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Ford vs. Toyota
Presented by :
Group No 8
Anirudh G 18
Shruti Jain 27
Gopalakrishnan 28
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Henry Ford's first started with a company named Henry Ford Company on November 3, 1901,which became the Cadillac Motor Company on August 22, 1902, after Ford left with the rights to
his name
Ford Motor Company was established by Henry Ford on June 16, 1903 which is now theworld's fifth largest automaker based on vehicle sales
1908: Henry T was a historic model which revolutionised the automobile manufacturingindustry
1930: Ford introduced the Model A, the first car with safety glass in the windshield and in1932, Ford launched the first low priced V8 engine powered car
The Ford Mustang was introduced in 1964 followed by introducing seat belt reminder alert in1965
It is also one of the largest family-controlled companies in the world, which has been undercontinuous family control for over 100 years
History of Ford Motor Company
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Established by a Japanese automaker Kiichiro Toyoda in 1937, is headquartered in Toyota city,and currently is the eleventh largest company in the world by revenue
Toyota was started in 1933 as a division of Toyoda Automatic Loom Works devoted to theproduction of automobiles under the direction of the Kiichiro Toyoda
Its first vehicles were the A1 passenger car and the G1 in 1935
Introduced small sized cars under brand name Toyopet
Entered the American Automobile market in 1957 with Crown initial failure due to loweracceptance
In 1982, the Toyota Motor Company and Toyota Motor Sales merged into one company, theToyota Motor Corporation
In 2012, it was the largest automobile manufacturer in terms of production and eleventh largestcompany in the world by revenue
History of TOYOTA Motor Company
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Ford once owned 5 luxury brands Mercury(1938), Jaguar(1989), AstonMartin(1994), Volvo(1999) and Land Rover(2000) but now it encompasses only
two brands Ford and Lincoln with total asset worth of 196bn
Jaguar and Land Rover were sold to Tata Motors in March 2008
FORDs AcquisitiOns, DivestituRes, stRAtegic AlliAnces
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It is spread across North America, Europe, Asia Pacific, South America, Africa andMiddle East
Ford has produced trucks since 1908, also involved in the manufacturing oftractors, buses
Also offers automotive finance, sells aftermarket parts and recently acquiredSoftware Company Livio to Further Advance In-Car Connectivity Leadership
Internationalization through strategic alliance with Mazda, Japanesemanufacturer to counter competition from other Japanese companies and to learn
about quality production and other technological information
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tOYOtAs mAjOR AcquisitiOns AnD stRAtegic AlliAnces
Toyota brands include Scion, Daihatsu and Lexus forming a part of the Toyota Group
Acquired Hino in 1967 which is a manufacturer of diesel trucks, buses
They also own a stake of 16.7% of Fuji Heavy Industries(engine technology) and 5.9% of IsuzuMotors Ltd (diesel technology)
Toyota also established a commercial dealership called Toyota Diesel Shop from 1957 until
1988, that sold various commercial platform trucks, buses, and forklifts
A JV with GM in 1982 , New United Motor Manufacturing, Inc. (NUMMI) , which eventuallyended in 2009
In 2002, Toyota managed to enter a Formula One works team and establish joint ventures withFrench motoring companies Citron and Peugeot
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Related Diversification strategies
Ford Motor Company
Acquired automobile companies
Lincoln
Manufactured Trucks, tractors,
buses
Automotive Finance
Acquired S/w Company Livio to
Advance car technology
Toyoda Automatic Loom Works
Toyota Motor Company
Acquired automobile
companies Scion & Lexus
Manufactured diesel Trucks,
buses
Toyota Financial Services
Stakes in companies that have superior engine and diesel
technology
FORD
TOYOTA
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Vertical/HORIZONTAL Integration of FORD
Ford through its ONE Ford Plan has tried to implement itsgrowth and renewal strategies
In order to reduce the inventory costs, Ford motor companyintegrated both forward and backward to become its own
supplier as well as distributor
Horizontal integration by means of collaborating with companiesin the same business such as Aston Martin, Jaguar and the like
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Vertical Integration of TOYOTA
Toyota on the other hand is also vertically integrated in both thedirections but without full ownership
Toyota rigorously screens its suppliers for quality and financialhealth, and then spends time and money to ensure their efficiency
and survival by taking minority stakes
It is to create a supply chain with the stability and efficiency ofvertical integration but with some of the flexibility of looser networks
of suppliers
This approach is also cheaper than the traditional vertical method ofowning suppliers outright, a virtue at a time when cash and credit are
rare
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Creating Corporate Advantage
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FORDs business strategy is their ONE Fordplan, wherein they would,
Aggressively restructure to operateprofitably at the current demand
Accelerate development of newproducts as per customer needs
Work together effectively as oneteam
The company has a specialized set ofresources that compete in a
narrower range of business i.e.
