeachfactorweightwithits
ratingtogiveaweightedscore,andaddallweightedscoresforeachfactortocompute
thetotalweightedscoreofFord.FordweightedEFEscoreis2.21whichisjustlower,
butadjacent,totheaverageweightedscoreof2.5whichshowsthattheycanexploitmore
onopportunitiesanddomoretocircumventexternalthreats.
FordcantakeadvantagethestrongdriveofacquiringacarinthePhilippinesby
penetratingthemarket.Combinationwithadifferentcompany,Cisco,whichspecializes
innetworking,maybeofagreathelpinimprovingthemarketstrategy.Despitebeing
oneofthelargestautomakersintheindustry,Fordlacksincompetingwithotherplayers.
ForddidnothavepublictrustwhileothercompanieslikeGMandToyotaaregaining.
Becauseofvaryingoilprices,Fordmustmakeastudywheretheywillproducecarsthat
usenondieselfueledcar.

VII.

INTERNALANALYSIS

VIII. INTERNALFACTOREVALUATION(IFE)MATRIX
Key Internal Factors

Weight

Rating

W. Score

1. Limitless improvement of quality in .10

products and services
2. Long-lasting commitment in making .07
vehicles safer for customers
3. Protects extended service plans
.05

.30

.27

.15

4. Strong brand image

.10

.40

5. Effective innovation development

.13

.52

6. Customers Loyalty

.10

.40

1. Unprofitable Europe operations

.10

.10

2. Defective airbag inflator

.08

.08

3. High price structure

.12

.24

4. Retrenchment in Indonesia and Japan

.10

.10

.10

STRENGTH

WEAKNESSES

5. No return on investment despite high cash .05

inflows
TOTAL
1.00

2.66

FordsInternalFactorEvaluation,IFE,consistsof6strengthsand5weaknesses
in the functional areas of the business. These provide a basis for recognizing and
assessingrelationshipsamongtheseareas. Oncestrengthsand weaknessesparticularto
Fordscompanyarespecified,everyfactorisweightedaccordingtoimportance.Each
strengthmustberatedasa4(majorstrength)or3(minorstrength),andeachweakness
mustberatedasa1(majorweakness)or2(minorweakness).Furthermore,togetthe
weightedscore,theweightismultipliedbytherating.Finally,toachievetotalweighted

score,addalltheweightedscoreofeachfactor.ThecombinedweightedscoreforFords
IFEis2.66.Fordspointismarginallyabovetheaveragepositionof2.5
Fordbeingoneofthelargestautomobilecompaniesintheworldhasalreadybuilt
astrongbrandimageinthisindustry.StrongestfactorthatcontributedtomakeForda
wellknownautomotivemanufacturerisbeingeffectiveintheirinnovationdevelopment.
CustomersloyaltyisalsooneofthestrengthofFordbecauseitcontinuouslyimproves
their products and services. Retrenchment in Indonesia and Japan and unprofitable
operationsinEuropeareledtoalosstoFord.Inordertorecovertheselosses,Fordmust
not stop to develop and penetrate market to new geographical areas. High quality
productsmeanshighprices,so,improvingthecoststructureofFordmaybedifficult.The
onlywaythatfordcanimproveit,istominimizethespendingandatthesametime
maximizetheproductionefficiency,tocreatemoreprofit.

IX.

STRATEGYFORMULATION
A.

TOWSMatrix
Strengths

Opportunities

(1) Ford must promote its

vehicles free of sudden
unintended acceleration
(SUA) risk through
developing, testing and
continuously evaluating
their acceleration systems.
(S1, S2, S5, O1)
(2) Ford should develop its
market by outsourcing their
products and services in
countries that have strong
demands in acquiring
automotive. (S4,O2, O3)

Threats

(1) Ford must focus on

innovating products
primarily designed not only
to save traveling time, but
also car gas usage. (S1,
S5,T3)
(2) Ford should improve
product quality, and design
that fits the demands cab
employers and residents.
(S1, S4, S5,T1, T5)

Weakness
(1) Ford should take into
consideration the marketing
of its products and services
affecting different categories
of investments. (W5,O2, O3)
(2) Ford must associate with
other companies to expand its
enhancement, production, and
marketing capacities, and also
its capital. (W2,O4)

(1) Ford should adjust their

prices that correspond well to
the financial capacity of
buyers in certain markets
while maintaining quality
within the products, enabling
the company to compete
globally. (W3, W5,T1, T5)
(2) Ford must close its operations
in Indonesia and Japan.
(W3,T3)

