2019

INTERNATIONAL BUSINESS
MACHINE CORPORATION
CHARLES RANLETT FLINT

GROUP MEMBER
[Link] KHAN MBPE-F16-003

JUNAID SHAHID MBPE-F16-012

ZAIN MUKHTAR BBHM-S15-056

QAISER ILYAS MBPE-S16-015

GOHAR ALI MPBE-F16-046

[FINAL PROJECT OF IFM]

INTRODUCTION:
Ford Motor Company is a multinational automaker that has its main headquarter in Dearborn,
Michigan, a suburb of Detroit. It was founded by Henry Ford and incorporated on June 16, 1903.
The company sells automobiles and commercial vehicles under the Ford brand and most luxury
cars under the Lincoln brand. Ford also owns Brazilian SUV manufacturer Troller, an 8% stake
in Aston Martin of the United Kingdom and a 32% stake in Jiangling Motors. It also has joint-
ventures in China (Changan Ford), Taiwan (Ford Lio Ho), Thailand (Auto Alliance Thailand),
Turkey (Ford Otosan), and Russia (Ford Sollers). The company is listed on the New York Stock
Exchange and is controlled by the Ford family; they have minority ownership but the majority of
the voting power.
Ford introduced methods for large-scale manufacturing of cars and large-scale management of an
industrial workforce using elaborately engineered manufacturing sequences typified by
moving assembly lines; by 1914, these methods were known around the world as Fordism.
Ford's former UK subsidiaries Jaguar and Land Rover, acquired in 1989 and 2000 respectively,
were sold to Tata Motors in March 2008. Ford owned the Swedish automaker Volvo from 1999
to 2010. In 2011, Ford discontinued the Mercury brand, under which it had marketed entry-level
luxury cars in the United States, Canada, Mexico, and the Middle East since 1938.
Ford is the second-largest U.S.-based automaker (behind General Motors) and the fifth-largest in
the world (behind Toyota, VW, Hyundai-Kia and General Motors) based on 2015 vehicle
production. At the end of 2010, Ford was the fifth largest automaker in Europe. The company
went public in 1956 but the Ford family, through special Class B shares, still retains 40 percent
voting rights. During the financial crisis at the beginning of the 21st century, it was close to
bankruptcy, but it has since returned to profitability. Ford was the eleventh-ranked overall
American-based company in the 2018 Fortune 500 list, based on global revenues in 2017 of
$156.7 billion. In 2008, Ford produced 5.532 million automobiles and employed about 213,000
employees at around 90 plants and facilities worldwide.
COMPANY PROFILE & CATEGORY:

The Ford World Headquarters in Dearborn, Michigan, also

known as the Glass House

Type Public

 NYSE: F
Traded as
 S&P 100 Component
 S&P 500 Component

CATEGORY Automotive

Founded June 16, 1903; 115 years ago

Founder Henry Ford

 Headquarters Dearborn, Michigan
,
U.S.

Area served Worldwide

Key people  William Clay Ford Jr.

(Executive Chairman)

 Jim Hackett
(President & CEO)

Products  Automobiles
 Luxury Vehicles
 Commercial Vehicles
 Automotive parts
 Pickup trucks
 SUVs

Production output 6.6 million vehicles (2017)

Services  Automotive finance

 Vehicle leasing
 Vehicle service

Revenue US$156.776 billion(2017)

Operating income US$4.813 billion (2017)

Net income US$7.602 billion (2017)

Total assets US$257.808 billion(2017)

Total equity US$34.918 billion(2017)

Owner  The Vanguard Group(5.82%)

 Evercore Wealth Management (5.58%)
 Ford family
(2% equity; 40% voting power)

Number of ~202,000 (December 2017)

employees

Divisions  Ford
 Lincoln
 Motorcraft
[Link]
VISION AND MISSION STATEMENT
VISION:

People working together as a lean, global enterprise for automotive leadership.

MISSION:

One Team. One Plan. One Goal.

[Link]

CORE VALUES AND SLOGANS

Core values:
INTEGRITY
We always strive to do the right thing. Our commitment to the truth is unwavering, both in
actions and in words.

SERVANTS’ ATTITUDE
We only exist to serve our internal and external customers, so their concerns are always at the
forefront of our business. We will serve our clients with a genuine humility that leaves no doubt
that they are the sole focus of all of our endeavors.

