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, increasing household debt because of falling income levels, supply chains are disrupted by pandemic , banking and financial system is disrupted by Bitcoin and other crypto currencies, customer relationship management is fast transforming because of increasing concerns over data privacy, geopolitical disruptions, technology disruption,
digital marketing is dominated by two big players Facebook and Google, increasing inequality as vast percentage of new income is going to the top 1%, 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 -
Successful track record of launching new products
– Ford Mulally has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Ford Mulally has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Analytics focus
– Ford Mulally is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by James Shein, Matt Bell can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
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.
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.
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.
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.
Training and development
– Ford Mulally has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in At Ford, Turnaround Is Job One Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Sustainable margins compare to other players in Leadership & Managing People industry
– At Ford, Turnaround Is Job One firm has clearly differentiated products in the market place. This has enabled Ford Mulally to fetch slight price premium compare to the competitors in the Leadership & Managing People industry. The sustainable margins have also helped Ford Mulally to invest into research and development (R&D) and innovation.
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.
Ability to lead change in Leadership & Managing People field
– Ford Mulally is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Ford Mulally in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
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.
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.
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 -
Capital Spending Reduction
– Even during the low interest decade, Ford Mulally has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
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.
Products dominated business model
– Even though Ford Mulally has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - At Ford, Turnaround Is Job One should strive to include more intangible value offerings along with its core products and services.
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.
Interest costs
– Compare to the competition, Ford Mulally has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
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.
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.
Workers concerns about automation
– As automation is fast increasing in the segment, Ford Mulally needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study At Ford, Turnaround Is Job One, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
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.
Need for greater diversity
– Ford Mulally has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
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 -
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.
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.
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.
Building a culture of innovation
– managers at Ford Mulally can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Leadership & Managing People segment.
Manufacturing automation
– Ford Mulally can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
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.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Ford Mulally can use these opportunities to build new business models that can help the communities that Ford Mulally operates in. Secondly it can use opportunities from government spending in Leadership & Managing People sector.
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.
Learning at scale
– Online learning technologies has now opened space for Ford Mulally to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
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.
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.
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.
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.
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 -
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.
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.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Ford Mulally business can come under increasing regulations regarding data privacy, data security, etc.
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.
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 .
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 level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Ford Mulally needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Stagnating economy with rate increase
– Ford Mulally can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.
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.
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.
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.
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.
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.
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.
