Ford's strategic repositioning after the 2008 financial crisis

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.

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 smaller and more efficient cars -- something the company is gravitating towards anyway -- would be even more effective as a means of generating increased market share during a second recession, and if the company is able to promote greater innovation through more flexibility and self-directed research in their design department more effective and significant advances are likely to be made in this regard (Ford, 2012). More innovative financing tools and structures could also lead to more closed sales and more ongoing revenue streams from finance customer payments, though the risks in this area are also going to be greater in a recessionary economy. Still, careful planning of innovative new credit tools could help counter these risks and ensure profitability.

Conclusion

Strategy should always be in a state of adjustment if not outright change due to shifts in the environment (Johnston & Bates, 2003). For Ford, moving to a leaner strategy is advantageous at the current time. The company needs to encourage ongoing innovation in order to fully benefit from current conditions.