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Australia
E-Commerce Management
Venkata Allagadda-30066555
Submitted: May 31,2011
Page 1
Table of Contents
ABSTRACT:.............................................................................................................................. 3
INTRODUCTION......................................................................................................................... 4
BUSINESS MODEL, MARKETPLACE ANALYSIS, REVENUE MODEL TUTORIAL 2:........................5
FORD INFRASTRUCTURE (ABOUT WEBSITE, INTRANET, ONLINE ADAPTATION) TUTORIAL 3:......8
E-ENVIRONMENT OF FORD TUTORIAL 4...............................................................................13
E-BUSINESS STRATEGY TUTORIAL 5...................................................................................16
E-SCM (VALUE CHAIN FLOWS) TUTORIAL 6:.......................................................................20
E-PROCUREMENT AT FORD (TUTORIAL-7) .............................................................................22
E-MARKETING AND CRM AT FORD (TUTORIAL-8) .................................................................23
CHANGE MANAGEMENT AT FORD (TUTORIAL-9) ....................................................................26
ANALYSIS AND DESIGN IN FORD WEBSITE TUTORIAL 10.......................................................27
CONCLUSION:..........................................................................................................................29
REFERENCES:..........................................................................................................................30
Abstract:
The Cast study about the Electronic Commerce management at Ford Motor Company
Australia website and as well as the areas in the Ford Australia organisation where ECommerce is adopted. The organisation in this case study is one of the leading multinational
Introduction
Ford management controls possibly the most famous automobile brand in the world.
Over many years the Ford business structure has had to adapt to changing markets, trends and
economic conditions. Ford is also notable for its combination of three technology tools to sell
the right car with the right mix of features to the right customer at the right price. It uses one
tool to determine the car with the optimum package of features most likely to appeal to
consumers in a specific market. Another tool, pricing software technology from Manugistics,
determines which sales-promotion campaign should be offered on each car in each market. A
third tool puts Ford dealers in the driver's seat to order the inventory most likely to wheel off
their lots. With this knowledge in hand, Ford can gear its production, sales, and marketing to
get the biggest bang for the buck. "There is a clear link between what customers want and
what we build," says Lloyd Hansen, the spear head behind the project. "The problem has
been finding it. For example, one of Ford's lowest-margin businesses is the rental-car
market, where it sells primarily Ford Escorts.
Revenue Model:
The major source of revenue for the Ford Motor Company accumulates from
its percentage sales of automobiles from company recognised dealers that are operating in
over 200 countries. These dealer operated showrooms also pay loyalties to the Ford
Company. The following figure indicated the total sales occurred for ford in the financial year
of 2009 which is sub-categorised in by regions (Unknown, 2011).
Ford IT Infrastructure:
In the year 1991, internet was open for commercial usage which attracted many companies to
utilize the opportunity. In the same year, Ford had launched its plan to update its
infrastructure, and seized the opportunity brought by the global movement of integrating the
voice, fax transmission network with data transmission and expanded its WAN to include its
offices in Europe and elsewhere. The financial benefits also came from the fact that Ford
adapted the TCP/IP protocol which is a standard protocol from the beginning and made sure
that all its technical infrastructure upgrades adhere to the standards. This made the transition
of its system to the Internet as cost effective as it could be. (Sally.A, 2008)
ford.com.au
12-Oct-2009 16:08:36 UTC
TPP Internet
TPP Internet
ok
Ford Motor Company of Australia Limited.
OTHER 004 116 223
Other
TPP185375-R
Domain Admin
dnsmgr@ford.com
TPP185376-C
Domain Admin
dnsmgr@ford.com
dns005.ford.com
dns006.ford.com
extdns001.ford.com
extdns002.ford.com
Registrant:
DNS MGR
Ford Motor Company
20600 Rotunda Drive ECC Building
Dearborn MI 48121
US
dnsmgr@FORD.COM +1.3133903476 Fax: +1.3133905011
Domain Name: ford.com
Registrar Name: Markmonitor.com
Registrar Whois: whois.markmonitor.com
Registrar Homepage: http://www.markmonitor.com
Administrative Contact:
DNS MGR
Ford Motor Company
20600 Rotunda Drive ECC Building
Dearborn MI 48121
Drivers:
a) Communication: One of the main reasons for Ford motor company to establish internet is
to improve the communication between the organisation and the customers. Communication
services used over internet to contact customers for resolving issues, updating latest news
about their product are some the reasons that Ford uses internet for.
b) Knowledge Management: Ford created a Knowledge Domain Team to build complete
information in nine areas that were identified as vital to the business. The process Ford took
Barriers:
a) Security: Sometimes user are concerned over their information that is stored in the website
such as their Name, Address and other details being misused by the company or being
distributed third party organisations for promotional use.
b) Skills: People who use internet must have some knowledge on how to use the computer
and applications (browsers) in it. So, user who needs to use the Ford company website needs
some computer skills to use the companys website.
c) Costs: Even though many people now days have computers or smart phones that are used
to access the Ford company website, it is still an requirement that consumers need to have
these electronic devices which costs the user in order to use the website.
