1. Ford has been the leading global company in automobile industry. Discuss the innovations that contributed to its success

• Manufactures and distributes automobiles in 200 markets across six continents.

• 300,000 employees and 108 plants worldwide

• The company’s core and affiliated automotive brands include Aston Martin, Ford, Jaguar, Land Rover, Lincoln, Mazda, Mercury and Volvo.

• Its automotive-related services include Ford Motor Credit Company. The company provides financial services through Ford Motor Credit Company.

1. Ford has been the leading global company in automobile industry. Discuss the innovations that contributed to its success

• Consumer Demand Drive's Ford's Innovative Vehicle Ideas

- Constant brainstorming sessions on designs and creativity,

- Developed some of the top rated vehicles in the United States.

- Meet the needs of consumers with fresh designs, products, new ideas, and features to its automobiles.

• Partnership with Mazda

- Ford has created many different design and product for Asia region or even the operation process which is improve from Mazda’s know-how.

- Share resources together

1. Ford has been the leading global company in automobile industry. Discuss the innovations that contributed to its success

• Opportunities of Ford

- Production of the fuel efficient & efficient cars and commercial vehicles.

- Run on renewable energies like solar power and bio fuels. Production of Hybrid Vehicles Ford had one more option in designing the cars and commercial vehicles based on electric engines.

- Designed based on electricity engines the consumers will show more interest to buy the cars, the reason is the car maintenance charge will low when the car is run on electricity.

1. Ford has been the leading global company in automobile industry. Discuss the innovations that contributed to its success

• Hybrid strategy to perform well in the automobile industry and to provide the competitor edge.

• Low prizes when compared to the others

• Provide the customers to choose their design of the car and their interiors through online sales.

• Focused group like a family. Ford manufactures the some models like CRV, SUG for the people who are interested in using premium and luxury cars.

• Pure battery electric vehicles

• Concentrating on product approach rather than customer approach

• More on new technology and innovative products.

2. In 2008, Ford suffered a serious setback and was forced to sell some of it divisions, such as Volvo. What are some of its weaknesses that led its decline and how did it recover from the Global Recession?

• In 2008 the automotive industry faced a deep recession in the United States and Europe, the worst worldwide financial crisis in decades and a dramatic slowdown in all major global markets. Like all automakers, Ford Motor Company was adversely impacted by these extraordinarily difficult economic conditions.

2. In 2008, Ford suffered a serious setback and was forced to sell some of it divisions, such as Volvo. What are some of its weaknesses that

led its decline and how did it recover from the Global Recession?

“Weaknesses of Ford “

Sales Performance of ford

• Sales Decline - year 2008 to 2009 due to global recession in the world financial market.

• Huge unfunded pensions and other obligations• huge competitors who are providing better competitive

edge.Recommendations • Concentrate more on revenue growth by manufacturing

premium and luxury cars and should use the focus group strategy.

• The opportunity to manufacture cars which can run of electricity, solar energy and bio fuels. It will help the organization to develop in environmental factor.

2. In 2008, Ford suffered a serious setback and was forced to sell some of it divisions, such as Volvo. What are some of its weaknesses that

led its decline and how did it recover from the Global Recession?

• Low productivity – expanded operations in diversified geographical areas, so management is missing focus on some lines performance

• Weakening operations in North America – the huge competitors like GM, Toyota etc. The revenue of Ford was declined by 2.4%.

Performance of Ford in Share Market • not too declined when compared with the general motors. • The performance of ford in the year 2009 was increasing, the

share value of ford according to 2009 market it was increased by 12%. “Now ford shares are increasing due to loyal customers and increased satisfied”

3. Hyundai has emerged as the fastest growing company in the automobile industry, especially in small car division. What are the innovative strategies that Hyundai has developed that led to its success?

• Channeling its energies into closing the gap with industry leaders, particularly the Japanese.

• Now, with gasoline prices staying in the stratosphere, Hyundai is jumping on the hybrid-engine bandwagon.

• Diesel vehicles held greater potential than hybrids, which combine electric motors with gasoline-powered engines.

• Korean government incentives may remove the sticker shock, as will Hyundai's ramp-up to the mass production of hybrids.

