Ford's e-Business Strategy
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Case Details:
Case Code : ITSY002
Case Length : 09 Pages
Period : 1999-2002
Pub Date : 2002
Teaching Note : Available
Organization : Ford
Industry : Automobiles
Countries : USA
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"Henry Ford put wheels on the road, and now we are
putting wheels on the Internet."
- Phil Spender, Managing Director, Ford India Ltd.
Introduction
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In early 1999, Ford Motor Company (Ford), the leading
automobile manufacturer in the world, announced its e-business strategy, through
which it sought to transform itself from an 'old economy' to a 'new economy'
company. Almost 90 years after Ford introduced the world to the concept of mass
production, the company was all set to revolutionalize the auto industry, by
using the Internet to introduce radically new ways of planning, manufacturing
and selling cars.
Towards the end of 2000, Ford announced its 'Build to order' model for
manufacturing cars. The model, similar to Dell Computer's model was expected to
help Ford's customers to customize car features with just a click of the mouse. |
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The model once implemented would enable customers to get what they ordered,
delivered at their doorsteps. Initially, customers were allowed to send
personalized information through Ford's website (Forddirect.com) which
enabled them to configure, select, price, finance and schedule delivery of
any Ford car or truck. Ford expected major improvements in supply chain
management as well as rise in demand for its vehicles after the
implementation of its e-business initiatives (Refer Exhibit I).
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Above all, Ford hoped to increase customer
satisfaction levels by providing speed, convenience and value-added
information to them (Refer Exhibit II). This led some analysts to remark
that none of the other automobile companies were pursuing their e-biz
initiatives as boldly and broadly as Ford. However, critics felt that it
was not necessary for Ford to rush with its e-business initiatives on
such a large scale. They criticized Ford for announcing several grand
plans but implementing few. Moreover, return on investment was one of
the key issues for e-business ventures. Jurgen Hubbert, a member of
DaimlerChrysler's management board, said, "Why jump into this sort of
business when nobody makes money?" |
Ford's e-Business Strategy
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