This document outlines a work plan for analyzing whether Ford Motors will survive tough economic times. The plan involves gathering data on Ford's cash reserves, product portfolio, cost structure, and supply chain stability. Teams will examine historical financials, conduct market research, and have discussions with creditors, suppliers, and labor. The final presentation will conclude that Ford has enough cash, the right cars, a sustainable cost structure after cost reductions, and a stable supply chain due to negotiations, showing Ford will survive the difficult economy.
2. Agenda
SCQ Analysis – Key Issue
Issue Analysis
Work Plan
Data gathering and analysis
Findings and recommendations
3. SCQ Analysis – Key Issue
• Ford- one of the largest car producers in the world, a family owned company, Americans,
capitalist, don’t want to be owned by the government, and don’t want to lose control.
• Huge crisis going on in the world; Government giving money for bail out. Ford decided not to
take the money. We have the best product line and we are feeling pretty good about that. We
Situation
have cars to perfectly match the market, that is, small cars in the pipeline.
• Gave myself a 30% salary cut, in talks with UAW to reduce salaries and wages, working with
suppliers to keep them vibrant and alive, not investing in new capacities, reduced hours of
working, and also closed some factories.
• Never been in this type of recession not at least in my life, every industry is down. I am losing my
sleep. Consumer confidence is all time low and sales have declined 42%.
• We are running through cash from $5 billion to $10 billion every month.
Complication
• Will the sales continue to decline?
• Supplier base may go away
• Will our product line satisfy current demand?
• Credit line may be at risk because of the rate at which we are running out of cash
Questio
Key
• How can Ford motors survive through these tough times?
n
Issue
Key
• Will Ford motors survive through these tough times?
4. Issue Analysis
Will Ford motors survive through these tough
times?
Do we have right cost Do we have stable supply
Do we have enough cash? Do we have right cars?
structure? chain?
Do we know how much Do we know what Can we maintain a profit Do we have stable
cash we need? consumers want? margin? suppliers?
Can we reduce cost by
Do we have access to Will our product portfolio
Can we work out any
downsizing labors,
sources of cash? satisfy the requirement?
reducing working hours, plans with the suppliers
so that they can
cutting on production,
and eliminating idle stabilize?
capacities?
Are the sources ready to Do consumers know that
work on favorable we can satisfy their
terms? demand?
5. Work Plan Weeks
Assign
To Modules To Get Evidence For Tasks
Individuals 1 2 3 4 5
Work on
historic and
Do we know how much cash we need?
current data
Mike Do we have Talk with
Do we have access to sources of cash?
enough cash? creditors
Are the sources ready to work on favorable Negotiate with
terms? creditors
Do we know what consumers want? Market Survey
Tom Do we have Will our product portfolio satisfy the
Gap analysis
right cars? requirement?
Advertising
and
Do consumers know that we can satisfy
communicatio
their demand?
n
Market
Can we maintain a profit margin?
research
Do we have
Mary right cost
Can we reduce cost by downsizing labors,
structure? Talk and
reducing working hours, cutting on
Negotiate
production, and eliminating idol capacities?
Talk to
Do we have stable suppliers?
suppliers
Do we have
Jane stable supply
Work out
chain? Can we work out any plans with the
stabilization
suppliers so that they can stabilize?
plan
Executive Meetings
6. Data Gathering
Primary
◦ Market research
◦ Talks & Negotiations with concerned
parties
◦ Executive knowledge resource in
meetings
Secondary
◦ Historical financial data analysis
7. Final Client Presentation
Ford will survive through these tough times.
• We have enough cash.
• We have the right cars.
• We have the right cost structure.
• We have stable supply chain.
8. We have enough cash.
We know how much cash we need
We have access to sources of cash
The sources are ready to work on favorable
terms
9. We have enough cash.
We know how much cash we need
Historical data base and financial panel experts
analysis suggest a cash requirement of
$30 billion vis-à-vis $24 billion in hand
Detailed financial analysis present in the office file provided.
10. We have enough cash.
We have access to sources of cash
Existing creditors
Banks
Institutions
Pension Funds
11. We have enough cash.
The sources are ready to work on favorable
terms
Talks and negotiations with new and existing
creditors have resulted in access to funds in short
term.
Convertible debt, coupon bonds will be offered.
12. We have the right cars.
We know what consumers want
60%
New trend for
50%
40%
mid-size cars Income below
30%
$50k
20%
between $50k to
10% 150k
above $150k
0%
13. We have the right cars.
Our product portfolio will satisfy the
requirement
Existing mid-size cars are strong
Ford Fusion, Taurus
Upcoming mid-size cars development completed
Ford C-Max
Refer the file for market research for more insights
14. We have the right cars.
Consumers know that we can satisfy their
demand.
Promotion campaign team already on the road
External Consultants are working to make effective
campaigns
March 1st week March 3rd week April
• Promotion Campaign • Progress check • Information
Launched transmitted thoroughly
15. We have the right cars.
Consumers know that we can satisfy their
demand.
Advertising agencies started working
O&M team has started working with Ford
Television Newspaper
Road Promotion
shows Campaigns
16. We have the right cost
structure.
We can maintain a profit margin
We can reduce cost
17. We have the right cost
structure.
We can maintain a profit margin
Market research reveals consumer confidence in
Ford still present.
Limited profit margin can be achieved
Sales vs Profit Margin
No
4
Strong
3
Somewhat
Sales vs
2
Profit
1 Margin
Good
0
30 40 50 60 70 80
Consumer Confidence
18. We have the right cost
structure.
We can reduce cost
Cost reduction programs progress report
Negotiations
Production cuts
% Cost Reduction
Idle capacity shutdowns Progress
*Benchmark
0 2 4 6 8
19. We have stable supply
chain.
We have stable suppliers
We can workout plans to stabilize suppliers
20. We have stable supply
chain.
We have stable suppliers
Few suppliers relieved by bail out
Others have started diversifying in to other
segments to shift the risk
21. We have stable supply
chain.
We can workout plans to stabilize suppliers
Negotiations will resulted in sustainable and
stable supply from suppliers
Monetary support can worked out with Ford’s
creditors
22. Final Client Presentation
Ford will survive through these tough times.
• We have enough cash.
• We have the right cars.
• We have the right cost structure.
• We have stable supply chain.