Ford Company Limited Analysis: Strategic Issues - Case Study Example

He appointed Alan Mulally as the CEO of the company in 2006. Bill Ford was impressed with Alan Mulally leadership skills. Alan Mulally came into automobile business from metal bending business. Bill Ford appointed Alan Mullay as the CEO of Ford because he had the skills to overcome the problems Ford was facing. Alan Mulally had faced similar problems in Boeing so his experience would be useful to Ford. Alan Mulally vision was to provide customized automobiles to the customers. He brought in changes so that Ford would be a small and profitable business in future.

He had convinced Bill Ford to take up loan of about $23 billion to avoid bankruptcy after he arrived from Boeing Company. In order to build up cash cushion the automaker had put up all the major assets as collateral. Mulally set plans to take loan from the market. He replaced "the bigger is better" policy of ford with "less is more approach." Ford concentrated more on cutting various costs and transforming the way ford was doing business. Former CEO Jacques Nasser emphasized on doing acquisitions in order to reshape ford but the daily activities of the company were ignored in this process.

The policy followed by Jacques Nasser failed because plans were not prepared after thorough research. Bill Ford is a visionary. He appointed Alan Mulally so that he could bring in his experience to ford. . Alan Mulally help in establishing the best brand mix in 2011.Alan Mulally had stressed that proper forecasting needs to be done for 2013. He brought in the “less is more business model.” According to this approach the company concentrated on providing customized cars instead of doing large scale production.

A shift from the old policy of “bigger is better” to “less is more” policy resulted in Ford concentrating on providing quality cars as per the requirements of the customers. Strategic issues Ford Company Limited is facing serious problems since 1999. The profit of the company during this period was about $7.2 billion and the pretax income was about $ 11 billion. It was expected around this time that Ford would overtake General Motors but Toyota overtook Ford. This led to the beginning of the problems for the Ford Company Limited.

Toyota used innovative technology as well as cost arbitration policy to overtake both GM and Ford. The main reasons for the failure of Ford were:- Ford failed to incorporate a proper diversifying strategy. Ford’s internal problem aggravated during this period. The CEO at that time Jacques Nasser failed to address this problem. The result was that the market share began to drop from 25% in 1999 to about 15% in 2011. The company suffered heavy losses in the light vehicle segment. However the good news is that the overall market share has started to rise again in 2009, 2010 and 2011.

Another sign of problem for the company are the falling stock prices. The stock prices have decreased over the last decade. The stock prices were around $ 60 in1999. This price fell to as low as $1.43 in 2008 but it has now rebound to about $18.7 in 2010. The