Ford Motors Company business plan

It is the goal of Ford to produce more advanced electric vehicles for the mass market at affordable prices while Tesla seeks to produce more premium electric vehicles to meet the market demand for Tesla EV models. Ford will produce trucks and SUV’s while Tesla will produce premium luxury SUVs and cars. Ford will employ cost leadership while Tesla will focus on product differentiation as key business strategies. These have been projected to be profitable since the market for electric cars is expected to grow due to increasing demand for the EVs. It has also been projected that by 2040, about 55% of all the new car sales and 33% of the global fleet will be electric. In addition, Ford also sells parts and accessories mainly to its dealerships and authorized parts distributors.

Ford also provides extended service contracts. The automotive segment of the company mainly includes the manufacture and sale of Ford and Lincoln vehicle brands, service accessories and parts, and associated costs to develop, manufacture, distribute as well as service these vehicles, their parts and accessories. Ford’s automotive segment is made up various business units distributed across the world. They are present in North America, South America, Europe, Middle and East Africa. The company’s vision is of a “people working together as a lean, global enterprise for automotive leadership. This vision focuses on three key things which include global leadership, lean business and emphasis on stakeholders. However, based on its current position, Ford Motor Company needs to work on growing its sales in order to attain global leadership.

This is why merger with Tesla is a viable business venture that Ford must pursue. Justification for Undertaking the Merger with Tesla In 2017, Ford Motors Company is currently ranked as position six globally in the automotive industry in terms of the number of vehicles sold globally that year. While working with Tesla, there is also a huge opportunity for cost reduction which will ensure that Ford maintains its cost leadership strategy. Besides, Ford also has an opportunity to meet the increasing demand for small vehicles in the global market especially in Africa and Asia. This demand can be met with increased production that will be possible with the merger. In addition, there is a huge opportunity in leveraging Tesla’s AI technology and production lines where a single robot can perform up to 4 functions.

This will also affect the quality and rate of production positively. Therefore, it will be easier to capitalize on possible gains from economies of scale to when Ford and Tesla integrate their production following the merger. This will give the companies more control of the suppliers thus further reducing the supplier power which would make it possible to further push down the cost of raw materials and consequently the cost of the vehicles. This is necessary for maintain cost leadership. Moreover, the threat of new entrants is low due to high cost of building brand, doing business and high economies of scale. Therefore, it is possible to grow and thrive in the industry. Both companies will combine the autonomous driving technologies they are developing and use it to as a foundation on which to build more advanced version.

Ford also seeks to gain from the expert management and leadership team at Tesla led by investor Elon Musk. The venture will also involve developing an improved charging infrastructure. This will involve focusing in improving the already existing Tesla charging stations. Through the venture, technology will be standardized between the two companies in order to reduce costs and streamline production in both organizations. Accelerate: This is about Ford speeding up its production of electric and autonomous vehicles by leveraging on Tesla’s technology as well as its already developing technology. Development: This is about being able to improve Ford existing technologies as well as those of the target organization to advance the production of electric and autonomous vehicles. In addition, it covers aggressively restructuring to operate profitably at the current market demand and changing product mix; Accelerate development of new products that our customers want and value; Finance our plan and improve our balance sheet’ Work together effectively as one team.

Electric and autonomous vehicles: This includes the latest technology of providing sustainable transport through the production of electric vehicles. Our mission statement is a response new market opportunities caused by the increasing preference for sustainable energy products including electric vehicles as well as the increasing urge to reduce the carbon footprint globally. Target Market (Customers) The Ford electric vehicle models will target eco-friendly, tech-savvy, and entry level buyers. These are mostly individuals aged between 20 and 40 years. In addition, Ford will target individuals who are able to afford electric trucks and SUVs priced from $30000. Alignment with the Higher-Level Corporate Strategy The four Ps that make up the marketing mix: product, price, place and promotion help to explain an organization’s approach to both local and international markets.

Ford Motor Company’s corporate strategy involves striking a balance between standardization and customization in the global markets and treats its domestic markets as a unique entity from world markets. Despite this the prices will still be competitive with the prevailing market prices. In addition, based on the SWOT analysis results, it has been established that Ford has a huge opportunity in meeting the increasing demand for electric vehicles as more people look to avoid the high cost of gasoline and increasingly become eco-friendly. Ford also has the opportunity to provide low cost electric and hybrid vehicles which will serve the expanding global market. Through the merger with Tesla, it will be possible to achieve tap into these opportunities. Moreover, since the automotive industry is highly competitive, the move to merge with Tesla is one way that Ford Company can ensure that it maintains its competitiveness.

Such actions spur the demand for more energy efficient vehicles such as electric vehicles. Also, eco-friendly consumers have a higher chance of purchasing electric cars. This is an inelastic demand that does not depend on the cost of fuel but is influenced by the desire to reduce carbon emissions. In addition, Tesla’s brand recognition and the perceived elite status of the brand also helps to increase the demand for its cars. Ford can leverage on this to spur its growth through the merger with Tesla. Our research established that the environmental impact that results from the production of electric vehicles is between 15% and 68% higher compared to the production of other conventional vehicles. However, at the operation stage, electric vehicles have zero tail pipe emission and low costs of maintenance.

Also the high upfront costs of EVs are higher for similar vehicles in the conventional categories. In addition, our findings established that an average EV will breakeven at 60,000 kilometers. The plug-in hybrid vehicles reach the breakeven point after 25,000 or 55,000 kilometers. On the other hand, Tesla will be the premium brand in the partnership, and continue to focusing on more luxury and high performance electric vehicles. Ford will focus on its long-term strategy to move away from cars and focus move on crossovers, SUV and trucks.  In general, the starting price of the Tesla vehicles should be greater than that of the Ford model. Available options for each model will be determined by the manufacture, which will further influence the price of the vehicle.

The vehicles produced by Ford will standardized on the use of the motor, battery and charging technology developed by Tesla. g. China) markets. Also, Ford will leverage current equipment used by Tesla to help reduce retooling and new equipment cost. This should help to reduce operational cost and streamline production Production and Distribution Tesla has one of the most technologically advanced production lines. For example the robots in its production/assembly line can perform up to five functions including welding, riveting, gripping and moving materials, bending metal, and installing components. Drop in investors/share prices Transparency in company actions and release public statements to ensure trust Short-term drop in stock cost. Action Plan The merger between Ford and Tesla will include an initial investment of $11 billion which will be spent by Ford in acquiring a significant stake in Tesla based on its current market capitalization value.