ACCOUNTABILITY
A personal choice to rise above one’s circumstances and demonstrate the ownership necessary
for achieving key results: to See it, own it, solve it, and Do it. Doing it right the first time is not
our goal, but our standard. We will hold ourselves responsible for this attention to detail in all of
our duties.

CONTINUOUS IMPROVEMENT
We are a dynamic organization that constantly seeks areas of growth and innovation. This
growth starts at the personal level and continues into all aspects of our business.

TEAMWORK
Teamwork is our individual actions, brought together for our common purpose, which
subordinates our individual needs to the needs of the group. We put aside our individual needs to
work towards and accomplish the larger group objective. We cooperate, using our individual
skills, and provide constructive feedback despite any personal conflict between individual

[Link]

SLOGAN:
BUILT FOR THE ROAD AHEAD
GOAL, OBJECTIVES & ETHICS

GOALS:
Deliver our Ford Smart Mobility plan, with a focus on emerging opportunities in mobility.

OBJECTIVES:

Ford Motor Company's objectives span a number of areas, including sales, research and
innovation, sustainability and safety. As of 2014, Ford's financial objectives included increasing
its global sales and achieving more balanced geographic profitability by the year 2020, say
[Link].

[Link]

ETHICS:

As Ford continues to grow, we work hard to ensure that ethics and compliance remain the
foundation of all our business practices. Our integrated governance systems and processes help
us manage the different aspects of sustainability across our business, from climate change to
product quality and safety, and from ensuring ethical business practices to managing our supply
chain.

KEY STAKEHOLDERS:
Below, we have identified our key stakeholder groups and summarized the channels we use to
maintain dialogue with them. For each group, the engagement varies on a case-by-case basis, and
includes formal and informal channels that are used to varying degrees of regularity.

COMMUNITIES:

 Community Relations Committees

 Interactions with governments
 Membership of associations
 Dialogue with nongovernmental organizations
 Ford Fund
 Driving Skills for Life program

CUSTOMERS:

 Consumer Insight process

 Market research
 Customer care programs
 Dealer interactions
 [Link] website
 Ford Owners magazine

DEALERS:

 Intranet communications
 Brand sales and service representatives
 Brand Dealer Councils
 Dealer roundtables
 President’s Circle
 Salute to Dealers
 Advertising and public service announcements
 U.S. NADA Dealer Attitude Survey

EMPLOYEES:

 Intranet site
 Sustainability Report and executive summary
 Social media applications
 Union representatives
 Joint labor-management committees
 Webcasts, videos, blogs and executive Q&A sessions with senior management
 “Town Hall” meetings
 Employee surveys
 Employee Resource Group initiatives
 Test drive and product reveal events
INVESTORS:

 Investment community forums

 Quarterly earnings communications
 Annual shareholders’ meeting
 Annual report
 Proxy statement
 SEC filings
 Ratings and rankings
SUPPLIERS:

 Top Supplier meetings

 Ford Partnership for a Cleaner Environment (PACE)
 Aligned Business Framework supplier dialogue sessions
 Supplier quality roundtables
 Supplier Diversity Development Networking
 External supplier organizations
 Coalitions including EICC

ORGANIZATIONAL HIERARCHY:
FACTS AND FIGURE ABOUT BUSINESS IN PAKISTAN:

 Competitive Edge
 Government support
 Easily accessible for raw material
 New model every year
 Easily tackle people
 Affordable

AREA & LOCATION

We are launching new showroom in Lahore at Johar Town.

AREA GEOGRAPHICAL OVERVIEW:

The Ford Company launches the showroom in Lahore Johar Town because this area is good for
sale purchase of the cars. The Ford Company has unique cars which are not seen on other cars.
Lahore is famous city on selling / buying the cars. The rate of driving in Lahore is larger than
other cities of Pakistan.

PURPOSE:
the purpose of launching this showroom is that these vehicles are less expensive than other cars
and the import rate of is little bit high but it is not costly than other cars.

