Gm vs Ford

In: Business and Management

Submitted By shikharsagarwal
Words 11121
Pages 45
General Motors Co
Strategic and Financial Analysis

ADVANCED CORPORATE FINANCE April 22, 2012 Authored by: Ana Romero, Roshan Picardo, Carlos Castro, Shikhar Agarwal

0

General Motors Co
Strategic and Financial Analysis
Executive Summary This report provides an evaluation of strategic and financial evolution of General Motors Company (GM) in the last ten years. Events like the global economic recession lead to a deep restructuring of the firm, filling for bankruptcy and a government bailout. The report provides an analysis of GM’s business model, products, the markets it is competing in, the global automotive and manufacturing industry and it also assess its attractiveness for incumbents and new entrants is also With a brief history of GM we evaluate its reaction to the global recession. We compare their business model before, during and after the recession, comprising the strategic and financial implications of their restructuring plan. We provide results from this restructuring, including improvements in GM’s financial ratios like ROA (from 0.05 in 2010 to 0.07 in 2011) and ROE (from 0.23 in 2010 to 0.25 in 2011). While the recession significantly affected GM, it also affected the rest of the automobile industry, including their American competitor Ford Motors. We compare the main differences between these two important companies and analyze the way they reacted to the recession. We also observe the approach that Ford has taken to recovery, in terms of governance, recession reactions and financial branches. The report ends with a conclusion summarizing the key differences between General Motors and Ford Motors, and how these differences influenced their financial performance. We can conclude that the way these two companies compete in the same industry is very different and includes distinctive business models and results. The management styles of their…...

Similar Documents

Ford vs Dell

...business that the Ford Motor Company has excelled in since 1903. Ford can never be virtually integrated like Dell but the Ford Company can adopt some of Dell’s concepts of virtual integration to strive for excellence in supply chain management. As Director of Supply Chain Systems, I am convinced that Ford can implement portions of Dell’s Virtual Integration strategy even though the Ford Company differs in many respects from Dell. A modification of the virtual integration system that Dell uses should be applied to Ford’s supplier base, distribution system, dealerships, and divisions. Issue Identification Ford must find ways to improve their supply chain management to compete in a global market and continue to retain its market share in an increasingly competitive, saturated and over capacitated US market. Ford must act now or risk losing market share. The main issue Ford must deal with is decreasing the volume and complexity of its supplier base as it is plagued with costly inefficiencies. Secondly, Ford must get closer to its customers to better understand their needs and wants and to create better forecasting of demand. Teri Takai must decide within a week if Ford should model its supply chain strategy close to Dell’s Virtual Integration. Environment and Root Cause Analysis The Ford Motor Company is the 2nd largest industrial corporation in the world with revenues of $144 billion. Ford employs over 370,000 employees and has operations in 200 countries. What Ford does......

Words: 1490 - Pages: 6

Toyota vs Ford

...Toyota and Ford Comparison L. Johnson MGT680-1203B-12 Abstract Toyota and Ford companies are two of the major players in the auto industry. Comparing the two companies helps to understand what contributes to the success of each. The SWOT analysis can be used to identify weaknesses and a plan of action to turn those into strengths. The current issues faced by each company affect how it operates globally. It is important for each company to understand how each issue affects its operations. Introduction Every firm creates a relationship between the political and economic forces within its community. Toyota and Ford understand the importance of developing a strategic plan that guides them on how to create effective relationships within the community. This helps with building brand name, which both companies have done successfully. Ford and Toyota’s current position on the main issues that they face and a SWOT will be done to show their current market position. Issues The following table will compare the current issues faced by Ford and Toyota. The current position/views of each company are briefly explained. The purpose of this table is to understand how Ford and Toyota view their responsibility to the community. Understanding the companies’ positions help to develop strategic plan suggestions. |Issues |Ford |Toyota | |Legal, Social and......

