Hamill Bassue Owen Hendershot Goran Nagradic

Overview
Company Overview
Fords brief history Mission and Vision statement Current Objectives & Strategies

Strategy Formulation

New Mission and Vision External Assessment

Industry Analysis Opportunities & Threats EFE Matrix

SWOT Matrix BCG Space Matrix IE Matrix Grand Strategy Matrix QSPM Matrix

Strategic Plan for the Future Implementation Evaluation

EPS/EBIT Other issues Objectives Strategies

Internal Assessment
Strengths & Weaknesses Financial ratios IFE Matrix

Ford 2008 Update

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).

Fords Brief History

1903 Ford Motor Company founded in Michigan 1908 Model T introduced 1913 first moving automobile assembly line in the world 1956 Fords stocks go on sale (10.2 million shares sold the first day) 1987 beginning of the acquisitions of other brands 1988 Ford Motor Company reached the peek

Management
William Clay Ford, Jr. Executive Chairman

Alan Mulally President and CEO

Donat R. Leclair Executive V.P. and CFO

Lewis Booth Executive V.P. Ford of Europe/PAG

Mark Fields Executive V.P. and President, The Americas Mark Schulz Executive V.P.

Mission & Vision Statement

"To become the world's leading consumer company for automotive products and services. - Ford doesnt have vision statement

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 biofuels and help reduce our dependence on oil To cut the usage of global energy by 27% and the usage of water by 25%

Strategies
Utilizing their advance technology Building of smaller vehicle Cost reduction Market expansion through joint venture and strategic alliance

New Mission & Vision Statement

- Both mission and vision are one statement

Our vision is to become the world's leading consumer manufacturing company for automotive products and services. To achieve this, we the company and all our employees are dedicated to provide all our customers and the community with safe innovative products and services of world class standards. Through our engineering excellence, high quality and the use of our constantly upgrading technology we limit the harm that we cause to the environment while delivering superior value to our customers. Our close knit working environment allows our employees, community and business partner to share in our success, while achieving a substantial return on our shareholders investment.

External Assessment

Industry Analysis
Global Automobile Industry Value Global Automobile Industry Volume

Industry Segmentation

Industry Segmentation

Industry Market Share

Industry Forecast

CPM
DiamlerChrysler AG Ford GM Toyota Weigh Rati Weighted Rati Weighted Rati Weighted Rati Weighted ts ng Score ng Score ng Score ng Score 0.0 to 1 to 1 to 1 to 1 to 1.0 4 4 4 4 0.14 0.10 0.16 0.20 0.15 0.18 0.07 1 2 2 1 3 4 3 3 0.28 0.2 0.16 0.6 0.6 0.54 0.21 2.59 3 4 3 4 3 3 4 0.42 0.4 0.48 0.8 0.45 0.54 0.28 3.37 2 3 1 2 4 2 3 0.28 0.3 0.16 0.4 0.6 0.36 0.21 2.31 3 3 4 2 3 2 3 0.42 0.3 0.64 0.4 0.45 0.36 0.21 2.78

Critical Success factors

Global Expansion Financial Position Growth US Market Share Customer Loyalty Hybrid/Fuel Efficient Vehicles Management Experience Totals

Opportunities & Threats

Opportunities Consumers demand hybrid and fuel efficient vehicles Increase in consumer spending 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

EFE Matrix

Internal Assessment

Stock performance

Financial Highlights
Income Statement Balance Sheet Cash Flow Statement

Ratios
Ratio Debt-to Total assets Debt-to Equity Long-term debt-to Equity Time-interest-earned Net Profit Margin Gross Profit Margin Operating profit Margin Compass Group PLC Industry Ratio Return on Total Assets Return on Equity EPS P/E Sales (growth) Net Income (growth) EPS (growth) Dividends (growth) Compass Group PLC -0.01 -0.48 -1.24 -5.98 7.74 463 1101 -100 Industry 1.38 5.19 14.53 -7.24 1.75 14.91 1

0.60 29.94 29.94 -2.64 -0.02 0.11 0.11

47.47 110.45 0.01 1.75 15.3 2.99

Strengths & Weaknesses

Strengths
Strong and globally positioned brand names Large employee base with highly 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 actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls causing losing customers) Lack of management of the company EPS very bad in negative numbers (unattractive for the investors)

