Strategic Memoblack

STRATEGIC MEMO ON FORD INDIA LTD. Presented By:

Group 2 – Peter Drucker Akanksha Arora - Business Development (8001) Garima Singh - CEO (8014) Utsav Shah – CMO (8045) Pritesh Lodha – COO (8084 Vishal Shah – CFO (8107) Ashish Trivedi – CMO (8117)

Agenda 

About Ford, India



Industry overview



Marketing strategies



Positive practices adopted by Ford



Challenges



Brief financial analysis



SWOT



Competitive analysis



Strategies for Indian market



Recommendations



The road ahead

Ford India Ltd 

Started in 1995 with M&M ltd.  50 – 50 JV  Mahindra Ford India, Limited (MIFL)



In 1998, its stake increased to 92.18%  Re-christened as Ford India Limited



Has manufacturing plant at Chennai with 2100 employees



Ford is the worlds 4th largest automaker based on sales

Automobile Industry in India  7 largest in the world th

Among the fastest growing in the world Growth rate is at the average of 10‐12% India has the fourth largest car market in the world

Source: www.team-bhp.com

Car market in India – Major players

Segmentation a) Geographic Segmentation: metro cities e.g. Delhi, Noida, Mumbai, Kolkata Bangalore, Pune etc b) Demographic Segmentation: 3. on the basis of Age: middle age people (25-40) 4. on the basis of Income: upper middle level or the high-level income groups c) Psychographic Segmentation: on the basis of the Lifestyle: segmentation is done on the basis of the attitude, interests and lifestyle etc of the potential customers

d) Behavioral segmentation: 2. on the basis of Benefits Provided: such as quality, service, economy, speed comfort etc. 3. on the basis of the Readiness stage: awareness and interest among the customers about the brand e) Strategic Segmentation of Cars: 5. Family car segment: e.g. FORD IKON’ AND ‘FORD FUSION’ 6. Premium car segment: e.g. FORD FIESTA’, ‘FORD MONDEO’ 7. SUV segment: e.g. ‘FORD ENDEAVOUR’

Targeting Ford Ikon - Entry-level middle class group Ford fusion – Youth class Ford Fiesta - Upper middle class group Ford Mondeo and Endeavour – Higher income group or premium segment

Positioning  Upper  The

middle luxury brand

brand provides ‘Innovation’, ‘Advanced technology’ and ‘Best quality’ automobiles.

Marketing Strategies 4P’s

Product and services 

Ford India sells Ikon in five variants



Ford fusion, ford fiesta, ford Endevour,Ford Mondeo comes in two different variants



Ford launched Endeavour to cater to the Sports Utility Vehicle (SUV) market

New products 

Ford small car



Ford electric car



Fuel efficient vehicles

Services  Quality  Ford

care

assured

 Quick

service centers

 SSP(schedule

service plan)

Place  Target

metro cities

 Strategic

vHMIL vJai Hind

Distribution network

Pricing 

Ford Ikon: Rs. 5,45,200



Ford Fusion: Rs. 6,50,000



Ford Fiesta: Starting from Rs. 6,00,000 up to 10,00,000



Ford Endeavour: Rs. 16,00,000

Promotion 

Hoardings, advertisements



Website



Dealer development



Go green strategy



Ford offers



Ford marathon Ikon drive



Community sponsorship

Selling strategy 

Corporate sale



Field sales



Showroom sales

Positive practices adopted



Excellence in manufacturing



Constant monitoring of the supplier base



Maintaining quality and customer satisfaction



Degree of localization

Challenges 

Uncertainty and fluctuations in the Indian car market.



Global increase in crude prices will impact the purchasing decision of the potential customers to buy the petrol engine models.



Reluctance of Indian consumers to upgrade cars. Initially, this had resulted in lower than expected sales volume in the C-Segment.



To combat the increasing usage of LPG fuelled or electric cars in the world.



To come out with competitive models occasionally in order to sustain in the market and keep up with the competitors.



To keep up with the technological advancements taking place in countries like Japan and Korea in the companies like Hyundai, Honda, etc.

