Running Head: FORD EDSEL CASE STUDY
Ford Edsel Case Study William Taylor Pittman PJM380-1 Project Management Tools Colorado State University – Global Campus Professor Michael Laverty June 15, 2014
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Ford Edsel Case Study Statement of Work Project Overview A bottom up design for a new automobile aimed at the medium-range price audience will be developed. The design will be developed and styled innovatively considering the customer taste change that will occur during development as well as market research. After development of the design, testing and selective market feasibility studies will be performed on prototype vehicles. After testing and approval, thorough market research will be conducted at this time in an effort to provide the most relevant data to promote the vehicle. Once a demand has been established from research, production will commence to meet projected demand. As vehicles are produced, they will be distributed to dealers most suited to sell the vehicle. Once vehicles are on the market, continuing market research will commence and actual performance will be compared with predefined performance goals. The project will be terminated if certain objectives are failed to be satisfied. Objectives Design and produce a mid-class price range automobile capable of selling one-hundred thousand plus units per year sustainably for a period of at least three years. Scope of Work Design a mid-class price range automobile and produce prototype vehicles for testing. Pending approval of testing and market research, approximately nine-thousand vehicles will be
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produced per month over a period of twelve months. This rate of production can change according to metrics established by current and projected demand. Three Planning Levels Level 1: Strategic Plan The introduction of a medium price range automobile into the lineup of vehicles would provide the company with an entry to the medium price range market. One-hundred thousand units of the automobile will be thee production goal after twelve months in the market. Eighty – five to ninety percent of cars produced have to be sold to meet performance standards Level 2: Tactical Plan Designs will be developed based on envisioned concepts and initial market research. After the designs are finalized they are then subject to approval from executive officials. If the designs do not meet the standards, objectives, and or satisfy stakeholders, they will then be subject to redesign. When designs are approved by senior officers, prototype vehicles will be produced for testing and marketing. Research will be done on reactions involved will marketing efforts. If a sufficient market exists, production of the automobile will then begin. The production goal is to produce one-hundred thousand units within twelve months of production commencement. As units are distributed to dealers and sold. Analysis of sales figures will be taken continuously to assess its current viability as well as project future demand. The production of the vehicle will cease or reduce in number if certain performance standards are not meet. Level 3: Operational Plan Production of the new automobile will source from four departments: design and devilment, production team, marketing and research department and senior officers.
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Initial Market Research: First, initial market research will be conducted by the marketing research department with support from senior officers. If the market exist and idea passes feasibility studies the project then moves onto the next phase: design and development. Design: The design and development team will be primarily responsible for the designing of the automobile. Expertise will be drawn from all four department sources, in order to design a buildable, marketable, producible automobile. Prototype Production: After design finalization, the production team will take over and produce prototypes of the vehicle. They may consult design team members on how to construct certain attributes of the automobile. Also, key stakeholder/executive officials are involved by approving the prototype. Market Research: The next phase of the project only involves one department: marketing and research. The marketing and research department will use prototypes as a tool to gather data consisting of customer interest, in addition to testing for road-worthy ness. If the prototype vehicle passes safety regulations and satisfies customer interest expectations, production of the automobile will commence. Production: Production will require the resources of all four departments. The department in charge of production, the production team will work closely with the design team to ensure envisioned features are accurate to design. Monitoring: In the final, longest phase of the project, monitoring, Cars are continually produced, but project priorities shift to market research, advertisement, etc. During this period, executive officials also must accept sales performance figures to determine whether to reduce, increase, or cease production of the automobile.
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Responsibility Assignment Matrix
Task
DDT
P
Initial market research Iniitial Design
R
AR
Prototype production
S
R
MRD
SO
R
S
S
MBC
Market resarch
R
Production
S
Monitoring
R
AR
AR
S
R
MBC
Stakeholder key:
Role Key:
DDT: Design and development team
R: Responsible
P:
S: Support
Production team
MRD: Marketing and research department
AR: Approval required
SO:
MBC: Must be consulted
Senior officers
Work Flowchart Initial Market Research
Protype Design
Initial Design
Market Research
Aprovall by senior officers
AR
Production Yes
Monitoring
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Answers to case study questions 1. The story of the Ford Edsel provides some key insight on the ways technical and commercial performance can affect the outcome of a project. In automobile manufacturing, in my opinion, I would rank technical and commercial performance almost equal in importance. With project success being the sale of a desired amount of Edsels, commercial performance would seem to be of more importance. However, technical performance is a key driving force being commercial performance. If technical performance is not up to standards, this will be reflected in commercial viability and desirability. 2. Although extensive market research had been performed, ultimately the Edsel failed because of dated nature of the research. The feasibility and marketability of the automobile was based too much so on historical data, dating back ten years. Ford failed to foresee the market conditions at the time of release and produced a car that may have succeeded five years prior. 3. The Ford Edsel failed because of a variety of reasons. None of which were derived from luck. In my opinion the Edsel may have been a success if the timing had been right. With the influx of smaller, German, less expensive cars, and their popularity combined with the economic recession at the Edsels launch ultimately caused the Edsels failure.