Words: 4068 - Pages: 17

Honda vs Gm

...According to Bloomberg Business Week some of the major difference in the finances of General Motors (GM) and Honda Motor Company come down to the way they handle their Inventory costs and their cost of goods sold. The following information will reveal in detail these differences. Year over year, General Motors Company has seen net income shrink from $9.2B USD to $6.2B USD despite relatively flat revenues. A key factor has been an increase in the percentage of sales devoted to the cost of goods sold from 87.79% to 91.27%. Although debt as a percent of total capital increased at General Motors Company over the last fiscal year to 30.25%, it is still in-line with the Automobiles industry's norm. Additionally, even though there are not enough liquid assets to satisfy current obligations, Operating Profits are more than adequate to service the debt. Accounts Receivable are typical for the industry, with 24.79 days’ worth of sales outstanding. Last, General Motors Company is among the least efficient in its industry at managing inventories, with 39.08 days of its Cost of Goods Sold tied up in Inventories  Year over year, Honda Motor Co., Ltd. has been able to grow revenues from ¥7.4T JPY to ¥9.9T JPY. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold, SGA expenses and income tax expenses. All of these improvements led to a bottom line growth from ¥211.5B JPY to ¥367.1B JPY Although debt as a percent of total......

Words: 540 - Pages: 3

Ford vs Dell

...Executive Summary FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results. In order to stay competitive and become efficient again, FORD needs to re-evaluate their current supply chain and implement key portions of DELLs vertically integrated supply chain model. A proper implementation will increase information flow between suppliers, departments and dealers resulting in a reduction of redundant inventory and focus towards just in time inventory. All of these factors will further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system.   Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network also breeds FORD vs. FORD sales......

Words: 863 - Pages: 4

Ford vs Dekk

...complexity combined with other internal and external factorshave pushed Ford to search for solutions in order to overcome the costly supply chain challengesthat they are facing and may continue to face in the future. Ford’s major difficulty in their present system is: the inefficient control of their large data base and complex network of suppliers, the existence of independent distributors and their inability to communicate and servetheir customers directly.Realizing an urgent need to modify their supply chain in order to make it more cost effective andmore profitable, and after careful analysis of the whole situation, I have recommended the partialimplementation and execution of the virtual integration direct business model that has been used by Dell. Through this model, Ford will use the emerging information technologies and internet aswell as new ideas from high tech industries in order to interact and transact with their suppliersand end users. Furthermore, Ford can boost its sales by providing better customer service and byhaving faster communication between suppliers, manufacturers, and customers in the valuechain.This proposed system will have to run concurrently with the existing supply chain so that Fordwill cover both market segments at the same time. Since Dell and Ford are two different types of industries, one is in computer manufacturing and the other is in auto industry, it does not seemright for Ford to implement exactly the same "virtual integration model"......

Words: 6210 - Pages: 25

Ford vs. General Motors

...12/12/2013 Business Finance Ford Vs. General Motors I have decided to do my comparison project for my Business Finance class over Ford and General Motors Corporation. They are both car companies that are in the market of making compact, mid-sized, luxury, and SUV classes. They are similar in many ways and are also very different in many ways. General Motors was more affected by the recession of 2007 to 2009 and were part of the great bailout, where Ford was more self-supported and took care of itself without having to have any help from the bailout. I am taking information for this report from the years of 2010 to 2012 as the 2013 information is not yet out. I will start with Ford on the issue of stocks and then go into General Motors. I will try to do my best to compare them to one another and point out the highlights of both companies. First off, Ford. Ford had only 9.15% of its liabilities paid out to stockholders in 2012, which was similar to its 2011 percentage of liabilities to stockholders in 2011 with a rating of 9.2%. In 2010, only .41% of its liabilities were stockholders shares of stock. Common stock in the years 2010 to 2012 were all about the same. The balance sheet shows that anywhere from 38,000 to 40,000 were the numbers of owed common stock dividends. There was no information on Preferred Stock or Redeemable Preferred Stock so I am assuming that there were no shares of this stock available over these years for Ford. I would say that......

