Essay on "Ford Marketing Plan"

Essay 6 pages (1580 words) Sources: 3 Style: Harvard

[EXCERPT] . . . .

Ford Marketing Plan

The following pages are intended to provide an outlook on Ford Motor Company's current situation in the global automotive market's context. The first section, Situation Analysis, will help design a general idea about the company's current situation and the factors that were responsible for it.

Therefore, the four pillars upon which the company's well-functioning is relied upon are discussed in this section. The section brings into attention the importance of the company's aggressive restructure that was designed to increase profitability, the accelerated development of new vehicles while focusing on high quality and customer needs, the plan regarding the improvement of the company's balance sheet, and the company's teamwork orientation.

This section is followed by the market Summary. When analyzing the situation of large company, especially that of an automotive giant, it is imperative to situate the company's situation in the context of the global market. The company's activity is in an interdependent relationship with the global automotive market. The trends in the automotive market determine the course of action that the company should follow, while influencing the results of the company's implemented strategy. However, the market itself is the result of every company's actions.

As a consequence, this section is designed as an introductive presentation of the automotive market's conditions. The market trends that will be discussed in this section include: global economic and financial crisis, excess capacity, pricing pressure, consumer spending and credit, health care expenses, commodity and energy price increases, currency exchange rate volatility, and other economic factors. The importance of each factor and how it actually affects the automotive market and the company as a consequence are also presented.

The final section of the paper consists in the SWOT Analysis. The most important strengths, weaknesses, opportunities, and threats that are expected to most affect the company's activity in the future are presented in this section. In Ford's case, the strengths outnumber the weaknesses, but this does not mean that the company could not be affected by important threats, like competition.

However, even in the negative global market conditions, here are several opportunities that the company could exploit in order to overcome the financial and economic crisis. One of these opportunities consists in customers' orientation towards smaller, greener cars.

Situation Analysis

The financial and economic crisis that the global economy is currently traversing has left deep marks on the automotive industry's activity. Most automotive companies have been affected by the crisis, and Ford Motor Company makes no exception. Although Ford's situation is not as severe compared to other giants in the automotive industry, the company is struggling to overcome the negative effects produced by the crisis.

As a consequence, the company was forced to rethink its entire marketing strategy, from production to advertising. Ford's marketing strategy has been modified in order to fit the new requirements of the market. The most important factors that the company relies at the moment consist in: aggressive restructure in order to manage profitability in accordance with the market's demand and changing model mix; intensive development of new products; finance the company's plan and improve the balance sheet; teamwork is very important in counteracting the crisis and in leveraging the company's global assets (Annual Report, 2008).

In order to attain its established objectives, the company had to implement a series of measures, not all of them being positive ones. The measures addressed each sector of the company's activity, including production, human resources, or marketing.

The measures included the reduction of personnel levels in the United States by more than 60,000 employees. The company was also forced to close 12 of its manufacturing facilities in North America. The company's resources have been relocated from Jaguar Land Rover and Aston Martin operations to the One Ford vision.

In order to increase its capital, Ford sold a great part of its Mazda ownership. The company started to focus more of its attention and resources on the quality of its products and services. Furthermore, given the customer needs modifications induced by the financial and economic crisis, Ford decided to introduce some of its smaller and more fuel-efficient vehicles sold in Europe also on the American market. The company's overall situation was improved by the reduction of operating costs by more than $5 billion.

Market Summary

The global automotive market is currently affected by a series of trends, including: the global economic and financial market crisis, excess capacity, pricing pressure, consumer spending and credit, health care expenses, commodity and energy price increases, currency exchange rate volatility, and other economic factors.

The most important factors of influence of those listed above is obviously represented by the financial and economic crisis. Although the crisis affects the global economy, it is the recession in the United States that is leading the way, followed by major markets in the world that follow a descendent direction.

The crisis is very difficult to counteract because of its uniqueness and peculiar characteristics that are mainly attributed to the fact that its factors of emergence regard house-related securities. The future does not seem bright at all, and is generally characterized by uncertainty in all areas. Uncertainty conditions increase risks on the market.

For the current year it is expected that "global industry sales volume is projected to weaken, with a full-year decline in the range of 15% from 2008 levels. Consumer and business spending has been severely constrained by credit conditions and economic weakness" (Annual Report, 2008).

As mentioned above, the uncertainty in the market makes it difficult for companies to set a clear set of objectives that must be attained in the future periods of time and to establish a strategy that would lead to reaching those objectives.

Regarding excess capacity, another factor that is likely to affect the automotive market in the near future, and not in a positive way, it seems that the 2008 estimated automotive industry global production capacity for light vehicles reached 90 million units, which was 24 million units larger than the global production. In the U.S. The excess capacity reached 44%, while in Europe it reached 23%. It is expected that the situation will continue in the following years also.

The excess capacity, combined with the launch of new products on the market, will further affect the prices on the automotive market. This will emerge into a certain kind of pressure on producers' ability of increasing prices for the products in case. This trend affecting the pricing level will continue in the future periods of time.

Consumer spending and credit are other factors of direct and significant influence on the automotive market. Before the crisis, many consumers were willing to pay higher prices for more expensive vehicles or for more features included. But their number has significantly decreased since the crisis has installed. This is mainly because of the fact that automotive loans have reduced. Specialists in the field consider that even if per capita incomes will somehow increase, individuals will not be willing to spend this increase on new vehicles.

SWOT Analysis

Strengths

Ford Motor Company's strengths have somewhat diminished since the crisis has installed, but this is a general trend affecting the entire automotive industry. The most important strength consists in the company's sound financial position. This will help Ford to counteract the effects of the crisis and to overcome the sales volume decrease that is expected, also because of the crisis.

The company's tradition and positive brand image on the market might prove to be decisive for certain customers when purchasing a new vehicle, in the detriment of newer brands or vehicles that do not inspire the same trust that Ford does.

Ford can also rely on the fact that the company is following an environmentally friendly direction. Their investments in alternative fuel research will make a difference in customers' purchase decision.

Weaknesses… READ MORE

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