Questions and Topics We Can Help You To Answer:
Paper Instructions:

A formal, in-depth case analysis requires you to utilize the entire strategic-management process. Assume your group is a consulting team asked by Ford management to analyze its external/internal environment and make strategic recommendations. You will be required to make exhibits/matrices to support your analysis and recommendations. 
.

The completed case must include: (Use these as your headings within your paper. Place your work under each heading, following APA 7)


External Analysis

SWOT Analysis
Porter’s 5 Forces

2 sources


CASE 17
FORD: NO LONGER JUST AN AUTO COMPANY?*
In January 2017 Ford Motor Company celebrated a major milestone as the F-Series became the top-selling truck in the U.S. for the 40th consecutive year—all told, 26 million trucks sold since January 1977. The F-Series had also been the best-selling vehicle in the U.S. for 35 years straight.1 In February 2017, the F-Series, which included the Super Duty and the all-new F-150 Raptor, hit an all-time annual sales record of 65,956 vehicles.2 The F-150 was named 2017’s Autobytel buyer’s choice full-size truck, Edmunds most wanted full-size truck, Cars.com best pickup truck, U.S. News & World Report best truck brand, Kelley BlueBook Best Buy truck, and the Motor Trend Truck of the Year. Commenting on these results, Todd Eckert, Ford truck group marketing manager said, “what’s made the F-Series so successful is the Ford truck team’s ability to anticipate the needs of our customers better than anyone else—how those needs change, what’s most important, and what they need to do to move forward. Their insights help us design, engineer and build America’s best-selling trucks.”3

The ability to anticipate customers’ needs is crucial to any company’s long-term success, but especially in the capital-intensive, consumer-driven, globally competitive automobile industry. As the major players from Asia, Europe, and the U.S. jockey for position in the sales of traditional trucks and cars, smaller, more innovative companies such as Tesla, Elio Motors, and start-up Faraday Futures are creating concept cars that address consumers’ interests in alternative fuels, low operational costs, and self-driving autonomous designs that leave the passenger free to use in-transit time for other more productive pursuits.

Self-driving cars are reported to be coming as early as 2018 to the global roadways; and in 2017 Ford Motor Company was in this business big-time, testing its fleet of 30 autonomous cars in Arizona, California, and Michigan.4

Ford Motor Company CEO Mark Fields announced in January 2015 that Ford would be using innovation “not only to create advanced new vehicles but also to help change the way the world moves by solving today’s growing global transportation challenges.”5 Given the increasing disruption in the industry, and the obligation to return value to understandably concerned investors, Mark Fields had some significant decisions to make in the coming years.

Fields had been promoted to CEO in July 2014 on the retirement of Alan Mulally, widely hailed as one of the “five most significant corporate leaders of the last decade,” and architect of Ford’s eight-year turnaround from the brink of bankruptcy in 2006.6 It was Mulally who created the vision that drove Ford’s revitalization: “ONE Ford.” The ONE Ford message was intended to communicate consistency across all departments, all segments of the company, requiring people to work together as one team, with one plan, and one goal: “an exciting viable Ford delivering profitable growth for all.”7 Mulally worked to create a culture of accountability and collaboration across the company. His vision was to leverage Ford’s unique automotive knowledge and assets to build cars and trucks that people wanted and valued, and he managed to arrange the financing necessary to pay for it all. The 2009 economic downturn that caused a financial catastrophe for U.S. automakers trapped General Motors and Chrysler in emergency government loans, but Ford was able to avoid bankruptcy because of Mulally’s actions.

Mulally had groomed Mark Fields as his successor since 2012, instilling confidence among the company’s stakeholders that Ford would be able to continue to be profitable once Mulally stepped down. Even with this preparation, CEO Fields was still facing an industry affected by general economic conditions over which he had little control and a changing technological and sociocultural environment where consumer preferences were difficult to predict. And rivals were coming from unexpected directions. Fields would have to anticipate and address numerous challenges as he positioned the company for continued success.

Attempts at repositioning Ford had been under way for many years. In the 1990s, former CEO Jacques Nasser had emphasized acquisitions to reshape Ford, but day-to-day business activities were ignored in the process. When Nasser left in October 2001, Bill Ford, great-grandson of company founder Henry Ford, took over and emphasized innovation as a core strategy to reshape Ford. In an attempt to stem the downward slide at Ford, and perhaps to jump-start a turnaround, Bill Ford recruited industry outsider Alan Mulally, who was elected president and chief executive officer of Ford on September 5, 2006. Mulally, former head of commercial airplanes at Boeing, was expected to steer the struggling automaker out of the problems of falling market share and serious financial losses. Mulally created his vision of “ONE Ford” to reshape the company and in 2009 C-108finally achieved profitability. He committed Ford to remaining “on track for both [Ford’s] overall and North American Automotive pre-tax results to be breakeven or profitable”8 in the coming years. Mulally was able to sustain this success past the initial stages of his tenure, and maintained profitability up until his retirement in June 2014.

In 2014, as CEO Mark Fields took over, challenging global conditions meant 2014 year-end profit saw a 56 percent drop from 2013—meaning Fields had work to do. In 2015, Fields continued the focus on ONE Ford, highlighting the idea that ONE team, working with ONE plan, could achieve ONE goal, profitable growth for all. By successfully launching 16 new global products, opening the last of ten new plants to support growth in Asia Pacific, and seeing profitable global business unit performance in every region except South America, Ford had the most profitable year ever in 2015, and 2016 was just slightly lower, and the second best ever. The 2016 full year net income of $4.6 billion was down from 2015 due to a one-time pre-tax pension re-measurement. Adjusted pre-tax profit would have been $10.4 billion, on par with 2015. (See income statement in Exhibit 1.)