Words: 1376 - Pages: 6

Toyota vs. Ford

...Ford vs Toyota Ford Motor Company is the second-largest automobile company in the world. Ford's main focus is automobiles; however, they also operate in Ford Credit and Hertz Corporation. Ford also has controlling interest in Mazda Motor Corporation. Ford was established June, 1903; in an old wagon factory in Detroit Michigan. In 1903, Ford began production on a two-cylinder, 8 horsepower called the Model A. They produced a total of 1,708 of these cars in their first year of operation. Toyota Motor Corporation was Japan's largest car company. Toyota ranked the world's third largest by the year 2000. The company could produce near five million car units annually in the 1990s and controlled approximately 10 percent of the global market. Toyota was founded by a man named Kiichiro Toyoda in 1933. He did not produce his first car until 1935. By this time General Motors and Ford were already operating in Japan. Both companies are manufactures of cars which are sold in the United States. One is made in Japan and the other in the United States. They are both a financially well because of the popularity of their cars. The accounting criteria's that they both face are different because of the foreign rules and regulations. Both companies are faced with their own set of rules that have to be followed, but Toyota is faced with more issues since they sell their cars in the United States How does a U.S. company differ from a foreign company? What reporting regulations are different or the...

Words: 314 - Pages: 2

Ford vs Chevy

...Ford vs Chevrolet Ford and Chevrolet (Chevy) are in the automotive industry and have been in completion for many years start back in 1908, both companies started in the state of Michigan and have been battling it out for profits, market share and hometown bragging rights. Ford was founded in the suburb of Dearborn, Michigan and Chevy was founded in Flint, Michigan. Ford and Chevy both are good-producing sectors, they both manufacture automobiles that are similar but different. They each have a mission statement, Ford’s mission statement “One Team, One Plan, One Goal.” Ford’s mission statement is defined to each part of the statement, One Team meaning people working together as a lean, global enterprise. One Plan meaning aggressively restructure to operate profitably at the current demand and changing model mix, developing new products our customers want and value, finance our plan and improve our balance sheet, and work together as one team. One Goal meaning an exciting viable Ford delivering profitable growth for all. Chevy’s mission statement is an unofficial statement “We win when the customer says we win.” Chevy has an unofficial mission statement but uses more of Five Principles to guide its business, Safety and Quality First, create long-life customers, innovate, deliver long-term investment value and make a positive difference. Both Ford and Chevy are oligopoly competition, being that both companies supplies a large portion of the automotive industry. Being in...

Words: 1311 - Pages: 6

Hitler vs Ford

...German Studies Association Adolf Hitler vs. Henry Ford: The Volkswagen, the Role of America as a Model, and the Failure of a Nazi Consumer Society Author(s): Wolfgang König Source: German Studies Review, Vol. 27, No. 2 (May, 2004), pp. 249-268 Published by: The Johns Hopkins University Press on behalf of the German Studies Association Stable URL: http://www.jstor.org/stable/1433081 . Accessed: 11/11/2013 18:23 Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at . http://www.jstor.org/page/info/about/policies/terms.jsp . JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. . The Johns Hopkins University Press and German Studies Association are collaborating with JSTOR to digitize, preserve and extend access to German Studies Review. http://www.jstor.org This content downloaded from 140.203.12.206 on Mon, 11 Nov 2013 18:23:56 PM All use subject to JSTOR Terms and Conditions The AdolfHitlervs.HenryFord: Volkswagen, the Role of America as a Model, and the Failureof a Nazi ConsumerSociety WolfgangKinig TechnischeUniversitat Berlin the to Abstract:Modeling consumer States,NaziGermany planned societyoftheUnited witha......

