ford presentation.ppt

8/12/2019 ford presentation.ppt

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Hamill Bassue

Owen Hendershot

Goran Nagradic


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Overview

Company Overview Fords brief history

Mission and Vision statement

Current Objectives &Strategies

New Mission and Vision External Assessment

Industry Analysis

Opportunities & Threats

EFE Matrix

Internal Assessment Strengths & Weaknesses

Financial ratios

IFE Matrix

Strategy Formulation SWOT Matrix BCG Space Matrix IE Matrix Grand Strategy Matrix

QSPM Matrix Strategic Plan for the Future

Objectives Strategies

Implementation EPS/EBIT

Other issues Evaluation

Ford 2008 Update


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About the Company

Manufactures and distributes automobiles on

six continents, strong presence in all 50 states.

Employs approximately 224,000 people and

operates 90 plants worldwide.

Brands include Ford, Lincoln, Mercury, Volvo,

Mazda and Ford Motor Credit Company

(financial service).


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Fords Brief History

1903Ford Motor Company founded in Michigan

1908Model T introduced

1913first moving automobile assembly line in the

world1956Fords stocks go on sale (10.2 million shares

sold the first day)

1987beginning of the acquisitions of otherbrands

1988Ford Motor Company reached the peek


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Management

William Clay Ford, Jr.

Executive Chairman

Alan Mulally

President and CEO

Donat R. Leclair

Executive V.P. andCFO

Lewis Booth

Executive V.P. Ford ofEurope/PAG

Mark Fields

Executive V.P. andPresident, The

Americas

Mark Schulz

Executive V.P.


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Mission & Vision Statement

"To become the world's leading consumer

company for automotive products and

services.

- Ford doesnt have vision statement


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Objectives

To contribute to stabilizing the climate by

considering reducing long-term emission

To promote the development of an

infrastructure that will expand the use of bio-

fuels and help reduce our dependence on oil

To cut the usage of global energy by 27% and

the usage of water by 25%


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Strategies

Utilizing their advance technology

Building of smaller vehicle

Cost reduction Market expansion through joint venture and

strategic alliance


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New Mission & Vision Statement

- Both mission and vision are one statement

Our vision is to become the world's leading consumer manufacturingcompany for automotive products and services. To achieve this, wethe company and all our employees are dedicated to provide all ourcustomers and the community with safe innovative products andservices of world class standards. Through our engineeringexcellence, high quality and the use of our constantly upgradingtechnology we limit the harm that we cause to the environmentwhile delivering superior value to our customers. Our close knitworking environment allows our employees, community andbusiness partner to share in our success, while achieving asubstantial return on our shareholders investment.


