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TEACHING NOTE
CASE 18
Ford Motor Company: New Strategies
for International Growth
Overview
Founded in 1903 by Henry Ford and a group of 11 investors, the Ford Motor Company had modest origins,
launching in a converted factory on Mack Avenue in Detroit that only produced a few cars per day. Ford
quickly differentiated itself, however, through a variety of unique production and employment practices
that transformed the automobile industry and positioned Ford at the forefront of technological innovation. Ford
had pursued international expansion primarily via acquisition in the 1980s and 1990s, purchasing iconic brands
such as Aston-Martin, Jaguar, Land Rover, and Volvo, as well as an equity stake in Mazda. Ford was not alone
activities firmly established the automotive industry as a global industry.
From 2007-2010, Ford divested all of its luxury bands, folded its mid-range Mercury division, and also closed
13 plants and laid off more than 50,000 of its nearly 200,000 employees to decrease capacity in the wake of the
Great Recession. Since that time, Ford’s global strategy largely focused on returning the company to profitability.
Under CEO Alan Mulally, the One Ford Plan was developed to shift Ford from having many regional platforms
to a focus on fewer, more global production platforms to better capitalize on economies of scale. Ford began to
launch more products off fewer platforms, and revamped older vehicle families with technological improvements
*This teaching note reflects the thinking and analysis of Professor Armand Gilinsky, Sonoma State University. We are most grateful
for his insight, analysis and contributions to how the case can be taught successfully.
*
Case 18 Teaching Note Ford Motor Company: New Strategies for International Growth
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The concept of the Dynamic Shuttle was for an on-demand shuttle bus or van that could be accessed via a user’s
mobile phone, and be dispatched either directly to the requesting customer (usually in developed markets), or
to a pick-up location within a short walk that aggregated multiple customers for pick-up (potentially in more
rural areas or in areas with poor infrastructure). The pricing of the shuttle was to be positioned between lower–
Suggestions for Using the Case
The case pairs particularly well with the coverage of strategies for competing in international markets in Chapter
7, and possibly diversification strategies in Chapter 8. It can also be useful to review the interactions between a
business and forces in its external environment, in particular the five forces driving profitability in an industry,
covered in Chapter 3.
Particular learning objectives that can be met include:
nBuilding students’ awareness and understanding of cross-country differences in demographic, cultural,
and market conditions
The assignment questions and teaching outline presented below reflect our thinking and suggestions about
how to conduct the class discussion and what aspects to emphasize.
To give students guidance in what to think about and what analytical tools to utilize in preparing the Ford Motor
To facilitate your use of study questions and to make them available to students, we have posted a file of the
assignment questions contained in this teaching note for the Ford Motor Company case in the instructor
resources section of the Connect Library.
You may also find it beneficial to have your class read the Guide to Case Analysis that follows Case 31 and is
Case 18 Teaching Note Ford Motor Company: New Strategies for International Growth
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Videos for Use with the Ford Motor Company Case. As a way to set the stage for class discussion, we
suggest showing either or both of the following videos:
This case is suitable for both written and oral presentations. Our recommended assignment questions are as fol-
lows:
1. The Smart Mobility team has hired you as an intern and asked you to prepare an analysis of Ford’s efforts
to enter the Indian market with its Dynamic Shuttle program. Your report should contain 2-3 pages of
2. A key executive at Ford has learned of your considerable skills in strategic analysis and has hired you to
develop a strategic plan that will enable Ford to pursue its Smart Mobility strategy in international markets,
with specific reference to choosing a partner for its Dynamic Shuttle program. You should also assess Ford’s
Assignment Questions
1. In which industry do you think Ford’s Smart Mobility business segment competes? Why?
2. How strong are the competitive forces confronting Ford in the global market for smart mobility? Do a five-
forces analysis and identify the key driving forces and key success factors to support your answer.
3. How have Ford’s business strategy choices strengthened or weakened its prospective competitive position in
the mobility industry? Discuss how the company’s senior management has chosen to increase the horizontal
or vertical scope of the firm.
4. Perform a competitive strength assessment of Ford’s prospective partners in the mobility industry. Based on
that assessment, which partner makes the most sense for Ford?
5. What specific business strategy recommendations would you make to Ford’s management regarding its
Dynamic Shuttle program? Consider carefully its strategy to enter emerging markets such as India. Should
the company consider a greenfield development, a strategic partnership or alliance, or acquire an existing
mobility provider? Are there other potential strategic options that should be under consideration? Please
justify your recommendations by outlining the pros and cons of each.