SWOT Strength 

One of the world best known brands



Investment in alternate fuel



Web strategy

Weakness 

Limited product portfolio



Limited reach to metro cities

Opportunity 

Small car segment and electric car



Govt. initiative

Threat 

High import subsidies



Rising prices of steel and other raw materials



Rising fuel prices



Competitive rivalry

Financial Analysis

Current Ratio

Asset Turnover Ratio

Operating Profit Margin Ratio

Debt-Equity Ratio

Competitive Analysis  Porters

five force analysis

 Competitive

Profile Matrix (CPM)

Porter’s 5 Force Analysis : FORD India Potential Entrants H igh Supplier

Low

Existing Industry Competitors H igh Low Substitute

Buyer Modera te

Competitive Profile Matrix

Ford ranks alarmingly low amongst its competitors Ford has to work upon certain factors where it is ranking less and has to develop strategies in order to have an edge over its competitors.

Choosing the type of strategy to adopt 

No strategy is right or wrong  Depends on the goals, present situation, resources, intents and

vision of the company 

Four types of strategy  Aggressive  Competitive  Defensive  Conservative



SPACE matrix (Strategy Position ACtion Evaluation) A four quadrant matrix to determine the type of strategy to be adopted

+1

+2

+3 Poor

+4

SCALE +5 +6 -6 -5 Best Poor

-4 -3 Best

-2

-1

Continued…

+1

+2

+3 Poor

+4

SCALE +5 +6 -6 -5 Best Poor

-4 -3 Best

-2

-1

Calculations for SPACE 

Financial Strengths: 19/5 = 3.8



Environmental Stability (ES): -22/9 = -2.44



Competitive Advantage (CA): 23/7= 3.29



Industry Strength (IS): -17/6 = -2.83

Y Axis FS + ES = 3.8 + (-2.44) = 1.36 X Axis CA + IS = 3.29 + (-2.83) = .46

SPACE Matrix

Adopt AGGRESSIVE Strategies

Ansoff’s Model

Applying Ansoff’s Model for FORD

1. Market Penetration 

Economic Downturn  Not followed market penetration, but increased prices. ○ ‘Ikon’ price up by 1.5% from April ’09 ○ Rising component import bills due to rupee depreciation

 Believes in premium quality products ○ Target customers

:

upper middle class, who wont mind the price

hike if they get good quality

 Maintain or increase share of current products through

promotions and providing quality product.  Introducing loyalty schemes

2. Market Development 

Increasing its market share through Expanding dealer and service center networks ○ Availability ○ Tier II & III cities

Limited editions providing more at the same costs Raising local contents of its vehicles

○ Outsourcing aluminum cylinder blocks from Pune instead of

Europe ○ Local content in Ford Fiesta & Ikon are 85% & 90% resp.

3. Product Development  New

version of Ford Fiesta for the younger

generation Based on customer experience, it appeals the

young, suave and style-oriented professionals It surrounds its occupants with eye-catching

luxury and comfort and sumptuous interiors

4. Diversifications 

Vertical diversification Setting up integrated and flexible engine manufacturing

plant in India Current capacity of 60K units per annum to be increased

to 2.5 Lakhs 

Concentric Diversification Launching new crossover cars in the long term in India

Recommendations  Launch A Small  Networking  Effective

Car before its too late

with suppliers and Localization

media campaign for India

Ford India: The Proposed Roadmap Enter into SMALL CAR market, which is the highest selling (70%) market in India.



(Petrol version) prized small car



High fuel efficiency approved by ARAI



Prized at 3.5 – 4.0 Lacs



Stylish international design



1100 CC Engine



3 year service warranty



(Less govt duty for engines less than  1200 cc)

Availability of options such as ABS,

A whole new design and R&D for the car

premium price for safety

customized to the Indian market 

BS Stage IV emission norms



Following the Industry and category



Effective

and

Innovative

media

campaign bundled with a good PR work for the car

benchmarks in offerings of comfort, safety and performance

Airbags for consumers who want to give



Availability of Nationwide ford service

Ford India: The Proposed Roadmap Enter into ELECTRIC & HYBRID CAR market, which is growing Why?

How?



Environmental Concerns



A strong R & D



Fuel Price



Develop a Hybrid vehicle



Seen as NEXT Era of



Develop an Electric Powered

Automobiles 

Lower Running Cost

car 

Lobbying with Industry associations & Govt. of India to reduce the taxes and duties.



Effective Marketing

Suggestions to FORD India

Suggestions to FORD India (cont)

Thank You..!

Thank You..!