EXHIBIT 1 Ford Motor Company and Subsidiaries: Income Statement
For the Years Ended December 31,

2014

2015

2016

Revenues            
Automotive    $ 135,782    $ 140,566    $ 141,546
Financial Services    8,295    8,992    10,253
Other    
—

—

1

Total revenues

144,077    149,558    151,800
Costs and expenses
Cost of sales    125,025    124,041    126,584
Selling, administrative, and other expenses    11,842    10,502    12,196
Financial Services interest, operating, and other expenses    
6,878

7,368

8,904

Total costs and expenses

143,745    141,911    147,684
Interest expense on Automotive debt    797    773    894
Non-Financial Services interest income and other income/(loss), net    76    1,188    1,356
Financial Services other income/(loss), net    348    372    438
Equity in net income of affiliated companies    
1,275

1,818

1,780

Income before income taxes    1,234    10,252    6,796
Provision for/(Benefit from) income taxes    4    2,881    2,189
Net income    1,230    7,371    4,607
Less: Income/(Loss) attributable to noncontrolling interests    (1)    (2)    11
Net income attributable to Ford Motor Company    
$      1,231

$      7,373

$    4,596

EARNINGS PER SHARE ATTRIBUTABLE TO FORD MOTOR COMPANY COMMON AND CLASS B STOCK
Basic income    $        0.31    $        1.86    $        1.16
Diluted income    0.31    1.84    1.15
Cash dividends declared    0.50    0.60    0.85
Note: Figures in millions, except per-share amounts; year-end December 31.
Source: Ford Motor Company 10K filings.
But in 2016 CEO Mark Fields decided to restructure, creating a new focus, expanding the company’s scope from C-109vehicles to “mobility,” through business model innovation. Of interest in the income statement shown in Exhibit 1 is the presence, for the first time, of an “Other” revenue item, representing the newly operational Ford Smart Mobility LLC, a subsidiary formed to design, build, grow, and invest in emerging mobility services. Designed to compete like a start-up company, Ford Smart Mobility LLC was planning to design and build mobility services on its own, and collaborate with start-ups and tech companies as needed to pursue opportunities.

Going into 2017, Ford was guiding profits lower, primarily because of this intent to invest in the emerging mobility services opportunities. The ONE Ford legacy of Mulally was being adapted. In 2015, the plan had identified the following objectives:

Aggressively restructure to operate profitably at the current demand and changing model mix.

Accelerate development of new products, service, and experiences customers want and value.

Finance our plan and maintain a strong balance sheet.

Work together effectively as one team.

The new vision was to make “people’s lives better by changing the way the world moves,” and the strategy was to deliver top quartile shareholder returns through automotive and high-growth mobility businesses.9 Ford intended to do this by focusing on those strategic priorities in both the core business and emerging opportunities that would fortify, transform, and grow business:

Fortifying the automotive “profit pillars” of trucks, vans, commercial and utility vehicles; delivering updated performance vehicles such as the Ford GT and Mustang.

Transforming the underperforming Lincoln, Continental and Navigator luxury products, and repositioning small vehicles in developed markets through redesign; focusing on the needs of emerging markets.

Growing investments in emerging opportunities, especially in electrification, autonomous vehicles, and mobility services.

In 2017, reminding investors of the company’s long-term legacy, Fields pointed out a history going back to founder Henry Ford of “democratizing technology,” not just making products for people who could afford luxury vehicles, but using technology to solve problems of mobility and access, providing not only products but also transportation services that made people’s lives better.10 So, although Ford would always sell cars, CEO Fields was making big bets in autonomous technology (self-driving cars), electric vehicles, and other transportation services such as urban mobility solutions via ride-sharing, bike-sharing, and customized interior vehicle experiences serving multiple customer needs.

This vision of a seismic shift in personal transportation was fully supported and even driven by Ford’s executive chairman Bill Ford, who had championed the concept of increased mobility back in 2009 when the only things to invest in were “parking and municipal ticketing solutions”11 Now, in 2017, Bill Ford was supporting the company’s movement beyond selling vehicles to investing heavily in mobility services. As the initial architect of this shift, Bill Ford predicted the company could make profit margins of up to 20 percent on new services, more than double what it had traditionally made selling cars and trucks, but the ultimate goal, beyond making money, was to improve people’s lives. In doing so, Bill Ford would be protecting his great-grandfather’s legacy.12

History of the Ford Motor Company
In 2017, Ford Motor Company, based in Dearborn, Michigan, had about 201,000 employees and 62 plants worldwide. It manufactured or distributed the automotive brands Ford and Lincoln across six continents, and provided financial services via Ford Motor Credit. In 2017, it was also aggressively pursuing emerging opportunities with investments in electrification, autonomous vehicles, and consumer mobility. It was the only company in the industry where the company name still honored the vision and innovative legacy of its founder, Henry Ford.

American engineer and industrial icon Henry Ford had been a true innovator. He didn’t invent the automobile or the assembly line, but through his ability to recognize opportunities, articulate a vision, and inspire others to join him in fulfilling that vision, he was responsible for making significant changes in the trajectory of the automobile industry and even in the history of manufacturing in America. Starting with the invention of the self-propelled Quadricycle in 1896, Ford had developed other vehicles, primarily racing cars, which attracted a series of interested investors. In 1903, twelve investors backed him in the creation of a company to build and sell horseless carriages, and Ford Motor Company was born.

Starting with the Model A, the company had produced a series of successful vehicles, but in 1908 Henry Ford wanted to create a better, cheaper “motorcar for the great multitude.”13 Working with a group of hand-picked employees, he designed the Model T. The design was so successful, and demand so great, that Ford decided to investigate methods for increasing production and lowering costs. Borrowing concepts from other industries, by 1913 Ford had developed a moving assembly line for automobile manufacture. Although the work was so demanding that it created high employee turnover, the production process was significantly more efficient, reducing chassis assembly time from 12 ½ hours to 2 hours 40 minutes. In 1904, Ford expanded into Canada, and by 1925 Ford had assembly plants in Europe, Argentina, South Africa, and Australia. By the end of 1919, Ford was producing 50 percent of all the cars in the U.S., and the assembly line disruption in the industry had led to the demise of most of Ford’s rivals.14

C-110
The Automotive Industry and Ford Leadership Changes
The automotive industry in the United States has always been a highly competitive, cyclical business. In 2017 there were a wide and growing variety of product offerings from a growing number of manufacturers, including the electric car lineup from Tesla Motors, self-styled as “not just an automaker, but also a technology and design company with a focus on energy innovation.”15 The total number of cars and trucks sold to retail buyers, or “industry demand,” varied substantially from year to year depending on general economic situations, the cost of purchasing and operating cars and trucks, and the availability of credit and fuel. Because cars and trucks were durable items, consumers could wait to replace them, and, starting in 2016, the average age of light vehicles on U.S. roads was over 11 years. Partly due to this, replacement demand was forecasted to stay fairly flat for 2017 and beyond. Any increase in sales would be aided by an improvement in the general economic situation, reduced gasoline prices, and lower interest rates for car loans. However, sales in U.S. markets had not belonged only to U.S. manufacturers for some time.

