THE DECLINE OF FORD REPORT Angela Cornelia Hanciulescu 1816783 Executive Summary Ford has faced a reduction in the share prices, an extension in restructuring costs, a lessening in the general continues, and extensive stagnation. Ford should present digital marketing with the goal to contact the clients at financially well-informed prices and increment the base of the clients in various nations utilizing the unhindered commerce understanding. The company can use the government help, expand international trade agreements, increase goodwill and recognition among the people, and successfully start its business in various countries to construct increased profits. Ford needs to use the possibilities in the market and it ought to make new things, for example, self-driving cars and hybrid automobiles, which will be again practical. The extension in the US economy will increase the demand for electric automobiles and hybrid vehicles and can transform into a favored situation for Ford. It is also critical for it to give identical respect to the European market and redesign the arrangements. They should concentrate on product development, should utilize the prospects in the market, and improve the deals to increment the client base. Table of Contents Executive Summary 2 1.0 Introduction 4 2.0 Findings 5 2.1 Brief Overview of the company 5 2.2 Problems faced by Ford 5 2.3 Internal Environment 6 SWOT analysis 6 2.4 PESTLE analysis 7 3.0 Conclusion 9 4.0 Options 10 4.1 Segmentation and Targeting 10 4.2 Strategy 12 5.0 Action Plan 13 6.0 Appendices 14 6.1 SWOT analysis 14 7.0 Acknowledgements 15 8.0 Reference List 16 1.0 Introduction Business strategy is important to maintain at imprint in the market and increase the sales. It will assist in attracting many customers at the same time, dealing with problems like competition, and increasing the market share. This report has been asked by the managers and leaders of Ford so that they can deal with the problems they are facing currently, especially the problems with decreasing shares and the extreme losses in different parts of the world. This will be submitted as soon as possible, so that it becomes easy for the company to deal with the problems and increase the market share. The purpose of this report is to analyse the current problems that Ford is facing in the current markets and that is why; a series of analytical tools will be used to provide with the external and internal environment of Ford and the aspects that a leading to such problems. Conclusion and recommendation be provided as well and the overall study will be done using secondary methods of data collection, reaching out to the use of academic sources only. 2.0 Findings 2.1 Brief Overview of the company The Ford Motor Company is a public limited American multinational company, which specialises in automobile making and has its headquarters in Detroit, USA. Henry Ford is the founder of the company and it has been selling automobiles and commercial vehicles since 1903, making Ford one of the well-known luxury car brands in the world. Ford has a stake in companies like Jiangling Motors, Aston Martin, and Troller and has current ventures with Changan Ford, Ford Lio Ho, Ford Otosun, and AutoAlliance Thailand. The company has the second-highest market share in the United States after General Motors and has revenue of 163.33 billion dollars. Ford owns nearly 199000 employees currently and provides an array of services including vehicle service, automobile finance, vehicle leasing, and automobile manufacturing. The first car was made in 1901 with the name of Henry Ford Company, which later started to be known as the Cadillac Motor Company. Ford started to introduce different cars like the Model T. The company is well known for the products including automobiles pickup trucks, SUV, luxury vehicles, hybrids, fleets, commercial vehicles, and automotive parts, and it is currently operating worldwide except the countries of North Korea, Iran, Sudan, Japan, Indonesia, and Cuba. 2.2 Problems faced by Ford Ford has been facing different problems in the market and one of the major problems that are noticed is the decrease in the share prices of Ford, which is a byproduct of the decreasing earnings, decreasing promising sales, and guidance overseas (Bayou and De Korvin, 2008). The first problem that can be identified is the decrease in earnings and the increase in restructuring costs, in which the company had to pay more than 11 billion dollars and had to shift to the production of products like trucks and SUVs. There was a decline in the overall income by 423 million dollars in a single year and the total revenues declined by 1.8%, which resulted in an overall of 37 billion dollars (Wee and Wu, 2009). There was a continuous decline in the performance and the relative stagnation from 2018 is decreasing the value of the stock. The number of sales is also falling and it has been seen that the market share of China has fallen by 0.6%, which has led to a decrease in 27% of the revenue (Maloney, 2019). Revenues in North America have increased while the market share has decreased by 0.7%. Finally, the problem faced by Union Talks is becoming extreme where there will be increased battles over production and wages leading to long-term debate, which can make Ford lose a lot of money. 2.3 Internal Environment SWOT analysis (Refer to 6.1 for the SWOT analysis) It has been identified in the SWOT that Ford has high goodwill and recognition among the people around the world, but currently, the company is facing decreasing sales and this has been because of the lack of leadership and strategy. As clearly identified in the above part that Ford was facing decreasing earnings and sales, this has been the result of increased losses, and product recalls in countries like China and the USA (Macdonald, 2017). The company invests a lot of money in research and development and it is currently looking for restructuring, which has resulted in an extensive cost of 11 billion dollars, decreasing the profitability to a huge extent. However, in countries like China and France, Ford has not been able to maintain the performance and this is also decreasing the reputation of the company while some of the competitors like that of the European and the Japanese descendant like BMW and Toyota has been able to capture a good portion of the market (Su and Wagner, 2017). The dependence on the United States of America is also a big problem and Ford can easily start its business in other countries like India and some African countries like Kenya to increase its market share. It is also important for it to provide equal importance to the European market as it is extremely huge and can enhance Ford's sales. The company can also make use of the wide distribution network and adapt using the new technology, which can help it to enhance the operations in the future. Ford needs to use the opportunities in the market and it will have to produce new products like self-driving cars and hybrid automobiles, which must be eco-friendly (Baker, 2015). This is likely to increase the base of customers and similarly, Ford will have to use aggressive marketing process to deal with the extreme competition and use low-cost labour to increase profit margins. 