Group Case Analysis: “Ford Ka (A): Breaking New Ground in the Small Car Market”
Fall 2013, Team 13
Ainhoa Robles
Kathleen Lockwood
Israel Novelo
Javier Álvarez
The Challenge
In 1990, French small cars market experienced a completely new definition of customers’ expectations and products devoted to satisfy those needs. The Renault Twingo changed the characteristics of the Basic-B category, forcing other manufacturers to offer more than basic transportation to remain competitive. The Twingo gave customers a very distinct, original style, flashy colors, greater functionality and more interior space than cars of similar size. The Twingo was the pioneer that confirmed a demand for an urban, stylish car.
Ford France management felt that its current small cars products, the Fiesta brand line, did not have the appeal to compete with the Renault Twingo. Ford decided therefore, to develop the Ka using the same chassis as the Fiesta. Saving time and cutting the development costs to US$ 250 million (instead of US$ 1 billion to develop a new car). It restricted Ford's ability to build the Ka on the basis of technical innovation. Instead, the idea was to use innovative styling, features and maneuverability as a basis for marketing the Ka.
Gilles Moynier is Ford's Brand Manager responsible for the communication of the smallest Ford at that time. “The Ka is already developed and therefore, we need to find an appropriate target market for the product, rather than the other way around.'' The car industry traditionally segmented the car market into size-tiers. However, Twingo success raised significant concerns about continuing with "traditional" size-based market segmentation.
Company Background
In 1995 Ford was the second largest manufacturer of cars and trucks in the world after General Motors, sales in Europe accounted for 26% of total dollar sales. Ford was the largest non-French manufacturer with a 7.3% unit share of the total passenger car market in France,...