In the U.S., Ford’s market share had dropped over time—from almost 25 percent in 1999 to 15.5 percent in 2011,16 with major blows to market share in the light-vehicle segment. Going into 2017, although still losing ground at 14.9 percent, Ford claimed the second spot in the U.S. market, just behind GM and ahead of Toyota. (See Exhibit 2.)

EXHIBIT 2 Sales and Share of U.S. Total Market by Manufacturer, 2016
Automaker    Units Sold    % Change    Market Share
General Motors    2,723,667    −2.5%    17.2%
Ford Motor Company    2,361,426    −0.2%    14.9%
Toyota Motor Corporation    2,206,359    −2.4%    13.9%
FCA/Chrysler Group    2,051,796    −0.6%    12.9%
Honda Motor Company    1,477,465      2.9%      9.3%
Nissan Motor Company      1,411,680      4.9%      8.9%
Hyundai-Kia    1,305,945      2.8%      8.2%
Volkswagen Group*    525,176    −4.6%      3.3%
Daimler    343,695      0.6%      2.2%
BMW-Mini    327,711    −10.2%       2.1%
Jaguar-Land Rover    92,531    22.7%      0.6%
Total    15,850,640    0.04%          —
Red font indicates declining year-over-year volume.
Source: Automakers & Autonews.com as of 12/1/2016.
Originally dominated by the “Big 3” Detroit-based car companies, Ford, General Motors, and Fiat/Chrysler, competition in the United States had intensified since the 1980s, when Japanese carmakers began gaining a foothold in the market. To counter the problem of being viewed as foreign, Japanese companies Nissan, Toyota, and Honda had set up production facilities in the United States and thus gained acceptance from American consumers. Production quality and lean production were judged to be the major weapons that Japanese carmakers used to gain an advantage over American carmakers. Starting in 2003, because of innovative production processes that yielded better quality for American consumers, Toyota vehicles had unquestionably become “a better value proposition” than Detroit’s products.17

Back in 1999, Ford Motor Company had been in good shape, having attained a U.S. market share of 24.8 percent, and had seen profits reach a remarkable $7.2 billion ($5.86 per share) with pre-tax income of $11 billion. At that time people even speculated that Ford would soon overtake General Motors as the world’s number-one automobile manufacturer.18 But soon Toyota, through its innovative technology, management philosophy of continuous improvement, and cost arbitrage due to its presence in multiple geographic locations, was threatening to overtake GM and Ford.

In addition, unfortunately, the profits at Ford in 1999 had come at the expense of not investing in Ford’s future. Jacques Nasser, the CEO at that time, had focused on C-111corporate acquisition and diversification rather than new vehicle development. By the time Chairman Bill Ford had stepped in and fired Nasser in 2001, Ford was seeing decline in both market share and profitability. By 2005, market share had dropped to 18.6 percent and Ford had skidded out of control, losing $1.6 billion, pre-tax, in North American profits. It was obvious Ford needed a change in order to adapt and survive. Observers believed the Ford family would take action to prevent further losses: “Ford may need a strongman . . . a Ford characteristic—the ‘prime minister’ who actually runs the company under the ‘constitutional monarch,’ a member of the Ford family.” It was speculated that Mark Fields, named head of Ford’s North American operations in 2005, might be tapped to take that job.19

The Ford empire had been around for over a century, and the company had not gone outside its ranks for a top executive since hiring Ernest Breech away from General Motors Corporation in 1946.20 Since taking the CEO position in 2001, Bill Ford had tried several times to find a qualified successor, “going after such industry luminaries as Renault-Nissan CEO Carlos Ghosn and DaimlerChrysler chairman Dieter Zetsche.”21

Among large corporations, it had become fairly common to hire a CEO from outside the family or board. According to Joseph Bower from Harvard Business School, around one-third of the time at S&P 500 firms, and around 40 percent of the time at companies that were struggling with problems in operations or financial distress, an outsider was appointed as CEO. The reason might be to get a fresh point of view or to get the support of the board. “Results suggest that forced turnover followed by outsider succession, on average, improves firm performance.”22 Bill Ford claimed that to undertake major changes in Ford’s dysfunctional culture, an outsider might be more qualified than even the most proficient auto industry insider.23

In 2006, Alan Mulally was selected as the new CEO and was expected to accomplish “nothing less than undoing a strongly entrenched management system put into place by Henry Ford II almost 40 years ago”—a system of regional fiefdoms around the world that had sapped the company’s ability to compete in a global industry, a system that Chairman Bill Ford couldn’t or wouldn’t unwind by himself.24

Mulally set his own priorities for fixing Ford: Ford needed to pay more attention to cutting costs and transforming the way it did business than to traditional measurements such as market share.25 The vision was to have a smaller and more profitable Ford. The overall strategy was to use restructuring as a tool to obtain operating profitability at lower volume and create a mix of products that better appealed to the market.

By 2011, Ford had closed or sold a quarter of its plants and cut its global workforce by more than a third. It also slashed labor and health-care costs, plowing the money back into the design of some well-received new products, like the Ford Fusion sedan and Ford Edge crossover. This put Ford in a better position to compete, especially taking into consideration that General Motors and Chrysler had filed for bankruptcy in 2009, and Toyota had recently announced a major recall of its vehicles for “unintended acceleration” problems.26 Ford’s sales grew at double the rate of the rest of the industry in 2010, but entering 2011 its rivals’ problems seemed to be in the rearview mirror, and General Motors, especially, was on the rebound.

