Ford-Ifetomiwa
Instead of solely relying on
they have a high level of
Ogunyomi
its dealers and distributors
certainty that they have
to get its products to its
made the right choices.
customers, Ford can pursue
Ford will provide the
a concentric diversification
needed conducive
by expanding its offerings
atmosphere for consumers
into a renting its cars. Ford
by renting out the cars to
has engaged in the rental
them, thereby giving them
car business by partnering
the chance to test drive it
with Hertz, but sold its
for as long as they want
interest in 2005. In 2005,
and most likely purchase it
Ford’s net income was
after so doing.
only $2 Billion, but as of
Renting cars can serve as
2009 Ford reported net
an avenue to especially test
income of $86 Billion- a
out the reliability of its
good indication that it is
new vehicles and make
has a high potential for
improvements before they
growth as well as the
are available in large
financial resources to
quantities, thereby
expand its service
reducing the percentage of
offerings.
recalls and creating an
Ford is a company that
values innovation and
change and is constantly
working to stay ahead of
the curve by
manufacturing new
vehicles that adequately
meets customers’ needs in
terms of quality, safety,
value and environmental
sustainability. Most of the
sales the company
generates is as a result of
business with dealers and
distributors. Ford relies on
its dealers and distributors
to get its vehicles to its
consumers, but it often has
to wait to realize the
image as a leader in
revenue from the sales.
By renting its cars, Ford
Ford initially bears the
stands the chance to attract
responsibility for the
several customers, increase
While this is a good
dealers by paying off their
sales and have access to
avenue for Ford, it can be
obligations for the price of
revenue more quickly and
dangerous because if there
the vehicle and then
easily. Purchasing a
is a negative response to it
recovering the payment
vehicle is a huge
and that spreads through
from the dealer when the
investment for many
word of mouth, it can have
vehicle has been sold.
customers and these
an undesirable effect on
customers feel better when
sales.
providing reliable vehicles.
Also, it will have to incur
time with the car and make
maintenance and insurance
accurate decisions. This
costs to constantly keep its
will have the benefit of
vehicles in good working
increasing sales because
order.
customers will most likely
the car enough to buy it.
An advantage of doing this
will
As an incentive, Ford can
offer some sort of
The company had a net
discounts or additional
income of approximately $2
services to customers who
rent its cars and then buys
The advantage of engaging
in a rental car business lies
them within a certain
period of time.
Billion in 2005 when it sold
its interest in Hertz, but as of
2009 it reported income of
$86 Billion. As a result, it can
develop a rental company
in the fact that potential
It will serve as a testing
that will serve as a testing
customers will have the
ground and as a means to
ground for its products,
opportunity to test drive
receive feedback. This will
thereby boosting income as
the car to the best of their
reduce the number of
well as the sales of its
satisfaction. Many times
recalls because Ford will
vehicles.
when potential customers
have the chance to correct
they do not have the
problems before they are
advantage to test the car
made available to the
for as long as they want
general public.
and may feel undue
This is a major opportunity
for Ford as it can show its
strengths as a growing
company as a supporter of a
green environment.
pressure to buy or may not
be able to gather enough
http://corporate.ford.com/d
information to make a
oc/2005_AR_full.pdf
decision about buying.
By renting out its cars
http://www.mba-
especially the new ones,
tutorials.com/marketing/342
customers can spend more
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