Strategic ManagementStrategic ManagementCase AnalysisCase Analysis

Lecturer: Dr. YeapLecturer: Dr. Yeap

Mohammad Tehrani NasrMohammad Tehrani Nasr 10712005301071200530

Competitive Environment Analysis

• Market Structure:Market Structure: Oligopoly Oligopoly

• Largest auto market:Largest auto market: U.S. U.S.

• 1616 million vehicle in year, 22 firms million vehicle in year, 22 firms

• Big Five:Big Five: GM, Ford, Toyota, Chrysler and Honda GM, Ford, Toyota, Chrysler and Honda

Automobile IndustryAutomobile Industry

• Founded:Founded: 19081908

• Headquarters:Headquarters: Detroit, Michigan, USADetroit, Michigan, USA

• Employees :Employees : 252,000 (2008)252,000 (2008)

• Founded:Founded: 1937 1937

• Headquarters:Headquarters: Tokyo, Japan Tokyo, Japan

• Employees:Employees: 316,121 (2008) 316,121 (2008)

• Founded:Founded: 19251925

• Headquarters:Headquarters: Michigan, USAMichigan, USA

• Employees:Employees: 58,000 (2008)58,000 (2008)

• Founded:Founded: 19481948

• Headquarters:Headquarters: Tokyo, JapanTokyo, Japan

• Employees:Employees: 167,231 (2008)167,231 (2008)

What is The Ford’s Competitors Objective?What is The Ford’s Competitors Objective?

• Maximum ProfitMaximum Profit

• Market share growthMarket share growth

• Technological leadershipTechnological leadership

• Service leadershipService leadership

U.S. Market Share - 2008U.S. Market Share - 2008

15%

22%11%

11%16%

25%Other Other 17 Co.17 Co.

Source: http://www.usnews.com

U.S. Light Vehicle Sale - April 2009U.S. Light Vehicle Sale - April 2009

0

50,000

100,000

150,000

200,000

250,000

300,000

April 2009 171,258 129,476 126,540 76,682 101,029

April 2008 256,058 188,527 217,700 147,751 135,180

GM Ford Toyota Chrysler LLC Honda

↓33% ↓42%

Source: http://online.wsj.co

↓48% ↓25%↓31%Number

Total RevenueTotal Revenue

-

50,000,000

100,000,000

150,000,000

200,000,000

250,000,000

300,000,000

GM 207,349,000 181,122,000 148,979,000

TM 179,083,000 202,864,000 262,394,000

Ford 160,123,000 172,455,000 146,277,000

HM 84,217,966 94,240,690 121,228,623

2006 2007 2008

Source: http://finance.yahoo.com

Net IncomeNet Income

(50,000,000)

(40,000,000)

(30,000,000)

(20,000,000)

(10,000,000)

-

10,000,000

20,000,000

GM (1,978,000) (38,732,000) (30,860,000)

TM 11,681,000 13,927,000 17,146,000

Ford (12,613,000) (2,273,000) (14,672,000)

HM 5,074,781 5,034,737 6,060,394

2006 2007 2008

Source: http://finance.yahoo.com

SubsidiariesSubsidiaries

8 Brands 8 Brands (Ford, Lincoln, Mercury, Mazda, Volvo, Jaguar, (Ford, Lincoln, Mercury, Mazda, Volvo, Jaguar, Land Rover, Aston Martin)Land Rover, Aston Martin)

13 Brands 13 Brands (Buick, Cadillac, Chevrolet, GM Daewoo, GMC, (Buick, Cadillac, Chevrolet, GM Daewoo, GMC, Holden, Hummer, Pontiac, Opel, Saab, Saturn, Vauxhall, Holden, Hummer, Pontiac, Opel, Saab, Saturn, Vauxhall, and Wuling)and Wuling)

5 Brands5 Brands (Toyota, Lexus, scion, Daihatsu, Hino)(Toyota, Lexus, scion, Daihatsu, Hino)

4 Brands4 Brands (Chrysler, Dodge, Jeep, Mopar)(Chrysler, Dodge, Jeep, Mopar)

2 Brand2 Brand (Honda, Acura) (Honda, Acura)

Patterns of Target MarketPatterns of Target Market

• Differentiated marketing

Innovation in service and technologyInnovation in service and technology

TQM (Total Quality Management)TQM (Total Quality Management)

Innovation in technology, safety, design Innovation in technology, safety, design

Core CompetenceCore Competence

Active Park Assist Active Park Assist

• Helps drivers parallel park with the touch of a button• Available in mid-2009 on Lincoln

Environmental Trend Environmental Trend

• Oil Price Shock

• Global warming

• Ford’s Plan:Ford’s Plan:““Our plan also includes building on our competence inOur plan also includes building on our competence in

hybridhybrid vehicles. And vehicles. And $14$14 billion investment on advance billion investment on advance

technologies to improve fuel efficiency by over technologies to improve fuel efficiency by over 25%”25%”..

Environmental Trend Environmental Trend

2010 Ford Fusion with better highway2010 Ford Fusion with better highway

fuel economy than Toyota Camry fuel economy than Toyota Camry

Attractiveness of External EnvironmentAttractiveness of External Environment

Industry Analysis

Attractive

ExternalEnvironment

Competitor Analysis