Why You Need an Innovation Strategy: Ford Motor Company Tries to Turn Around With Electric Vehicles in China


The U-turn of Ford’s sales in China is hitherto unprecedented. After a peak in 2016, sales began faltering in late 2017, then nearly halved in 2018. Ford suffered more from China’s slowdown than other foreign carmakers, and the company warned that profits had fallen by up to 93% in 2019. In addition, Ford suffered a breakdown with its local partner, mainly responsible for the manufacturing of Ford brand passenger cars for the Chinese market. The sales continue to decline and, like the rest of the automakers in China, Ford is facing a new normal of “low speed growth” with more intense competition that may weed out weaker players. A recovery is a must! This case illustrates the need for an innovation strategy that exploits technological changes as an opportunity for innovation, and helps local management make decisions and select the right processes and structures for innovation to align perspectives and priorities. Could such measures turn around sales in China and, eventually, help the company regain its profitability?

This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

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