Ford Case Study

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3. FORD’S CURRENT STRATEGY In order to meet the future consumers’ trend forecasted by the automotive industry, Ford wants to reposition itself and its business model regarding as how to better satisfy consumer needs, which is to produce smaller economic cars that the US middle-class customers value. Therefore, it seeks to take a new direction and to bring a revolution to the automobile industry, and to revive its glory years. A number of vehicle programs have been changed, delayed or even dropped throughout 2007. Ford officials believe that the shifts are aimed to get the right products to the market faster, with the emphasis on reducing costs and accelerating product development. 3.1 TOWARDS MORE ECONOMIC VEHICLES Ford’s current…show more content…
Further, the US government, precisely the Department of Energy, is ready to fund half of Ford’s project on BEVs and PHEVs. Ford expects that once started, the hybrid mass production will reduce current total production costs by 30%. Meanwhile, Ford targets a change in its product portfolio which increasingly allocates more weight to cars & crossovers rather than trucks and SUVs, from 48% in 2007 to 60% in 2010, and increases its investment allocation from 59% in 2007 to 82% in 2010 for cars & crossovers as well(see Figure 6). These models will help US consumers to achieve substantial savings for gasoline, while being environmentally-friendly. Planned to be fully implemented in 2020, BEVs are designed to aim for zero-emission since they run purely on electricity power. Furthermore, Ford promise that the driving experience of electrified vehicles will not be compromised. Ford believes that it will achieve economies of scale, once the manufacturing process is started on the global scale. On this matter, the Electric Power Research Institute (EPRI) collaborates with Ford to evaluate technical approaches for integrating PHEVs, which is a key requirement to facilitate widespread adoption of the vehicles. Meanwhile, Ford restructures itself to attain its optimal capital structure. By selling off its subsidiaries which are burdensome, Ford can reduce its losses. However, selling Land Rover and Jaguar to Tata might strengthen its

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