"Table of ContentsDeclaration .................................................................................................................................................... 2Acknowledgements ....................................................................................................................................... 3List of Tables ................................................................................................................................................. 7List of Figures ............................................................................................................................................... 8List of Charts ................................................................................................................................................. 9Executive Summary ..................................................................................................................................... 101. Introduction ............................................................................................................................................. 121.1 Overview of Ford Motor Company ................................................................................................... 121.2 Purpose and rationale ........................................................................................................................ 191.3 Terms of reference ............................................................................................................................ 201.3.1 Research Questions ................................................................................................................... 201.3.2 Research Objectives .................................................................................................................. 201.3.3 Research Framework ................................................................................................................. 212. Business Review ................................................................................................................................. 232.1 Market ............................................................................................................................................... 232.1.1 Economic environment ............................................................................................................. 232.1.2 Market demand and needs ......................................................................................................... 262.1.3 Market segmentation ................................................................................................................. 262.2 Marketing .......................................................................................................................................... 272.2.1 Innovative Products .................................................................................................................... 272.2.2.1 Product differentiation ......................................................................................................... 272.2.2.2 BCG-Matrix Model ............................................................................................................. 282.2.2.3 Product Quality and Safety.................................................................................................. 302.2.2 Pricing ....................................................................................................................................... 322.2.3 Promotion ................................................................................................................................... 322.3 Organisation ...................................................................................................................................... 332.3.1 Leveraging Supply Chain ........................................................................................................... 332.3.2 Monitoring Strategies ................................................................................................................. 362.3.3 Business Processes ..................................................................................................................... 362.4 Financial Performance....................................................................................................................... 383. Research Design .................................................................................................................................. 413.1 Research Philosophy ......................................................................................................................... 413.2 Research Methods ............................................................................................................................. 413.3 Sample Unit ...................................................................................................................................... 423.4 Sampling Method .............................................................................................................................. 434 3.5 Sample Size ....................................................................................................................................... 433.6 Data Collection Methods .................................................................................................................. 433.7 Expected Outcomes .......................................................................................................................... 453.8 Limitations and Ethical Considerations ............................................................................................ 453.9 Research Gantt Chart ........................................................................................................................ 464. Data Analysis ...................................................................................................................................... 484.1 Primary Data Analysis ...................................................................................................................... 