Case_Analysis_of_Ford

CASE ANALYSIS OF FORD’S LINCOLN: THE REBRANDING STRAEGY * INTRODUCTION Ford motors have the history of providing excellent products ranging from small cars to luxurious brands to its customers Ford had secured 25% US automobile market in 1998. In the year 1999 and onwards its market shares where drooped from 25% to 14%. The company was at the verge of collapse. High dept, failed market image operation cost were the some of the issues ford motor was facing. Ford related its market failure with the increase in price of fuel and weak US economy. There were different reviews from other experts like they were not focusing on market trend and consumer preference. They were focusing only on product line and they have increase the operation cost and they lacked communication with the customers and appropriate market research. * COMPETITOR ANALYSIS General Motors have maintained the largest market share in United States. The company took few strategy wise changes to cope with issues relating to the bad sales and market shares. GM decentralized the decision making process to get the quick decision in time of need. The company revised its marketing goals and devised new marketing plan. It is involved in providing innovative products to consumer with innovative car. GM market shares alone amounted to 60% of the US market with sales of $12 billion Toyota Motors market sales in 1990 was 7.6% which increased to 12.2% in 2004 which has managed to capture the market Toyota took away US market with low cost automobiles to compete with the market leaders; GM and FORD. It competes to serve different market segment. Toyota products are considered to be efficient as compared to other model in terms of fuel. Toyota has secured large market in US * FORDS COMPETITIVE ADVANTAGE Ford motors adopted the strategy that allowed it low production cost by cutting all the waste cost involved in its operation. The strategy established cost advantage and gives the company advantage over its competitors in term of lower cost. In the mean while company focus on producing smart cars that were not price sensitive In 1991 ford explorer was introduced and it transformed into a family vehicle (rural SUV). It was one of the best selling midsize SUVs in the US and mainly competes with other market runner. Ford acquired Great Britain’s luxury car companies, Aston martin and jaguar to improve its luxury brand portfolio. For better supervision (Aston Martin, Daimler, jaguar, land rover, Lincoln Volvo cars) all combined to form the Premier Automotive Group (PAG). It was felt that to profit from these luxury brands Ford would have to share components and platform avoiding any likely dilution of brand image. Fords proposes to sell vehicles with lower rehates and increase profit margin for its new vehicles it would be positive probably won’t outshine last year’s selling rate, but it will stabilize in the near term and ultimately grow market share by making customer value and attitudes central to their business model They also plan to launch hybrid vehicles such as electric escape, memory mariner and Mazda Tribute in the wake of increase in demand for the hybrid vehicles. With regard to its luxury car line, ford plans to re-brand the Lincoln brand, which was once the most successful luxury car brand of US * BIRTH OF LINCOLN AND THE RE-BRANDING STRATEGIES Lincoln was the first acquired brand as well as the first luxury brand in the ford family. The zephyr (Lincoln brand) grew from 15,000 units was itself a 80% of the Lincoln brand sales in 1963 to 30,000 in 1937. But the production of Lincoln zephyr was stopped in 1942 during Second World War In 1981 Lincoln town car was introduced as a full size luxury sedan and served as the flagship of Lincoln division since replacing the Lincoln continental. The Lincoln town car carried many advance luxury options compare to its competitor Lincoln navigator SUV launched in 1998 was highly popular. The market share of navigator that introduced the concept of luxury SUV, was 40% of the US luxury SUV market in 2001 competition from GM and other soon entered into the market The sales of Lincoln brand have witnessed a continues decline since 2000 due to the competitor from the Japanese and the European brands and the lack of adequate launches The company came to a conclusion that people identify Lincoln cars through their specific model name such as town car or the navigator rather than the brand name. Ford developed a strategy to make name of Lincoln in the minds of it customer by adopting alpha numeric names in the model launches its plans for 2006 and 2007 MKZ was the brand’s first entry luxury small car for which there was a huge investment where Z stands for Zephyr. This model was replaced by MKX the first crossover vehicle. Lincoln customer doesn’t need to shout about success. They are self made people with enough confidence to be elegant and understand, that understanding of the Lincoln customer will drive our brand and product decision going forward * CONCLUSION Ford motor is the only one in the US auto motor industry who tried to sustain its leadership and its market position with effective strategies to match the market requirements and needs. It updated its products with latest technology gadgets and equipped its products with the latest ones. After conducting the in depth analysis of the company’s success factors, revamped processes and other operational strategies as well as the study of case study, it came to the following recommendations for the Ford Motors that can help the company to leverage its market position and sustain profitability Ford with the re-branding of Lincoln its new product launches and the restructuring plan the way forward is hopeful that it will soon be successful again. Hence Ford has initiated a re-branding of Lincoln to improve the brand’s sales and image. With its new strategy of planning ford was able to regain its customer and made the chances of their success more high which would keep them in the market and will help them to maintain their brand image in the market by providing a product that is better than the competitors is more important than a mere name change.