Ford Case Study

Ford Case Study Student’s Name Institution Affiliation Ford Case Study INTRODUCTION History Henry Ford founded Ford Motor Company in 1903 as an automotive making and selling company. It was incorporated in 1919 and its headquarters is in Dearborn, Michigan. The Ford family currently controls the company to date. William Clay Ford Jr. is the executive chairperson of Ford and Jim Hackett is the current CEO and president of the automotive company. Mission The mission of Ford Motor Company is to remain a global family that is compassionate about the mobility of people globally, anticipates the needs of customers, and delivers services and products that will improve their lives. Today, Ford has become a global enterprise that improves the lives of people through mobility and automotive leadership (Panmore Institute, 2017). Products or services offered/marketed Ford Motor Company deals with automobiles of all type including SUVs, Pickup trucks, commercial vehicles, electric cars, luxury cars, and automotive parts (United States Securities and Exchange Commission, 2018). It has three product divisions/brands namely: Lincoln, Ford, and Motor craft. The Lincoln division constitutes of luxury cars, while the Ford division specializes in selling commercial vehicles and automobiles. The services that Ford provides to clients include vehicle service, leasing, and automotive finance. Ford markets its products and services worldwide except for Indonesia, Japan, Sudan, Iran, North Korea, and Cuba. The company has also collaborated with other automotive manufacturers in Taiwan, China, Turkey, Russia, Australia, Thailand, and the SUV manufacturer- Troller in Brazil to market and sell its products and services to interested customers. Financial profile In 2019, Ford Motor Company recorded revenue of $155.900 billion and a net income of $84 million. These numbers are lower than in the previous years and like many companies in the automotive industry, Ford is spending money faster resulting in negative operating activities balance. The most recent increase in annual company income recorded by Ford Motor Company was in 2017 after which there has been a notable decrease in annual income to date. In 2017, the company outflow was approximately $883 million, which was attributed to the reduction of negative cash flows from $3.3 billion in 2016 to $2.5 billion in 2017 (Zacks, 2018). High inflation rates are increasing pressure on the company because they have to pay more for raw materials needed to manufacture automobiles and the company is forced to raise the average price of its products. For instance, Ford had to double its automobile process in 2011 to keep up with the high inflation rates (Trefis, 2011). Direct and indirect corporate competitors The automotive industry does not have a single dominant producer and in this case, the key competitors of Ford Motor Company include General Motors, Fiat Chrysler Automobiles, Honda Motor Company, Volkswagen AG Group, Toyota Motor Company, Suzuki Motor Company, Renault-Nissan B.V., Hyundai-Kia Automotive Group, and Groupe PSA. Indirect competitors of Ford are those automobile companies that majorly operate in specific countries, more so, in their countries of origin (United States Securities and Exchange Commission, 2018). They are indirect competitors because they only affect Ford's success in a minimal capacity. Remarkable and substantial HISTORICAL marketing campaigns initiated by the corporation Unlike many automotive companies that raise the average price of their cars to offset the high cost of production, Ford adopted a historical marketing strategy of dropping automobile models whose prices could not offset their cost of production. For instance, they stopped manufacturing the traditional Sedan model sold in North America thus cutting costs and boosting their profit margins (Carey, 2018). EXAMINATION OF TARGET MARKETS Three different and specific market segments targeted for your organization’s product or service, and characteristics of each group. Mobility segment The mobility segment of Ford Motor Company involves the company's investment in mobility through development costs that relate to autonomous vehicles. The technology involved in autonomous vehicles includes vehicle integration, self-driving systems, advanced vehicle research and engineering, network development, and user experience (United States Securities and Exchange Commission, 2018). The goal is to promote responsible technology advancement in the quality of automobiles made by the company. An ideal ad example from this segment would demonstrate professional partnerships between the manufacturer and a new technology company to show customers that Ford is diversifying and embracing technology in their automobiles. Credit segment On the other hand, Ford has a credit segment that finances and supports Ford automobile dealers all over the world. This segment earns money through payments originating from purchases, supplements of interest rates, and other support payments from subsidiaries (United States Securities and Exchange Commission, 2018). The goal is to finance dealers so that they can acquire, deliver, and lease automotives to customers worldwide with ease, therefore, improving company-customer relations. An ad example from this segment would highlight that the company is making an effort to ensure that customers can acquire a Ford automobile even as a rental, hence affordable to everyone. Automotive segment The automotive segment focuses on the sales made by Ford by the three divisions. These sales constitute of automotives, accessories, and spare parts. The cost of manufacturing, operations, distribution, service, and development is also a vital consideration in this segment. The