The SWOT Matrix is an essential matching tool that uses factors from both the Internal
Factor Evaluation (IFE) and the External Factor Evaluation (EFE) to evaluate both
internal and external aspects of doing business. SWOT is the first stage of planning and
supports decision makers to concentrate on key matters. It is a graphical depiction of the
SWOT framework. It develops four types of strategies: SO (strengths-opportunities)
Strategies, WO (weakness-opportunities) Strategies, ST (strengths-threats) Strategies, and
WT (weakness-threats) Strategies. Strengths and weaknesses are taken from the IFE
while opportunities and threats are taken from the EFE. From there, we can come up four
different types of strategies by matching together the different internal and external
factors.
SO Strategies chase opportunities that are appropriate to the companys strength. Our
group suggests that Ford must take advantage the weaknesses of other automotive
companies to improve its strength. Such as the recent news about Mitsubishis sudden
acceleration issue, Ford may promote vehicles free of sudden unintended acceleration
risk through developing testing and evaluating their acceleration system. Also, Ford
having a strong brand image, will help them to outsource products and services in
countries that have high demands in acquiring cars in which a market penetration would
be another striking SO strategy.
WO Strategies are ones that aim at overcoming weaknesses by taking advantage of
external opportunities. The two WO Strategies are seen as intensive strategies. Regarding
the defective airbag inflator issue, associating with other company like Cisco, would
decrease the chance of defective products and enhance more of its technology. In this
case, product development can be attractive in this strategy.

In addition, further

investments will improve Ford to expand its production and marketing capacities.
Moreover, Ford should take into consideration the marketing of its products and services

affecting categories of investment. Therefore, market development could be attractive

WO strategy to show out.
ST strategies detect ways that the firm can utilize its strength to diminish it susceptibility
to external threats. Second threat to Ford is the unstable prices of oil. Since generations
have been change and many advanced technologies now are being discovered and
released, Ford started for innovating cars that wont affect by oils unstable price. Ford
has actually adding more plug-in hybrid all-electric cars to their portfolio. So if oil
decreases, Ford will be little less affected and vise versa. Furthermore, Ford had already
anticipated that gas prices will eventually increase, so Fords target is to have the best
fuel economy in every division its in. Another threat is the tight competition in the
automotive industry. Since Ford does not doing well in competition in the industry, the
group suggests, Ford must focus on improving more products quality and design that fits
the demand cab employers and residents. In these two cases, product development can be
strike ST strategy.
Lastly, WT Strategies are focused at lessening internal weaknesses and preventing
external threats. One thing that a lot of Fords shareholders had a problem with was no
return on investment despite high cash flows. If this scenario continues, many investors
may think to pull out their shares because no one wants to invest if return is not
promising. Our group was not able to create a strategy to discontinue this situation. Our
group created a strategy with regard to its weaknesses; high price structure and no return
despite cash inflow, and threats; aggressive competitive rivalry and Cabs make car firms
rethink sales plans. Ford must adjust their prices that correspond well to the financial
capacity of buyers in certain markets while maintaining quality within the products,
enabling the company to compete globally. With the varying oil price, Ford in Japan and
Indonesia might not able to handle its market share thats why our group suggested that
Ford must close its operation there.
While this SWOT Matrix shows Fords current situation in this phase, it illustrates them a
lot about their company: the effective innovation development, improvement on quality
products and services, the downfall in some countries, the interest of the shareholders and
consumer, the unstable condition of the economy and most importantly, the strategies to

answer and defend their company. In a world that change is the only constant, it is
essential that SWOT Matrix should frequently be examined and improved.

B.

SPACEMatrix

InternalStrategicPosition
FinancialStrength(FS)
AssetTurnover
CashFlow
ReceivablesTurnover
ReturnonInvestment
InventoryTurnover
ReturnonAsset
WorkingCapital
TOTAL
AVERAGE
CompetitiveAdvantage
(CA)
MarketShare
ProductQuality
Brand&Image
ProductLifeCycle
CustomerLoyalty
TOTAL
AVERAGE

ExternalStrategicPosition
Ratin
g
+2
+3
+3
+2

EnvironmentalStability(ES)
InflationRate
Taxation
TechnologicalChanges
BarrierstoEntry

+2

Pricerangeofcompeting
products

+1

CompetitivePressure

Ratin
g
3
4
1
1
1
3

+3
+18

13

+2.57

2.17
IndustryStrength(IS)

GrowthPotential

+4

ProfitPotential

+4

FinancialStability

+3

ResourceUtilization

+6

EaseofEntryintoMarket

+6

+23

1.2

+4.6

FS

CA

IS

ES

Conclusion
DirectionalVectorCoordinates:

xaxis:1.20+(+4.60)=+3.40
yaxis:2.17+(+2.57)=+.40

AsshownintheMatrix,FordMotorCompanyshouldpursueAggressive
Strategies. Ford should continue to develop its market by expanding to different
countries, thus, will help in improving Fords market share. They must continually
improvetheirproductsordevelopnewproducts.

C.