DIFFERENCIATION AND SPECIALTY:

 Unique look
 Mileage is good from other cars
 Can travel to mountains
 Can capture market easily
 Different styles
 Better in quality
 Automatic cars
 Market reputation
PRODUCTS AND SERVICES:

2018 Models

 2018 Ford Eco Sport

 2018 Ford Edge
 2018 Ford Escape
 2018 Ford Expedition
 2018 Ford Explorer
 2018 Ford F-150
 2018 Ford Fiesta
 2018 Ford Flex
 2018 Ford Focus
 2018 Ford Fusion
 2018 Ford Mustang
 2018 Ford Super Duty F-250
 2018 Ford Super Duty F-350
 2018 Ford Taurus
 2018 Ford Transit Connect Van
 2018 Ford Transit Van
 2018 Ford Transit Wagon

2019 Models

 2019 Ford EcoSport

 2019 Ford Edge
 2019 Ford Escape
 2019 Ford Expedition
 2019 Ford Explorer
 2019 Ford F-150
 2019 Ford Fiesta
 2019 Ford Flex
 2019 Ford Fusion
 2019 Ford Mustang
 2019 Ford Ranger
 2019 Ford Super Duty F-250
 2019 Ford Super Duty F-350
 2019 Ford Super Duty F-450
 2019 Ford Taurus
 2019 Ford Transit Connect Van
 2019 Ford Transit Connect Wagon
 2019 Ford Transit Passenger Wagon
 2019 Ford Transit Van
INITIAL INVESTMENT:
Initial investment is about Rs 10,000,000.

STOCKHOLDERS NAME AND INVESTMENT:

STOCKHOLDERS INVESTMENTS (Rs)
National Investment Trust Limited 1,000,000
Personal Investment 5,000,000
IGI Investment 2,000,000
LSE Financial Services Limited 1,000,000
Allied Bank Limited 1,000,000
Starting Infrastructure and Expenses:

The starting infrastructure expenses that we can conclude that is the starting building development
expanses is write under as following, our plant must be on ( 10 marla)

Bricks 500000

Cement 150000

Tiles 100000

Concrete 80000

Sand 150000

Labor 400000

Iron 300000

Machinery (Rent) 40000

Daily/Monthly Expenses:

Food 10000

Administration 30000

Raw Material 100,00,000 (estimated monthly)

Salaries 400000
Logistics 5,00,000

R&D 100000

Direct Labor 50000

Staff transportation 50000

Electricity Bill 1000000

Land 200,000

Our Required Labor:

In the car production plant there is different type of labor involve in it like the production department
labor, labor for loading and unloading. These are the main two different labor in the auto manufacturing
sector.

 Manufacturing Department
 Loading & Unloading Department

Our Major Competitors:

The Nissan Motors auto company is product car for two classes. The all customer community is divide in
three categories.

 Upper Class
 Middle Class
 Lower Class

The Nissan motor produce for the upper class and middle class and its competitors is also as like two
types, the Nissan Competitor is,

 Honda
 Nissan
 BMW
 Ford
 Mercedes

Marketing Expenses:

Marketing is the major component of the organization. Marketing department is influence sales of the
organization. We use three type of marketing strategy to improve the sales.

 Billboards 100,000
 Bank Lease ---------
 Social Media Promotion 250,000
  Event organize 10,00,000
 Shopping Mall Showcase 10,00,000

Capital Budgeting

Initial Investment:

Initial investment of launching the subsidiary of Ford company in Pakistan shall be

approved of Rs. 10,000,000.

Operating Cash Flows: 2017 2018 (Rs.000)

Cash Flow from operating activities Automotive financial All Other Consolidated
Adjustments
Net Income 4894 2944 (210) 7628
Depreciation & Tooling Amortization 4963 4159 9122
Other Amortization 134 (803) (669)
Provision for credit & Insurance Losses 6 711 717
Pension & OPEB Expense/ (income) (608) (608)
Equity Investment(Earnings)/Losses in excess 271 (31) 240
of dividends received
Foreign Currency Adjustments (395) (8) (403)
Net(gain)/Loss on changes in investment in (7) (7)
affiliates
Stock Compensation 233 10 3 246
Net change in wholesale and other receivables -- (836) (836)
Provision for deferred income taxes 651 (883) (232)
Decrease/(Increase) in intersegment 7 (28) 21
receivables/payables
Decrease/(Increase) in accounts receivable and other (1824) (470) (3) (2,297)
assets
Decrease/(Increase) in inventory (959) (959)
Increase/(Decrease) in accounts payable and accrued 5777 301 11 6089
and

other liabilities
Other 307 (346) 104 65
Interest supplements and residual value support to (4524) 4524
Financial

Services
Net cash provided by/(used in) operating activities 8926 9244 (74) 18,096

Net Present Value:

Cash Flow for the year ended 2018= Rs 18,096,000

Discount Rate: 3.60%

Initial Investment: Rs. 10,000,000

Time: 2 years

Net Present Value: Cash Flow _ Initial Investment = Rs. 6,860,213.

