Ford Motor Company's marketing strategy amid global economic crisis

Ford Marketing Plan

The following pages are intended to provide an outlook on Ford Motor Company's current situation in the global automotive market's context. The first section, Situation Analysis, will help design a general idea about the company's current situation and the factors that were responsible for it.

Therefore, the four pillars upon which the company's well-functioning is relied upon are discussed in this section. The section brings into attention the importance of the company's aggressive restructure that was designed to increase profitability, the accelerated development of new vehicles while focusing on high quality and customer needs, the plan regarding the improvement of the company's balance sheet, and the company's teamwork orientation.

This section is followed by the market Summary. When analyzing the situation of large company, especially that of an automotive giant, it is imperative to situate the company's situation in the context of the global market. The company's activity is in an interdependent relationship with the global automotive market. The trends in the automotive market determine the course of action that the company should follow, while influencing the results of the company's implemented strategy. However, the market itself is the result of every company's actions.

As a consequence, this section is designed as an introductive presentation of the automotive market's conditions. The market trends that will be discussed in this section include: global economic and financial crisis, excess capacity, pricing pressure, consumer spending and credit, health care expenses, commodity and energy price increases, currency exchange rate volatility, and other economic factors. The importance of each factor and how it actually affects the automotive market and the company as a consequence are also presented.

The final section of the paper consists in the SWOT Analysis. The most important strengths, weaknesses, opportunities, and threats that are expected to most affect the company's activity in the future are presented in this section. In Ford's case, the strengths outnumber the weaknesses, but this does not mean that the company could not be affected by important threats, like competition.

However, even in the negative global market conditions, here are several opportunities that the company could exploit in order to overcome the financial and economic crisis. One of these opportunities consists in customers' orientation towards smaller, greener cars.

Situation Analysis

The financial and economic crisis that the global economy is currently traversing has left deep marks on the automotive industry's activity. Most automotive companies have been affected by the crisis, and Ford Motor Company makes no exception. Although Ford's situation is not as severe compared to other giants in the automotive industry, the company is struggling to overcome the negative effects produced by the crisis.

As a consequence, the company was forced to rethink its entire marketing strategy, from production to advertising. Ford's marketing strategy has been modified in order to fit the new requirements of the market. The most important factors that the company relies at the moment consist in: aggressive restructure in order to manage profitability in accordance with the market's demand and changing model mix; intensive development of new products; finance the company's plan and improve the balance sheet; teamwork is very important in counteracting the crisis and in leveraging the company's global assets (Annual Report, 2008).

In order to attain its established objectives, the company had to implement a series of measures, not all of them being positive ones. The measures addressed each sector of the company's activity, including production, human resources, or marketing.

The measures included the reduction of personnel levels in the United States by more than 60,000 employees. The company was also forced to close 12 of its manufacturing facilities in North America. The company's resources have been relocated from Jaguar Land Rover and Aston Martin operations to the One Ford vision.

In order to increase its capital, Ford sold a great part of its Mazda ownership. The company started to focus more of its attention and resources on the quality of its products and services. Furthermore, given the customer needs modifications induced by the financial and economic crisis, Ford decided to introduce some of its smaller and more fuel-efficient vehicles sold in Europe also on the American market. The company's overall situation was improved by the reduction of operating costs by more than $5 billion.

Strengths

Ford Motor Company's strengths have somewhat diminished since the crisis has installed, but this is a general trend affecting the entire automotive industry. The most important strength consists in the company's sound financial position. This will help Ford to counteract the effects of the crisis and to overcome the sales volume decrease that is expected, also because of the crisis.

The company's tradition and positive brand image on the market might prove to be decisive for certain customers when purchasing a new vehicle, in the detriment of newer brands or vehicles that do not inspire the same trust that Ford does.

Ford can also rely on the fact that the company is following an environmentally friendly direction. Their investments in alternative fuel research will make a difference in customers' purchase decision.

Weaknesses

Some of the company's brands are expensive ones that many customers will not be willing to purchase anymore, their sales volume is expected to decrease, unlike their production cost. Together with excess capacity, this will slow the company's future growth.

The fact that Ford has reduced its personnel levels, while allocating certain amounts of resources overseas and creating jobs abroad because it is cheaper, is seen as a weakness for the company.

Opportunities

The sports segment can be considered an opportunity for the company. Sport-utility vehicles were previously a weakness for Ford. But the company's research and development activity has managed to improve a segment ant to make it much more competitive. The demand for this segment has increased and is expected to follow this trend, given the new customer requirements that have modified because of the financial crisis (Heath, 1993).

Ford is focusing its strategy on going green and on smaller vehicles. These types of vehicles cost less to produce. This leads to reduced prices compared with other vehicles. This is an opportunity for overcoming the negative effects induced by the crisis (Ford, 2008).

Threats

Competition is probably the most important threat to Ford's activity, although this may be considered a cliche. But there are several brands that are considered to have higher quality products, and quality has become the most important factor when deciding to purchase a new vehicle.

Reference list:

1. Annual Report (2008). Ford Motor Company. Retrieved June 14, 2009 from http://www.ford.com/doc/2008_annual_report.pdf.

2. Heath, D. (1993). Explorer Leads Ford's Sales Inroads. The Seattle Times. Retrieved June 15, 2009 from http://community.seattletimes.nwsource.com/archive/?date=19930327&slug=1692681.

3. Small Cars: A Green, Global Strategy for Ford (2008). Global Auto Shows. Ford Motor Company. Retrieved June 15, 2009 from http://autoshows.ford.com/230/2008/03/24/small-cars-green-global-strategy/.