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Ford presentation

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Karen Diaz
Karen Diaz

• PRODUCTIVIDAD Alcanzar/mejorar los niveles de productividad de Toyota. Aumentar la utilización de recursos. Estandarizar las prácticas/procesos óptimos. Sistema de producción Ford estandari­zado. • SATISFACCION DEL CLIENTE Mayor sensibilidad hacia los clientes. Decisiones rápidas e implementación ágil.” Así, el objetivo que Ford Motor Company persigue es "producir mejores produc­tos más rápidamente y a un precio más bajo para satisfacer a más clientes en todo el mundo". Para conseguirlo va a llevar a cabo un rediseño tanto de sus procesos como de su estructura, basando la misma en sus productos y no en las áreas geográficas, como venía actuando desde su creación.

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Hamill Bassue Owen Hendershot Goran Nagradic
Overview • Company Overview – Ford’s brief history – Mission and Vision statement – Current Objectives & Strategies • New Mission and Vision • External Assessment – Industry Analysis – Opportunities & Threats – EFE Matrix • Internal Assessment – Strengths & Weaknesses – Financial ratios – IFE Matrix • Strategy Formulation – SWOT Matrix – BCG – Space Matrix – IE Matrix – Grand Strategy Matrix – QSPM Matrix • Strategic Plan for the Future – Objectives – Strategies • Implementation – EPS/EBIT – Other issues • Evaluation • 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).
Ford’s Brief History 1903 – Ford Motor Company founded in Michigan 1908 – Model T introduced 1913 – first moving automobile assembly line in the world 1956 – Ford’s 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
Ford presentation
Management
Mission & Vision Statement "To become the world's leading consumer company for automotive products and services.“ - Ford doesn’t have vision statement
Objectives • To contribute to stabilizing the climate by considering reducing long-term 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 provide all our customers and the community with safe innovative products and services of world class standards. Through our engineering excellence, high quality and the use of our constantly upgrading technology we 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 partner to 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 Ford GM DiamlerChrysler AG Toyota Critical Success factors Weigh ts Rati ng Weighted Score Rati ng Weighted Score Rati ng Weighted Score Rati ng Weighted Score 0.0 to 1.0 1 to 4 1 to 4 1 to 4 1 to 4 Global Expansion 0.14 2 0.28 3 0.42 2 0.28 3 0.42 Financial Position 0.10 2 0.2 4 0.4 3 0.3 3 0.3 Growth 0.16 1 0.16 3 0.48 1 0.16 4 0.64 US Market Share 0.20 3 0.6 4 0.8 2 0.4 2 0.4 Customer Loyalty 0.15 4 0.6 3 0.45 4 0.6 3 0.45 Hybrid/Fuel Efficient Vehicles 0.18 3 0.54 3 0.54 2 0.36 2 0.36 Management Experience 0.07 3 0.21 4 0.28 3 0.21 3 0.21 Totals 1 2.59 3.37 2.31 2.78
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 equity 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 0.0 to 1.0 1, 2, 3 or 4 Internal Strengths   3 or 4   Strong and globally positioned brand names 0.13 4 0.52 Large employee base with highly educated engineers and good R&D  department 0.09 3 0.27 One of the largest automotive manufacturer (along with a long  history) 0.06 3 0.18 1285% increase in net cash 0.09 3 0.27 Huge increase in total equity 0.11 4 0.44 Internal Weaknesses   1 or 2   A lot of time spent to actually put the product on the market 0.1 2 0.2 Recording continuous losses (net income) from 2006 0.12 1 0.12 Low quality of new products (recalls - causing losing customers) 0.12 1 0.12 Bad management of the company 0.08 2 0.16 EPS very bad - in negative numbers (unattractive for the investors) 0.1 1 0.1 Totals 1 2.38
