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A New Enterprise Approach:Megacity Mobility [M2]
David BerdishSustainable Business Strategies, Ford Motor Company
Prince of Wales Business and Poverty ProgrammeNovember 13-16, 2006
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Agenda
Background: Sustainable Business Strategies
Emerging 21st Century Megatrends
A New Enterprise Approach: M2
Work Plan and Scope
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Sustainable Business Strategies in perspective
Key activities 2000 to date:
Stakeholder Engagement insight into changing societalexpectations and innovative community initiatives
Disclosure award winning Sustainability Reports
Sustainability Risk & Issues learning and managementof emerging issues notably climate change and human
rights
Focus progressively shifting from risk management tolonger term opportunities of sustainable mobility
Unifies wide ranging initiatives
Responds to 21st
century mega-trends Identifies new forms of added value and innovative
business models for FMC
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SMG
Technologies
Human Rights
Environmental
Management
Carbon Offset
Green Bonds
NGO
Engagement
Reporting
NationalDialogue
CO2
roadmap
Piquette
Project
SBS
Unifying wide ranging initiatives
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2006 Strategic Review
SBS identified external threats and opportunities relevant to Fordsbusiness, based on both internal and external research and the results
of the SLC Learning Summit in May these observations, and ourresponses, were presented to Automotive Strategy as input to the 2007Strategic Plan
Climate change and associated regulation will lead to new vehiclestandards and increased costs
Increasing resource costs, and urbanization and congestion
particularly in growing megacities will cause customers to changepurchasing behavior and explore other means of transportation
Shifting demographics and social inequality will lead toincreasingly diverse and fragmented markets
Addressing these issues can create vast new opportunities for the
company
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2015 = 33 megacities (27 in developing world): a
major shift of population from rural to urban areas
39 of the 50 most populated cities will NOT be inthe United States, Western Europe or Japan (amajor shift in per capita income)
2025 = 5 billion in cities
2050 = 450 megacities mostly in EmergingEconomies (vs. two in 1950)
Two thirds of world population in cities: socialdisintegration and horrific urban poverty
21st Century - Megacities
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Megatrends are resulting in megacities withinevitable shifts in customer base and marketneeds
Present Ford business model will have to adapt tomeet radical new market requirements
Affordable & city-effective transportation solutionswill require non-traditional models to delivermegacity mobility
No competitor is yet leading the way inmeeting/shaping the market needs resulting from
these fundamental shifts Ford has a real opportunity to establish
competitive advantage if it can develop thesolution sets that meet the new demographic andeconomic dynamics
Ford should respond to these factors
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Meeting the needs in Mexico City
18 million people with a per capita income of $15,000
One of the largest, busiest and cheapest bus systems in theworld
Ozone exceeding WHO limits 300+ days per year
Over one million with permanent breathing problems
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Meeting the needs in Dhaka
13 million people with a per capita income of $2801
90% of schoolchildren with lead levels which impairdevelopmental and learning abilities
The largest number of rickshaws (400,000) in the world
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Meeting the needs in Bangalore
6.7 million people with a per capita income of $842
1.4 million food ration card holders, 25% live in slums 300,000 IT employees travel 20km in 2 hours
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New Mobility Defined
SBS partnered with U-M to exploresustainable mobility solutions as a
result of Mobility 2030 and ChangingDrivers: New Mobility demands a highly-accessible,
seamlessly integrated, multi-modaltransportation system
Meets individual transport needs whileminimizing its negative human and ecologicalimpacts
Highlighted Fords potential role as a mobilityintegrator
Shifting our core competency (BuildingVehicles Building Ideas BuildingIntegration) will allow us to: Enter new, untapped, profitable markets Achieve progress toward sustainability-related
goals (GHG emissions reductions, etc.) Minimize threats from new, low-cost
manufacturers in the traditional market
Can we come up with transportationsolutions that are lower costs to thecustomer than a low cost car sale?
How will the new solutions provide
revenue and growth opportunity forFord and its partners?
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A New Enterprise Approach: M2
Creates new opportunities as a result of rapidly shifting demographicsthat will create huge new markets with the majority living in cities
(and the needs of all levels of the economic pyramid)
Creates prototype products and services based on the mega-cityneeds and Ford's ability to deliver (skills, technology, patent portfolio)
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A New Enterprise Approach: M2
Faced with increased competition from low-cost auto manufacturers, stricter regulationand policy standards, and immediate andpronounced climate change effects fromhigh-impact individualized transportation,Ford has the ability to generate profits andalleviate poor conditions through newmobility solutions
Recall Fords beginnings: at the turn of theprevious century, Ford createda middleclass in the United States by offeringaffordable options to the poor
Ford can create new and different products,not stripped down or inferior ones, thatfulfill identified needs
Ford can rethink the problem: What do people need, and why?
Do they desire a product, or does the inherent benefit take the form of the servicethat the product provides?
What does the revenue stream look like (not a car or part sale)?
How can Ford catalyze economic, environmental and social development through
innovative mobility options?
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Megacity Mobility is a vision for next-generation transportation
It is a highly-accessible, seamlessly integrated, multi-modalsystem that meets individual transport needs while minimizingits impact on ecological systems
Megacity Mobility includes personal and
commercial vehicles, public
transportation, other transport
products and services
Value-add for current systems
Smart
Integrated
Clean
Efficient
A New Enterprise Approach: M2
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Megacity Mobility: Portfolio of Solutions
Leverage capabilities to design new technologies and success
Vehicle & Infrastructure Design
Advanced power trains
Vehicle materials
Vehicles for seniors
Vehicles for congested cities
Vehicle alternatives in megacities
Transportation Equipment
Interactive kiosks
End user equipment (readers/writers)
Safety systems
ITS
Navigation systems Space & route optimization
Ticketing & routing information
Electronic payment systems
Market of the Majority Transportation Services
Planning & integration
Car sharing
Village car
Fleet services
Goods movement Turnkey solutions
Transportation for seniors
Urban to rural / rural to urban transport
Remote medical transportation access
Business Services
Transit payment accounts
Project financing & venture capital
Mobility marketing services
Outdoor and in-vehicle advertising
Loyalty programs
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Work Plan and Scope
Increased research on Mega-Cities and building SubjectMatter Expertise, including research library, including: Detroit
Bangalore
Istanbul
Shanghai, Beijing, Chongqing, Jangling
Hermosillo, Mexico City
Bahia, Sao Paulo Cape Town, Johannesburg
Hanoi
Increased understanding of the needs of Mega-Cities citizenswhile we continue to leverage:
Sustainability reporting Engagement
Human Rights Leadership
Build Subject Matter Expertise in the Base of the PyramidProtocol
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Work Plan and Scope
Development of new economic systems in Mega-Cities, including a business planning approach for: Customers/Markets
Citizens Community Mega-City Attributes
Solutions
New Mobility Portfolio Vehicle Design Transportation Infrastructure Technology and Logistics
Partners
Stakeholders
Local Governments Local NGOs
Investors World Bank and International Finance Corporation Social Venture Capitalists