Words: 8203 - Pages: 33

Ford vs Dell

...Ford vs Dell Executive Summary FORDs current method of controlling all aspects of the manufacturing is outdated and is limiting the corporation’s annual results. In order to stay competitive and become efficient again, FORD needs to re-evaluate their current supply chain and implement key portions of DELLs vertically integrated supply chain model. A proper implementation will increase information flow between suppliers, departments and dealers resulting in a reduction of redundant inventory and focus towards just in time inventory. All of these factors will further drive up the already US industry leading profit margin per vehicle. In order to accomplish these goals FORD needs to refocus the Purchasing department’s responsibilities, consolidate and develop suppliers that deliver finished high level components and increase the information flow across all points of the supply chain. These steps will help to introduce a more pull-based system.   Contents Issue identification 1 Environmental and root cause analysis 2 Alternatives/Options 3 Recommendations 4 Implementation 5 Monitor & Control 6 Issue identification • Current order to delivery (OTD) is more than 60 days. • Management of large supplier network. • Utilization of IT is lacking. • Purchasing isn’t integrated into Product development. • Independent dealership network has resulted in FORDs loss of control over customer service experiences. This network......

Words: 410 - Pages: 2

Ford vs Gm Case Study

...rather have a Chevy Truck than a Ford” and “The general motors cars are more dependable than Ford.” These comments made it clear that I liked the General Motors auto line of cars. Then, I asked myself what would be a cooperate company just as enormous. I came to a conclusion that Ford would be the other company. Though Ford has a nice line of cars, I had some negative thoughts about the company. Acronyms were said such as, “Found On Road Dead” or “Fix Or Repair Daily.” Each of those sayings had put a dent in my thoughts that I would not buy a Ford, not solely on those sayings, but also because of the influence of my parents and other such adverse publicity. These companies have a long-standing tradition in the U.S as manufacturing giants in the automobile industry, since they began here. With these two cooperategiants, I can evaluate and compare both companies financially. My over all preference. was to buy the General Motors line of cars; in doing this project I wanted to know if by researching each company if I would change my mind. Also, this will enable me to draw a conclusion on which company would be a better investment and which company is doing better as a whole. GM History: Founded in 1908, GM today sells its vehicles in about 200 countries. The company has manufacturing operations in more than 30 countries. General Motors (NYSE: GM), the world's largest vehicle manufacturer, designs, builds and markets cars and trucks worldwide. In 2000, GM earned $5 billion on......

Words: 2386 - Pages: 10

Gm vs Ford

...You don't have to use any sign. Present value and Future value can be calculated from common sense. Simple Interest: FV = PV*(1+r*t) where r=rate of interest per annum and t=number of years. Compound Interest: FV =PV*(1+r)^t , where r=rate of interest per annum , t=number of years. PV in both the cases can be calculated by deviding FV with the other part in the right hand side.That is (1+r*t) in case of simple interest and (1+r)^t in case of compounding interest.The examples in the text show a unique characteristic (think: positive or negative sign) associated with how the PRESENT VALUE (PV) of a monetary sum (when given) should be expressed when you are solving for future value (FV) of that sum. What is that characteristic? What questions would you ask a mortgage lender if you used the Time Value of Money calculations to compare loan terms with what you "expect" to pay (or owe) based on your calculations. If you've never considered a home loan, substitute a car loan or (dare I say it ...) a student loan. Time value of money is most important factor when we are dealing with loans, investment analysis, capital budgeting. Positive or negative signs associated with the present value of a monetary sum when we are solving for future value. Negative sign indicates that at present this amount is flowing out to know the future value of the project. For example; PV -500 N 60 I/YR 1.00% PMT 0 FV $908.35 In this case negative present value......