Strategic Formulation
SWOT Matrix Strengths – S 1.Marcas posicionadas a nivel mundial Fuertes 2.Gran base de empleados con los ingenieros de alto nivel de educación y un buen departamento de I + D 3.Uno de los mayores fabricantes del automóvil (junto con una larga historia) 4.Aumento de 1.285% en el efectivo neto 5.Enorme incremento en el patrimonio neto Weaknesses – W 1. gran cantidad de tiempo dedicado a poner en realidad el producto en el mercado 2.Grabación de continuas pérdidas (ingresos netos) a partir de 2006 3.La baja calidad de los nuevos productos (recuerda - que causa la pérdida de clientes) 4.La falta de gestión de la empresa 5.EPS muy malas - en números negativos (poco atractivos para los inversores) Opportunities – O 1.Los consumidores piden vehículos híbridos eficientes y bajo consumo de combustibles 2.Aumento de las tendencias de consumo 3.Los consumidores piden vehículos más innovadores 4.La expansión global 5.Crecimiento de las experiencias de la industria lento y constante SO 1.El desarrollo de nuevos vehículos en los combustibles alternativos (S1, S2, S4, O1, O3. O5) 2.Ofrecer nuevos productos innovadores - Aumento del mercado - motos (S1, S2, S3, O2, O3, O5) 3.Concéntrarse en hacer los mejores vehiculos de combustible eficiente WO 1.Realizar producción mas economica y de bajos impuesto Threats – T 1.Débil USD 2.Aumento de los precios del acero y resina 3.El aumento de los precios de la gasolina 4.Estrictas normas de emisión de CO2 5.El aumento de las tasas hipotecarias ST 1.Construir productos ecológicos con materiales alternativos (S2, S3, S4, T2, T3, T4) 2.Producir más autos para el mercado exterior (S1, S2, S4, T1, T4) WT 1.Combinar con los competidores (W1, W2, W5, T2, T3, T5) 2.Fabricación únicas partes de automóviles (W1, W2, T1, T2)
SPACE Matrix FS +6 +1 +5 +4 +3 +2 -6 -5 -4 -3 -2 -1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 IS Conservative Aggressive Defensive Competitive 28
BCG Matrix Revenues % Revenues Profit % Profit % Market Share % Growth Rate NA 69365 45% -4161 - 61% -0.1 SA 7585 5% 1172 - 30% +33 Europe 36330 24% 744 - 81% -3 PAG 33067 21% -1872 - - +10 Asia 8032 5% 206 - 38% +3 Total 154379 100% -3911 - - -
BCG Matrix Relative market share position in the industry High 1.0 Medium .50 Low 0.0 High+30Medium0Low-3 Industrysalesgrowthrate SA APA NA
IE Matrix Hold and Maintain 31
Grand Strategy Matrix Rapid Market Growth Quadrant II Quadrant I Strong Competitive Position Slow Market Growth Weak Competitive Position Quadrant III Quadrant IV
Matrix Evaluation Alternative Strategies BCG IE SPACE GRAND COUNT Forward Integration x 1 Backward Integration x 1 Horizontal Integration x 1 Market Penetration x x x 3 Market Development x x 2 Product Development x x x 3 Concentric Diversification x x 2 Conglomerate Diversification x x 2 Horizontal Diversification x x 2 Joint Venture x 1 Retrenchment x x 2 Divestiture x x 2 Liquidation x 1
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 15-20% 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 fuel-efficient 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 Common stock financing Debt financing Recession Normal Boom Recession Normal Boom EBIT 10 20 40 10 20 40 Interest 0 0 0 1.5 1.5 1.5 EBIT 10 20 40 8.5 18.5 38.5 Taxes 0 0 0 0 0 0 EAT 10 20 40 8.5 18.5 38.5 #shares 2.695 2.695 2.695 2.695 2.695 2.695 EPS 3.71 7.42 14.84 3.15 6.86 14.28 *data in $ billion
Other Issues • Laws and regulations in foreign countries • Regain lost trust in the Ford’s 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- relations • Datamonitor – Global Automobile Industry manufacturer 2006 • Pictures taken from Web
Questions???

