Ford Analysis

Ford Case Write-up

Nidhi Singhania (ns787), Vishnu Nair (vkn3), Durreh Tabassum (dt452)

September 9, 2015

Question 1

Jacques Nasser’s strategy for Ford in 1999 focused on new talent recruits, autonomous management, customer needs and revolutionary product development and processes. The major strategic steps he undertook are:

1. Cultural & Structural Changes:  Nasser wanted greater accountability in the system and focused on creating autonomous, independent regional units. He hired fresh talent from auto and consumer goods companies to execute on his visions of a ‘growth oriented consumer company’. His ‘nimble entrepreneurial style’ had succeeded in successfully turning around businesses in the past.
2. Customer Focus: Nasser’s strategy was for his team to get understand and anticipate better the customer’s needs and wants.  His approach here was to move away from overly quantitative analysis and market research to more unconventional ways of getting customer insight. He invested heavily on training Ford’s designers, engineers and marketers to better understand its customers and their trend lines.
3. Creativity in Products & Service:  Nasser was leading Ford to undertake ‘build to order’ service that will allow customers to have personalized small cars, passenger-cabin versatility and SUVs. He divested into easy cash generating auto service business with the vision of providing cradle to grave auto service to its customers.
4. Innovations in Information Technology:  Nasser led Ford’s e-business strategy to revolutionize the auto industry by achieving cost efficiencies, capturing a new revenue stream of transaction/service fee, reach new customers and collect valuable customer data.

Nasser’s strategy was bold and visionary but lacked some core ingredients which resulted in its failure.

1. Lack of focus on Core Business- In pursuit of other innovation, Ford experienced significant decline in its efficiency over the last few years that affected sales and delayed new product launches. While the competitors were capitalizing on higher efficiencies and better quality, Ford was struggling with maintaining its quality.
2. Lack of Strategic Direction - Nasser had a very visionary outlook for his business, but he got carried away by the excitement of the vision and lost sight of ground realities. He invested a lot of money into new initiatives that may not have been financially prudent for a company that was losing money heavily in foreign operations.
3. Failure to build a better Company Culture - While it may not have been a bad idea to reinvent an organization that was stodgy, bureaucratic and slow to react, Nasser may have pushed the organization and the people too hard. Too many changes and too many new initiatives may have put too much pressure on the people. Rather than focusing on making one change at time, Nasser wanted to overhaul the entire setup at one go. He also adopted HR policies and processed from GE without customizing them for Ford.

Question 2

Jacques A. Nasser came in at a time when auto business was undergoing a tremendous change with consolidations happening across the board which further rendered the industry extremely competitive. He wanted to transform the way Ford operated its business. His goal was to reinvent the organization as a nimble, growth-oriented consumer powerhouse for the 21st century.