Ford Motor Company: Implementing the 'One Ford' Strategy

            
 
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Case Details:

Case Code : BSTR423
Case Length : 18 Pages
Period : 2006-2012
Pub Date : 2013
Teaching Note :Not Available
Organization : Ford Motor Company
Industry : Automotive
Countries : US; Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.



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"Our goal is to build more of the products that satisfy the wants and needs of our customers. We are working as a single worldwide team to improve our cost structure, raise our quality, and accelerate our product development process to deliver more exciting new vehicles faster." 1

-Ford Motor Company, 2006 Annual Report.

"Because of One Ford, our local product-development team is part of the (global) development team, so we could provide input in early (production) stages to meet local needs." 2

-Rogelio Goldfarb, vice president of corporate affairs, Ford.

In September 2012, Ford Motor Company (Ford) unveiled revamped versions of the Mondeo and the Fiesta in an Amsterdam stadium packed with its European dealers. At the event, Ford also unveiled the EcoSport, a sport utility vehicle to be manufactured in Ford's India facility. The EcoSport was expected to be launched in Europe within 18 months. These models, together with new ones to be launched over the next few years, were to share as few as nine platforms. Prior to 2006, Ford had as many as 94 platforms. By limiting the number of platforms and models, the company aimed to drastically reduce costs and remain profitable even at a lower volume. This product strategy was part of the 'One Ford' strategy, which Ford started to implement in September 2006.

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While the other two American auto giants, General Motors and Chrysler , had struggled to survive the recession, Ford had not only been able to tackle it effectively but to also be profitable. Analysts attributed this in significant measure, to the 'One Ford' strategy that CEO Alan Mullaly put into place.

Ford's 'One Ford' strategy was designed to restructure the company's global operations, simplify its brand structure, minimize labor costs, strengthen its balance sheet, and ensure that its production capacity matched the demand for its vehicles.

However, Ford was up against several challenges. Though it seemed as if the global automotive industry had put the worst behind it, the market continued to be sluggish. The macro indicators suggested that the developed market would continue to operate at a smaller volume. This meant that Ford and its competitors would be jostling for a shrinking market. With most auto companies realizing the importance of alternative energy powered vehicles, Ford's efforts in this space came in for some face stiff competition. In the emerging markets of China and India, Ford was a minor player, struggling to improve its market share. In the developed markets too, it had to deal with resurgent competitors.

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1] Ford Motor Company, 2006 Annual Report, www.ford.com/doc/2006_AR.pdf
2] Byron Pope, "'One Ford' Strategy Key to Global Challenge, Executives Say," www.wardsauto.com, September 20, 2012.


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