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External Assessment


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Industry Analysis

Global Automobile Industry Value Global Automobile Industry Volume


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Industry Segmentation


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Industry Segmentation


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Industry Market Share


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Industry Forecast


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CPM

Ford GM

DiamlerChrysler

AG Toyota

Critical Success factors

Weigh

ts

Rati

ng

Weighted

Score

Rati

ng

Weighted

Score

Rati

ng

Weighted

Score

Rati

ng

Weighted

Score

0.0 to

1.0

1 to

4

1 to

4

1 to

4

1 to

4Global Expansion 0.14 2 0.28 3 0.42 2 0.28 3 0.42

Financial Position 0.10 2 0.2 4 0.4 3 0.3 3 0.3

Growth 0.16 1 0.16 3 0.48 1 0.16 4 0.64

US Market Share 0.20 3 0.6 4 0.8 2 0.4 2 0.4

Customer Loyalty 0.15 4 0.6 3 0.45 4 0.6 3 0.45

Hybrid/Fuel Efficient Vehicles 0.18 3 0.54 3 0.54 2 0.36 2 0.36

Management Experience 0.07 3 0.21 4 0.28 3 0.21 3 0.21

Totals 1 2.59 3.37 2.31 2.78


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Opportunities & Threats

Opportunities

Consumers demand hybrid

and fuel efficient vehicles

Increase in consumerspending trends

Consumers demand more

innovative vehicles

Global expansion Industry experiences slow

and steady growth

Threats

Weak USD

Increase in steel and resin

pricing Increasing gasoline prices

Stricter CO2 emission

standards

Increasing mortgage rates


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EFE Matrix


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Internal Assessment


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Stock performance


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Financial Highlights

Income Statement

Balance Sheet

Cash Flow Statement
http://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=ANN&symbol=F.Nhttp://www.reuters.com/finance/stocks/incomeStatement?stmtType=BAL&perType=ANN&symbol=F.Nhttp://www.reuters.com/finance/stocks/incomeStatement?stmtType=CAS&perType=ANN&symbol=F.Nhttp://www.reuters.com/finance/stocks/incomeStatement?stmtType=CAS&perType=ANN&symbol=F.Nhttp://www.reuters.com/finance/stocks/incomeStatement?stmtType=BAL&perType=ANN&symbol=F.Nhttp://www.reuters.com/finance/stocks/incomeStatement?stmtType=INC&perType=ANN&symbol=F.N


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Ratios

Ratio

Compass

Group PLC Industry

Debt-to Total assets 0.60 -

Debt-to Equity 29.94 47.47

Long-term debt-to Equity 29.94 110.45

Time-interest-earned -2.64 0.01

Net Profit Margin -0.02 1.75

Gross Profit Margin 0.11 15.3

Operating profit Margin 0.11 2.99

Ratio

Compass

Group PLC Industry

Return on Total Assets -0.01 1.38

Return on Equity -0.48 5.19

EPS -1.24 -

P/E -5.98 14.53

Sales (growth) 7.74 -7.24

Net Income (growth) 463 1.75

EPS (growth) 1101 14.91

Dividends (growth) -100 1


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Strengths & Weaknesses

Strengths

Strong and globally positioned

brand names

Large employee base withhighly educated engineers and

good R&D department

One of the largest automotive

manufacturer (along with a

long history) 1285% increase in net cash

Huge increase in total equity

Weaknesses

A lot of time spent to actuallyput the product on the market

Recording continuous losses

(net income) from 2006 Low quality of new products

(recallscausing losingcustomers)

Lack of management of thecompany

EPS very badin negativenumbers (unattractive for theinvestors)


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IFE Matrix

Key Internal Factors Weights Rating

Weighted

Score

0.0 to

1.0

1, 2, 3 or

4

Internal Strengths 3 or 4

Strong and globally positioned brand names 0.13 4 0.52

Large employee base with highly educated engineers and good R&D

department 0.09 3 0.27One of the largest automotive manufacturer (along with a long

history) 0.06 3 0.18

1285% increase in net cash 0.09 3 0.27

Huge increase in total equity 0.11 4 0.44

Internal Weaknesses 1 or 2

Alot of time spent to actually put the product on the market 0.1 2 0.2

Recording continuous losses (net income) from 2006 0.12 1 0.12

Low quality of new products (recalls - causing losing customers) 0.12 1 0.12Bad management of the company 0.08 2 0.16

EPS very bad - in negative numbers (unattractive for the investors) 0.1 1 0.1

Totals 1 2.38


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Strategic Formulation


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SWOT MatrixStrengthsS

1. Strong globally positioned brandnames

2. Large employee base with highly

educated engineers and good R&D

department

3. One of the largest automotive

manufacturer (along with a long

history)

4. 1285% increase in net cash

5. Huge increase in total equity

WeaknessesW

1. A lot of time spent to actually put theproduct on the market

2. Recording continuous losses (net income)

from 2006

3. Low quality of new products (recalls -

causing losing customers)

4. Lack of management of the company

5. EPS very bad - in negative numbers

(unattractive for the investors)

OpportunitiesO

1. Consumers demand hybrid and fuel

efficient vehicles

2. Increase in consumer spending trends

3. Consumers demand more innovative

vehicles

4. Global expansion

5. Industry experiences slow and steadygrowth

SO

1. Developing new vehicles on

alternative fuels (S1, S2, S4, O1, O3.