IFE Matrix
Key Internal Factors Weights Rating 0.0 to 1, 2, 3 or 1.0 4 3 or 4 0.13 4 0.09 0.06 0.09 0.11 1 or 2 0.1 0.12 0.12 0.08 0.1 1 2 1 1 2 1 0.2 0.12 0.12 0.16 0.1 2.38 3 3 3 4 Weighted Score

Internal Strengths Strong and globally positioned brand names Large employee base with highly 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 Internal Weaknesses A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls - causing losing customers) Bad management of the company EPS very bad - in negative numbers (unattractive for the investors) Totals

0.52 0.27 0.18 0.27 0.44

Strategic Formulation

SWOT Matrix
1. 2. 3. Strengths S Strong globally positioned brand names Large employee base with highly 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 1. 2. 3. 4. 5. Weaknesses W A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls causing losing customers) Lack of management of the company EPS very bad - in negative numbers (unattractive for the investors)

4. 5. Opportunities O Consumers demand hybrid and fuel efficient vehicles Increase in consumer spending trends Consumers demand more innovative vehicles Global expansion Industry experiences slow and steady growth Threats T 1. 2. 3. 4. 5. Weak USD Increase in steel and resin pricing Increasing gasoline prices Stricter CO2 emission standards Increasing mortgage rates 1.

1. 2. 3. 4. 5.

1.

2.

3.

2.

SO Developing new vehicles on 1. alternative fuels (S1, S2, S4, O1, O3. O5) Offer new innovative products increase market share - motorbikes (S1, S2, S3, O2, O3, O5) Concentrate on making the best fuel efficient cars (S1, S2, S3, S4, O1, O4, O5) ST Build eco-friendly products from 1. alternative materials (S2, S3, S4, T2, T3, T4) 2. Produce more cars for foreign market (S1, S2, S4, T1, T4)

WO Relocate the production to cheaper country with lower taxes (W2, W4, O4, O5)

WT Merge with competitors (W1, W2, W5, T2, T3, T5) Manufacture only parts for automobiles (W1, W2, T1, T2)

SPACE Matrix
Conservative FS
+6 +5 +4 +3 +2 +1

Aggressive

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

Defensive

-5 -6

Competitive
28

BCG Matrix
Revenues NA SA Europe PAG Asia Total 69365 7585 36330 33067 8032 154379 % Revenues 45% 5% 24% 21% 5% 100% Profit -4161 1172 744 -1872 206 -3911 % Profit % Market Share 61% 30% 81% 38% % Growth Rate -0.1 +33 -3 +10 +3 -

BCG Matrix
Relative market share position in the industry High 1.0 Medium .50
SA

Low 0.0

High +30 Industry sales growth rate Medium 0 Low -3

APA

NA

IE Matrix
Hold and Maintain

31

Grand Strategy Matrix

Rapid Market Growth Quadrant II Quadrant I

Weak Competitive Position

Strong Competitive Position

Quadrant III Slow Market Growth

Quadrant IV

Matrix Evaluation
Alternative Strategies BCG IE SPACE GRAND COUNT Forward Integration x 1 Backward Integration x 1

Horizontal Integration

Market Penetration Market Development

x x

x x

3 2

Product Development

Concentric Diversification

Conglomerate Diversification

Horizontal Diversification

Joint Venture Retrenchment Divestiture Liquidation x x

x x x x

1 2 2 1

Possible Strategies
Developing new vehicles on alternative fuels (S1, S2, S4, O1, O3, O5) SO1 Offer new innovative products increase 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

QSPM

Strategic Plan for the Future

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 income and EPS by 15%) 2009-2010

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

Implementation

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

EPS/EBIT
*data in $ billion Common stock financing Recession EBIT Interest EBIT Taxes EAT #shares EPS 10 0 10 0 10 2.695 3.71 Normal 20 0 20 0 20 2.695 7.42 Boom 40 0 40 0 40 2.695 14.84 Recession 10 1.5 8.5 0 8.5 2.695 3.15 Debt financing Normal 20 1.5 18.5 0 18.5 2.695 6.86 Boom 40 1.5 38.5 0 38.5 2.695 14.28

Other Issues
Laws and regulations in foreign countries Regain lost trust in the Fords brand

Evaluation
Excellent

Good

Unsatisfied

Ford 2008 Update

Industry Update

Sources
Ford Motor Company Annual Report 2007 General Motors Annual Report 2007 http://www.ford.com/about-ford/investorrelations Datamonitor
Global Automobile Industry manufacturer 2006

Pictures taken from Web

Questions???