Benefits:
Macro-environment
Society Ford.com.au collects personal information only when the customers
Country specific, international legal Ford respect towards its customers' privacy is
paramount. They have policies and procedures to ensure that all personal information is
handled in accordance with the National Privacy Principles that is collected online.
Country specific, international economic Some of the economic constraints for Ford
Company when operating globally are country specific taxes and laws. For example when
Ford Australia import/export its vehicles in Australia, its pays the duty taxes according to the
countrys tax policies.
Technology The growth in technology has provided more diverse opportunities to Ford
with the growing usage of mobile and hand held devices such as Smart phones. Ford has
developed applications that are compatible with these devices and are more easily accessible
by the customers. For example, mobile applications developed for Ford Company in Apple
and Android devices.
Competitive threats can arise from different areas in an organisation. An organisations ebusiness mainly comprises of buy-side and sell-side. Below figure illustrates the areas
where competitive threats can occur in e-business environment.
Porter's five forces analysis is a framework for the industry analysis and business strategy
development developed by Michael E. Porter of Harvard Business School in 1979. It uses
concepts developed in Industrial Organization (IO) economics to derive five forces which
determine the competitive intensity. So, we can use this framework to analyse the threats in
order to achieve overall profitability of the organisation. Below figure illustrates the areas
where threats can arise from competitors.
Threat of new entrants Threat of new entrants will be low for the ford because the ford is
one of automobile company which provides the best services in online environment with low
cost servicing; Ford also provides customers to choose their vehicles to be test drive before
purchased. Ford is having cost advantage because it is providing the vehicles with low cost
when compared to the other competitors such as hot deals/offers advertised through online.
Bargaining power of suppliers Ford motor company enhances the relations with sixteen
new suppliers to gain the bargaining power of suppliers. Ford is having good relations with
suppliers for the output of quality cars.
Bargaining Power of customers Customers of Ford are comfortable with ford way of
providing the vehicles customization in their online website and way of delivering the
Threat of substitute Substitutes for ford motor company are less but there are some
substitutes which the cars are running on the electricity and other bio fuels. Example, Riva
one small car which runs on electricity can be a threat to Ford.
Rivalry among existing companies - The important competitors of Ford motor company is
General motors, Toyota, Honda and BMW. All the above mentioned forces will lead to the
rivalry among these companies to provide the customer with competitive advantage and
provide the customer with quality cars and commercial vehicles.
assemblers
core
operations,
and
operations
in
two
other
locations.
Vehicle
Dealers
Centre
Ford supply chain process can often be compared to that of Dell. The difference in
distribution model between Dell and Ford lies in the middle link of using distributors and
retailers. Since Ford cannot skip retail as it is crucial distribution point, it worked on
establishing a network of retail shops also known as Ford dealers by successfully connecting
all the Ford dealers under a single network also known as Distributor . Ford made sure shops
are not affecting each other in terms of sales, and gave them all a standard look and feel to
establish itself in the consumers market as a prestigious cars sales retail company.
Furthermore, extensive re-engineering initiatives were undertaken to enhance Ford external
network by eliminating the association with smaller suppliers. In that way, Ford made sure
that key suppliers have access to forecasting data from customers purchasing trends and
production information to enable a faster order-to-delivery cycle. Ford vision was to create a
model that allowed flexibility, predicable processes and delivered the product at the right time
to the right consumer.
Ford is a paradigm of how traditional organizations can mature to adapt current trends that
increased its business significance in terms of revenues and profits. The business model that
Ford Motor Company followed demonstrates the continuous support from management in
adapting changes. The association was not only limited to internal staff of the organization
but also extended to external bodies such as Ford dealers who analyzed current trends to
overcome their competitors such as the Revealed Secrets campaign which helped the
dealers to reduced unnecessary cost spend towards marketing thus by improving the
accountability of the revenues spent. Ford technical management of improving its IT
infrastructure came at a period where the Internet is was not even in its full potential. This
shows how Ford has the competitive edge over its competitors by being early adapters of the
technology in Internet age. The introduction of Ford adaptation towards technologies intranet
and TCP/IP protocols in the late 90s helped Ford cut most of its costs in order to connect its
own offices. Furthermore, the ISP services that provided hosting servers were limited to only
few players, which explained why Ford preferred to manage its own web server.
From this case study, I understood the level of commitment large firms have to
maintaining their position in the market. These companies know the revolving nature of
business in the sense of how easy it is to fall back if they did not keep up with the change.
The Ford process also shows the need for quick and resourceful thinking when faced with
situations that might seem to be unfavorable. The way Ford ventured into the foreign market
by acquiring local manufacturers was a strategic decision that did not only enabled Ford to
merge with different technologies, but it also saved it the additional cost of establishing
production centers in Asia-Pacific and Europe.