• Acquiring a majority stake in rival Kia Motors

3. Hyundai has emerged as the fastest growing company in the automobile industry, especially in small car division. What are the innovative strategies that Hyundai has developed that

led to its success?

Customer Oriented

• Hyundai’s strong showing in consumer surveys and safety tests

• The structural shifts in automotive industry - it’s becoming more global, and automakers can build and sell their vehicles anywhere now.

4. Discuss Hyundai’s global strategy and its competitive advantages and weaknesses, especially focusing on dramatic sales incre global

recession

Competitor Analysis

• The Core Competencies - using the high technology

• The important competitive advantage is ford is the first motor company to come with active park assist.

• General Motors sales are high among these automobile companies.

• Ford is performing well even in recession time because the ford motor vehicles are not too costly when compared with competitors.

• Overall ford sales are good when compared to general motors and Toyota.

• Ford's 2009 Earnings, first Profit since 2005

• Ford is going to focus on doing it with their products, through their dealers, and as Ford launches more new products.

4. Discuss Hyundai’s global strategy and its competitive advantages and weaknesses, especially focusing on dramatic sales incre global

recession

Hyundai’s Global Strategy

• Hyundai’s global strategy, to create a car that fits into a worldwide car category.

• The second stage of globalization comes after the expansion of export.

• Setting up of transplant in major market regions.

• The last stage of globalization is complete localization of transplants on one hand and the establishment of a global business network on another hand.

• Explore the transition of globalization strategy from transplants in the core market to set-up the KD production site in periphery regions from 1985 through 1995.

4. Discuss Hyundai’s global strategy and its competitive advantages and weaknesses, especially focusing on dramatic sales incre global recession

Weaknesses• Unlike auto makers General Motors (GM),

DaimlerChrysler (DCX), BMW, and Ford (F), which have either partnered to develop hybrid technology or licensed it from competitors, Hyundai is going it alone.

• Production model may not be sustainable in the long term, as Hyundai is a late-comer in the alternative market, even though it is competitive worldwide in rapidly expanding emerging markets in the medium term.

4. Discuss Hyundai’s global strategy and its competitive advantages and weaknesses, especially focusing on dramatic sales incre global recession

Conclusion• Focus on improving its cars’ characters and designs” Other

factors also contribute to Hyundai’s recent sales surge. • Some credit its corporate structure, while others applaud its

charismatic management team and leadership style. • A streamlined marketing strategy, a Research and

Development division, and the means to maximize resources from its suppliers.

• Attract buyers with extended warranties, improved product quality, stringent manufacturing location selection, and constant innovation.

5.  Hyundai is a public traded company but ran by Chung’s family. Family run businesses are called chaebol in Korea. Compared the strengths and weakness of companies run by chaebol versus professional CEO such as Ford in terms of corporate governance. What are the weaknesses and benefits of having professional CEO?

Composition of Board of Directors/Nominees  • The Nominating and Governance Committee recommends to the Board the nominees for all

directorships to be filled by the Board or by you. • The Committee also reviews and makes recommendations to the Board on matters such as

the size and composition of the Board in order to ensure the Board has the requisite expertise and its membership consists of persons with sufficiently diverse and independent backgrounds. Between annual shareholder meetings, the Board may elect directors to vacant Board positions to serve until the next annual meeting.

• The Board proposes to you a slate of nominees for election to the Board at the annual meeting. You may propose nominees (other than self-nominations) for consideration by the Committee by submitting the names, qualifications and other supporting information to: Secretary, Ford Motor Company, One American Road, Dearborn, MI 48126. Properly submitted recommendations must be received no later than December 2, 2010 to be considered by the Committee for inclusion in the following year’s nominations for election to the Board. Your properly submitted candidates are evaluated in the same manner as those candidates recommended by other sources. All candidates are considered in light of the needs of the Board with due consideration given to the qualifications described on p. 5 under Election of Directors.

• . Identification of Directors / Director Independence / Audit Committee Report / Audit Fees / Audit-Related Fees / Tax Fees

6.  How can Thai automotive companies compete with Hyundai and Chinese companies such as SAIC and BYD of China?

China• Joint venture - both public and private

enterprises. • FDI is also a major factor of the development

of Chinese automotive industry. • China's automotive industry still remains

underdeveloped both technically and managerially.