484.1.1 General questions ....................................................................................................................... 484.1.2 Subject Matter Questions ........................................................................................................... 524.2 Business Implications ........................................................................................................................ 615. Business Model ................................................................................................................................... 645.1 Business Model Canvas .................................................................................................................... 645.2 Business Model Elements ................................................................................................................. 655.2.1 Business Drivers ......................................................................................................................... 655.2.2 Key Partnerships ........................................................................................................................ 655.2.3 Key Activities ............................................................................................................................. 675.2.4 Value Chain Based Resources .................................................................................................... 685.2.5 Superior Value Proposition ........................................................................................................ 685.2.6 Priority Customer Segments ....................................................................................................... 685.2.7 Customer Relationships .............................................................................................................. 695.2.8 Channels ..................................................................................................................................... 695.2.9 Cost Structure ............................................................................................................................. 705.2.10 Revenue Streams & Cashflow .................................................................................................. 706 Business Plan ...................................................................................................................................... 726.1 Vision & Mission .............................................................................................................................. 726.2 Objectives ......................................................................................................................................... 736.3 Marketing Plan .................................................................................................................................. 746.3.1 STP-analysis ............................................................................................................................... 746.3.3 Strategic Growth ........................................................................................................................ 776.3.3.1 Product Development Strategy ............................................................................................ 776.3.3.2 Global Diversification Strategy ........................................................................................... 786.4 Operational Plan................................................................................................................................ 796.4.1 Organisational Structure ..................................................................................................................... 796.4.2 Continuous Improvement ........................................................................................................... 806.4.3 Human Capital Plan ................................................................................................................... 816.4.4 Business Process / Value Chain ................................................................................................. 846.4.5 Customer Satisfaction ................................................................................................................ 875 6.5. Financial Plan ................................................................................................................................... 886.5.1 Balance Sheet ............................................................................................................................. 886.5.2 Income Statement ....................................................................................................................... 896.5.3 Justifications ............................................................................................................................... 906.6 Implementation Schedule – Gantt Chart ........................................................................................... 916.7 Critical Success Factors .................................................................................................................... 936.8 Risk Mitigation / Contingency Plan .................................................................................................. 94References ................................................................................................................................................... 96Appendices ................................................................................................................................................ 102i. Application for Ethics Approval ....................................................................................................... 102ii. Questionnaire ........................................................................................................................................ 110iii. Ford Motor Company July 2015 U.S. Sales ........................................................................................ 115iv. Ford Motor Company Ratio Analysis .................................................................................................. 116v. Respondents` vehicle characteristics ..................................................................................................... 