The release of the Ford Fusion was the culmination of six years of planning, imp
ID: 1163930 • Letter: T
Question
The release of the Ford Fusion was the culmination of six years of planning, implementation, and monitoring. Top managers established the mission for the new vehicle as “the most talked about car of 2012.” The three goals for driving this strategy were to (1) become the company’s highest volume car in order to gain market share, (2) offer customers unparalleled levels of choice, and (3) have green offerings. When Alan Mulally became CEO, he instituted the One Ford Strategy. The One Ford Strategy unites the operations of the company through four clear objectives. The One Ford Plan facilitated the collaboration between marketing and product development for the Ford Fusion project. This ensured the final product was cohesive both in design and market positioning. This collaboration was especially important to the execution of tactical plans for this project. It is not enough to simply create plans—measuring the effects of a plan is imperative to successful execution. Ford uses a system called Launch Readiness, which began about two years before the launch with phase 1 or LR1. The operational part of planning is encompassed by LR2, the next phase in Launch Readiness. This phase precedes the Final Status Review. Each of these phases serves as an overall control process for the entire project, and all phases are considered to be milestones that determine the project’s progress. The results of the Ford Fusion launch exceeded the company’s aggressive expectations, and these significant results can be attributed the level of planning the company engaged in.
Based on this information above, how did the companywide One Ford Plan contribute to the project-specific Launch Readiness plan? Explain in detail.
Explanation / Answer
Introduction:-
Management of a business is best done when companies tend to exercise control and planning hand in hand with one another. One ford is one of the classical studies which highlights how important it is to go hand in hand with each of the departments. It helps achieve this by taking a larger picture into consideration. Further, it tries to breakdown the entire production process and exercises control measures based on inputs from the production and marketting team alike.
This helps the company in being ready to what the market demand is and therefore. it is able to deliver on any product in the best possible way.
One Ford Strategy:-
In September 2006, Alan Mulally was appointed CEO of Ford. Soon after, he unveiled the 'One Ford' strategy in an effort to stimulate growth.
Components of the One Ford Strategy that contribute to the project-specific Launch Readiness plan
ONE TEAM
The first component of the 'One Ford' strategy concerned people. It recognized the importance of a skilled and motivated workforce working together as a team.
The company planned to develop a winning team by putting in place the principles and practices that would unlock the full potential of its employees.
To start with, all employees who were connected to a project were to be included in the decision making process. While work was to be assigned to teams, individuals were to be given authority and held accountable for delivering results.
ONE PLAN
Traditionally, Ford's regional operations operated as autonomous business units. While many of these units had been successful, it was felt that this mode of operation was too inefficient and would not be sustainable in the long run. The 'One Plan' involved replacing disparate units with a single, unified entity.
How the Strategy was Implemented :-
Implementing the Strategy
Ford set out to implement the 'One Ford' strategy. Its initial focus was on securing financing as this was vital for the restructuring efforts.
SECURING THE FINANCING
In December 2006, Ford secured $23.5 billion of new liquidity. In addition, the company obtained a convertible debt of $4.95 billion, a secured term loan of $7 billion, and a secured revolving credit facility of $11.5 billion. This amounted to total automotive liquidity of about $46 billion at year-end 2006. The company intended to utilize this liquidity to fund the restructuring and product development initiatives. It was also to act as a cushion for unforeseen events in the near term.
RESTRUCTURING THE COMPANY
As part of the 'One Ford' strategy, the company initiated a restructuring exercise of its automotive business with the objective of dealing with the realities of lower demand, higher fuel prices, and changing consumer tastes This was expected to further bring down annual operating costs.
Results:-
In 2009, Ford recorded a pre-tax operating profit of $454 million and a net income of $2.7 billion. This was the first time since 2005 that Ford had posted a full-year positive net income. In 2009, Ford's market share in the US increased to 15.3 percent, an increase of 1 percent compared to 2008. Ford's market share in Europe went up to 9.1 percent, a half point increase compared to the previous year; this was the highest in 11 years. And in China, Ford sales were up 45 percent although it continued to be a minor player in the region
In 2009, Ford recorded a pre-tax operating profit of $454 million and a net income of $2.7 billion. This was the first time since 2005 that Ford had posted a full-year positive net income. In 2009, Ford's market share in the US increased to 15.3 percent, an increase of 1 percent compared to 2008. Ford's market share in Europe went up to 9.1 percent, a half point increase compared to the previous year; this was the highest in 11 years. And in China, Ford sales were up 45 percent although it continued to be a minor player in the region