automobiles
Toyota's corporate strategy isencompassed by :
Specialized resources working foran organization wherein the focus
is not on diversifying the portfolio
but on quality production
Adding value to the organization bydeveloping its people
Recognizing that continuouslysolving root problems drives
organizational learning
Corporate strategies
The corporate advantage of these companies lies in the tight fit
among the resources, businesses and the organization
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1. Alliances for Market access:
Market Entry Alliances in developing countries such as India and Pakistan
2. Global leverage alliances:
For acquiring Diesel technology know how, Robert Bosch(injection technologies), Fiat for
efficient diesel engines and Volkswagen for higher range diesel engines
3. Component sourcing alliance with DENSO, GM, VW
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Sustainability : Roadmap to future
Toyota through its Toyota way strategy is
building capabilities for sustainability
such as:
Commitment to quality
Exceed expectations of customers
Constant innovation in the productsbeing offered
Future of mobility
Safest and most responsible way ofmoving people
And challenging goals
Ford through its One Ford plan
strategy is building capabilities for
sustainability such as:
Delivering high quality vehicles
Working towards profitable growthfor all
Exploring solutions to the changingtransportation landscape
Making affordable fuel technologiesavailable to everyone
And finally ONE Ford, one team
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Ford A Dynamic View Perspective
RESOURCE
ENDOWMENTS
RESOURCE
COMMITMENTSACTIVITIES
Business Under Consideration: Automobile Manufacturing of Ford
Competitive Strategy Analysis and Comparison using the Dynamic View Framework
Human Resources Platform optimization Cash Flows Technology
Focus on core competencies
One Ford One IT synergy
Newer facilities Top Management
commitment
Platform optimization keeping in mind external environment changes
Offering One Car to the
World
New Capability Development
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Ford Competitive Strategy Analysis
ONE FORD Strategy
Focus on core-competencies restructuring to operate profitably changing external environment
Conceiving products that customer wishes to own co-creation
Financial improvements stronger balance sheet
Teamwork One Ford One Team One Plan One Goal
Strategic Approach : Single Global Approach
Concept of World Car
One product for multiple markets approach
Capability brought in through CEOs experience from Boeing
Geographic scope expansion: 1/3rd revenues from emerging Asia-Pacific African region by 2020
Building Great Products, Strong Business & Better World through sustainability
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Competitive Positioning:
Low-Cost Leadership through platform consolidation
Aided by global scale and efficiency Hub and Satellite Approach
Resources
Global Management Team
Technically driven human resource with top management commitment
Synergy of One Ford Strategy with One IT centralized IT department
Value chain partners creation of synergies
Capabilities
Efficient platform optimization at a global level from 27 to 9 core platforms globally (2007-2014)
Product design dedicated design studios for cars such as Lincoln
Sourcing through common suppliers consolidation efforts
Enterprise data consolidation building newer facilities upping assembly line speed
Flexibility retooling operations volume flexibility to meet the external environment changes
Distinctive competency
Concentration on core brands Strategic alliances and global supply network unmatched
Cars engineered to accept full technology range meeting unique customer preferences
Cost efficiency going hand-in-hand with revenue enhancement
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Toyota A Dynamic View Perspective
RESOURCE
ENDOWMENTS
RESOURCE
COMMITMENTSACTIVITIES
Business Under Consideration: Automobile Manufacturing of Toyota
Competitive Strategy Analysis and Comparison using the Dynamic View Framework
Toyota Global Vision TNGA Efficient Human Resource Technology
Employee stability Supply Chain
relationship
Continuous Quality improvement for Sustainability
TPS Efficiency
improvement
New Capability Development
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Toyota Competitive Strategy Analysis Toyota Global Vision
Medium long term initiative: Refine corporate culture joint ventures with companies
Monozukuri - conscientious marketing
Emerging Markets concentration meeting local needs product design keeping local needs in mind
Reforming of Car development structure Toyota New Global Architecture (TNGA)
Toyota New Global Architecture (TNGA)
Enhances Toyotas international competitiveness
Foundation of grouping development improving efficiency
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Competitive Positioning
Cost-leadership strategy achieved through process differentiation
Economies of scale TNGA bringing technologies together standardization across value chain activities
Resources
Empowered human resource high level of employee stability and loyalty
Coordination and cooperation supply chain partners
JIT inventory system expertise in robotic technology
Capabilities