Mulally set three priorities: first, to determine the brands Ford would offer, second to be “best in class for all its vehicles,” and third to make sure that those vehicles would be accepted and adapt[able] by consumers around the globe: “if a model was developed for the U.S. market, it needed to be adaptable to car buyers in other countries.”27 Mulally said that the “real opportunity going forward is to integrate and leverage our Ford assets around the world” and decide on the best mix of brands in the company’s portfolio.28 The “best mix of brands” appeared to have been established going into 2011, after brands such as Jaguar, Land Rover, Aston Martin, and Volvo were all sold off, and the Mercury brand was discontinued. Ford also had an equity interest in Mazda Motor Corporation, which it reduced substantially in 2010, retaining only a 3.5 percent share of ownership. This left the company with only the Ford and Lincoln brands, but the Lincoln offerings struggled against Cadillac and other rivals for the luxury car market. Mulally acknowledged that this needed fixing, and forecast a date of 2013 for real changes in the Lincoln lineup.29

In 2014, thanks to Mulally’s vision and perseverance, Ford maintained its position. Ford had introduced 24 vehicles around the world, including the new Mondeo in Europe, but although still profitable, net income was down $4 billion from 2013. Even though Ford maintained its number two position in Europe, behind Volkswagen, major losses had occurred in that sector, primarily due to Russian economic instabilities. South America had also seen losses due to currency devaluation and changing government rules. In addition, Ford’s push into Asia-Pacific, specifically China, was behind schedule. North American sales, while still strong, had resulted in operating margin reductions due to recalls and costs associated with the relaunch of the F-150. The one real bright spot was in financial services. Ford Motor Credit, the financing company that loans people money to buy new cars, saw its best results since 2011.30

As Mark Fields took over as CEO in 2014, he pointed to the ONE Ford plan as essential to Ford’s future: “our ONE Ford plan is build on compelling vision, comprehensive strategy, and relentless implementation, all leading to profitable growth around the world.”31 The actions of Mulally and now Fields, in enacting the ONE Ford plan, had attracted many long-term investors who believed in the strategy. Going into 2015 the financials, especially the balance sheet, appeared strong, and because of this, the company was able to reinstate and subsequently boost the dividend to shareholders, rewarding those investors who had stayed the course. Through 2016, going into 2017, the balance sheet stayed strong. (See Exhibit 3.)

C-112
EXHIBIT 3 Ford Motor Company and Subsidiaries: Sector Balance Sheets 
December 31, 2015

December 31, 2016

ASSETS
Cash and cash equivalents    $    14,272            $  15,905        
Marketable securities    20,904            22,922        
Financial Services finance receivables, net    45,137            46,266        
Trade and other receivables, less allowances of $372 and $392    11,042            11,102        
Inventories    8,319            8,898        
Other assets    
2,913        

3,368        

Total current assets

102,587            108,461        
Financial Services finance receivables, net    45,554            49,924        
Net investment in operating leases    27,093            28,829        
Net property    30,163            32,072        
Equity in net assets of affiliated companies    3,224            3,304        
Deferred income taxes    11,509            9,705        
Other assets    4,795            5,656        
Total assets

$ 224,925        

$ 237,951        

LIABILITIES        
Payables    $  20,272            $  21,296        
Other liabilities and deferred revenue    19,089            19,316        
Automotive debt payable within one year    1,779            2,685        
Financial Services debt payable within one year    41,196            46,984        
Total current liabilities

82,336            90,281        
Other liabilities and deferred revenue    23,457            24,395        
Automotive long-term debt    11,060            13,222        
Financial Services long-term debt    78,819            80,079        
Deferred income taxes    
502        

691        

  Total liabilities

196,174            208,668        
Redeemable noncontrolling interest    94            96        
EQUITY        
Capital stock        
Common Stock, par value $.01 per share (3,976 million shares issued of 6 billion authorized)

40            40        
Class B Stock, par value $.01 per share (71 million shares issued of 530 million authorized)

1            1        
Capital in excess of par value of stock    21,421            21,630        
Retained earnings    14,414            15,634        
Accumulated other comprehensive income/(loss)    (6,257)            (7,013)        
Treasury stock    
(977)        

(1,122)        

Total equity attributable to Ford Motor Company

28,642            29,170        
Equity attributable to noncontrolling interests    
15        

17        

Total equity

28,657            29,187        
Total liabilities and equity

$ 224,925        

$ 237,951        

Note: Figures in millions.
Source: Ford Motor Company 10K filings.
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Starting in 2016, CEO Fields began restructuring, and the cash flow reflected this. (See Exhibit 4.) Fields kept watch over an increasingly volatile landscape while strategizing for investments in areas of emerging opportunities. Going into 2017, Fields stated that Ford needed to be “very, very prudent, disciplined” in how cash was used to transform the business.32 The forecast for 2017 showed total automotive operating cash flow remaining positive through 2018, with the overall cash balance expected to stay at or above the company’s minimum target of $20 billion.33

EXHIBIT 4 Ford Motor Company and Subsidiaries: Sector Statements of Cash Flows 
For the Years Ended December 31,

2014  

2015  

2016  

Cash flows from operating activities
Net income    $ 1,230    $ 7,371    $ 4,607
Depreciation and tooling amortization    7,385    7,993    9,023
Other amortization    38    (27)    (306)
Provision for credit and insurance losses    305    418    672
Pension and other postretirement employee benefits (“OPEB”) expense    4,429    512    2,667
Equity investment (earnings)/losses in excess of dividends received    189    (333)    (178)
Foreign currency adjustments    825    710    283
Net (gain)/loss on changes in investments in affiliates    798    (42)    (139)
Stock compensation    180    199    210
Net change in wholesale and other receivables    (2,208)    (5,090)    (1,449)
Provision for deferred income taxes    (94)    2,120    1,478
Decrease/(Increase) in accounts receivable and other assets    (2,896)    (3,563)    (2,855)
Decrease/(Increase) in inventory    (936)    (1,155)    (815)
Increase/(Decrease) in accounts payable and accrued and other liabilities    5,729    7,758    6,595
Other    
(467)

(701)

(1)