117 6 List of TablesTABLE 1. SWOT-ANALYSIS OF FORD MOTOR COMPANY ............................................................................. 14TABLE 2. MARKET SHARES OF FORD MOTOR COMPANY IN DIFFERENT REGIONS .............................. 15TABLE 3. FORD`S CUSTOMER SEGMENTATION .............................................................................................. 27TABLE 4. FORD GQRS “THINGS GONE WRONG” (TGW) INDICATOR, BY REGION ................................... 30TABLE 5. FORD GQRS CUSTOMER SATISFACTION, BY REGION .................................................................. 31TABLE 6. FORD SIX SIGMA IMPLEMENTATION ............................................................................................... 36TABLE 7. FORD ANNUAL REVENUE INFORMATION ...................................................................................... 38TABLE 8. DIMENSIONS OF RESEARCH PHILOSOPHY ..................................................................................... 41TABLE 9. QUALITATIVE VERSUS QUANTITATIVE RESEARCH .................................................................... 42TABLE 10. SUMMARIZED DATA NEEDS MATRIX ............................................................................................ 44TABLE 11. RESEARCH GANTT CHART ............................................................................................................... 46TABLE 12. BUSINESS MODEL CANVAS .............................................................................................................. 64TABLE 13. TYPES OF EVSE .................................................................................................................................... 87TABLE 14. FORD 3-YEAR BALANCE SHEET FORECAST ................................................................................. 88TABLE 15. FORD 3-YEAR INCOME STATEMENT FORECAST ......................................................................... 89TABLE 16. IMPLEMENTATION GANTT CHART ................................................................................................. 91TABLE 17. COMPARATIVE ANALYSIS OF CSF .................................................................................................. 93TABLE 18. KEY AIM INDICATORS ....................................................................................................................... 957List of FiguresFIGURE 1. STRATEGIES OF INTERNATIONAL BUSINESS ............................................................................... 13FIGURE 2. FORD`S RECALL RATE ........................................................................................................................ 16FIGURE 3. FORD SALES IN CHINA ....................................................................................................................... 17FIGURE 4. GLOBAL AUTOMOTIVE INDUSTRY FORECAST, 2013-2018 ........................................................ 18FIGURE 5. LIGHT VEHICLE SALES FORECAST ................................................................................................. 19FIGURE 6. RESEARCH FRAMEWORK .................................................................................................................. 21FIGURE 7. PEST-ANALYSIS ................................................................................................................................... 24FIGURE 8. PORTER`S 5 FORCES ............................................................................................................................ 25FIGURE 9. FORD GLOBAL PRODUCT LINE ........................................................................................................ 28FIGURE 10. BCG GROWTH-SHARE MATRIX ...................................................................................................... 29FIGURE 11. AUTOMOTIVE VEHICLES WITH MORE PROBLEMATIC INFOTAINMENT SYSTEMS .......... 31FIGURE 12. SUPPLY CHAIN MANAGEMENT FRAMEWORK: KEY ELEMENTS ........................................... 33FIGURE 13. FORD MULTI-TIER SUPPLY CHAIN MANAGEMENT .................................................................. 35FIGURE 14. FORD`S REENGINEERED ACCOUNTS PAYABLE SYSTEM ........................................................ 37FIGURE 15. AZURE CLOUD-BASED DATA DELIVERY SERVICES ................................................................. 66FIGURE 16. FORD`S FUTURE SALES PROPORTION .......................................................................................... 67FIGURE 17. FORTHCOMING CHANGES IN VEHICLE SIZES ............................................................................ 69FIGURE 18. FORD VALUES .................................................................................................................................... 72FIGURE 19.STP-ANALYSIS ..................................................................................................................................... 74FIGURE 20. FORD OPERATIONS MAPPING ........................................................................................................ 75FIGURE 21. PROMOTIONAL MIX .......................................................................................................................... 76FIGURE 22. PROPOSED STRATEGIC DIRECTION FOR FORD MOTOR CO. ................................................... 77FIGURE 23. COMPETITION IN EV MARKET ....................................................................................................... 78FIGURE 24. FORD ORGANIZATIONAL STRUCTURE ........................................................................................ 79FIGURE 25. BALANCED SCORECARD AS A STRATEGY MAP ........................................................................ 80FIGURE 26. EMPLOYMENT IN FORD MOTOR COMPANY, IN 1000S .............................................................. 81FIGURE 27. THE TRIPLE HELIX MODEL OF UNIVERSITY–INDUSTRY–GOVERNMENT RELATIONS .... 82FIGURE 28. FORD STRATEGIC HRM .................................................................................................................... 83FIGURE 29. TRIPLE BOTTOM LINE ...................................................................................................................... 