COMPETITIVE ADVANTAGE FORD MOTOR COMPANY
ALVIN SENNA (224412132)
Ford Motor Company faces many strategic challenges during these volatile economic times.
In the next month and a half, two of its major competitors may be forced to file for
bankruptcy or liquidate assets. As of this writing, Ford is the most financially sound
American car manufacturer and possesses enough cash on hand to continue operations
through fiscal year 2009, provided there are no further dramatic deteriorations in the market.
Analysts believe that the company will not need to seek government funding unless car sales
for 2010 are below 12 million. While Ford, like all major car companies at this time, faces
serious challenges, we assert that opportunities exist during any time of crisis. We believe
that Ford can, with our help, break even in fiscal year 2010 barring further macroeconomic
This report makes the following recommendations to Ford Motor Company:
1) Ford should continue attempts to sell off the Volvo brand. The funds from this sale
should provide Ford with increased flexibility during the coming year as well as
contribute to existing strategic goals.
2) Ford should extensively prepare for the bankruptcy of Chrysler and/or General
Motors. Such bankruptcies pose a great deal of risk to Ford, including but not
limited to: the possibility that the government may chose a winner, the potential for
GM to emerge from bankruptcy with a significant cost advantage, and supply chain
disruption resulting from bankruptcies of mutual suppliers. While we believe that
any liquidation of Chrysler should be viewed as a strategic opportunity, we remain
deeply concerned about how the future of GM may impact Ford. In the short term,
we believe that Ford should continue to capitalize on its competitors’ instability and
steal market share.
3) We have faith in management’s ‘One Ford’ strategy and believe that the Ford Fiesta
is poised for success in North America, if marketed correctly and executed properly.
Continued differentiation through the creation of defining style and feature set
exclusive to Ford vehicles is also a positive step in the long run.
4) We recommend that, wherever possible, Ford should shift production from the
United States and the Euro Zone to Mexico and Eastern Europe.
5) We recommend that Ford exploit current opportunities in China and apply capital to
ramp up its sales and market share. In the long run, Ford must also focus on
expanding its share in India. We do not, however, recommend that Ford invest
significant capital in the Indian market at this time.
We at Oasis Consulting believe that these recommendations are in line with the Ford
philosophy and are in touch with its history as a family owned company. It is important to note
that this report is only current as of April 20th
, 2009. Industry circumstances are rapidly changing,
and Ford’s optimal next steps cannot be fully expounded upon until specific information
regarding GM and Chrysler’s future is announced. Oasis Consulting looks forward to the
opportunity to provide continued support for Ford Motor Company as the situation with
Chrysler and General Motors develops, and believe that this report sets forward the optimal
strategy for the company at this juncture in time.