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Ford SCQ Assignment
Sunil Gupta- Athos Cohort
Agenda
  SCQ Analysis – Key Issue

 Issue Analysis
 Work Plan
 Data gathering and analysis
 Findings and recommendations
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?
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?
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
Data Gathering
    Primary

    ◦ Market research
    ◦ Talks & Negotiations with concerned
      parties
    ◦ Executive knowledge resource in
      meetings
    Secondary

    ◦ Historical financial data analysis
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.
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
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.
    
We have enough cash.

    We have access to sources of cash



      Existing creditors
    
     Banks
     Institutions
     Pension Funds
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.
    
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%
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
    
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
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
We have the right cost
structure.
    We can maintain a profit margin



    We can reduce cost

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
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
We have stable supply
chain.
    We have stable suppliers



    We can workout plans to stabilize suppliers

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
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
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.

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Ford Motors SCQ Analysis

  • 1. Ford SCQ Assignment Sunil Gupta- Athos Cohort
  • 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.