Hamill Bassue Owen Hendershot Goran Nagradic

Overview Company Overview New Mission and Vision External Assessment Ford’s brief history Mission and Vision statement Current Objectives & Strategies New Mission and Vision External Assessment Industry Analysis Opportunities & Threats EFE Matrix Internal Assessment Strengths & Weaknesses Financial ratios IFE Matrix Strategy Formulation SWOT Matrix BCG Space Matrix IE Matrix Grand Strategy Matrix QSPM Matrix Strategic Plan for the Future Objectives Strategies Implementation EPS/EBIT Other issues Evaluation Ford 2008 Update

About the Company Manufactures and distributes automobiles on six continents, strong presence in all 50 states. Employs approximately 224,000 people and operates 90 plants worldwide. Brands include Ford, Lincoln, Mercury, Volvo, Mazda and Ford Motor Credit Company (financial service).

Ford’s Brief History 1903 – Ford Motor Company founded in Michigan 1908 – Model T introduced 1913 – first moving automobile assembly line in the world 1956 – Ford’s stocks go on sale (10.2 million shares sold the first day) 1987 – beginning of the acquisitions of other brands 1988 – Ford Motor Company reached the peek

Management Executive Chairman William Clay Ford, Jr. President and CEO Alan Mulally Executive V.P. and CFO Donat R. Leclair Executive V.P. Ford of Europe/PAG Lewis Booth Executive V.P. and President, The Americas Mark Fields Executive V.P. Mark Schulz

Mission & Vision Statement "To become the world's leading consumer company for automotive products and services.“ - Ford doesn’t have vision statement

Objectives To contribute to stabilizing the climate by considering reducing long-term emission To promote the development of an infrastructure that will expand the use of bio-fuels and help reduce our dependence on oil To cut the usage of global energy by 27% and the usage of water by 25%

Strategies Utilizing their advance technology Building of smaller vehicle Cost reduction Market expansion through joint venture and strategic alliance

New Mission & Vision Statement Both mission and vision are one statement “Our vision is to become the world's leading consumer manufacturing company for automotive products and services. To achieve this, we the company and all our employees are dedicated to provide all our customers and the community with safe innovative products and services of world class standards. Through our engineering excellence, high quality and the use of our constantly upgrading technology we limit the harm that we cause to the environment while delivering superior value to our customers. Our close knit working environment allows our employees, community and business partner to share in our success, while achieving a substantial return on our shareholders investment. “  

External Assessment

Industry Analysis Global Automobile Industry Value Global Automobile Industry Volume

Industry Segmentation

Industry Segmentation

Industry Market Share

Industry Forecast

Critical Success factors CPM Ford GM DiamlerChrysler AG Toyota Critical Success factors Weights Rating Weighted Score   0.0 to 1.0 1 to 4 Global Expansion 0.14 2 0.28 3 0.42 Financial Position 0.10 0.2 4 0.4 0.3 Growth 0.16 1 0.48 0.64 US Market Share 0.20 0.6 0.8 Customer Loyalty 0.15 0.45 Hybrid/Fuel Efficient Vehicles 0.18 0.54 0.36 Management Experience 0.07 0.21 Totals 2.59 3.37 2.31 2.78

Opportunities & Threats Consumers demand hybrid and fuel efficient vehicles Increase in consumer spending trends Consumers demand more innovative vehicles Global expansion Industry experiences slow and steady growth Weak USD Increase in steel and resin pricing Increasing gasoline prices Stricter CO2 emission standards Increasing mortgage rates

EFE Matrix

Internal Assessment

Stock performance

Financial Highlights Income Statement Balance Sheet Cash Flow Statement

Ratios Ratio Compass Group PLC Industry Debt-to Total assets 0.60 - Debt-to Equity 29.94 47.47 Long-term debt-to Equity 110.45 Time-interest-earned -2.64 0.01 Net Profit Margin -0.02 1.75 Gross Profit Margin 0.11 15.3 Operating profit Margin 2.99 Ratio Compass Group PLC Industry Return on Total Assets -0.01 1.38 Return on Equity -0.48 5.19 EPS -1.24 - P/E -5.98 14.53 Sales (growth) 7.74 -7.24 Net Income (growth) 463 1.75 EPS (growth) 1101 14.91 Dividends (growth) -100 1

Strengths & Weaknesses Strong and globally positioned brand names Large employee base with highly educated engineers and good R&D department One of the largest automotive manufacturer (along with a long history) 1285% increase in net cash Huge increase in total equity A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls – causing losing customers) Lack of management of the company EPS very bad – in negative numbers (unattractive for the investors)

IFE Matrix Key Internal Factors Weights Rating Weighted Score   0.0 to 1.0 1, 2, 3 or 4 Internal Strengths 3 or 4 Strong and globally positioned brand names 0.13 4 0.52 Large employee base with highly educated engineers and good R&D department 0.09 3 0.27 One of the largest automotive manufacturer (along with a long history) 0.06 0.18 1285% increase in net cash Huge increase in total equity 0.11 0.44 Internal Weaknesses 1 or 2 lot of time spent to actually put the product on the market 0.1 2 0.2 Recording continuous losses (net income) from 2006 0.12 1 Low quality of new products (recalls - causing losing customers) Bad management of the company 0.08 0.16 EPS very bad - in negative numbers (unattractive for the investors) Totals 2.38

