Disruption in Detroit: Ford, Silicon Valley, and Beyond
by Ernest Gundling
The (A) case focuses on the Ford Motor Company in Spring 2016 and how its then-CEO, Mark Fields, and his senior management team should best respond to several emerging disruptive technologies that will ultimately force the automaker to modify its current business model. These disruptive technologies includes electric vehicles, connectivity autonomous vehicles, car ownership and use, and emergence of subcompact cares. Having experienced a successful financial turnaround under the leadership of its prior CEO, Alan Mulally, during and after the 2008-09 recession, Ford must now decide whether its current investment in responding to these new emerging technologies is too much, too little or just right. As Ford considers the degree of its response, it also faces new competitors in the fast-changing automotive landscape -- besides its traditional automaker rivals like General Motors, Toyota and Hyundai -- that now includes the Google, Apple and Tesla from the Silicon Valley as well as BYD and LeEco from China. Ford's history of innovation in response to past opportunities and challenges is also discussed. The (B) case provides an update on Ford's strategy during the fall of 2017, following the dismissal of Fields and the appointment of former Steelcase CEO and Fort Smart Mobility (FSM) chair Jim Hackett as his successor in May 2017. Faced with a drop of 37 percent in Ford's stock price during Field's tenure, declining year-over-year vehicle sales in early 2017, and the view of some Ford Board members that the company needed to more successfully communicate its recent strategic moves in the mobility space, Hackett lays five themes to turnaround the company, while keeping his eye on the 'now, near, and far' on the company's performance.
The purpose of these (A) and (B) cases is to illustrate how 'disruptive innovation,' through new technologies, is changing the way traditional businesses, like the Ford Motor Company, are thinking about their future. Ford, an iconic American automaker for more than a century since its 1903 founding by Henry Ford, now faces a variety of new challenges worldwide to its core business model: electric vehicles, connectivity software, autonomous vehicles, car ownership and use, and the emergence of subcompact cars.
Pub Date: Dec 31, 2017
Discipline: General Management
Subjects: Innovation, Leadership, Technological change, Technology, General management, Business models, Organizational change, Disruptive innovation
Product #: B5905-PDF-ENG
Geography: United States, Michigan, California, Silicon Valley, China
Length: 16 page(s)
Berkeley Haas Case SeriesFollowThe Berkeley Haas Case Series is a collection of business case studies written by faculty members at the Haas School of Business. Cases are conceived, developed, written, and published throughout the year, on subjects ranging from entrepreneurship and strategy to finance and marketing. Each case includes a teaching note for use in the classroom.