(1+i)t

Payback Period for the year ended 2018:

10,000,000/9,244,000= 1.08 Years.

OUR COMPETITORS AND TIMINGS:

  General Motors Company
 Toyota Motors
 Tata Motors
 Daimler
 Hyundai Motors
 Honda Motor Company
 Tesla Motors
 Volkswagen
 Renault Group
 Fiat Chrysler Automobiles
 Nissan
 Groupe PSA
 Geely Group
 Maruti

MARKETING EXPENSES:

PROMOTIONAL TOOLS:

 Internet
 Advertisement
 Sale promotion
 Public relation and Publicity

MARKET SAGMENT AND TARGET MARKET:

Age From 30 onward
Salaried person Rs 2,00,000 onward
Area Lahore, Johar Town
Customers Upper middle class

BUSINESS ANALYSIS:
SWOT ANALYSIS:
STRENGTH: WEAKNESS

 Strong brand image  Limited global scope of production

 Global supply chain network
 Effective innovation processes  Higher costs compared to competitors
 Slow innovation processes

OPPERTUNITIES THREATS

 Global expansion through market  Aggressive competitive rivalry

penetration  New entry of high-tech firms
 Growth through product development  Fluctuating oil prices
 Cost reduction through strategic supply
chain management

PEST ANALYSIS:
POLITICAL ECONOMICAL
 Political stability and importance of  Government intervention in the free
Auto Manufacturers - Major sector in market and related Consumer Goods
the country's economy.  Exchange rates & stability of host
 Risk of military invasion country currency.
 Level of corruption - especially levels  Efficiency of financial markets – Does
of regulation in Consumer Goods FORD Motor Co., Ltd. needs to raise
sector. capital in local market?
 Bureaucracy and interference in Auto  Infrastructure quality in Auto
Manufacturers - Major industry by Manufacturers - Major industry
government.  Comparative advantages of host
 Legal framework for contract country and Consumer Goods sector in
enforcement the particular country.
 Intellectual property protection  Skill level of workforce in Auto
 Trade regulations & tariffs related to Manufacturers - Major industry.
Consumer Goods  Education level in the economy
 Favored trading partners  Labor costs and productivity in the
 Anti-trust laws related to Auto economy
Manufacturers - Major  Business cycle stage (e.g. prosperity,
 Pricing regulations – Are there any recession, recovery)
pricing regulatory mechanism for  Economic growth rate
Consumer Goods  Discretionary income
 Taxation - tax rates and incentives  Unemployment rate
  Wage legislation - minimum wage and  Inflation rate
overtime  Interest rates
 Work week regulations in Auto
Manufacturers - Major
 Mandatory employee benefits
 Industrial safety regulations in the
Consumer Goods sector.

SOCIAL TECHNOLOGICAL
 Demographics and skill level of the  Recent technological developments by
population Ford Motor Co., Ltd. competitors
 Class structure, hierarchy and power  Technology's impact on product
structure in the society. offering
 Education level as well as education  Impact on cost structure in Auto
standard in the Ford Motor Co., Ltd. ’s Manufacturers - Major industry
industry  Impact on value chain structure in
 Culture (gender roles, social Consumer Goods sector
conventions etc.)  Rate of technological diffusion
 Entrepreneurial spirit and broader
nature of the society. Some societies
encourage entrepreneurship while some
don’t.
 Attitudes (health, environmental
consciousness, etc.)
 Leisure interests

PLC ANALYSIS:
ATTRACT CUSTOMER:
The strategy for attract customer is first give them awareness about the product which is launch
in Pakistan. Advertisement is very important tool to attract customers. Use market mix to attract
customers. The customer taste regarding to vehicles are the quality, performance, mileage,
interior structure etc. Ford Motor company is fulfilling the requirements of customers according
to their taste. The option of test drive also available for customer so that the feedback regarding
to the product know in that case it can be replaced with it.