What is the problem statement in the case study

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Reference no: EM133312488

Case Study: Ford Motor Co. is preparing new rules for how it sells electric vehicles, a shift that is concerning some dealers and seen as challenging the traditional franchise model.

Executives from the Detroit giant have alluded to such changes for months, highlighting a future with less inventory on the dealer lot, more online transacting, no-haggle pricing and an increased focus on dealerships as service and repair centers. Ford plans to release its new EV-selling rules in September.

As executives at other auto makers have discussed using the switch to EVs as a way to revamp how cars are sold, Ford Chief Executive Jim Farley has been among the more vocal. At a Bernstein investor conference earlier this month, he talked about keeping zero inventory at dealers and sales being 100% online.

"I think our dealers can do it. But the standards are going to be brutal. They're going to be very different than today," Mr. Farley said at the time.

Dealership owners, in interviews with The Wall Street Journal, raised concerns about Mr. Farley's comments and said dealers play an important role in interacting with customers and providing them with service, repair and education. They and their attorneys also point to current franchise laws that might make it hard for Ford to tighten restrictions.

This week, Mr. Farley held four hours of group meetings with a total of around 300 dealers to field questions and discuss their concerns about the future of EV sales, said Tim Hovik, chairman of the Ford National Dealer Council. The president and head of sales from Ford's gas-engine division were also present.

Mr. Farley raised morale by emphasizing that dealers are key to Ford's success, Mr. Hovik said, and answered questions about the comments he made at the Bernstein conference.

Mr. Farley's statements about having zero inventory at dealers and sales being all online sounded to some observers like the direct-sales model employed by Tesla Inc. and other EV startups. Mr. Farley has said Tesla's direct-sales model saves around $2,000 per car.

QUESTION:

- What is the problem statement? Name 3 realistic alternatives.

- List 2 final recommendations

Reference no: EM133312488

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