Net cash provided by/(used in) operating activities    14,507    16,170    19,792
Cash flows from investing activities
Capital spending    (7,463)    (7,196)    (6,992)
Acquisitions of finance receivables and operating leases    (51,673)    (57,217)    (56,007)
Collections of finance receivables and operating leases    36,497    38,130    38,834
Purchases of equity and debt securities    (48,694)    (41,279)    (31,428)
Sales and maturities of equity and debt securities    50,264    40,766    29,354
Change related to Venezuelan operations    (477)    —    —
Settlements of derivatives    281    134    825
Other    
141

500

62

Net cash provided by/(used in) investing activities

(21,124)    (26,162)    (25,352)
Cash flows from financing activities
Cash dividends    (1,952)    (2,380)    (3,376)
Purchases of Common Stock    (1,964)    (129)    (145)
Net changes in short-term debt    (3,870)    1,646    3,864
Proceeds from issuance of other debt    40,043    48,860    45,961
Principal payments on other debt    (28,859)    (33,358)    (38,797)
Other    
25

(317)

(49)

Net cash provided by/(used in) financing activities

3,423    14,322    7,458
Effect of exchange rate changes on cash and cash equivalents    (517)    (815)    (265)
Net increase/(decrease) in cash and cash equivalents    
$ (3,711)

$ 3,515

$ 1,633

Cash and cash equivalents at January 1    $ 14,468    $ 10,757    $ 14,272
Net increase/(decrease) in cash and cash equivalents    (3,711)    3,515    1,633
Cash and cash equivalents at December 31    
$ 10,757

$ 14,272

$ 15,905

Note: Figures in millions; year-end December 31.
Source: Ford Motor Company 10K filings.
C-114
Ford and the Automobile Industry Changing Product Mix
Going into 2017, the entire automobile industry was facing disruption, but this wasn’t unusual. For instance, the 2009 global economic downturn and financial crisis had a significant impact on global sales volumes in the auto industry. The once-profitable business of manufacturing and selling trucks and SUVs had changed. Especially in the U.S., oil prices had been fluctuating, making it difficult to anticipate consumer demand. In 2010, this had caused a shift in consumers’ car-buying habits, reducing the demand for large vehicles.

The core strategy at Ford had centered on a change in products, shifting to smaller and more fuel-efficient cars. Ford had imported European-made small vehicles, the European Focus and Fiesta, into North America. It also converted three truck-manufacturing plants to small-car production.34 The Ford and Lincoln lines were upgraded, emphasizing fuel-economy improvement and the introduction of hybrid cars. In 2012 Ford launched six new Ford hybrid cars in North America and sold more hybrids in the fourth quarter of 2012 than during any quarter in their history. In 2014 Ford began producing its first hybrid electric car in Europe, the Mondeo Hybrid. This car was well-known to those in the U.S., being based on the North American Fusion model hybrid vehicle. By 2014, Ford was the world’s second largest manufacturer of hybrids, after Toyota.35

By late 2015 gas prices had reduced enough to spur interest in SUVs once again. This trend should have been good for Ford, given their branding emphasis on the F-150, Edge, Escape, and Explorer, but by 2013 Ford and other U.S. manufacturers had shifted production to the small and midsized cars, and in 2014 this positioning hurt Ford. With large inventories of smaller vehicles on dealer lots, U.S. auto manufacturers, including Ford, had to adjust once again to meet the demand for the newly designed cross-over vehicles. The smaller crossovers and SUVs now had greatly improved fuel economy, and were attractive to consumers due to their versatility, while the smaller sedan and compact owners were an older demographic, and less likely to be impulse buyers. These kinds of fluctuations in the industry meant automobile executives had to keep close track of trends and maximize their ability to adjust to demand.36 Ford, specifically, reconfigured plants to flex back and forth between cars and light trucks. See Exhibit 5 for shifting vehicle sales figures in the U.S. market.

C-115
EXHIBIT 5 U.S. Vehicle Sales by Segment YTD 2017
An exhibit compares 2017 year-to-date sales with February 2017 sales by segment
Source: http://online.wsj.com/mdc/public/page/2_3022-autosales.html#autosalesB.
Access the text alternative for Exhibit 5
In 2015, Ford relaunched the F-150, as well as further developing 15 other global products. 2016 saw the launch of the F-150 Raptor high-performance off-road pickup truck, and the next-generation Fusion Hybrid Autonomous Development Vehicle, bringing Ford’s test fleet of these innovative designs up to 30 vehicles, making it one of the largest in the automobile industry. In 2017, the company planned to triple the size of this hybrid fleet to a total of about 90 vehicles.37 By 2017 Ford had become the top-selling plug-in hybrid brand in the U.S., and was second in overall U.S. electrified vehicle sales. To support this growth, Ford had invested $700 million and projected 700 new jobs in its Flat Rock Assembly Plant in Michigan to build autonomous and electric vehicles.38

Ford’s most successful vehicles were still the F-series pickup trucks (see Exhibit 6). In 2017, for the 40th consecutive year, the Ford F-series was ranked as America’s top-selling vehicle.39 Ford’s vehicles had proven dependable, overall. However, it appeared consumer perceptions had not kept pace with actual performance. J.D. Power and Associates found that the Ford and Lincoln brands still had large lags between actual dependability performance and consumer perception. “Producing vehicles with world-class quality is just part of the battle for automakers; convincing consumers to believe in their quality is equally important,” said David Sargent, vice president of global vehicle research at J.D. Power and Associates. “It takes considerable time to positively change consumer perceptions of quality and dependability—sometimes a decade or more—so it is vital for manufacturers to continually improve quality and also to convince consumers of these gains.”40 For 2016, the highest scoring American-branded cars in the Consumer Reports road test, reliability, owner satisfaction, and safety ratings included the Ford Fusion SE–midsized car, Ford Escape Titanium–compact SUV, and the Ford Edge SEL–midsized SUV. Models with declining reliability included the Lincoln MKX.41