Strategic Formulation

SWOT Matrix Strengths – S Strong globally positioned brand names Large employee base with highly educated engineers and good R&D department One of the largest automotive manufacturer (along with a long history) 1285% increase in net cash Huge increase in total equity Weaknesses – W A lot of time spent to actually put the product on the market Recording continuous losses (net income) from 2006 Low quality of new products (recalls - causing losing customers) Lack of management of the company EPS very bad - in negative numbers (unattractive for the investors) Opportunities – O Consumers demand hybrid and fuel efficient vehicles Increase in consumer spending trends Consumers demand more innovative vehicles Global expansion Industry experiences slow and steady growth SO Developing new vehicles on alternative fuels (S1, S2, S4, O1, O3. O5) Offer new innovative products – increase market share - motorbikes (S1, S2, S3, O2, O3, O5) Concentrate on making the best fuel efficient cars (S1, S2, S3, S4, O1, O4, O5) WO Relocate the production to cheaper country with lower taxes (W2, W4, O4, O5) Threats – T Weak USD Increase in steel and resin pricing Increasing gasoline prices Stricter CO2 emission standards Increasing mortgage rates ST Build eco-friendly products from alternative materials (S2, S3, S4, T2, T3, T4) Produce more cars for foreign market (S1, S2, S4, T1, T4) WT Merge with competitors (W1, W2, W5, T2, T3, T5) Manufacture only parts for automobiles (W1, W2, T1, T2)

SPACE Matrix FS Conservative Aggressive IS Defensive Competitive +6 +5 +4 +3 +2 +1 IS -6 -5 -4 -3 -2 -1 +1 +2 +3 +4 +5 +6 -1 -2 -3 -4 Defensive -5 Competitive -6

BCG Matrix Revenues % Revenues Profit % Profit % Market Share % Growth Rate NA 69365 45% -4161 - 61% -0.1 SA 7585 5% 1172 30% +33 Europe 36330 24% 744 81% -3 PAG 33067 21% -1872 +10 Asia 8032 206 38% +3 Total 154379 100% -3911

BCG Matrix Relative market share position in the industry High 1.0 Medium .50 Low 0.0 High +30 Medium 0 Low -3 SA Industry sales growth rate APA NA EU

IE Matrix Hold and Maintain

Grand Strategy Matrix Rapid Market Growth Quadrant II Quadrant I Strong Competitive Position Slow Market Growth Weak Quadrant III Quadrant IV

Matrix Evaluation Alternative Strategies BCG IE SPACE GRAND COUNT Forward Integration x 1 Backward Integration Horizontal Integration Market Penetration 3 Market Development 2 Product Development Concentric Diversification Conglomerate Diversification Horizontal Diversification Joint Venture Retrenchment Divestiture Liquidation

Possible Strategies Developing new vehicles on alternative fuels (S1, S2, S4, O1, O3, O5) – SO1 Offer new innovative products – increase market share (S1, S2, S3, O2, O3, O5) – SO2 Concentrate on making the best fuel efficient cars (S1, S2, S3, S4, O1, O4, O5) – SO3

QSPM

Strategic Plan for the Future

Objectives for the 2008 - 2010 Reduce manufacturing expenses by 15-20% 2008 Introduce new small fuel efficient vehicles 2009 Enter Latin American and Asian market with hybrid vehicles 2010 Develop affordable electric car for US market 2009-2010 Increase market share 2009-2010 Build up strong financials (increase net income and EPS by 15%) 2009-2010

Recommendation Manufacturing of new small fuel-efficient vehicle $ 7,000,000,000 Entering the Latin American and Asian market with hybrids $ 20,000,000,000 Implementation of electric car in the US market $ 13,000,000,000 Total Cost = $ 40,000,000,000

Implementation

EPS/EBIT Amount needed: $40,000,000,000 Stock price: $7.42 Interest rate: 7.5% Tax rate: 0% (firm is having a loss) # of shares outstanding: 2,195,000,000 # shares needed: 500,404,312

Common stock financing EPS/EBIT *data in $ billion Common stock financing Debt financing Recession Normal Boom EBIT 10 20 40 Interest 1.5 8.5 18.5 38.5 Taxes EAT #shares 2.695 EPS 3.71 7.42 14.84 3.15 6.86 14.28

Other Issues Laws and regulations in foreign countries Regain lost trust in the Ford’s brand

Evaluation Excellent Good Unsatisfied

Ford 2008 Update

Industry Update

Sources Ford Motor Company Annual Report 2007 General Motors Annual Report 2007 http://www.ford.com/about-ford/investor-relations Datamonitor Global Automobile Industry manufacturer 2006 Pictures taken from Web

Questions???