CASE ASSIGNMENT: Ford Motor Co.
1. One Ford; One Big Turnaround
In 2006, as the United States was nearing one of the worst economic recessions in its history, Ford Motor Co. was best known for big brawny pickups, gas-guzzling SUVs, and the all-American Mustang. That year, Ford posted a $12.6 billion loss. In 2007, it posted a $2.7 billion loss, and U.S. and global economies dove into a three-year recession. During that recession, Ford’s major U.S. competitors (General Motors and Chrysler) suffered such losses that the U.S government gave them massive bailout loans and both companies filed for bankruptcy. Ford, however, executed a series of key strategic maneuvers, asset divestitures, ...view middle of the document...
Mullaly then asked his design team, “How many billions of dollars does it cost to build brand loyalty around a name?” Because the Ford Taurus name had great brand loyalty and name recognition, Mullaly immediately brought the Taurus back and set about reviving the brand name with new cooler design, rather than lose the valuable brand equity.
Along with changing the Taurus, Ford revamped the Fusion and Focus lines and brought in the Fiesta from global markets. The changes have reaped awards: Ford’s revamping of the Ford Fusion resulted in the mid-size sedan being selected as the 2010 Motor Trend Car of the Year. The new Fiesta was ranked number one by U.S. News Rankings and Reviews in the affordable small car category at the beginning of 2011.
One way that Ford has been able to quickly bring about success is by building different models with the same or similar excellent components all over the world. The Focus and Fiesta lines use a single platform for each worldwide market. Ford will still offer five Focus variants based on that one platform—four-door, hatchback, SUV, minivan, and commercial vehicle. The cost savings allow Ford to produce hybrid and electric models more affordably. In fact, the Ford Focus Electric, due out in late 2011, is one of five electric vehicles that Ford intends to release over the next two years. Ford is also exploring alternative fuels such as hydrogen and increasing the efficiency of existing gas and diesel engines.
But a vehicle is more than its engine, and Ford understands that the entire consumer experience is what builds loyalty. Ford engineers invest great care and creativity in the design and safety features of their vehicles. For example, the integrated tailgate step and assist bar on Ford F-series trucks make it easier to climb into the truck bed. Ford’s curve control technology in the Ford Explorer can automatically reduce the vehicle’s speed by 10 mph in one second if...