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Teaching Outline and Analysis
1. In which industry do you think Ford’s Smart Mobility business segment competes? Why?
As described in the case, there may be internal tensions among Ford managers—as well as debate among
industry observers—as to whether Ford should be classified as a transportation manufacturer or evolve into
a transportation services (e.g. bus, taxi or limousine) company, or even into a technology and information
company or perhaps a new type of company that does not fit neatly within any existing industry definition.
This is a complex question with no “right” answer and it should be possible to generate debate and
disagreement within the class.
Sample student arguments for each classification might include:
1. Taxi – Many riders could choose a Dynamic Shuttle instead of a taxi, Uber pricing varies by distance
rather than being set in advance like most limousine rentals.
4. New type of company or hybrid – Disagreement on Dynamic Shuttle’s fit within the above
classifications can also serve as justification for a new classification, such as “Transportation Network
Company” (TNC) or “Smart Mobility Company” (SMC).
Dynamic Shuttle service.
2. How strong are the competitive forces confronting Ford in the global market for smart
mobility? Do a five-forces analysis and identify the key driving forces and key success
factors to support your answer.
Varying opinions on the answer to the previous question and the limited availability of information about
market trends, asset bases or market share increase the difficulty of answering this question. As they work
through the five forces, students should be encouraged to state and justify their assumptions.
The first step in a Porter’s Five Forces analysis is to clearly define the industry being analyzed and this step
is particularly important in this case where buses, shuttles, taxis, limousines, Didi Chuxing (China), Grab
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FIGURE 1. Five Forces Analysis: Taxi Industry before Uber
advantage
Competitive pressures coming
from the threat of entry of new rivals
Substitutes for
Potential New
Entrants into the
Taxi Industry
nBargaining power of suppliers was low.
• This is due to the ease of replacing drivers and vehicles.
replaced.
nThe threat of new entrants was extremely low.
• There is little evidence of non-price differentiation between taxi companies in terms of the ride
experience or customer service.
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nThe threat of new entrants was low in that although substitute forms of on-demand transportation
such as driving, biking, walking, or taking public transit existed before Uber and Lyft, none were ideal
substitutes for common taxi usage, particularly in congested cities of upwards of 20 million people.
Students could be asked to prepare a different five-force analysis using public mass
transport. As a subsequent or alternative exercise, the shuttle or public bus (before Uber) can also be
analyzed using the same five-forces model, and a number of factors suggest it is not quite as attractive as
the taxi industry.
nEntry by new firms and new drivers is not as difficult due to the absence of a strict capacity cap by
governments and moderate to low capital intensity, increasing the threat of new entrants.
nRivalry within the industry was likely higher, given variety in vehicle and service offerings and variable
prices. This reduced attractiveness may partially explain the willingness of shuttle/bus companies listed
The introduction of Dynamic Shuttle and other ride-sharing shuttle/bus companies clearly would have an
impact on the attractiveness of the taxi, shuttle/bus, and limousine markets described above, regardless of
opinion on the industry in which Dynamic Shuttle best fits and whether it represents a significant unexpected
On the supplier side, Dynamic Shuttle could directly affect bargaining power for taxi drivers. However
Dynamic Shuttle should give all drivers, whether limousine, taxi or the general public, the option of earning
money while driving one’s own shuttle/bus and this new option could reduce the power of taxi and shuttle
Key drivers in the mobility industry include:
nSocial/Demographic. Global population growth and increasing urbanization, accompanied by rising
standards of living
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nCompetition. Vehicle platform standardization activity among top tier firms, driven by pressures to
globalize activities across the value chain and localize production to reduce transportation costs;
potential retaliation by incumbent taxi, livery, shuttle, or bus companies.
Key success factors for rivals competing in the mobility industry include:
nTrusted brand
nBuild quality
3. How have Ford’s business strategy choices strengthened or weakened its prospective
competitive position in the mobility industry? Discuss how the company’s senior management
has chosen to increase the horizontal or vertical scope of the firm.
Key aspects of Ford’s emerging market entry strategy are as follows:
Ensure stellar quality, cost-effectiveness, reliability, support, and integrity across all aspects of the
business
Build a culture of local employees that serve the corporation’s social mission — solving transportation
bottlenecks, improving economic opportunity, and helping to develop better cities.
Ford’s stated objectives are to:
nCreate a new transport ride-sharing platform in the space between scheduled (mass-transit) and private
transport, enabled by smartphone development and penetration