83FIGURE 30. FORD VALUE CHAIN ......................................................................................................................... 84FIGURE 31. FORD LEAN MANUFACTURING SYSTEM ..................................................................................... 85FIGURE 32. CUSTOMER PROFITABILITY FRAMEWORK ................................................................................. 87FIGURE 33. PRIM-MODEL ...................................................................................................................................... 94 8 List of ChartsCHART 1. NUMBER OF FORD VEHICLES SOLD FY2010 - 2014 ....................................................................... 14CHART 2. SUPPLIER WRI ....................................................................................................................................... 34CHART 3. FORD KEY FINANCIAL METRICS ...................................................................................................... 38CHART 4. DATA COLLECTION DYNAMICS ....................................................................................................... 48CHART 5. GENDER .................................................................................................................................................. 48CHART 6. RESPONSES BY GEOGRAPHICAL REGIONS .................................................................................... 49CHART 7. RESPONSES BY AGE GROUPS ............................................................................................................ 49CHART 8. RESPONSES BY CATEGORIES OF DRIVING EXPERIENCE ........................................................... 50CHART 9. RESPONSES BY MONTHLY INCOME ................................................................................................ 50CHART 10. DRIVING EXPERIENCE OF FORD VEHICLES IN THE PAST ........................................................ 51CHART 11. FORD FUEL-EFFICIENCY ................................................................................................................... 52CHART 12. FORD`S MARKET DEVELOPMENT PROGRESS ............................................................................. 52CHART 13. FORD INNOVATIVENESS .................................................................................................................. 53CHART 14. CUSTOMER NEEDS AND WANTS .................................................................................................... 54CHART 15. UNIFIED VEHICLE MODEL ............................................................................................................... 54CHART 16. EXTERIOR DESIGN ............................................................................................................................. 55CHART 17. INTERIOR DESIGN .............................................................................................................................. 55CHART 18. VEHICULAR INSPECTIONS ............................................................................................................... 55CHART 19. TECHNICAL PROBLEMS .................................................................................................................... 56CHART 20. MEDIA CHANNELS ............................................................................................................................. 56CHART 21. SMALL ECO-FRIENDLY VEHICLES ................................................................................................. 57CHART 22. SOURCES OF VEHICLE PURCHASE ................................................................................................. 57CHART 24. CONGRUENCE WITH STANDARDS ................................................................................................. 58CHART 23. FORD DEALERSHIPS .......................................................................................................................... 58CHART 25. THE INFLUENCE OF POLITICAL INSTABILITY AFFAIRS ........................................................... 59CHART 26. FORD MSRP .......................................................................................................................................... 59CHART 28. FORD COMPETITORS ......................................................................................................................... 60CHART 27. INVESTMENTS IN R&D ...................................................................................................................... 60CHART 29. CURRENT EQUITY OWNERSHIP ...................................................................................................... 66CHART 30. U.S. UTILITY PATENTS ISSUED TO FORD AND SUBSIDIARIES ................................................ 68CHART 31. EV CHARGING STATION UNIT SALES BY REGION, WORLD MARKETS: 2011-2017 ............. 86CHART 32. CHARGING STATION UNIT SALES, BY TYPES OF EVS ............................................................... 86 9 Executive SummaryFord Motor Company is known worldwide as one of the veterans in car manufacturing. Rebornafter profound crisis situation with new restructuring plan in 2005, it has recovered unseizedpositions and opportunities. The company has been steadily growing for little less than 10 yearsand again started to feel difficulties. Therefore, this study aims to improve and nail down thegrowth path of the company and, what is more, to provide a business development plan toachieve the global leadership in the automotive industry. The study begins with brief overview of the company, SWOT-analysis and PEST and FiveForces frameworks estimating current external environment. Hence, the author using secondarydata information pursues the business review analysis based on the consideration of mostimportant factors influencing latest business performance that are: Market, Marketing,Organization, and Financial Performance. Elaboration of these factors relies on currentcompany`s and industry`s perspectives. Market factor review helps to identify existingtendencies of automotive market development. Marketing factor review includes 3 P`s ofmarketing mix concept: product, price, and promotion. The main attention here falls to BCGmatrix model assessing current product