STRATEGIC MNGT - forecastPaper

STRATEGIC MNGT - forecastPaper - Justin Gardiner Dr. Keith...

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Justin Gardiner Dr. Keith Ward Strategic Management- BUSI 4349.04 1 April 2009 Automobile Manufacturer Industry Ford Motor Company Forecast Paper
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FORD MOTOR COMPANY Section I: General Environmental Assumptions Political/Legal Short Range Assumptions: With the recent developments from the Obama administration in dealing with automobile manufacturer titans such as the big three, Ford, Chrysler, and GM, and the mandated heavy involvement of the government to assist with specifications of requirements in the reinstitution of these companies’ plans, the automobile industry will take its first step towards ascension while continuing its downward trend. President Obama has elected to provide several billion of the $700 billion bailout package to the big three automakers in Detroit, MI. In addition, “Obama took the extraordinary step of announcing the government will back new car warranties issued by both GM and Chrysler, an attempt to reassure consumers their U.S.-made purchases will be protected even if the companies don’t survive” (ESPO). Intermediate Range Assumptions: Given the financial stimulus to the large automobile manufacturers, and the automobile industry being highly concentrated Hoovers), in addition to the government mandates and willingness to let companies go bankrupt while backing their new car warranties for consumers if operations are not suitable for growth, it can be assumed that 2014 should still be below average. However, it is proper to consider it an improvement from current circumstances. With the big three automakers having an average of 40 percent decline in sales (ARI) it can be assumed that such deficit will not clear in five years time, but the percent can inevitably be lowered given the political/legal factors stated.
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Long Range Assumptions: It is forecasted that within the next 20 years automakers will have returned to average sales, if not already be profitable again. With the current business plan negotiations instituted March 30, 2009 and President Obama’s stern declarations and deadlines for the industry leaders of GM and Chrysler, positive progress should be made by the end of his first term, and continue for the following years. This will also be helped by already proven models of “restructuring success” from foreign companies such as Fiat who have turned operations around from once plummeting back to international success (Whitehouse.gov). Socio-cultural Short Range Assumptions: The President’s attempt for a greener America also will adversely affect the next year, while attempting to establish a national low carbon fuel standard, and increase fuel economy standards, instituting plans to have one million plug-in hybrid cars on the road in six years. The strong mandates set by the new president elect will inevitably bring about policy changes, and business plans for rebuilding in the large automakers. This is vital pending this is an industry where the “eight largest companies account for more than 90 percent of revenue” (Hoovers). Intermediate Range Assumptions:
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STRATEGIC MNGT - forecastPaper - Justin Gardiner Dr. Keith...

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