majority of administrations in the automotive industry focus on this segment because it involves revenues, costs, and all the major aspects of the company. The business units involved in Ford's automotive segment include Asia Pacific, Africa, the Middle East, Europe, South America, and North America (United States Securities and Exchange Commission, 2018). Decisions made in this segment affect all the other segments suggesting that it is the most relevant in applying personality trait theory in consumer behavior research. The goal of this segment is to balance company affairs from the acquisition of raw materials to manufacturing, assembling, quality control, sales, distribution, transportation, and delivery, as well as marketing, and advertising. The automotive segment also influences product marketing since those involved in the segment oversee budgets meant for advertising and marketing. An ad example from this segment would demonstrate the efforts that the company is making to meet consumer preferences in regards to design and vehicle performance. The role of the government in overseeing the segments The government oversees the three operating segments discussed above to ensure that they follow the set guidelines and standards that relate to product safety, emission control, theft prevention, vehicle recycling, fuel efficiency, and substances of concern. On the other hand, manufacturing industries are expected to adhere to standards that relate to water discharges, emission control, proper disposal, and handling of hazardous waste, and pollution (United States Securities and Exchange Commission, 2018). The goal is to ensure environmental safety and the safety of consumer health. Since more people are environmentally conscious, this segment is most relevant in applying personality trait theory in consumer behavior research because consumers are seeking eco-friendly automobiles. Relevant reference groups of your market segments that influence product sales, and assert which core values Creditors influence product sales because they ease the transportation of automotives from one country to another. Failure to support the country may result in losses since customers will not access the cars in time and Ford's competitors will have a competitive advantage as customers develop a preference for their readily available products (United States Securities and Exchange Commission, 2018). Product availability is a vital core value that creditors promote in the company. CONCLUSION How your chosen company uses consumer memory in its advertising strategy Ford has adopted a seasonality type of advertising since they noted that there is a seasonal fluctuation of business in the automobile industry, especially during summer and spring. Informing consumers that the product will ease the mobility stress of getting around during summer triggers consumer memory, therefore, influencing them to make purchases or rent the company's vehicles during summer and spring. Easing the stress of waiting for the automobile to be delivered is another strategy that Ford uses to influence consumer memory and boost sales. The company hardly experiences backlog once a customer places an automobile and keeping their assurance for quick delivery of products and services gives consumers a positive memory about the company and its products. Also, today’s society is more environmentally conscious and they emphasis on safety, fuel efficiency, and limited emission of gases by their cars. Meeting such needs portrays the company in positive light to the public eye and customers are more inclined to rent or buy from Ford because their products are eco-friendly (United States Securities and Exchange Commission, 2018). Personal insight Ford's advertising strategy is diverse and caters to all target groups. Not only does it meet customer needs, but also keeps up with new customer preferences and provides them accordingly resulting in high consumer retention rates. In addition, the company provides long-term warranty coverage that covers safety recalls, emission recalls, therefore, gaining the trust of customers who may be skeptical about their safety and efforts being made by the automobile company to protect consumer interests. On the other hand, this paper shows that Ford is eco-friendly as they observe fuel efficiency, proper handling of hazardous waste, proper waste disposal, reduced toxic gas emission, meeting noise and air pollution guidelines and putting consumer safety first. Many consumers appreciate a company that has their interest at heart and Ford has managed to win the trust of its customers, maintain high customer retention levels, and meet the ever-changing consumer preferences in the global space. The company’s financial report of the year 2019 is evidence that the company has successfully understood the importance of monitoring customer behavior over time and effectively restructured its products and services to suit customer needs. References Panmore Institute. (2017). Ford Motor Company Operations Management, 10 Decisions, Productivity. Panmore Institute. http://panmore.com/ford-motor-company-operations-management-10-decisions-areas-productivity Trefis, T. (2011). Ford Turns Commodity Inflation into Higher Car Prices. Forbes. www.forbes.com/sites/greatspeculations/2011/04/15/ford-finds-turns-commodity-inflation-into-higher-car-prices/#4e51d9cf7333 United States Securities and Exchange Commission. (2018). Form 10-K: Ford Motor Company Annual Report on Form 10-K for the Year Ended 31, 2018. file:///C:/Users/GRACY/Documents/sr18-form-10-k.pdf Zacks. (2018). Ford Motor Company. Zacks: Our Research, your Success: https://www.zacks.com/stock/quote/F/cash-flow-statements FORD CASE STUDY 9 Running Head: FORD CASE STUDY 1