Ford Develops a Strategy for Competitive Advantage Case Study

Ford Develops a Strategy for Competitive Advantage - Case Study Example The plan created a series of moves and tactics that reduce the costs of the company, while at the same time preparing a path that would ensure medium and long term growth by emphasizing in emerging economies. Key Marketing Issues Lower sales – Since the company lost nearly a quarter of its sales in 2008 the firm has to achieve continuous growth for several years just to recover the ground it lost in 2008. Global products – the organization wants to shift its company to emphasize in economical compact cars that will be accepted by customers worldwide Marketing campaign standardization – The firm seeks to make universal commercials, but factors such as culture can affect the buying decisions in customers from different parts of the world. Customer retention rate: The organization seeks to expand into other international markets and obtain similar customer loyalty as in its domestic market. Personal Case Analysis It is my opinion that The Way Forward strategy was a success because the company eliminated waste that was draining the resources of the company. By shutting down its least profitable plants the cost structure of the organization was reduced. Ford is the most powerful automaker in America. The reputation of the company improved when Ford did not take money from the governmental bailout package. The Ford Figa was an incredible product that increased the sales volume of Ford in India by more than three times. Other cheap model like the Figa must be designed to further exploit many emerging economies. Case Questions (1-3) Introduction questions Ford Corporation is one of the Big Three automakers in the United States of America. The company has historically achieved tremendous sales growth and profit for decades. The firm in the late 1990’s was considered the most profitable companies in America. This all changed in 2008 when Ford as well as thousands of companies in the United States and abroad faced the global recession. The car industry was devastated during this recession. General Motors and Chrysler nearly went bankrupt prior to the governmental auto bailout. In January 2009 the Obama administration injected $24.9 billion of the $700 billion bailout money in the dying U.S automobile industry (Amadeo). Ford Motors was the lone company that did not take the government handouts, but the firm suffered dearly losing over 23% of its sales between 2008 and 2009. 1. During the 2008 global recession Ford Motors decided to implement a new strategy called â€Å"The Way Forward† in order to boost the firm’s sales and restructure the company. The organization knew that the only way to stay profitable during recessionary times is to decrease costs in order to offset the effect of lower sales numbers. The organization realized that this could only be achieved by decreasing both fixed and variable costs. Fixed costs refers to costs that recurring each month whose amount are fixed such as building rents, ma nagerial salaries, and business loans. Variable costs are periodic costs that vary in step with the output or the sales revenues of the company (Businessdictionary). An example of variable costs is direct labor. The Way Forward strategy included cost cutting initiatives such as closing down 16 factories and downsizing Ford’s workforce by 30,000 employees. The plan included a philosophical change in the managerial approach in order to focus more on the customer by designing cars that served their needs. The company realized that in a bad economy people are looking for gas savings. Despite the fact the company lost nearly 23% of its revenues, certain brands that were targeted as part of The Way Forward initiative had higher sales figure. The Ford Focus is