Toyota Production System capability to competitive advantage
Improvements in processes employee contributions : 10 per employee per year (99% implementation)
Extended partner relationships and development of exceptional teams and leaders in-house
Distinctive competency
Lean Manufacturing Long term sustenance
Higher value creation through well-designed products with cost-price balance
Robust Human Resource philosophy in line with overall organization philosophy
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Analysis through the 7S FrameworkSTRATEGY
Ford Low Cost strategy through activities that offer economies of scale and scope Product offerings that cater to global markets One product for the world Reinvesting Savings to better manage the platforms and strive towards greater efficiency Focus on profitability driving brands restructuring to operate at greater profitability Strengthening bottom line and balance sheet
Toyota Differentiated process reforming production technology based on the Toyota New Global
Architecture (TNGA)
Business unit optimization will be under the purview of the individual SBU Research and production to engage in face-to-face interaction transforming the activities to serve
the markets
Developing better cars location dependent perception design and development specifically catering to those markets
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STRUCTURE
Ford Centralized Leadership structure with decentralized policy implementation Integrated global structure from a regionally focused structure Hub and satellite approach coordination from regional centers maintaining the overall DNA of Ford
Toyota Automotive business : 4 SBUs Toyota No:1 for developed markets, Toyota No:2 for emerging markets Empowered manager decision making genchi genbutsu on-site and hands-on experience TNGA planning medium to long term product strategies & Product and Business planning market-
based product strategies
Lexus international unit a separate unit establishing it as a Japanese brand globally
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SYSTEMS
Ford Scorecards to track performance part of the annual business planning process Compensation levers: a. Individual goals and performance evaluation b. Company wide progress and
annual targets
Weekly Business plan review at the corporate level sustainability scorecard Adoption of management systems adhering to standards both at the corporate and supplier level
Toyota Toyota Production System TPS - problem solving solution Continuous process flow standardized systems and processed with employee empowerment Consensus based decision making relentless reflection and continuous improvement Competitive position when it comes to human resource management
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STAFFING
Ford Employees from diverse backgrounds integrating people processes into ONE FORD Career Management: Pulse process survey candid feedback from employees to be incorporated into
business planning review
Inclusion- major factor for workforce recruitment at each level in the organization Skill based recruitment with employees aligned with the overarching organization strategy
Toyota Staff viewed as Knowledge workers ideation from shop floor to boardrooms Quality People value stream model selecting the right people Fosters contradictory viewpoints as a deliberate attempt to enable employees find solutions for
business problems
Recruitment aligned with organization strategy
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SKILLS
Ford Employees from diverse backgrounds integrating people processes into ONE FORD Career Management: Pulse process survey candid feedback from employees to be incorporated into
business planning review
Inclusion- major factor for workforce recruitment at each level in the organization Skill based recruitment with employees aligned with the overarching organization strategy
Toyota Robust production process with expertise in hybrid vehicle design and development Operational efficiency globally standardized with increased employee involvement Supply chain management receiving benefits of specialized suppliers
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STYLE
Ford Alan Mullaly CEO Visionary leadership style taking the external environment into consideration No-Fail Attitude motivation across the organization - focus driven Change Management not just people but also cars expertise in turning a company around
Toyota Management practices transitioning from Japanese style to a more westernized style coping with
the changes in the global scenario
Traditional slow response to faster response change in leadership as board members from diverse backgrounds were appointed
Importance towards corporate governance increasing global organization
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SHARED VALUES
Ford Community initiatives: SUMURR catering to rural citizens as a part of community engagement Driving Skills for Life Fords vision of safety and standards communicated to young drivers in line
with organization
Water conservation refining the value chain adding value to the community at the same time eliminating loss of value from the corporates perspective
Cluster engagement Operation Goodwill empowerment, training and sustainable development
Toyota Contribution through sustained development societal enrichment environment, traffic safety,
