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Ford's Revitalization Strategy Essay

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Case 4 Ford and the World Automobile Industry Robert M. Grant FORD’’S REVITALIZATION STRATEGY In September 2003, Bruce Blythe took up the new position as chief strategy officer at Ford Motor Company. His appointment came in the wake of a massive upheaval of Ford’’s strategy, leadership, and organization. In 2001, Ford’’s CEO Jacques Nasser had been ousted by the board after a three-year tenure. Nasser’’s goal had been to transform Ford into a flexible, customer-focused, innovative, global giant——that simultaneously paid careful attention to profitability and shareholder return. By late 2001, it was clear that the strategy was not working. Overpriced acquisitions had dissipated shareholder value, the Firestone-Ford Explorer recall …show more content…

By the turn of the century hundred of small companies were producing automobiles both in Europe and in America. By 2004, the industry was in different stages of its life cycle in different parts of the world. The US industry entered a period of rapid growth during 1910-28, and reached its peak of production in 1965. In the two decades up to 2004, car production was on a downward trend, but if trucks were included, output was broadly stable (see table 4.2). In Europe and Japan too, total production was showing a declining trend The problem of market saturation was exacerbated by the tendency for cars to last longer(see table 4.3). [Tables 4.2 and 4.3 about here] As a result, the automobile producers have looked increasingly to the newly industrializing countries for market opportunities. During the 1980s and 1990s countries such as Korea, Malaysia, Taiwan, Thailand, Turkey, Brazil, and Argentina offered the best growth prospects. As these markets became increasingly saturated, so China, India, and the former Soviet Union were seen as the ““next wave”” of attractive markets. With the opening of many of these countries to trade and direct investment, the world production of cars and trucks s continued to grow (see table 4.4 ). [Table 4.4 about here] The Evolution of the Automobile The early years of the industry were characterized by considerable uncertainty over the design and technology of the motorcar.

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