Ford Case Strategic Case Study: Ford Motors

Ford Case Strategic Case Study: Ford Motors Company Overview Ford Motors is one of the oldest and largest auto manufacturers in the world, and despite being enormously hard-hit by the economic downturn of the recent past the company has returned to profitability and has been successful in redefining its strategy and realigning its resources to achieve its strategic ends (Ford, 2012; Hoover, 2012; Reuters, 2012). With internationally-based sourcing, manufacturing, distribution, and sales operations, the company is also quite large in terms of geographic spread, which comes with advantages and disadvantages (Ford, 2012; Reuters, 2012).

The following pages present a brief overview of the company's current strategy in the light of the recent near-collapse of the company and its climb to profitability, and also gives a summary of a strategy the company could possibly pursue to further solidify its position and increase profitability. Existing Objectives and Strategies Many companies underwent serious changes in both their perspectives and their strategies and operations as a result of the economic crisis precipitated by the collapse of the U.S. financial sector, but the U.S.

auto industry was one of the hardest hit (Hoovers, 2012). The U.S. auto industry had already suffered relative to Japanese and other foreign competition, yet the availability of capital led to a culture of simply being big -- in cars and in company strategy (Ford, 2012; Hoovers, 2012). The current era has seen a dramatic shift in that strategy, as demonstrated by certain of Ford's recent actions and overall outlook. Whereas multiple brands and more diverse car lines used to define the company and much of the U.S.

auto industry, Ford has recently been demonstrating a desire both to slim down in terms of its branding an manufacturing attempts, and to become more vertically integrated in order to facilitate lean manufacturing and distribution principles (Ford, 2012; Reuters, 2012). The Mercury brand, for decades a part of Ford's more diversified strategy, was discontinued in 2010; in that same year ford sold the Volvo brand that it had acquired in the mid 1990s to a Chinese auto manufacturer (Ford, 2012; Hoovers, 2012).

These actions and other efforts to strengthen a central brand image and to save costs by focusing and streamlining operations demonstrate a significant change in strategy and objectives, with cost savings and a strong marketing and brand position taking precedent over the variety of offerings the company has for consumers (Ford, 2012; Hoovers, 2012). Also important to acknowledge is the focus on vertical integration other actions and trends in the company demonstrate.

While divesting itself of brands and operations it sees as disconnected from the core business, Ford has moved to acquire certain manufacturing companies and facilities that it depends on as a means of controlling costs and quality while spurring innovation (Ford, 2012; Hoovers, 2012; Reuters, 2012). Its credit department is also highly successful, and represents an added revenue stream from retail sales that provides a great deal of profitability and security to the company (Ford, 2012; Reuters, 2012).

All of this denotes a company dedicated to the idea of profitability from core business through tighter control. Strategy Recommendation As an overall strategy recommendation, Ford should maintain an awareness of innovation needs and consumer responsiveness in the auto industry. Streamlining and cost-savings are laudable and necessary objectives for the company, however they can have the effect of reducing flexibility and market reaction if not carefully monitored (Johnston & Bate, 2003).

Tight control on operations combined with a culture that promotes creative thinking and innovation would be of key strategic benefit to Ford, as the explanation of specific strategies in response to opportunities and threats given below will show. A major opportunity facing Ford and indeed all auto manufacturers in the current environment is foreign growth, especially in China and India, with the number of consumers able to purchase cars growing dramatically and infrastructure development that actually makes this feasible also increasing at a rampant pace.

Achieving a meaningful market share in these countries will necessitate the adoption of marketing strategies and even product development and design that is highly innovative according both to Western standards and generally speaking -- the same cars simply won't sell in all markets, and therefore innovative strategies are required (Johnston & Bates, 2003).

A research-based strategy that identifies specific consumer desires or constraints and then promotes creative thinking models and processes for designs that meet those needs could help Ford achieve better results on a meaningful market scale, and not simply through the pride of innovative achievement (Johnston & Bates, 2003). In light of the recent and current economic situation, a very real threat that faces Ford and other companies is the possibility of a second recession, or a "double dip" in economic activity perhaps comparable to the initial recession that began in 2008.

Innovation and the flexibility that comes with it would also be incredibly advantageous in countering this threat, in both the manufacturing and the financing sectors of the company. In manufacturing, designing.