Strategic Audit For Ford Motor Company

Strategic Audit

Section 1: Current Situation.

My team members and I have researched the Ford Motor Company and have found that they seem to be doing quite well despite the $12.6 billion in losses and plants. They have the first SUV Hybrid on the market and it continues to be number one. Last year in 2007 for the J.D. Power Initial Quality Study, Ford vehicles got 14 vehicle honors and that is more than any other automaker. Their mission is to provide personal mobility for everyone around the globe with heritage, culture, and passion. They anticipate consumer needs and deliver high quality products and services that will help improve the lives of the people around them (Ford Motor Co., 2005, April 27).

One of their major goals is to contribute to stabilizing the climate by considering reducing long-term emission. They have reported that they will achieve this goal by continuously reducing the GHG emissions and energy usage of their operations, developing more products that lower GHG-emissions, and establishing an effective and predictable market policy and technological framework for reducing road transport GHG emissions. Another one of their goals is to promote the development of an infrastructure that will expand the use of bio-fuels and help reduce our dependence on oil. One more goal of theirs is to cut the usage of global energy by 27% and the usage of water by 25% which they have been working on since 2000. Some of their major timeframe targets they are currently working on to contribute to the climate are to reduce North American facility emissions by 6% by 2010, voluntarily offset 2007 and 2008 CO2 emissions from manufacturing facilities, and reduce U.S. facility emissions by 10% per vehicle produced by 2012.

Section 2: Corporate Governance.

Ford Motor Company: Board of Directors

(Feb 2007)

Name Position Entry Date Organization

Alan Mulally President & CEO 2006 Ford Motor

Irvine O. Hockaday Jr. Retired President &CEO 1987 Hallmark Cards

Stephen G. Butler Retired Chairman & CEO 2004 KPMG, LLP

Richard Manoogian Chairman & CEO 2001 Masco Corp.

Jorma Ollila Chairman & CEO 2000 Nokia Corp.

Gerald L. Shaheen Group President 2007 Caterpillar

Kimberly A. Casiano President & Chief Ops Officer 2003 Casiano Communications

Edsel B. Ford II Retired Vice President 1998 Ford Motor

William C. Ford Jr. Executive Chairman 1988 Ford Motor

John R.H. Bond Group Chairman 2000 HSBC Holding

William C. Ford Director Emeritus 1948 Ford Motor

Ellen R. Marram Managing Director 1988 North Castle Partners

John L. Thornton Professor & Director 1996 Tsinghua Univ.

Homer A. Heal Director, Univ. Michigan ATLAS Project 1997 Univ. of Michigan

Section 3: External Environment; Opportunities and Threats.

In the EFAS process of scanning a firm's external environment, one is looking for their opportunities and threats which contribute to the developed relationship between a firm and its profitability within the market setting. The ability to identify these factors within a corporation's societal and task environment are the influential forces placed on their long-run decision making. The identifiable factors lie within these forces: Economic, ability to regulate the exchange of materials, money, energy, and information; Technology, solving problems trough innovation; Political-legal, power attained through protective laws and regulations; and Sociocultural, a society's overall view of values, morals, and customs (Hunger & Wheelen, 2007).

Opportunities - Foreign markets and organizational culture. Through globalization Ford has been able to attain additional revenue. In Europe, Ford's overall sales increased by 5 percent compared to 2005. The Ford S-MAX won Europe's Car of the Year, and the Ford Transit won International Van of the Year for 2007. Ford also maintained the best-selling car nameplate in Britain for the 30th consecutive year, and the Ford Transit remained the best-selling medium commercial vehicle in Europe. As of 2006, Ford has attained 10.6% of the market share and 27% of total auto sales in Europe.

The American people have become huge fans of reality TV, evident in several series such as "Orange Co. Croppers" and "Celebrity Fit Club" Ford is taken a hold of this fad and developed an online documentation series that views the inside-workings of the automaker as it designs, engineers, and produces new vehicles in hopes of re-gaining consumers in North America (Media.Ford.Com., 2006, May 2). Ford also sponsors the hit reality TV show "American Idol" which has produced a number of new vocal artists like Kelly Clarkston; who's 24-city summer concert tour in 2006, was exclusively sponsored by Ford which allowed them to give back to their community through the donation of 24 new cars and a portion of ticket proceeds given to "Ford's Warriors of Pink" supporting the Susan G. Komen Foundation Race (Media.Ford.Com., 2006, May 2).

Threats - Imports and Rising healthcare costs. On August 27, 2007, it has been reported that for the first time in history the "Big Three" automakers have dropped below 50% of the US market share, as a result of foreign-based automakers. This report showed the US dropping to 49.5% of the market which included foreign nameplates they owned such as Jaguar, Land Rover, and Volvo (Associated Press., 2007, August 2). Ford's current share of the 49.5% is approx. one-third which indicates that they have a slightly below-average presence within their market.

When the cost of healthcare increases so does the price tag attached to a health plan which Ford provides for their retirees. The amount of money Ford pays for this program is cutting into their profits. Ford has attempted to address this situation because it is causing a major upset with individuals they made a promise to (Durbin, 2006, March 18).

External Factor Analysis Summary (EFAS) Tables for Ford Motor Company

External Factors Weight Rating Weighted Score Comments