Ford's e-Business Strategy
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ICMR HOME | Case Studies Collection
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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Please note:
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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Background Note
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Ford was established in June 1903 by Henry Ford. The
company's first car Model A was introduced in July 1903. Several manufacturers
launched expensive car models to compete with Model A, but failed. A few years
later, Ford launched Model T, which became very successful because of its
durability and easy reparability. In the early 1920s, Ford entered the luxury
car segment by acquiring Lincoln Motor Company. However, in the 1920s, General
Motors (GM) launched a variety of styles, an assortment of colors and became
Ford's biggest competitor.
In the 1930s, Ford faced major problems during the Great Depression. Henry tried
to deal with the depression by increasing wages and reducing prices. |
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Ford also obtained an order to supply to the US Military 500 liberator bombers1
per month to support the World War II, as a result of which the company
survived. In the 1940s, Henry Ford II (Henry Ford's grandson) took over as
the CEO of Ford. He made several changes in the company including
establishing of 'Profit Centers', to identify areas that were not making
money. He also closed obsolete plants and initiated moves to retrain
workers. In January 1956, Ford made an initial public offering of 10,200,000
shares. In the 1960s, Ford expanded its operations to Europe.
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The oil crisis of 1974 had a major impact on the
automobile industry. While the US market shifted towards small and
fuel-efficient cars, Ford had excess capacity in large cars. Ford
responded by diverting a part of its production capacity to Pinto, its
small car. By the mid 1980s, Ford's profitability had improved and for
the first time in 60 years, Ford generated more profits than GM
worldwide. In 1988, Ford reported the highest level of profits ever for
a US car company. In 1993, Ford's Board of Directors appointed Alex
Trotman as the new CEO. According to Fortune, Trotman's entrepreneurial
instincts and his remarkable self-confidence helped him get the coveted
post. In 1998, Ford acquired the Audi's racing engines unit. |
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