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2009-08-06
Case Study: Ford Motor Company
Case Study: Ford Motor Company
While other American car companies contract during the global recession, Ford is actively pursuing opportunities in the international market, with the aid of proven expansion and optimization tools from getchee.
Ford Lio Ho, the Taiwanese subsidiary of Ford Motor Company,
began operations in 1972. While originally set to assemble only
Ford branded cars, since the 1980's Ford Lio Ho has since
expanded to include the production of Mazda, Jaguar, and Land
Rover. Additionally the company produces several cars special
for the Taiwanese market and also acts as a hub for Ford and
Mazda cars sold throughout Asia. Ford Lio Ho is currently 70%
owned by the Detroit-based Ford Motor Company.
Challenge
During this time of waning global auto sales, Ford is not only
aggressively looking to increase market share but also
simultaneously consolidate their distribution & retail networks.
With eight direct competitors presently in Taiwan, Ford needs
detailed and current population demographics along with
consumer behavioral data in order to better understand how to
reach their customers and avoid competition.
getchee’s location intelligence online combined with GeoPro’s
market analysis will help Ford better manage their distributors
and showrooms.
Summary: During this time of waning global auto sales,
Ford is not only aggressively looking to
increase market share but also consolidate
their distribution & retail networks.
Solution
Using getchee’s online demographic data, GeoPro will locate
clusters of Ford’s target customers throughout Taiwan. By then
analyzing each current trade area for cannibalization and
competition, GeoPro will identify optimized market segmentation and consolidate the distribution network. From this Ford
will be able to lower costs while maintaining the same level of
sales coverage.
Summary: Using getchee’s online demographic data,
GeoPro will locate clusters of Ford’s target
customers throughout Taiwan.
Result
GeoPro analysts began by using getchee to overlay age, income,
marital and professional status demographic data in order to
form a map locating concentrations of target clients throughout
Taiwan. Accounting for district-level population growth and
competitor locations, GeoPro was able to identify regions of
high economic potential for Ford.
With the customer concentrations and understanding of
consumer behaviors, GeoPro then forecast future sales for each
type of Ford car. By segmenting Taiwan into regions based upon
natural geographic barriers and aiming to balance total car
volume sales, GeoPro was able to define eleven new distribution
regions for Ford. Consolidating the prior sixteen distributors down
to eleven will help Ford lower costs and improve efficiency by
removing overlaps in trade areas.
Using Ford’s in-house sales per showroom data and GeoPro’s
forecast of future sales, GeoPro established an optimal number
of showrooms for each distribution area. Finally, GeoPro
With intense competition from Asian auto
companies and shrinking global car sales, to
succeed in the Taiwanese market Ford will
not only need to capture market share but
also increase efficiency by consolidating
their distribution network.
benchmarked current showroom performance and analyzed trade
area overlaps to identify multiple locations underperforming
relative to their benchmarks. Reducing their overall showroom
count by 18% allows Ford to consolidate twelve underperforming
stores and reach the market-optimal number of showrooms per
region. Ford’s reduction in the total number of distributors and
showrooms may result in a minor 2% loss in sales coverage but
the larger gain in cost-sales efficiency will make Ford Liu Ho more
competitive in the Taiwanese auto market.
cover photo: unsplash
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