WORKSHEET FOR Disruption in Detroit: Ford, Silicon Valley,

and Beyond (A&B)

In this case study several issues can be identified. The case study shows the struggles and
problems which the company Ford and its top-level managers had to face to maintain and
to evolve as a company. The issues that could be identified in the case were such,
 The company faced an economic downfall in its worldwide sales during 2008-2009
when Alen Mullaly was the CEO, the company had to mortgage all its key assets to
raise funds to maintain its loss.
 Declining sales lead to multibillion-dollar losses.
 Ford company had to face several competitors like Google, Apple and Tesla who
were all redefining the concept of automated driving, electric cars. Which all
catered to change in the market.
 The company stock prices had fell to a staggering 37% even though it had high
pretax earnings of about 10 billion dollars.
 One of the core issues faced by the company Ford was the production capacity
which was not able to keep up with the emerging demand in the United States.
 The company was not also able to capture the market for small hatchback cars in
different countries such as India, such countries favored other brand like Suzuki,
Hyundai, and Toyota.
 It is difficult state the problems in its entirety.

2) Principles & frameworks

The principles and frameworks that can be seen in the case study is that
 VUCA , (Volatility, uncertainty, complexity, ambiguity )
 Conceptual Innovation

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3) Qualitative Data

Competitors of the company were much equipped and innovative in nature. The companies
introduced features such as
 Autonomous Driving capabilities,
 electronic batteries and
 entertainment
features which lead them the plunge the market.
The competitors of Ford are-
o Hyundai
o Toyota
o Tesla
o Apple
o Google
Ford introduced Disruptive innovations in the vehicles produced by the company, the
features were introduced to face the competition and to meet the demand of the consumers
as well. The products based on Disruptive Technology was more
o Cheaper, Simpler, Smaller and More convenient to use.
The Disruptive technology included
 Powertrain- The mechanism that drives a car by transmitting power to the axles,
electric engines
 Software- Cloud data storage, apple car play, and other software’s
 Autonomous Vehicles- Google experimented vehicles, self-driving,
 Car ownership and Use
 Small car challenge
The architectures and engineering firms working on this renovation is the same one that
has designed facilitates for Tesla, Google, and Microsoft.
Ford developed new strategies based on five principles, the principles were
 Ford will prepare for disruption by becoming fit.
 We will be in a vehicle business- that moves both people and goods
 Our vehicles will be smart and connected.
 These smart vehicles will thrive in a new business opportunity within this
transportation operating system.

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4) Quantitative Data

There has been significant quantitative data provided in the case about the company,
 To survive the economic downturn in 2008-2009 the company had to build up an
amount of 24 Ford billion dollars in cash by mortgaging almost all of Fords key
assets.
 Ford had a profit margin of well over 5000$ per unit sale when it was selling sports
utility vehicles during that time the company was losing money also by selling
compact cars.
 In 2015 during the time fields CEO run the first year witnessed an annual sale of
about 150 billion dollars and a net income of over 7 billion dollars.
 Maruti Suzuki captures about 50% if the Indian car market.
 U.S electric vehicle industry has an average sale of about 10,000 units each month
and 20,000 in the entire world of Ford vehicles itself.
 the company had record-breaking pretax earnings of about 10 billion dollars and the
total revenue for the year 2015 leading to about 149 billion dollars.
 They had a pretax profit of about 10.4 billion dollars on 151.8 billion dollars of
sales revenue during the year 2016.
 Despite of rise in profits Ford suffered 37% decrease in their stock valuation.
 Due to the change in the CEO the mid-summer profit decreased from 61.4 billion to
44.8 billion.
 4.2% drop in sales of truck, 21% drop in sales of cars.
 7.2% drop in sales in the US only.
 The company is 6th largest manufacturer in the automobile industry with 67
production plants around the world and has over 200,000 employees.

5) Analysis of Results
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 The automotive industry is ever changing and so as the customers the industry serves, with
the need for innovation can be seen in the case. As ford being one of the greatest and
largest automotive company in the industry not just by name and legacy but also with the
products provided by the company. Ford must face several competitions from new
innovative companies such as google, Tesla and Toyota. Ford has taken up research to
create new innovative technology to keep up with its competitors and have also tried
entering into new markets. The case talks about the new technologies adopted by the firms
such as autonomous capabilities, electronic batteries, entertainment system. In the era
where cars can drive itself the love for old motors with petrol and grease is not loved by the
people as it once was, the current customers need new advanced technology and driving
assists in their vehicles.

It is necessary for Ford to undertake a more aggressive strategy, the current strategies
followed by the firm is just another version of the field’s strategy.

6) Identify alternative courses of action

1. Ford should focus more on areas where it is good, market like trucks and heavy-duty
machinery and should leave the small car market.
2. If Ford enters the small car market, they should conduct proper research and make
sure that their car caters the needs of the customers in the market.
3. They should focus on autonomous vehicles.
4. Ford should focus on the newly innovative competitors from the Silicon Valley and
make counter measures to strategies undertaken by them
5. Ford should hire a person from the people who have previously served the
competitors who have experience in such innovative technology.

7) Select your preferred action plan

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 Ford should focus on the market and areas where it is more adamant in, rather than trying
to enter new markets which it has no experience in.

As Ford already has loyal customers. Ford has made several Cars and Trucks which have
become icons of their time like the mustangs and raptors. Ford should focus on such
markets and try to avoid entering the new markets which they have no prior experience in,
market such as small cars market. Entering such markets are waste of resources and efforts
by the company.

Name : Milan Mathew Philip

Roll No: P20186