According to John Quelch, Senior Associate Dean at Harvard Business School, Ford has finally woken up to what Toyota knew a long time ago: The power of a single global brand.
Over 20 years ago, Harvard professor Theodore Levitt praised Japanese manufacturers for their focus on "what every consumer in the world is seeking: world-class modernity at affordable prices." Since, then, Toyota, Nissan, and Honda have been selling standard products under a single brand umbrella.
For decades, Ford adapted its manufacturing platforms, features, and model names from one country to another. The results: added manufacturing and supply chain costs that strained consumers' willingness to pay; a balkanized bureaucracy in which regional managers exaggerate the need for local adaptations to defend their turf; and a deteriorating market share, financial performance, and stock price.
Ford was once one of the 10 most valuable brands in the world. They're no longer on that list, but Toyota now is. How did Toyota — and the other nine companies — do it? There are five characteristics that all top global brands have in common:
1. The same positioning worldwide. This provides a combination of functional product quality and innovation with emotional appeal. Think Coca-Cola and Disney.
2. A focus on a single product category. Think Nokia and Intel.
3. The company name is the brand name. All marketing dollars are concentrated on that one brand. Think GE and IBM.
4. Access to the global village. Consuming the brand equals membership in a global club. Think IBM's "solutions for a small planet."
5. Social responsibility. Consumers expect global brands to lead on corporate social responsibility, leveraging their technology to solve the world's problems. Think Nestlé and clean water.
Ford has a proud history. But, Low volume management distractions, including Jaguar, Land Rover, and Volvo will be sold off; they're now meaningless. US-based models like Mercury will be discontinued.
Thus, John Quelch asks - can Ford recover?
My reply is YES. Ford, by all means, can resurrect, provided it aims at doing so, whole heartedly. It's not necessary that if some Japanese companies have been "commoditizing" cars for the world, Ford should also be joining the bandwagon for no good reasons. Ford believes in catering to the differentiated needs and wants of its customers. And, there is nothing wrong in catering to those needs and wants. Ford just has to take care of its manufacturing and supply chain costs, and its bureaucracy. The results: a better market share, a better financial performance, and a highly respectful stock price will automatically fall in place. It's high time Ford should prove to the world what Ford is!
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