Does your Product Portfolio need a tune-up?

Solomon, the thought leader and visionary of his time, pointed out that “without a vision, the people perish.” A recent article citing Ford’s plan to cut its product lineup, reminded me that this concept cited some years ago still rings true as a solid strategy. Has Ford got a better idea? I think so.

Ford began to remake itself with the appointment of Alan Mulally, former Boeing executive who understood the need for new products and enticing customers. People wondered whether an individual from Aerospace could run an automobile company. Under Mulally’s direction Ford moved quickly to shore up its balance sheet and reinvent itself before the steep downturn giving it more latitude to define its future. He has focused on that which makes a company a winner, a laser-sharp focus on product quality, differentiated products and innovative, appealing designs.

GM and Chrysler were slower to react to the perfect storm that hit the auto industry, leaving it up to government policy to bail them out. GM’s Rick Wagoner tried in vain to hang on to the old GM business strategy of multiple brands and price points put in place by Alfred Sloan roughly 70 years ago. Venerable brands Oldsmobile, Pontiac, Saturn and Hummer fell to the wayside as this slow moving monolith tried to hang on to an outdated strategy. Lackluster design, high costs and a plethora of look-alike products limited GM’s ability to invest and keep its product line fresh and appealing.

I personally watched with anguish as the Big 3 nose-dived towards oblivion. But with every defeat comes the opportunity to rise from the ashes.

Jacques Nasser’s vision for Ford was to mimic GM, a model for every price point. When Mulally came to Ford in 2006, there were 97 models. “It was absolutely clear that we had to simplify Ford dramatically. We are on our way to 20 to 25 models. Fewer brands mean you can put more focus into improving the quality of engineering.”Some products have been terminated along with selling luxury brands Volvo, Jaguar, Land Rover and Aston Martin. Ford will discontinue its Mercury product line to put more resources into its upscale Lincoln brand.

Mulally has proven the skeptics wrong. He did it by focusing his organization on what really matters: products that delight the customer. He combined vision and innovation to create Ford’s future. The Ford Fusion has surpassed long-time leaders Honda Accord and Toyota Camry. The 2011 Mustang has performance that rivals a BMW M5 at half the cost, and with the new 2011 Ford Fiesta and Explorer, Ford appears to be clicking on all cylinders.

Ford and GM are more nimble today with both building world-class automobiles once again. Bob Lutz, before departing GM, led a revival in its product lineup that has well-positioned Cadillac, Buick and Chevrolet for the future.  Both have taken a new approach to building their brands with creative and appealing advertising.

I am excited about the future of these legendary industry icons given my passion for rebuilding American industry.

Combining Vision and Innovation to Create the Future

© Rich Kohler 2010. All rights reserved. For copies, please contact Rich at rich@rich-kohler.com.



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