capabilities. Organizational aspects such as supply chainmanagement, adoption of strategies and their consequences, and internal business processesoccurring in the company are examined further. And, finally, in financial performancesubsection, author highlights results by conducting revenue-, ratio-, and cash flow analysis. Oneof the key researching processes of this major project is the online research survey thatadditionally assists to find out crucial areas of investigation based on the primary data collectedfrom target respondents. After revealing and listing the gaps of operational activity, the proposed Business Model andBusiness Plan reflect the recommended mid-term strategy for further improvement based in acertain degree on Japanese methodologies and contained the upgraded marketing, operationaland financial plans. Much attention is devoted to more electrified vehicle production. For thisreason, author especially outlined those activities of value chain which need to establish from thevery beginning. Implementation schedule of the strategy mentions all activities within thefollowing three (3) years in details.The major project is supported by broad literature source base. Numerous tables, figures, andcharts serve as a reasonable evidence of author`s thoughts and make the perception of giveninformation understandable for readers.10CHAPTER 1INTRODUCTION 11 1. Introduction1.1 Overview of Ford Motor CompanyFord Motor Company is one of the oldest American automotive manufacturers that currentlyoperates worldwide with total 65 plants globally spread across the following geographicalsegments: North and South America, Europe, Asia Pacific and Africa (MarketLine, 2015).Fordis known as the first company in the world that applied the classical assembly car lines orconveyor for manufacturing and realizing purposes. Introduced methods allowed to the companyand further to the whole industry operate with large-scale manufacturing thereby increasing thetotal output. Subsequent stream of time was therefore named by the honor of the notion of masscar production - Fordism.In the middle of 2000-s due to tough and intense competition Ford was experiencing seriousfinancial difficulties and was on the verge of bankruptcy. The upgraded management teamproposed new restructuring plan of the company with “The Way Forward” strategy on its basisinitiated by former President and CEO Adam Mulally in 2006to provide cutting edge vehicleswith content and features that are characterized by “Quality, Safe, Green, and Smart” (Hughes- Cromwick, 2011). The strategy implied the reduction of fixed capital costs and the return toprofitability by resizing the company and closing inefficient vehicle assembly plants in order tomatch those current market realities. The core organizational division of the company called the “Premier Automotive Group”included that time such four prominent marques as Jaguar, Land Rover, Volvo, and Aston Martinwas eliminated by selling each of these particular business units to different automakers at thelower prices. In addition, Ford discontinued the luxury-marketed car brand Mercury in 2010 andsold its stakes in Mazda Motor Corporation and KIA Motors Corporation. But Ford stillproduces and sells luxurious passenger cars under the Lincoln brand, which is going to regain itslost ground, and off-road cars under the Brazilian Troller. The company successfully manages itssubsidiary in financial services sector – Ford Motor Credit Company. The downsizing of thestaff was also envisioned by the strategy, so that up to 30 000-factory jobs were cut.On another side, all divestments brought the company possibility to consolidate the productionlines and to produce uniform automotive vehicles commonly for every single market. Theconcept was called “One Ford”. As it generally known from international business science, thereare 4 most commonly-used strategies divided by two relative rates of pressures for localresponsiveness (complication of keeping costs low) and for cost reduction: 1) Localization, 2)International, 3) Transnational, and 4) Global Standardization.12 Figure 1. Strategies of International BusinessSource: Author based on (Prahalad & Doz, 1987)Thus, Ford has moved from localization strategy, where it had been considering the world as aportfolio of national markets, to global standardized strategy with the perception of the world asa single integrated market and with ability for regional customization. In fact, accepted strategywas slightly returning the company to rather profitable state. Great rebound of the company was expected. By the end of 2010, Ford had been the third largestcar manufacturer right behind the General Motors and Toyota. However, recent years werecharacterized by the decline of unit sales in certain countries, including some South-Americanth and European countries (See Figure 2). In 2014, Ford sank to 26 place in the Fortune Globalth 500 ranking of largest corporations measured by revenues whereas in 2006 it was 9 .Ford is ablue chip company, meaning this is a public limited company, whose shares are being quoted onthe stock market (on NYSE in particular) and which are considered as very high qualified andless liable to volatility.13 Chart 1. Number of Ford vehicles sold FY2010 - 2014Source:(Statista, 2015)Table 1. SWOT-analysis of Ford Motor CompanyStrengths1) Strong market position across product portfolioSometimes Ford`s strong market positions are associated with the endurance of the company`spresence in particular regions. Traditionally, the North American region remains the mostprofitable segment of the company. By 2012 year, the level of market share on the NorthAmerican market reached to 16,5% (Table 2). In addition, the product lineup of Ford is quitewide and various and designed for numerous group of consumers from small cars (B-platform14 products) such as B-MAX sold in Europe to large commercial trucks sold globally. Thecompany`s medium segment car Ford Focus is one of the largest selling cars globally, especiallythe second serial of the model was breaking the records of merchantability. Under thecommercial segment, the company`s F-series enjoys the leadership positions in the US best- selling pickups market controlling the 40% of total market share. Apart from that, Ford