IEMatrix
IFESCORE
STRONG
4

AVERAGE
3

WEAK
2

1
4

HIGH

3
EFESCORE
MEDIUM

2
LOW

The InternalExternal (I/E) Matrix uses both the IFE and EFE total weighted
scores.ThistoolisusedtoexamineworkingsituationsandstrategicpositionofFord.The
weightedscoresaretakendirectlyfromtheIFEandEFE.TheIFEtotalweightedscoreis
plottedonthexaxiswhichis2.66,whiletheEFEtotalweightedscoreplottedonthey
axisis2.21.Therefore,theplotonthematrixwouldbe(2.66,2.21).Tounderstandthis,
with2.66astheirIFEtotalweightedscore,Fordisconsideredaverageinternalposition
becauseit is betweenscore of2.0to2.99.Inaddition,with2.21as theirEFE total
weightedscore,Fordisconsideredmedium,betweenascoreof2.0to2.99.

FordMotorsInternalExternalMatrix(IE)showsthatweareinholdandmaintain
strategy.TheIFEis2.66whichliein5thboxandEFEis2.21whichalsolieinthesame
box.
HoldandMaintainstrategiesare
MarketPenetration
ProductDevelopment
MarketDevelopment
Ford Motor Company has global operations, which meansthat market
developmentisnotassignificantasithasbeenforthebusinessinitsearlyyears. But
Ford should still expand insmall and medium countries orentering new markets or
marketsegmentsinplacesthathavestrongdesiretobuyautomobile.Thisexpansionwill
powerthecompanysOneFordglobalportfolioandaimsgrowthopportunitiesforsmall,
midsizeandlargevehicles.Developnewproductsorimproveexistingproductsthatoffer
superiormodification,uniquedesignandadvancedtechnologies.Fordplanstoaccelerate
obtainabilityofinnovativetechnologiesthereaswell,includingEcoBoostengines,Sync
incarconnectivityandinflatablerearsafetybelts.Fordexperiencedslowmarketgrowth
inEuropeanddownfallinitsmarketshareinsomecountriesinAsia.Fordmustpenetrate
moremarketsincethisisfordsmainintensivegrowthstrategy.Itinvolvessellingmore
productstoexistingcustomerstogrowbusiness,increasethemarketshareofacurrent
productorpromotemorenewproduct,throughadvertising,volumediscountsorlower
prices.ThisschemeisassociatedtoFordscommoncompetitivestrategybyemphasizing
thebenefitsoflowcostsandincreasingdiversitytogainabiggermarketshare.

D.

BCGMatrix

RelativeMarketShare

High

Low
STARS

Low

QUESTIONMARKS
SA

NA

AP

EU
MEA

In
d
u
st
ry
G
r
o
w

CASHCOWS

Operating
Segments

DOGS

Revenue
2014(in
millions)

%Revenue

Income

%Income

Relative
Market
Share

Industry
GrowthRate

North
America

$82,376

61%

$6,898

132%

14.2%

5.8%

South
America

8,799

6%

(1,162)

22%

8.9%

9.4%

Europe

29,475

22%

(1,062)

20%

7.2%

6.3%

MiddleEast
&Africa

4,406

3%

(20)

0.4%

4.7%

5%

AsiaPacific

10,744

8%

589

11%

3.5%

7.9%

TOTAL

135,800

100%

5,243

100%

Asshowninthematrix,AsiaPacificisaquestionmarkbecauseeventhoughthey
generaterevenueandhavemanagestogainprofit,theAsiaPacificsegmentcompeteina
veryhighgrowthindustry.ThisjustmeansthattheautomotiveindustryinAsiaPacificis
a very competitive industry. To improve this, the segment should pursue intensive
strategies like market penetration, market development, or product development; or
divesture.
MiddleEast&Africasegment,however,hasthelowestrevenuegenerationand
hasalsoincurredanegativeprofit.Italsohasalowmarketsharebuttheautomotive
industryinMiddleEast&Africaisahighgrowthindustry.
Meanwhile, North America, South America, and Europe are all stars. North
AmericaSegmenthasthehighestrevenueandprofit.Italsohasahighrelativemarket
shareandiscompetinginahighgrowthindustry.WhileSouthAmericaandEuropehave
notbeenprofitable,theystillmanagetogeneratehighrevenuesandhavehighmarket
sharesandarealsocompetinginahighgrowthindustry.Tostrengthenthesegmentsthey
should purse strategies like forward, backward, horizontal integration; market
penetration;marketdevelopment;andproductdevelopment.

E.

GrandStrategyMatrix

Rapid Market
Growth

QuadrantII

Wea
k
Com
petit
ive
Posi
tion

QuadrantI

Slow Market
Growth

Stro
ng
Com
petit
ive
Posi
tion

QuadrantIII

QuadrantIV

SummaryofStrategyFormulationTools
Strategies

SPACE

IE

BCG

GRAN
D

Backward,forward,horizontal
integration

MarketPenetration

MarketDevelopment

ProductDevelopment

Diversification(related/unrelated)

Divestiture

Total
2

3
1

Liquidation

X.

QUANTITAIVESTRATEGICPLANNINGMATRIX(QSPM)

XI.

OBJECTIVES,STRATEGYRECOMMENDATION,ANDACTIONPLANS

XII.

STRATEGYEVALUATION,MONITORING,ANDCONTROL

XIII.

FINANCIALPROJECTIONS

REFERENCES
APPENDIX