C-116
EXHIBIT 6 Best-Selling Vehicles in America, 2016
Rank    Vehicle Make    # Sold    % Change Over 2015
1    Ford F-Series Truck    820,799    +5.2%
2    Chevrolet Silverado Truck    574,876    −4.3%
3    RAM Truck    489,418    +8.7%
4    Toyota Camry    388,616    −9.5%
5    Honda Civic    366,927    +9.4%
6    Toyota Corolla    360,483    −0.8%
7    Honda CR-V    357,335    +3.4%
8    Toyota RAV4    352,139    +11.6%
9    Honda Accord    345,225    −2.9%
10    Nissan Rogue    329,904    +14.9%
11    Nissan Altima    307,380    −7.8%
12    Ford Escape    307,069    +0.2%
13    Ford Fusion    265,840    −11.4%
14    Ford Explorer    248,507    −0.3%
15    Chevrolet Equinox    242,195    −12.8%
Source: http://www.businessinsider.com/best-selling-cars-trucks-vehicle-america-2016-2017-1/#3-ram-trucks-489418-87-18.
Globalizing the Ford Brand
Under the ONE Ford vision, Mulally globalized the Ford brand, meaning that all Ford vehicles competing in global segments would be the same in North America, Europe, and Asia.42 The company was looking for a reduction of complexity, and thus costs, in the purchasing and manufacturing processes. The idea was to deliver more vehicles worldwide from fewer platforms and to maximize the use of common parts and systems. Mulally felt he had positioned Ford to take advantage of its scale, global products, and brand to respond to the changing marketplace.43 However, each year posed new challenges.

In 2016 the U.S. auto industry had its best year ever, selling 17.55 million vehicles, breaking the annual sales record set in 2015. Going into 2017, the global marketplace for automobiles was stable, with pockets of strength, but each geographical segment had its issues. Both North American and European auto sales were subject to political uncertainty, due to policy shifts in government. The Chinese and larger Asian market was still growing, although starting to slow. Eastern European economic concerns, especially in Russia, made this a difficult area to manage. South American government regulations and currency fluctuations impacted growth there.44

The need for a global strategy was driving all major auto manufacturers to reduce the number of vehicle platforms, while simultaneously adding models in response to consumer preferences. Although the increased complexity raised costs, this more flexible approach allowed for improved product commonality and increased volume. As components could be shared between cars and platforms, this also reduced the number of suppliers. Ford had reduced its supplier base from 1,150 to 750.45 Although seemingly a positive, this could also prove costly if a major supplier had a problem, as had occurred with Japanese air bag manufacturer Takata in 2014.46 Ford had to recall 850,000 vehicles for airbag problems in 2014, at a cost of $500 million.47 Likewise, in 2016 a door latch recall cost Ford nearly $600 million.

For Ford, 2016 saw a record profit in Europe and the second-best profit in Asia-Pacific. For operations outside North America, on a combined basis, Ford generated a profit of $421 million, nearly double the previous year, and the best result since 2011. CEO Fields attributed this to strengthening brands and adjusting the mix of vehicles in each market, “focusing on the higher margin segments where consumer interest is particularly strong.”48 In Europe, especially, Ford saw double digit growth in sales of its commercial vehicles, specifically the Transit cargo van. (See Exhibit 7.)

EXHIBIT 7 Ford Performance by Region
A bar chart
Source: Ford 10-K.
Access the text alternative for Exhibit 7
Regarding global growth, in Asia, Ford had developed two car plants in India, while also increasing its commitment in China, having invested $5 billion in factories there since 2012.49 Although the Chinese market was slowing, profit margins were strong, and 2016 was the best sales year ever in China, up 14 percent over 2015, with the luxury or premium and SUV sectors seeing the most expansion. In 2016, Ford Lincoln became the fastest growing luxury brand in China.50 Ford was betting on this momentum to spur Lincoln sales, having introduced the Lincoln lineup to China in April 2014. Sales growth in this region was critical, given that Ford was late to the China market, with a 2014 share of less than 5 percent, while General Motors controlled 15 percent. Although Ford collaborated with Chinese manufacturer Changan to produce light vehicles such as the Focus, the Lincoln would be imported from America, leaving Ford to “deal with the added cost of import duties that would leave their premium vehicles in a difficult position C-117against rivals who are already well positioned in China.”51 Offsetting this, Ford introduced the Mustang and Taurus in China during 2016, and saw strong sales of these performance vehicles. In 2017, Ford began exporting the all-new F-150 Raptor to China, making it the first high-performance off-road pickup truck to be offered there.

Going into 2017, Ford was taking a new look at how to grow in select emerging markets. Russia and South America (except for Brazil) seemed positioned for recovery, and profitable growth was possible in the Middle East and Africa. Ford was also re-evaluating its strategy and business model for India.

Looking Ahead
Although Fields was clear that he would continue Mulally’s ONE Ford legacy, with the support and ongoing vision of chairman Bill Ford, he would do this by “tailoring aspects of the company to his preferences.”52

Going into 2017, Ford Motor Company was the seventh-largest automobile manufacturer in the world, but like all others who produced a multi-vehicle lineup, Ford was facing considerable uncertainty. Global markets were hard to predict and countries were increasing regulatory requirements for safety and environmental impact. All vehicles were seeing an increase in the amount of onboard technology that required a shift in both engineering and manufacturing priorities. Worldwide manufacturers were making design changes that allowed more lean production and consolidation of suppliers, and consumers were changing how they purchased vehicles and rethinking what they wanted from the transportation experience overall.53

Several marked shifts in the overall landscape were occurring: the interest, worldwide, in electric or alternative-fueled vehicles; the development of autonomously controlled cars that were also personally connected to a user who might not be the driver; the reduction in demand for actual automobile ownership in favor of rental or on-demand transportation options. These shifts created opportunities but also challenges for entrenched car manufacturers. Twenty companies were actively pursuing the development of self-driving cars in 2017, and although some of the big auto manufacturers were among them, including BMW, Toyota, Volvo, Nissan, Daimler, Audi, Honda, Hyundai, PSA Groupe, General Motors, and Ford, other technology giants such as Apple, Google, Baidu, Nvidia, and Bosch were entering the race.54