trucksenjoy dominant positions in commercial subcategories, including mining, construction, oil andenergy, small business. Hence, strong market position across product portfolio, backed by one ofthe advanced showroom warehouses in the industry, gives Ford significant competitiveadvantage in the market place and assist in delivering sustainable business performance(MarketLine, 2015).Table 2. Market shares of Ford Motor Company in different regions2) Intense focus on sustainability and fuel-efficient technologiesIntense focus on sustainability and fuel-efficient technologies further enhances Ford's brandequity that helps in further expanding its customer base. Ford focuses on deliveringenvironmentally and economically sustainable technologies. The company is recognized for itsefficient use of natural resources, including paint process improvements, retooling ofmanufacturing facilities with energy-efficient equipment and large-scale lighting replacements.Among its product sustainability efforts, the company is increasing the use of sustainablematerials, eliminating undesirable materials, substances such as heavy metals, and substancesthat are known to be common allergens. Additionally, the company is highly focused ondelivering sustainable technologies and alternative fuel options to further improve fuel economyand cut down CO2 emissions of its products around the world (MarketLine, 2015).3) Robust research and developmentFord operates 56 engineering, research and development centers worldwide. And one of themhas been recently opened in the Stanford Research Park, Silicon Valley (Tilley, 2015). Strongengineering, R&D capabilities support and enhance Ford's service offerings as well as enable itto drive future growth. The R&D efforts are directed at improving the fuel efficiency, safety,customer satisfaction, and developing new products (MarketLine, 2015).15 Weaknesses1) Frequent product recallsFrequent product recalls negatively affect the consumer's confidence on Ford, which in its turnresult in damage to the brand name, and reduced trust on the company's products. Product recallsare mainly connected with manufacturing and design problems. For instance, the company hasrecently recalled its release of Escape model SUV cars due to the huge number of customercomplaints on sticking brake pedal and parking brake issues, over accelerating, potential fuelleakages, speed control cable, steering, rust, which caused many injuries and car fires andcrashes. Figure 3 reflects statistical data on the recalling rates of largest automakers (Atiyeh,2014).Figure 2. Ford`s Recall Rate2) Decline of unit sales A sustained decline of unit sales in certain countries or regions could negatively influence thecompany’s market share and overall competitiveness in the future. The company has witnesseddecline in the unit sales of its vehicles in Russia. The company sold 105,000 vehicles in Russiaduring FY2013 against 134,000 in FY2012, a decline of 21.6% during the period. As a result, ofthis, the company's market share in Russia declined from 4.3% in 2012 to 3.8% in 2013. Ford's16 market share decline in Russia was largely driven by industry growth in SUV segments, wherethe company is not fully participating (MarketLine, 2015).Opportunities1) New product launchesNew product launches represents a huge actionable opportunity for Ford to enhance itscompetitiveness in the evolving automotive industry and position itself to further drive profitablegrowth. Thus, in 2015 six new models are anticipated to be released which will push the brand of“Blue Oval” more up market and will capture new customers (Auto Express, 2015).2) Increased focus on emerging marketsBy making substantial investments, Ford is increasing its participation in newly developed andemerging markets, such as Brazil, Russia, India, and China, in which vehicle sales are expectedto increase at a faster rate than in most mature markets. For instance, in May 2013, Fordintroduced its urban sport utility vehicle EcoSport in the Indian market that is expected tobecome the third largest automotive market in the world by 2020 (MarketLine, 2015). InDecember 2014 total sales escalated by 28% there (The Economic Times, 2015).The Chinese automotive marketpresents tremendous potential forfurther growth especially in fast- growing luxury car segment. TheChinese luxury segment isforecast to surpass the US luxurysegment by 2020. Luxury vehiclesales are expected to more thandouble - from the current 6% ofthe market to nearly 9% by theend of the decade to reachapproximately 2.7 million units.Therefore, the company hasintroduced Lincoln cars in Chinain the second half of 2014 (Miller,August 2014). Even though Fordsales in China has tripled lastyears, still some rivals sell moreFigure 3. Ford Sales in Chinaunits. 17 Threats1) Intense competition and pricing pressureThe global automotive industry is highly competitive which pressurizes manufacturers' ability toincrease prices. The principal competitive factors include price, quality, available options, style,safety, reliability, fuel economy and functionality.2) Currency fluctuations and trade policy risksFord, as well as other large automotive industries, may negatively be affected by fluctuating ofexchange rates. There is a threat of U.S. dollar`s weakening. Therefore, floating profits might belower because of appreciating dollar against other currencies (MarketLine, 2015).1.1 Business conceptThe business concept can be considered from two sides: from the industry perspective and fromthe company`s internal business processes and challenges expected to face in the future.According to the forecast of one of the most authoritative publisher in the industry “IHSAutomotive”, the automotive industry is looking forward to gradual growth i.e. by the period of2013-2018 it will increase by 11,6 million units and the total manufacturing industry value willgrow by one billion of USD (Pearson, 2015). Figure 4. Global Automotive Industry Forecast, 2013-2018(Statista, 2015)Global automotive production will grow. According to the survey conducted by KPMG`sanalytics interviewed a number of executives in automotive industry, global vehicle sales willsurpass the 100 million mark within next 2-3 years, and continue to rise until the end of this18 "