At Ford, Turnaround Is Job One SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of At Ford, Turnaround Is Job One
The case opens with the Ford Motor Company seemingly on the path toward bankruptcy. Ford had been bleeding red ink for more than ten years when it decided in 2006 that continuing the same turnaround attempts was not going to right the ship. The company was facing significant external challenges, such as intense competition and changing consumer preferences, as well as internal challenges, such as quality and design issues and a stifling level of corporate complexity. As the case begins, CEO Bill Ford has taken the unusual step of hiring an auto industry outsider as his replacement. Alan Mulally, a thirty-seven-year Boeing veteran and principal architect of the venerable airplane manufacturer's own massive and successful turnaround, wasted little time in getting about the business of remaking Ford. He developed a plan to: a??Focus on the Ford brand and divest the numerous other brands the company had acquired over the years a??Simplify and streamline the company's manufacturing operations a??Remake the corporate culture from one of fiefdoms and false optimism to collaboration and facing reality With an ardent belief in the plan's viability, Mulally raised nearly $24 billion and began to put his plan into motion. The case explores the many causes of this once-great company's decline and the steps it took to beat the odds and get back on the path of profitability.
Swot Analysis of "At Ford, Turnaround Is Job One" written by James Shein, Matt Bell includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Ford Mulally facing as an external strategic factors. Some of the topics covered in At Ford, Turnaround Is Job One case study are - Strategic Management Strategies, Change management, Competitive strategy, Decision making, Leadership, Managing people, Organizational culture, Strategic planning and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the At Ford, Turnaround Is Job One casestudy better are - – increasing government debt because of Covid-19 spendings, talent flight as more people leaving formal jobs, increasing transportation and logistics costs, increasing energy prices, supply chains are disrupted by pandemic , central banks are concerned over increasing inflation, competitive advantages are harder to sustain because of technology dispersion,
challanges to central banks by blockchain based private currencies, cloud computing is disrupting traditional business models, etc
Introduction to SWOT Analysis of At Ford, Turnaround Is Job One
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in At Ford, Turnaround Is Job One case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Ford Mulally, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Ford Mulally operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of At Ford, Turnaround Is Job One can be done for the following purposes –
1. Strategic planning using facts provided in At Ford, Turnaround Is Job One case study
2. Improving business portfolio management of Ford Mulally
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Ford Mulally
Strengths At Ford, Turnaround Is Job One | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Ford Mulally in At Ford, Turnaround Is Job One Harvard Business Review case study are -
Highly skilled collaborators
– Ford Mulally has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in At Ford, Turnaround Is Job One HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Learning organization
- Ford Mulally is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Ford Mulally is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in At Ford, Turnaround Is Job One Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Superior customer experience
– The customer experience strategy of Ford Mulally in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
Operational resilience
– The operational resilience strategy in the At Ford, Turnaround Is Job One Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
High switching costs
– The high switching costs that Ford Mulally has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Innovation driven organization
– Ford Mulally is one of the most innovative firm in sector. Manager in At Ford, Turnaround Is Job One Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Low bargaining power of suppliers
– Suppliers of Ford Mulally in the sector have low bargaining power. At Ford, Turnaround Is Job One has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Ford Mulally to manage not only supply disruptions but also source products at highly competitive prices.
High brand equity
– Ford Mulally has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Ford Mulally to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Ability to recruit top talent
– Ford Mulally is one of the leading recruiters in the industry. Managers in the At Ford, Turnaround Is Job One are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Ford Mulally digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Ford Mulally has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Strong track record of project management
– Ford Mulally is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Effective Research and Development (R&D)
– Ford Mulally has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study At Ford, Turnaround Is Job One - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses At Ford, Turnaround Is Job One | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of At Ford, Turnaround Is Job One are -
High cash cycle compare to competitors
Ford Mulally has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Ability to respond to the competition
– As the decision making is very deliberative, highlighted in the case study At Ford, Turnaround Is Job One, in the dynamic environment Ford Mulally has struggled to respond to the nimble upstart competition. Ford Mulally has reasonably good record with similar level competitors but it has struggled with new entrants taking away niches of its business.
Lack of clear differentiation of Ford Mulally products
– To increase the profitability and margins on the products, Ford Mulally needs to provide more differentiated products than what it is currently offering in the marketplace.
Skills based hiring
– The stress on hiring functional specialists at Ford Mulally has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
High operating costs
– Compare to the competitors, firm in the HBR case study At Ford, Turnaround Is Job One has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Ford Mulally 's lucrative customers.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study At Ford, Turnaround Is Job One, is just above the industry average. Ford Mulally needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study At Ford, Turnaround Is Job One, it seems that the employees of Ford Mulally don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the At Ford, Turnaround Is Job One HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Ford Mulally has relatively successful track record of launching new products.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Ford Mulally supply chain. Even after few cautionary changes mentioned in the HBR case study - At Ford, Turnaround Is Job One, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Ford Mulally vulnerable to further global disruptions in South East Asia.
Aligning sales with marketing
– It come across in the case study At Ford, Turnaround Is Job One that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case At Ford, Turnaround Is Job One can leverage the sales team experience to cultivate customer relationships as Ford Mulally is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Ford Mulally is dominated by functional specialists. It is not different from other players in the Leadership & Managing People segment. Ford Mulally needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Ford Mulally to focus more on services rather than just following the product oriented approach.
Opportunities At Ford, Turnaround Is Job One | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study At Ford, Turnaround Is Job One are -
Redefining models of collaboration and team work
– As explained in the weaknesses section, Ford Mulally is facing challenges because of the dominance of functional experts in the organization. At Ford, Turnaround Is Job One case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Ford Mulally can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Low interest rates
– Even though inflation is raising its head in most developed economies, Ford Mulally can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Ford Mulally can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. At Ford, Turnaround Is Job One suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Ford Mulally to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Ford Mulally in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Leveraging digital technologies
– Ford Mulally can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Loyalty marketing
– Ford Mulally has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Ford Mulally to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Ford Mulally to hire the very best people irrespective of their geographical location.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Ford Mulally can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Better consumer reach
– The expansion of the 5G network will help Ford Mulally to increase its market reach. Ford Mulally will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Using analytics as competitive advantage
– Ford Mulally has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study At Ford, Turnaround Is Job One - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Ford Mulally to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Ford Mulally in the consumer business. Now Ford Mulally can target international markets with far fewer capital restrictions requirements than the existing system.
Threats At Ford, Turnaround Is Job One External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study At Ford, Turnaround Is Job One are -
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Ford Mulally can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study At Ford, Turnaround Is Job One .
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Ford Mulally will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Consumer confidence and its impact on Ford Mulally demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
High dependence on third party suppliers
– Ford Mulally high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Ford Mulally in the Leadership & Managing People industry. The Leadership & Managing People industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Ford Mulally in the Leadership & Managing People sector and impact the bottomline of the organization.
Environmental challenges
– Ford Mulally needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Ford Mulally can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Ford Mulally.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Ford Mulally can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Shortening product life cycle
– it is one of the major threat that Ford Mulally is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Regulatory challenges
– Ford Mulally needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Leadership & Managing People industry regulations.
Technology acceleration in Forth Industrial Revolution
– Ford Mulally has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Ford Mulally needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Weighted SWOT Analysis of At Ford, Turnaround Is Job One Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study At Ford, Turnaround Is Job One needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study At Ford, Turnaround Is Job One is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study At Ford, Turnaround Is Job One is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of At Ford, Turnaround Is Job One is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Ford Mulally needs to make to build a sustainable competitive advantage.