How Winners Make Choices (Kiezen voor Winst) - How Ford Wrecked Jaguar

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How Ford wrecked Jaguar(And how Tata revived it)A source of inspiration for companies with ambition| www.howwinnersmakechoices.com

Welkom bij een van onze webinars voor het boek kiezen voor winst. In deze webinar staat de luchtvaartindustrie centraal, in het bijzonder zullen we ons richten op Brussels Airlines dat voor een aantal strategische keuzes staat.

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HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONJaguar: A Symbol Of English Elegance

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Jaguar was founded in 1922 (initially the company name was Swallow Sidecar Company, in 1945 the name changed to Jaguar) and has since become a symbol of British elegance with its slogan 'grace, space, pace'.

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Foto: 1961 Jaguar E-Type

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HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONFord Acquires Jaguar

1989Ford acquires Jaguar for $2,38 billion3

Until 1989, when Ford made an offer for all Jaguar shares, early 1990 Ford acquired Jaguar for more than 2 billion dollars.

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Bron: http://www.nytimes.com/1989/11/03/business/ford-to-buy-jaguar-for-2.38-billion.html3

HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITION

Ford Made Three Mistakes4

The marriage between Ford and Jaguar is not successful, the three major mistakes of Ford, that underlie this lack of success, will be explained in the next three slides.4

HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONMistake 1: Jaguar Management Lost Autonomy

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The first mistake was that Ford reduced the autonomy of the management of Jaguar. Ford started the integration process very arrogantly. The aim was to adjust Jaguar, as quickly as possible, to its new Ford environment. To realize this, Ford significantly reduced the autonomy of the management of Jaguar, even to the extent that Jaguars were designed in the US with very limited influence of the old Jaguar management.

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Bron: http://www.just-auto.com/the-just-auto-blog/x-type-debacle-not-our-fault-guv_id1704.aspx5

HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONMistake 2: Jaguar Is Not A Priority For Ford

Luxury Brands Ford6

Given that Ford owned five other luxury brands, in that period, Jaguar wasnt a priority for Ford. This is the second mistake.

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HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONMistake 3: Jaguar X-type Built On Ford Mondeo Platform7

The third mistake stems from Fords decision to build Ford and Ford Jaguar on the same platforms as much as possible. The identity of Jaguar was lost completely. This led to an apotheosis in 2000, when Ford released the Jaguar X-type as a competitor of the BMW 3-series and the Mercedes C-Class. Ford denied the differences between Ford and Jaguar and built the new X-Type on the Ford Mondeo platform. That choice, however, devalued the Jaguar brand. Despite the wooden veneer the consumer no longer recognized the English elegance, but only the mass-appeal that characterizes Ford. 7

HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITION

Consequences For Ford & Jaguar

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Profit?

Billion dollars invested by FordNone8

These errors have had major implications for both Ford and Jaguar. Between 1998 and 2004, Jaguar had five different CEOs. Ford has invested approximately 50 billion into Jaguar, despite the huge investment Jaguar wasnt profitable in any year under Ford.

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Bron cijfers: http://www.theglobeandmail.com/globe-drive/news/industry-news/how-the-cat-came-back-jaguars-playbook-for-prosperity/article24509337/

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HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONTata Buys Jaguar Land Rover From Ford

2008Tata buys Jaguar Land Rover for $2,3 billion9

In 2008, after a total investment of about fifty billion dollars Ford, at that time almost bankrupt, Sells Jaguar Land Rover to Tata Motors. Land Rover was acquired by Ford from BMW in 1999 for $ 3.3 billion. Although Land Rover was occasionally profitable Ford was also never able recover her investment in Land Rover.

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Interessante artikel over hoe Ratan Tata wraak nam of Ford:http://www.kenfolios.com/a-must-read-story-of-ratan-tata-buying-jaguar-to-take-revenge-from-ford/

Overige bron: http://www.thecarconnection.com/news/1015368_just-how-much-did-ford-lose-on-jaguar-and-land-rover9

HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONHow Did Tata Revive Jaguar?

Jaguar gets more autonomy

Jaguar team strengthened by BMW directorsJaguar XE, built on Jaguar XF-chassis

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Tata understands Jaguars identity much better than Ford, manages to give the brand a new impetus. Tata doesnt restrict Jaguar or forces it to fit within Tata Motors. In contrast: Tata allows Jaguar to rediscover its own soul. In 2010 the Jaguar team in strengthened in this mission by a number of former BMW directors. Jaguar gets way more autonomy from Tata than it ever got from Ford, which enabled the brand to regain its British finesse. The new Jaguar XE, successor of the X (whose production was discontinued in 2009), was built on a second generation XF-chassis, the successor fo the S-type.

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HOW WINNERS MAKE CHOICES: A SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITIONTata Makes Jaguar Land Rover Flourish

In 2015 revenue, w.r.t. 2008, increased tenfold & Tata made a 2.6 billion profit11

Under Tata's wings, Jaguar Land Rovers revenue increased tenfold in eight years (from 2.1 billion to 21.9 billion). In 2015 Jaguar Land Rover made a healthy 2.6 billion pound profit.

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Opmerking: In het boek staat het volgende over de omzetgroei van Jaguar onder Tata: Onder Tata is de omzet van Jaguar Land Rover in de laatste vijf jaar meer dan verdubbeld. De winst bedraagt nu een slordige twee miljard pond per jaar. De cijfers op de sheet zijn gebaseerd op het onderstaande artikel en gecheckt aan de hand van de jaarverslagen en moeten dus juist zijn.

Elio suggested to use increased substantially instead of increased tenfold. This makes the difference between the book and the slides less obvious, however substantially is really vague and therefore I prefer the current option. However if you prefer substantially feel free to change.

Bron Cijfers: http://www.telegraph.co.uk/finance/11876795/Jaguar-Land-Rover-is-back-and-purring-again.html11

How ford wrecked jaguar (and how Tata Revived it)HOW WINNERS MAKE CHOICESA SOURCE OF INSPIRATION FOR COMPANIES WITH AMBITION

Thank you for your attention. We hope that this webinar will help you start making choices like a winner.

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