6.  How can Thai automotive companies compete with Hyundai and Chinese companies such as SAIC and BYD of China?

Thailand - Detroit of Asia

• Thailand’s automotive industry is the South East Asia’s largest and most advanced automotive industry.

• ASEAN's largest automotive market and assembler and world's second largest pick-up truck market after the U.S.A.

• Boost up due to many new ventures in the country such as by the Tata Industries, the major Indian Auto producer.

• Thailand Automotive Industry (TAI) has developed an 8.7 billion baht (US $ 217.5 million) plan to further develop the sector.

• Human resource development program

• Automotive experts dispatching program to establish clusters and upgrade auto parts manufacturing technology

• Research and Development Centers, Development of information center to analyze industry data and automobile export promotion center.

6.  How can Thai automotive companies compete with Hyundai and Chinese companies such as SAIC and BYD of China?

• TAX structure

China ThailandCorporate Income Tax

SOEs and Chinese companies: 33% JV’s: 16%

30%

Tax on vehicles

VAT: 17% Consumption tax: 3 – 8% for motor-vehicles 10% for Motorcycle

VAT: 7% Interior tax: 10% Excise tax: Cars and PV 12 – 48% CVs 0 – 3% Bike 3 – 5%

Import tariffs on CBU

Car and light vehicles: 43 – 50% Parts and components: 15 – 20%

Cars and PV 60 – 80% CV 30 – 80% Bikes 30%

Features of Automobile Industry in Select Asian Countries China Thailand

Market/ Demand Structure

Production of passenger vehicles showing high growth The sale of MPV and SUV also grew rapidly Sales of domestic brands are also robust. China produces more number of vehicles compared to other selected countries Strong component sector, developed through protection

Big market for pick-up trucks. Demand for diesel cars is increasing. Toyota is market leader Strong focus on making component sector export oriented. Now Govt. is providing importance on the weak sub sectors of auto ancillaries to make the entire supply chain equally efficient.

Ownership Structure

Company structures are mainly in the form of JVs. Attempt was made to consolidate domestic companies into few large groups such as FAW, DMC, etc.

Mainly Japanese player in all segments of the industry. Toyota and Isuzu control 65% of the market. MNCs are present in component manufacturing also.

Trade Structure

Imports more than exports. Specializing in basic auto-components but imports engines parts. Technology absorption is given importance through JVs and follow up is made for component sector development and export of that. Lack of R&D and designing limits the export growth. Patent issues need to be addressed.

Specializing in full vehicles. Strong govt. support of domestic auto-component sector. Export mainly to Japan, Australia and ASEAN countries. FTA with Australia, India and AFTA are helping Thailand to increase exports. Components are getting exported to other ASEAN countries also.

Product Specialization

China is specializing in basic component sector and in future possibly in big cars. Currently specializing in two-wheelers, passenger cars, etc. Product development progress has limitation and may face competition.

Specializing in sedans and pick up. Currently focusing on gaps in component supply chain and will develop those missing links to have robust component sectors

Tax Structure

Lower corporate income tax for JVs to attract foreign players. Import duties are lower than India. Differentiated duties for vehicles and components

Import tariff on CBU is high. Not much reduction of duties on vehicles in last five years. Differentiated Import duties and excise taxes for different kind of vehicles

7.  What are the features that are critical to succeed in the automotive industry and to become a global leader?

Positive Image• Public image• To entrust safety, along with a sizable portion of their income, to a car

company, the perception of the company figures greatly in the buying decision.

7.  What are the features that are critical to succeed in the automotive industry and to become a global leader?

Distribution Network• Cars and trucks are not sold directly to customers, auto manufacturers rely on

franchised dealerships to provide local showrooms. • Knowledgeable and reputable to sell cars

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7.  What are the features that are critical to succeed in the automotive industry and to become a global leader?

Compliance• Federal and local regulations and emissions standards, fuel efficiency and safety

standards.

Flexibility• An elusive critical success factor for the automotive industry

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