2.4 PESTLE analysis The political environment is favourable as the government is increasing the support to the companies to increase technological innovation, which is an opportunity. Another opportunity that can be used is the increasing international trade agreements with different countries around the world that can help to increase the sales, which is an opportunity for the company (Loeb and GM Global Technology Operations LLC, 2015). The government is also increasing the benefits so that the companies can increase by infrastructure in the developing countries, which is an opportunity. The economic environment of Ford can provide moderate opportunities, and this is because there has been a development in the US economy currently and is becoming one of the biggest automobile markets around the world, which is an opportunity for Ford. It was also seen that the developing markets could be a big opportunity for Ford as these markets are having high potential and can increase sales (Di Minin et al., 2019). The Government of the United States is trying to strengthen the US dollar, which will be reducing the profit margins for Ford, and therefore, the attractiveness of the product will decrease to a certain extent, which can be defined as a threat. The social environment is also quite favourable for Ford as there is an increased demand for the electric automobiles and hybrid vehicles, which can be an opportunity if the company can produce the same products. The customer service for Ford is very effective and this can be an opportunity as there is a moderate attitude towards customer service, which is an opportunity (Ford, 2019). The increasing wealth gap in the United States can become an opportunity and threat as Ford can introduce premium products but the overall sales will be going down. The technological factors are moderately beneficial for Ford, as it has been noticed that there is increased use of mobile computing which can be an opportunity as it can create several prospects for Ford to grow through mobile setting and retailing. The use of online fulfilment services can be an increased opportunity for Ford as this can improve the performance and help it to deliver the customers a variety of product, increasing Ford's potential growth and introducing alternative products than the competitors (Johnson, 2016). However, the limited network of fuel stations can become a problem for Ford as it affect the growth of some products in different parts of the world. The environmental factors and not very influential but is opportunistic for Ford in different parts of the world, especially the developing countries. The climate in different parts of the world is becoming an opportunity for Ford as of the product created by Ford help in environmental conservation (Thoms and Donnelly, 2017). It has also been seen that people are buying products from those companies, which have a low carbon trend, and it is an advantage for Ford as it is looking for options to use electricity and alternative fuels to use in the products. The legal factors are also becoming an advantage for Ford in the US market as the environmental protection regulation is becoming an opportunity for Ford, as the company has been able to drive business sustainability and deal with the problems (Gwynne, 2017). Another opportunity that Ford can use is the safety regulations, which are increasing, and the increasing intellectual property laws through which the company can increase the business and safeguard the assets. 3.0 Conclusion One of the serious issues that are seen is the abatement in the share prices of the organization, an expansion in restructuring costs, a decrease in the general proceeds, and relative stagnation. The organization can utilize the government support to the organizations, expanding international trade agreements, high goodwill and recognition among the individuals, and effectively start its business in different nations like India and some African nations like Kenya to build its piece of the overall industry. It is additionally significant for it to give equivalent significance to the European market as it is very tremendous and can upgrade the organization's deals. Ford has to utilize the prospects in the market and it should create new items such as self-driving cars and hybrid automobiles, which will be again sustainable. This is probably going to expand the base of clients and likewise, the organization should utilize good advertising procedures to manage the outrageous competition and utilize minimal effort work to build profit margins. The expansion in the US economy, creating markets, expanded demand for electric automobiles and hybrid vehicles can turn into a preferred position for Ford. 4.0 Options Ford Motor Company can easily invest some of the money in the research and development so that they can introduce new products for the customers. They will have to focus on product innovation, will have to make use of the opportunities in the market like the use of hybrid and electronic cars, and must be able to use the different market opportunities to enhance the sales and increase the customer base (Turner et al., 2017). Ford will have to focus on increasing international trade by introducing ventures and acquisitions as it can provide it with an opportunity to grow in the market and use the high growth developing countries to be the primary base of the sales. Ford will have to introduce digital marketing so that it becomes easy for the company to reach out to the customers at cost-effective prices and increase the base of the customers in different countries using the free trade agreement. The free trade agreements can help Ford establish themselves in different parts of the world including countries like India and Kenya, which are the developing economies with high growth (Yang, 2018). Differentiation in the products is needed so that they can deal with the competition and will have to make use of the low-cost labour in the third world countries so that they can create the final products at cheaper prices and increase the profit margins. 