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Ford presentation

  • 2. Overview • Company Overview – Ford’s brief history – Mission and Vision statement – Current Objectives & Strategies • New Mission and Vision • External Assessment – Industry Analysis – Opportunities & Threats – EFE Matrix • Internal Assessment – Strengths & Weaknesses – Financial ratios – IFE Matrix • Strategy Formulation – SWOT Matrix – BCG – Space Matrix – IE Matrix – Grand Strategy Matrix – QSPM Matrix • Strategic Plan for the Future – Objectives – Strategies • Implementation – EPS/EBIT – Other issues • Evaluation • Ford 2008 Update
  • 3. 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).
  • 4. Ford’s Brief History 1903 – Ford Motor Company founded in Michigan 1908 – Model T introduced 1913 – first moving automobile assembly line in the world 1956 – Ford’s 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
  • 7. Mission & Vision Statement "To become the world's leading consumer company for automotive products and services.“ - Ford doesn’t have vision statement
  • 8. Objectives • To contribute to stabilizing the climate by considering reducing long-term 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%
  • 9. Strategies • Utilizing their advance technology • Building of smaller vehicle • Cost reduction • Market expansion through joint venture and strategic alliance
  • 10. 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 provide all our customers and the community with safe innovative products and services of world class standards. Through our engineering excellence, high quality and the use of our constantly upgrading technology we 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 partner to share in our success, while achieving a substantial return on our shareholders investment. “
  • 12. Industry Analysis Global Automobile Industry Value Global Automobile Industry Volume
  • 17. CPM Ford GM DiamlerChrysler AG Toyota Critical Success factors Weigh ts Rati ng Weighted Score Rati ng Weighted Score Rati ng Weighted Score Rati ng Weighted Score 0.0 to 1.0 1 to 4 1 to 4 1 to 4 1 to 4 Global Expansion 0.14 2 0.28 3 0.42 2 0.28 3 0.42 Financial Position 0.10 2 0.2 4 0.4 3 0.3 3 0.3 Growth 0.16 1 0.16 3 0.48 1 0.16 4 0.64 US Market Share 0.20 3 0.6 4 0.8 2 0.4 2 0.4 Customer Loyalty 0.15 4 0.6 3 0.45 4 0.6 3 0.45 Hybrid/Fuel Efficient Vehicles 0.18 3 0.54 3 0.54 2 0.36 2 0.36 Management Experience 0.07 3 0.21 4 0.28 3 0.21 3 0.21 Totals 1 2.59 3.37 2.31 2.78
  • 18. 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
  • 22. Financial Highlights • Income Statement • Balance Sheet • Cash Flow Statement
  • 24. 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 equity 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)
  • 25. IFE Matrix Key Internal Factors Weights Rating Weighted Score 0.0 to 1.0 1, 2, 3 or 4 Internal Strengths   3 or 4   Strong and globally positioned brand names 0.13 4 0.52 Large employee base with highly educated engineers and good R&D  department 0.09 3 0.27 One of the largest automotive manufacturer (along with a long  history) 0.06 3 0.18 1285% increase in net cash 0.09 3 0.27 Huge increase in total equity 0.11 4 0.44 Internal Weaknesses   1 or 2   A lot of time spent to actually put the product on the market 0.1 2 0.2 Recording continuous losses (net income) from 2006 0.12 1 0.12 Low quality of new products (recalls - causing losing customers) 0.12 1 0.12 Bad management of the company 0.08 2 0.16 EPS very bad - in negative numbers (unattractive for the investors) 0.1 1 0.1 Totals 1 2.38