Partnerships were inevitable: GM was partnering with Lyft, Ford with Uber, which was trying out the Ford Fusion autonomous vehicle. Ford had put Amazon’s virtual digital assistant Alexa in its cars. Ford had invested in Velodyne, a company that developed lidar remote-sensing technology for self-driving cars, and in artificial intelligence software firm Argo AI. Ford had acquired an app-based, crowd-sourced, ride-sharing service, Chariot. Ford had teamed up with Motivate, the global leader in bike-sharing to include the FordPass mobility network in the Ford GoBike commuting transportation option. Through its innovation and research centers, Ford was also developing strategies in fleet and data management, route and journey planning, and telematics, all in an effort to help solve congestion and help move people more efficiently in urban environments.55

These fundamental changes in the industry required leadership that could anticipate trends and allocate resources wisely, all while crafting a vision for the future that could inspire all relevant stakeholders to support and promote the company’s success. Alan Mulally’s “ONE Ford” slogan C-118had helped the automaker avoid bankruptcy and return to a position of financial strength in the industry. Mark Fields’s shift seemed to be toward TWO Fords, refocusing the company into both an automaker and a transportation services provider. In October 2016, Fields had said the ONE Ford strategy was “foundational” but that the company had to “evolve.” This evolution included plans to offer 13 new electric vehicles by 2020 and a self-driving car ready for commercial use by 2021, and to experiment with ways to provide innovative solutions to transportation and mobility problems in cities across the globe.56 To do this, Ford had “amped up” innovation efforts inside the company, encouraging its employees to file over 3,200 patents in 2016, more than any other automaker.57

Unfortunately, investors were not buying this vision: Ford’s stock had fallen by about 30 percent since Mulally’s departure in 2014. Despite record earnings in 2016, investors were not sure how the new strategy would play out. One analyst pointed out what others were saying: “They have a lot of the right initiatives; they’re doing something in every box. The difference from the Mulally days is there isn’t a single message that is more than just public-relations, tying it all together.”58 Mulally’s message had been clear, focusing all efforts around a common goal and returning the company to the “basics of auto making.” Fields appeared to be positioning the company to take on rivals from other industries, and investors wondered what bike-sharing and artificial intelligence had to do with the car business. Even though the new ventures developed as part of the new Ford Smart Mobility LLC were expected to deliver margins of 20 percent or more, this financial result was not projected to occur until 2020 at least. Some thought Fields needed to “take bolder action,” expressing a more “cohesive narrative or game plan.”59

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Answer the two following questions with the resources provided (links, videos, articles and trends). one page per each and it should be donee straight as question-answer. no introduction needed,  just  the  answer of those.e 

Leading companies start with the customer and work backwards from them to derive a solution. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers. Based on the readings and the Session 2 slides:  

1.- How do we identify WHO our customer is?
2.- How do we turn their needs and inputs into innovation?

Readings / videos:

Turn customer inputs into innovation https://hbr.org/2002/01/turn-customer-input-into-innovation

Customer needs: https://blog.hubspot.com/service/customer-needs

Exactly WHO is your customer: https://www.humansynergistics.com/blog/culture-university/details/culture-university/2018/03/30/customer-clarity-exactly-who-is-your-customer

Also another resources as tech trends:

Tech Trend: Natural voice browsing (Google home, Apple HomePod,  Alexa)
Tech Trend: No lines checkout - The Amazon Go experience
Method/tool: Walking backwards from the customer – IMPORTANT FOR THE SECOND QUESTION. We need to first understand what the customer need and then look for solutions.

Its important to point out in some ways that execution is significantly more important than ideas.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

This Individual Essay requires you to do individual research and write an essay on corporate social responsibility
using material from the course and from your own research.
A. During the semester, we will be doing a classroom exercise where we will generate ideas about current
issues that are relevant to CSR.
B. A selection of the top issues will be provided to you to use and launch your research questions. These
issues will be your broad research topic.
Instructions
1. Develop a research question based on one of the topics developed in class; support your argument with
research, provide recommendations and provide a conclusion.
2. You need to show the use of Course-related content and materials which will be evidenced by appropriate
in-text citations and references.
3. You also need to use the lens of your specific major (Human Resources) (this will be evidenced by using the first person in the essay and discussing
how your major field of study influences or is influenced by the theme of your paper). You need to
identify what your major area of study is, as I will not be able to determine that just from your essay.
Note that you need a title page, an abstract, a table of contents, introduction, the body of the paper, a conclusion,
page numbers, reference list, appendices if applicable and comply with APA requirements for in-text citations,
referencing, font size (12 Times New Roman), double-space, page numbers, figures and tables (if applicable).
Please use headings to help separate your sections and make it easier for us to grade. You should have a range of
2250-2750 words excluding title page, references or appendices. Graders will not grade anything that is beyond
2750 words. Make sure that you write your word count in your title page. You need a minimum of 5 academic
references outside of the course textbooks– ideally, they are peer-reviewed journal articles or academic textbooks
(do not use undergraduate or graduate thesis documents); and any number of non-academic references (do not use
Wikipedia, Investopedia, or Slideshare documents as part of your references). Note that formatting errors
including excessive spelling errors, grammar errors or other formatting issues will be penalized as part of the
Format part of the rubric.
Note that every factual claim or conceptual claim that you make or refer in your paper needs to be supported by an
in-text citation in proper APA formatting (this includes proper paraphrasing, use of quotation marks, etc.). Failure
to do so means that the point is not valid and in the case of improper formatting, you may be penalized up to an
Academic Misconduct based on the severity of the infraction. The Turnitin tool is made available for you to use
(submit your paper before the due date and review its content to ensure that proper citing, quoting and 
paraphrasing has been done). Note that if there is an indication that the essay has been sourced from a course or
note-sharing website, which will be obvious by looking at your Turnitin report, then the grade on the assignment
will be 0.
As this is a research-based essay, you should make sure that you support all of your claims and that you
structure the essay according to the format shown in the rubric.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

For this assignment you will take the role of Executive Coach with Kristen Peters as your client.  Many C Suite executives use Executive Coaches to help them improve their leadership skills, and to make plans for handling difficult situations.  For this activity we will assume that Kristen's company has provided the Executive Coach to help her get started in her new role ("on boarding").  