O5)

2. Offer new innovative products

increase market share - motorbikes

(S1, S2, S3, O2, O3, O5)

3. Concentrate on making the best fuelefficient cars (S1, S2, S3, S4, O1, O4,

O5)

WO

1. Relocate the production to cheaper

country with lower taxes (W2, W4,

O4, O5)

ThreatsT

1. Weak USD

2. Increase in steel and resin pricing

3. Increasing gasoline prices

4. Stricter CO2 emission standards

5. Increasing mortgage rates

ST

1. Build eco-friendly products from

alternative materials (S2, S3, S4, T2,

T3, T4)

2. Produce more cars for foreign

market (S1, S2, S4, T1, T4)

WT

1. Merge with competitors (W1, W2, W5,

T2, T3, T5)

2. Manufacture only parts for

automobiles (W1, W2, T1, T2)


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SPACE Matrix

FS+6

+1

+5

+4

+3

+2

-6

-5

-4

-3

-2

-1-6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6

IS

Conservative Aggressive

Defensive Competitive28


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BCG Matrix

Revenues % Revenues Profit % Profit% Market

Share

% Growth

Rate

NA 69365 45% -4161 - 61% -0.1

SA 7585 5% 1172 - 30% +33

Europe 36330 24% 744 - 81% -3PAG 33067 21% -1872 - - +10

Asia 8032 5% 206 - 38% +3

Total 154379 100% -3911 - - -


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BCG Matrix

Relative market share position in the industryHigh 1.0 Medium .50 Low 0.0H

igh+30

Medium0

Low-3

In

dustrysalesgrow

thrate

SA

APA

NA


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IE Matrix

Hold and Maintain

31


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Grand Strategy Matrix

Rapid Market Growth

Quadrant II Quadrant I

Strong

Competitive

Position

Slow Market Growth

Weak

Competitive

Position

Quadrant III Quadrant IV


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Matrix EvaluationAlternative Strategies BCG IE SPACE GRAND COUNT

Forward Integration x 1

Backward Integration x 1

Horizontal Integration x 1

Market Penetration x x x 3

Market Development x x 2

Product Development x x x 3

Concentric Diversification x x 2

Conglomerate Diversification x x 2

Horizontal Diversification x x 2

Joint Venture x 1

Retrenchment x x 2

Divestiture x x 2

Liquidation x 1


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Possible Strategies

Developing new vehicles on alternative fuels

(S1, S2, S4, O1, O3, O5)SO1

Offer new innovative productsincrease

market share (S1, S2, S3, O2, O3, O5)SO2

Concentrate on making the best fuel efficient

cars (S1, S2, S3, S4, O1, O4, O5)SO3


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QSPM


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Strategic Plan for the Future


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Objectives for the 2008 - 2010

Reduce manufacturing expenses by 15-20% 2008

Introduce new small fuel efficient vehicles 2009

Enter Latin American and Asian market with

hybrid vehicles 2010 Develop affordable electric car for US market

2009-2010

Increase market share 2009-2010

Build up strong financials (increase net incomeand EPS by 15%) 2009-2010


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Recommendation

Manufacturing of new small fuel-efficient

vehicle $ 7,000,000,000

Entering the Latin American and Asian market

with hybrids $ 20,000,000,000

Implementation of electric car in the US

market $ 13,000,000,000

Total Cost = $ 40,000,000,000


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Implementation


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EPS/EBIT

Amount needed: $40,000,000,000

Stock price: $7.42

Interest rate: 7.5%

Tax rate: 0% (firm is having a loss)

# of shares outstanding: 2,195,000,000

# shares needed: 500,404,312


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EPS/EBIT

Common stock financing Debt financing

Recession Normal Boom Recession Normal Boom

EBIT 10 20 40 10 20 40

Interest 0 0 0 1.5 1.5 1.5

EBIT 10 20 40 8.5 18.5 38.5

Taxes 0 0 0 0 0 0

EAT 10 20 40 8.5 18.5 38.5

#shares 2.695 2.695 2.695 2.695 2.695 2.695

EPS 3.71 7.42 14.84 3.15 6.86 14.28

*data in $ billion


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Other Issues

Laws and regulations in foreign countries

Regain lost trust in the Fords brand


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Evaluation

Excellent

Good

Unsatisfied


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Ford 2008 Update


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Industry Update


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Sources

Ford Motor Company Annual Report 2007

General Motors Annual Report 2007

http://www.ford.com/about-ford/investor-

relations

Datamonitor

Global Automobile Industry manufacturer 2006

Pictures taken from Web
http://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relationshttp://www.ford.com/about-ford/investor-relations


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Questions???

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ford presentation.ppt