  • 27. SWOT Matrix Strengths – S 1.Marcas posicionadas a nivel mundial Fuertes 2.Gran base de empleados con los ingenieros de alto nivel de educación y un buen departamento de I + D 3.Uno de los mayores fabricantes del automóvil (junto con una larga historia) 4.Aumento de 1.285% en el efectivo neto 5.Enorme incremento en el patrimonio neto Weaknesses – W 1. gran cantidad de tiempo dedicado a poner en realidad el producto en el mercado 2.Grabación de continuas pérdidas (ingresos netos) a partir de 2006 3.La baja calidad de los nuevos productos (recuerda - que causa la pérdida de clientes) 4.La falta de gestión de la empresa 5.EPS muy malas - en números negativos (poco atractivos para los inversores) Opportunities – O 1.Los consumidores piden vehículos híbridos eficientes y bajo consumo de combustibles 2.Aumento de las tendencias de consumo 3.Los consumidores piden vehículos más innovadores 4.La expansión global 5.Crecimiento de las experiencias de la industria lento y constante SO 1.El desarrollo de nuevos vehículos en los combustibles alternativos (S1, S2, S4, O1, O3. O5) 2.Ofrecer nuevos productos innovadores - Aumento del mercado - motos (S1, S2, S3, O2, O3, O5) 3.Concéntrarse en hacer los mejores vehiculos de combustible eficiente WO 1.Realizar producción mas economica y de bajos impuesto Threats – T 1.Débil USD 2.Aumento de los precios del acero y resina 3.El aumento de los precios de la gasolina 4.Estrictas normas de emisión de CO2 5.El aumento de las tasas hipotecarias ST 1.Construir productos ecológicos con materiales alternativos (S2, S3, S4, T2, T3, T4) 2.Producir más autos para el mercado exterior (S1, S2, S4, T1, T4) WT 1.Combinar con los competidores (W1, W2, W5, T2, T3, T5) 2.Fabricación únicas partes de automóviles (W1, W2, T1, T2)
  • 28. SPACE Matrix FS +6 +1 +5 +4 +3 +2 -6 -5 -4 -3 -2 -1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 IS Conservative Aggressive Defensive Competitive 28
  • 29. BCG Matrix Revenues % Revenues Profit % Profit % Market Share % Growth Rate NA 69365 45% -4161 - 61% -0.1 SA 7585 5% 1172 - 30% +33 Europe 36330 24% 744 - 81% -3 PAG 33067 21% -1872 - - +10 Asia 8032 5% 206 - 38% +3 Total 154379 100% -3911 - - -
  • 30. BCG Matrix Relative market share position in the industry High 1.0 Medium .50 Low 0.0 High+30Medium0Low-3 Industrysalesgrowthrate SA APA NA
  • 31. IE Matrix Hold and Maintain 31
  • 32. Grand Strategy Matrix Rapid Market Growth Quadrant II Quadrant I Strong Competitive Position Slow Market Growth Weak Competitive Position Quadrant III Quadrant IV
  • 33. Matrix Evaluation Alternative Strategies BCG IE SPACE GRAND COUNT Forward Integration x 1 Backward Integration x 1 Horizontal Integration x 1 Market Penetration x x x 3 Market Development x x 2 Product Development x x x 3 Concentric Diversification x x 2 Conglomerate Diversification x x 2 Horizontal Diversification x x 2 Joint Venture x 1 Retrenchment x x 2 Divestiture x x 2 Liquidation x 1
  • 34. 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
  • 35. QSPM
  • 36. Strategic Plan for the Future
  • 37. Objectives for the 2008 - 2010 • Reduce manufacturing expenses by 15-20% 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
  • 38. Recommendation • Manufacturing of new small fuel-efficient 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
  • 40. 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
  • 41. EPS/EBIT Common stock financing Debt financing Recession Normal Boom Recession Normal Boom EBIT 10 20 40 10 20 40 Interest 0 0 0 1.5 1.5 1.5 EBIT 10 20 40 8.5 18.5 38.5 Taxes 0 0 0 0 0 0 EAT 10 20 40 8.5 18.5 38.5 #shares 2.695 2.695 2.695 2.695 2.695 2.695 EPS 3.71 7.42 14.84 3.15 6.86 14.28 *data in $ billion
  • 42. Other Issues • Laws and regulations in foreign countries • Regain lost trust in the Ford’s brand
  • 46. Sources • Ford Motor Company Annual Report 2007 • General Motors Annual Report 2007 • http://www.ford.com/about-ford/investor- relations • Datamonitor – Global Automobile Industry manufacturer 2006 • Pictures taken from Web