Abstract

This case looks at some key challenges before James P. Hackett (Hackett), CEO of one of the largest automakers in the world, Ford Motor Company (Ford), as he tries to re-establish the auto maker as a market leader, compete with disruptive market changes, and make it more profitable. Hackett along with some senior executives came up with a new strategy for Ford called ‘Designing Smart Vehicles in a Smart World’ to narrow down the challenges and make the automaker more competitive. As part of the new strategy, Hackett streamlined production, cut costs, shifted the product portfolio from passenger cars to SUVs, invested in Autonomous Vehicles (AVs), and planned to launch more pure electric vehicles (EVs). However, Hackett still had several challenges to overcome before he could transform Ford into a successful mobility company. One of the biggest challenges was transforming Ford from a traditional auto manufacturer to a mobility services provider without destroying the core business in the process. Other challenges included slowing new-car demand, an older product line, growing competition, its collapsing business in China, falling shares, and slimmer margins. As Hackett is preparing Ford to wage an all-out battle against high-tech, innovative disruption, analysts wondered: Could Hackett keep the iconic carmaker relevant in a fast changing automotive landscape? Could Ford be successful in its fight against high-tech, innovative disruption in the auto industry? What could the company do to maintain its short-term profitability while investing in future EVs and self-driving cars?

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Analyze the problems faced by Ford in a rapidly evolving global automotive landscape.
• Understand disruptive innovation in the automotive industry.
• Evaluate the ‘Designing Smart Vehicles in a Smart World’ strategy and the challenges faced by Ford with regard to its new initiative.
• Explore the ways through which Ford can fight disruption and regain the position it had lost in the global auto sector.

Keywords

Disruptive Innovation; Competition; ‘Smart Vehicles in a Smart World’; Disruptive Technology; Automotive Disruption; Global Automobile Industry