Words: 382 - Pages: 2

Ford vs Gm

...Competitors Analyis 1. Major Competitors As a major communication service provider that covers 280 million people in the United States, T-Mobile still has major competitors that the company has to continuously compete with. T-Mobile’s major competitors are At&t Inc., Sprint Nextel Corporation, and Verizon Communications Inc. (Annual, 2014). 3. Competitors Comparative Advantage T-Mobile’s competitors have a comparative advantage that makes competition fierce. At&t Inc. has a strong competitive advantage over T-Mobile by having a strong position in the business services market. Among their business strong position At&t Inc. also has the world’s most advanced Internet Protocol (IP) backbones in the industry (AT&T Inc., 2014). At&t Inc. is also one of the largest telecommunications service providers as they serve to 110.4 Million wireless subscribers, 24.6 million line subscribers, and 16.4 million broadband subscribers by the end of fiscal year of 2013. The company shares a 58% market share with Verizon, AT&T holds a 27% market share (AT&T Inc., 2014). Another fierce competitor that T-Mobile has to strategically compete with is Sprint Nextel corporation. Sprint Nextel Corporation has a competitive advantage over T-Mobile as they are the third largest telecom provider in the United States. Sprint as also partnered up with SoftBank, an internet company, that has invested $22.2 billion for an 80% stake in Sprint (Sprint Nextel......

Words: 709 - Pages: 3

Toyota vs Ford

.../strategic-alignment/strategic-alignment-business-cases/the-rise-of-toyota.aspx Bunkley, N. (2016). Ford won’t blindly chase market share. Automotive News, 90(6708), 0032. Edwards, J. (2012). Mastering Strategic Management ( 1st Canadian Edition ed.). Retrieved 04 01, 2016, from http://opentextbc.ca/strategicmanagement/chapter/types-of-international-strategies/ Funaru, M. (n.d.). Toyota’s business strategies in international markets. Braşov: University of Braşov. Retrieved 04 01, 2016, from http://feaa.ucv.ro/annals/v3_2010/0038v3-004.pdf Gillis, C. (2015, September 13). What’s it really like in the driver’s seat of a driverless car? Mclean’s. Retrieved from http://www.macleans.ca Henry, J. (2015, August 30). One Ford, Part Two; Tweaking The Master Plan. Forbes. Retrieved from http://www.forbes.com Hitt, M., Ireland, R. & Hoskisson, R. (2015). Strategic management : competitiveness & globalization : concepts & cases. Stamford, Conn: Cengage Learning. Negi, R. (2013, 03 27). Toyota: Analysis of Vision Statement, Corporate Level Strategies & SWOT. Retrieved 04 02, 2016, from Slideshare: http://www.slideshare.net/rohannegi/toyota-analysis-of-vision-statement-corporate-level-strategies-swot NYSE. (2016). Financials for Ford Motor Company. Retrieved March 28, 2016 from http://www.google.com/finance?q=NYSE%3AF&fstype=ii&ei=n0f5VrjeEojUigKop5rADg NYSE. (2016). Historical prices for Ford Motor Company. Retrieved March 28, 2016 from......

Words: 671 - Pages: 3

Gm vs Toyota

...lower priced good, value-priced good, prestige goods, products proliferation, product innovation, improved services, distribution innovation, manufacturing cost reduction and intensive advertisement. Monitoring product life cycle is important for both of the organizations. In order to holding larger market share they have to make decision on their product on the perfect level of product life cycle. Contents Page no. 1. Introduction…………………………………………...07 2. Company profile (Toyota)…………………………….08 3. Company profile (GM)………………………………..09 4. Point of Parity………………………………………....10 5. Point of Difference……………………………………11 6. Market leader’s strategies (Toyota)…………………...11 7. Strategies for expanding total market demand(Toyota).11 8. Strategies for protecting current market share(Toyota).12 9. Market challenger’s strategies(GM)…………………..12 10. General attack strategies(GM)……………………...15 11. Specific attack strategies(GM)……………………...17 12. Product life cycle…………………………………...22 13. Product life cycle of Carina & Chevrolet lumia…...23 14. Conclusion………………………………………… 25 15. References………………………………………… 26 Introduction: Toyota Motor Corporation and General Motors are two leading market share holder in the automobile industry. Toyota is the market leader and General Motors is the challenger here. The leader will concentrate on expanding their total market demand and protecting their present market share from the challenger or......

Words: 4599 - Pages: 19

Val Kilmer | Autobiography of a Yogi [DOWNLOAD] View more | recruitment manager