Ford’s E-Business Strategy

Jacques Nasser, hybridisation Motor fraternity president and chief executive officeholder announced a new view for the firm in the fall of 1999 to lead the worlds leading consumer family providing automotive products and work. Key to that dream was the shift key of the business using Web technologies. Brian P. Kelly (Kelly), interbreedings e-business vice president, described foreshorten acrosss plan to rebuild itself as a move to consumer-centric from dealer-centric, and stated that get across would translate itself from being a maker to dealers into a marketer to consumers. Kelly explained that the important objectives of fords e-business strategy were to bring speed, convenience, and knowledge to customers rather than just focusing on cost cutting. The strategy was based more or less the principle The consumer is King and using the net, customer hallows would be sent directly to factories and suppliers which get out eventually allow get oer to translate a utos to consumers within days of ordering. Some of the e-business portas that crossing put in place to transform the social club into an e-commerce smart pay back is mentioned below.Improving talent in Supply mountain chain 1. traverse believed that using the internet improved the capacity of its supply chemical chain, so in mid-1999, the come with along with Oracle, created AutoXchange that allowed online B2B transactions with its suppliers. This e-commerce tool helped interbreeding and its suppliers swap selective tuition and bids on goods and services worth nearly USD 300 chargeion. The company expected to reduce its purchasing bill by 10% through the uptake of AutoXchange. 2. Until February 2000, the company followed the push operations fashion model, only if by collaborating with GM and DaimlerChrysler, hybridization set up an online marketplace cum secluded exchange Covisint. This substantially reduced the in operation(p) cost and brought efficiency to the business. Covisint followed the pull model which allowed cross to first take the order from a customer and then manufacture the car according to the customers specifications, thereof the traditional supply chain became a demand chain. 3. To optimally practice the features of Covisint, fording launched the cross Supplier meshing (FSN).FSN was used to share information with its suppliers over the web. By increasing the flow of information between suppliers and Ford, it reduced the fomite rake time. Focusing on the Demand Chain 1. In partnership with Microsoft, Ford essential CarPoint an auto buying website in 1999. retail customers could order cars through this website. In accompaniment to developing this website, Ford also got into alliances with reputed portals give care Yahoo. com, iVillage. com and bolt. com. These alliances gave Ford insight into the preferences and buying habits of assorted segments of the society. . In late 1999 Ford accomplished that customers qu eries should be resolved quickly to get closer to those who use the net and for this it established a new e-CRM company Percepta a joint venture with TeleTech holdings. 3. In continuance with the e-CRM strategy, Ford in 2000 launched another e-commerce initiative to supplement CarPoint. com and Ford. com it was called Ford Internet retail System (FIRST). FIRST was aimed at facilitating discourse of leads and orders between the company and its dealer network.This musical arrangement gave customers capability and options for buying a car manage never before, right from query to financing options. 4. Another e-commerce tool MyFord. com launched in February 2002, offered personalized service information like the maintenance schedules to owners All the above initiatives helped Ford to gain competitive advantage and they achieved the mint of the Build-to-Order (BTO) system that was conceived before the launch of e-commerce initiatives. It was estimated that a Web-enabled, BTO syste m could reduce diffusion be by almost USD 2,600 per vehicle.About USD 1,400 of these savings would be in physical cost such as freight, sales commissions, and advertising. The counterweight would be in phantom costs associated with the current push vehicle distribution/sales system, such as hurt discounts and stockout costs. Adding together all the supply-chain savings thus identified(back-end, on-line direct sales, and build-to-order) would produce an estimated hail potential cost reduction of about(predicate) USD 3,643 per vehicle, amounting to 14 percent of total vehicle cost. Source GS Research Analysis) With the means of e-business websites, Ford established a direct club with its customers. Now when customers came to FordDirect. com they had the ability of choosing the features of the car they precious to buy.This reduced the role of the middlemen and so dealers matte that they were being gradually excluded from the value chain. To nullify channel conflicts arising ou t of online retailing Ford began a number of initiatives. One of the main initiatives was to share the ownership of FordDirect. om with its 4200 dealers in the US. Ford also facilitated the communication of leads and orders between the company and its hugh dealer network through Ford Internet Retail System (FIRST). In addition to this, using MyFord. com the company enabled Ford dealers to inform vehicle owners about recommended maintenance, actuate them of oil change and provide information about tyre care, safety, insurance, loans and leases. It also provided dealers a vehicle locator tool to help them find a vehicle on another dealers stock.