Your assignment is to write a briefing document (PPT) in which you address the following topics:

1. What should Kristen know about the organization?

2. What kind of culture should she expect?

3. Which are the key relationships and stakeholders for her specific work?

4. What five actions should she take when she starts to make sure she starts in a positive way?


Length will depend on the format and style that you choose.  I encourage robust pages, so that the document is not too long, but it is up to your judgement. 

Grading will be based on:

1. Completeness (answer all questions completely) 10 points

2. Insights and analysis (demonstrating understanding of the concepts and situations, supporting ideas with class concepts and readings) 10 points

3. Communications (clarity of message, no errors, organization of content) 5 points

It is not important to overly design the document, but very important to cover items 1 & 2.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

In "What Was Volkswagen Thinking?," Jerry Useem (2016) presents Diane Vaughan’s theory of the normalization of deviance and includes a variety of corporate examples that demonstrate the effect of her theory.

In your response, briefly explain Vaughan’s theory. Explain how this type of communication within one of the organizations (Ford Motor Company, NASA, B.F. Goodrich, and Volkswagen) altered the behavior of the employees.

Your response should be at least 500 words in length.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

A manager has many tools available to analyze the financial condition of the organization. The four most common tools are the balance sheet, income statement, statement of cash flow, and ratios. Each one tells a different story. These stories will be the focus of this week's discussion question.

You are the financial manager for LazyRiver Regional Hospital. You have been asked by senior leadership to provide a primer to the newest managers on financial reporting tools. You will prepare a 5-slide, narrated presentation on the balance sheet, income statement, and statement of cash flow. You want to discuss what each one contains and how we can use it to make financial decisions. For example, what does the balance sheet illustrate? What types of decisions would a manager make using it?

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Refer to Chapter 14 Organizational Structure and Change (Open Educational Resource), they discuss the building blocks of structure as formalization, centralization, levels of hierarchy and departmentalization.
Briefly discuss each of these building blocks and explain why each must be a consideration in restructuring an organization going through significant organizational change. (2 pages minimum)

https://open.lib.umn.edu/organizationalbehavior/

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Why Transformation Efforts Fail in your HBR 10 Must Reads on Change Management. This article has been a seminal work in leading and managing change and is mentioned in most textbooks including yours. He identifies eight steps to transforming (changing) an organization.
Identify and discuss the eight steps.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Read Teamsters and UPS Strike a Deal for the 21st Century in your textbook.
Based on the information given, which of the terms in the new contract are favorable for workers? Which terms are favorable for UPS?
What effects, if any, do you think the employment contract will have on UPS’s ability to meet its goals for serving customers and improving efficiency?
Write an essay of at least 300 words in APA style, with a reference page and cover page. APA requires double space. Your essay will be automatically submitted to Safe Assign so it can be checked for originality. There is not a target for matching but your instructor will be assessing that you have used your own words with proper in-text citations and quotation marks for direct quotes.
Aligns with Lesson Objectives - LO4, LO5, LO6, LO7
By submitting this paper, you agree: (1) that you are submitting your paper to be used and stored as part of the SafeAssign™ services in accordance with the Blackboard Privacy Policy; (2) that your institution may use your paper in accordance with your institution's policies; and (3) that your use of SafeAssign will be without recourse against Blackboard Inc. and its affiliates.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Using scenarios 1-4 on attachment, complete the following:

1. Assume you are the manager or person in charge. For each scenario, identify the preferred level of employee involvement from one of the 5 levels described on page 208 (decide alone, receive info from individuals, consult with individuals, consult with the team, facilitatie a team decision). 

2. For each scenario, explain what factors led you to choose that level of employee involvement over the others. Identify what problems might occur with less or more involvement in this case.  

Requirements:

    Minimum Page Length – 1 full page (excluding title/header and reference list); 12-point Times New Roman; double spaced; and page numbering.
    Please be sure to answer the entire question to receive maximum credit for this task.
    Use and include information from the weekly course content and outside sources to support the conclusions contained in the paper.
    Be cognizant of spelling, punctuation, and grammar. 
    All sources should be cited in proper APA format (in-text citations and a reference list).

Questions and Topics We Can Help You To Answer:
Paper Instructions:

Think about how team dynamics have changed given the recent global pandemic. Provide a written analysis of the biggest ways in which teams have had to adjust to the current working conditions. Areas to consider include, but are not limited to, communication, productivity expectations, group/team synergy, performance, problem solving, leadership and management, and relationships among group members.  

Requirements:

    Minimum Page Length – 2 full pages (excluding title/header and reference list); 12-point Times New Roman; double spaced; and page numbering.
    Please be sure to answer the entire question to receive maximum credit for this task.
    Use and include information from the weekly course content and outside sources to support the conclusions contained in the paper.
    Be cognizant of spelling, punctuation, and grammar. 
    All sources should be cited in proper APA format (in-text citations and a reference list).

Remember: All writing must be supported by academic literature and will be in APA format during this course. You must cite each and every sentence in which you used materials from your academic literature.

Questions and Topics We Can Help You To Answer:
Paper Instructions:

CHAPTER 15: Personal Financial Planning: Assignment

Chapter Written Assignments: At the end of each chapter there is “Video Case” Project. Please provide a one to two-page paper on the topic. This work should include an opening paragraph clearly restating the questions (DO Not simply copy the questions). Then apply at least one complete paragraph on each of the topics, followed by a closing or summary paragraph. Cites and structure should comply with APA v6 style. Each assignment will be worth 25 points.


Assignment must be submitted via the Canvas drop box before the assignment closes. This work will be reviewed by TurnItIn for a similarity check and no work over 25% will be accepted. Do not email me your work if you miss the drop box closure.


Each assignment will be worth 25 points, for a total of 375 points.
Again, assignment postings should consist of a minimum of five complete paragraphs with a minimum of five sentences each. The following Link will provide you with some refresher of the five-paragraph model (Links to an external site.). Cites and structure should comply with  APA v6 (Links to an external site.) style.


Please apply the Critical Thinking rubric to your work. A Rubric will be used to review your assignments, look for changes and additions to the course and the Syllabus.