4.1 Segmentation and Targeting Segmentation basis Target Customers Geographic Place 65 countries Origin Urban Demographic Age 18-50 Gender Any Income Premium and middle income Profession Any Education Any Status Middle and upper-middle-class Size of family Combined or single Psychographic Lifestyle Gratified living Personality Strong-minded Behavioural Purpose Any Advantages Price benefits and quality User situation Active 4.2 Strategy Product: Ford can use the same products that it has in the product range but it will have to introduce innovative products like hybrid cars and self-driving cars so that they can attract more customers and increase the sustainability of the business practices to safeguard the environment as well. Price: The company must use the differential pricing policy as it will have to provide affordable prices to the people of middle-income groups and premium pricing to the people taking extra advantages and additional features, especially the people with high income. Place: Ford will be operating all around the world in 65 countries and will have to lay an imprint in the United States of America as well as some of the European States. It will have to focus on using free trade agreements to increase business in developing countries like India. It will also be operating online and with the help of third-party agents where the company will not be able to reach easily. Promotion: Ford will be using both traditional and modern methods of promotion and it will have to focus on attracting more customers from different parts of the world. The promotional technique will depend upon geographical locations and the cultural aspects. It will be using traditional methods like television and billboards as well as will be using the benefits of digital marketing to penetrate the markets. It will also have to focus on the word of mouth so that increased awareness the customer can increase the market share. 5.0 Action Plan Objectives Communication Monitoring Reviewing Introduction of new hybrid and self-driving cars This will be communicated to the customers and the stakeholders as well as the research and development team who will be making innovative products to help Ford excel. The managers and the production head to see that the products can be successful in the market before launching will continuously monitor the production line and beta testing will be done. Review from stakeholders will be taken into consideration to learn about the change and performance analysis will be done as well. New Promotional Techniques This will be communicated to the marketing team who will be marketing the products The marketing manager and the Development Officer will be monitoring the changes after every 1 month to learn about the benefits and cons. Review from stakeholders will be taken into consideration to learn about the change and performance analysis will be done as well. International Trade This will be communicated to the marketing team who will be marketing the products The marketing manager and will be monitoring the changes every 2 months to see the changes. Review from stakeholders will be taken into consideration to learn about the change and performance analysis will be done as well. 6.0 Appendices 6.1 SWOT analysis Strengths: High goodwill and recognition around the world Extensive research and development Huge product portfolio and diversified offerings Increased adaptability to the market structures using new technologies An extensive network including operations in more than 62 countries Weaknesses: Product recalls and huge losses Bad performance in different parts of the world Decreasing reputation in comparison to the Japanese and European competitors Extreme dependence on the market of the United States and the negligence of the European market Opportunities: Production of hybrid and self-driving cars Use of digital marketing Increase the base of customers Eco-friendly vehicles Threats: Increasing competition Inflation and the rise in raw materials cost Increased regulation and compliance in different parts of the world 6.2 Monitoring, review and communication Decision Implemented Emphasizing more on the production of the electric vehicle and heavily segregating into the commercial vehicles sector The Volkswagen collaboration project Monitoring the Decision Resources Among the important resources, there are new funding sources for setting up the new unit and advanced set up. However this will require new teams for directing work and create new avenues for collaboration, management as well as operations. Key Indicators Sales increment by at least 3% in every financial quarter. Targets Increasing sales in the Chinese belt Data Sources Market opportunity will be revealed by collecting data by dint of the global market survey conducted by Ford Review of the decision The new market ventures will be proved successful when they deliver better as well as higher profit margins in the new found markets The increase in stock listing and individual share value will determine project success and lay down chances further investment Communicating the Decision Internal Stakeholders Executive leaders: framing new strategies and directions for the business External Stakeholders Shareholders: searching new funding sources 7.0 Acknowledgements The completion of this project was not possible without the help of my friends and my family members who have supported me with a variety of information. The help from the librarian and my teacher has also assisted me to complete the project easily. 8.0 Reference List Baker, C.R., 2015. 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