education and culture
Low-carbon society establishment recycle based battery-to-battery recycling Environmental education Forest of Toyota and Shirakawa Go-Eco intitute
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Strategic Challenges - Ford
Recessionary conditions in Europe
Europe is a big part of Ford's business, and lately it has been losing a ton
of money
Recessions in Europe have clobbered new-car sales: They're now at lows
not seen in 20 years, and they may fall further before things start to
improve
Product / Technology Challenges
Quality issues related to Ford's complicated in-vehicle technologies -
newer technologies associated with Sync and MyFordTouch
Ford has also experienced bugs with its touch screen technology and
glitches in MyFordTouch
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Strategic Challenges - Ford
Leadership Challenge
Alan Mullaly is likely to quit by end of 2013 or beginning
of 2014
So, sustaining the transformations and leadership
activities done by Mullaly in terms of the culture or
strategies such as One Ford strategy will be the biggest challenge faced by Ford
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Strategic Recommendations for Ford
Green Vehicles
Due to increased emphasis on the manufacturing of eco-friendly cars, it has become important for every car maker to make more fuel efficient cars and emit less smoke
Hondas Civic GX is a green car and won the title of greenest car of 2011 from American Council
Ford has taken initiative with the production of Fiesta SFE but it should produce more eco-friendly cars in alignment with the Fords sustainability strategy
Pricing
Small world cars intended to be sold in developing markets which are price sensitive
Produce cars which are not only better in terms of features, performance, fuel efficiency but also in terms of low pricing
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Strategic Recommendations for Ford
Innovation
Main competitors are Toyota, Honda offering products
that are low priced, nice features
Ford should invest more in R & D and focus on
removing the glitches from the existing software
It should focus on improving the design of the vehicles
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Strategic Challenges - Toyota
Geographic Challenges
North America accounts for about a fourth of Toyotas sales but because of the weakening of the macroeconomic environment caused by fiscal
cliff, global sales may drop. Also, competitors like Ford and Honda
coming up with new hybrid and refreshed models
Sales in Japan accounts for 30% of the total sales volume
But due to natural calamities like earthquake, tsunami in 2011, the
government provided tax incentives to buy cars. So, buyers rushed to
purchase new vehicles before the subsidies ended in September. With
its expiry, the market is expected to fall by 20%
In China, due to anti-Japanese backlash, Japanese automakers have
suffered
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Strategic Challenges - Toyota
Toyotas value proposition has been built upon quality and reliability. Its culture, defined by the Toyota Production System,
completely supports that value proposition.
It has set the standard for quality and reliability in its industry and
rose to the top on these core competencies.
Operational effectiveness of Toyota has been matched by its
competitors in terms of quality and reliability
Now it must develop new competencies in design, innovation, and
customer engagement to remain the industry leader.
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Strategic Challenges - Toyota
Regulatory Challenges (Government)
There are stricter government regulations on safety, emissions and
fuel consumption, and rising customer demand for vehicles with
green and luxury features
So, cars are becoming increasingly sophisticated both in terms of how
they are designed and how they are manufactured
This has led to growing technical complexity of todays vehicles
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Strategic Recommendations - Toyota
Eco-friendly cars
One of the most powerful and reliable products that Toyota has is the
Hybrid cars, which helped the company to recover from it crisis.
So Toyota should meet the demand on the environmental cars by finding
new and creative environment friendly cars such as the electric car.
Geographic recommendations
Toyota went to its first loss in its operating income in its life due to the
mortgage crisis in the United State.
The company was obviously affected very badly by a crisis that happened
in one country.
Toyota shouldnt focus in one market and neglect other important and rapidly growing markets such as China, India
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Strategic Recommendations - Toyota
Organization Structure
Decentralized structure is a good structure for Toyota. It can bring more
coordination within the organization, having more effective
communication among head managers, division managers and employees
Resolving cultural mismatch
There are issues due to the culture mismatch between companies in
America and Japan
Toyota Japan, a high-context company, needs to have training for
American executives, so they can be aware of difference between two
cultures and understand Japan's collective culture
