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“Why Ford No Longer Makes the Contour…”

“Why Ford No Longer Makes the Contour…”. CM02 Jim Barton Kevin Potter Eric Ramey. Background of the Contour. Started as a global project in 1988 to make one car that appeals to the global market. Project was code-named CDW27.

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“Why Ford No Longer Makes the Contour…”

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  1. “Why Ford No Longer Makes the Contour…” CM02 Jim Barton Kevin Potter Eric Ramey

  2. Background of the Contour • Started as a global project in 1988 to make one car that appeals to the global market. • Project was code-named CDW27. • Mid-size family car was called “Mondeo” in Europe, “Contour” in America.

  3. Background of the Contour • The Contour represented the pinnacle of Ford’s technology initiatives. • Ford cut back on Contour production in 1999, and stopped offering new models in 2000. • The demise of the Contour may have been because of its emphasis on general appeal.

  4. The Ford Contour

  5. Comfort Safety Initial Round: 4th in overall revenue 1st in contribution 1st in % of sales Economy Price Ideal Position to Lose Market Share Because of Fierce Competition Strengths and Weaknesses

  6. Our Overall Strategy • Try to maintain as much of our initial position as possible. • Cumulative Contribution • Revenues • % of Sales • Stabilize the Contour performance measurements. • Cater to Safety & Traditional Segments

  7. Start of Simulation / Round 1 • Sales: $960.1M, Contribution: $290.3, % of Sales: 30.2% • Started to offer factory rebates. • Moderate increase in advertising. • Moderate changes to our advertising mix and targets. • Very conservative opening strategy.

  8. Round 2 • Sales: $971.2M, Contribution: $255.7, % of Sales: 26.3% • Overestimated demand. • Significant inventory buildup. • Altered our production plan as a result. • Started watching the “underdogs.”

  9. Round 3 • Sales: $978.0M, Contribution: $237.7, % of Sales: 24.3% • Inventory situation worsened. • Shifted some focus away from Safety Conscious to Traditional. • LX model becoming more popular than base model.

  10. Round 4 • Sales: $865.4, Contribution: $235.3, % of Sales: 27.2% • Lessons learned about cutting back on production. • Traditional segment surpasses Safety Conscious segment. • Key threat: Neon. • Decision time: New model introduction.

  11. Option 1: The Sporty Model

  12. Or…..an SUV???

  13. Round 5 • Sales: $910.5M, Contribution: $222.3, % of Sales: 22.4% • Scared of our own shadow: threat from Neon dissipates. • Major dilemma on how to handle the introduction of our LX+ model.

  14. Endgame • Sales: $813.8M, Contribution: $183.3, % of Sales: 22.5% • Pre-simulation contribution average: $193M (approx). • Post-simulation contribution average: $227M (approx). • Lost top position for period contribution in the final round.

  15. What Went Wrong?

  16. Theory #1: The Ryan Factor

  17. Actual Target Market…

  18. But Seriously… • Intense competition and price & promotion wars among other players. • Difficulties predicting demand conditions and ideal inventory levels. • Final round: difficult to predict and handle the introduction of the LX+, poor timing.

  19. What We Did Well… • We were able to stabilize the Contour performance measurements. • We improved average contribution over previous 5 periods. • We ended up with the highest overall cumulative contribution. (approx. $2B) • We ended with the highest % of sales figure. (22.5%)

  20. In Case You Just Can’t Get Enough of Contour… http://www.contour.org

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