Driverless Trucks at Ford: Cruising into a Compromised Brand Identity?

Abstract

Ford's F-Series of trucks were first introduced in 1948, and ever since they have represented American identity for their consumers. Both earned media, in movies like Urban Cowboy, and Ford's paid media positioned Ford as part of the pioneering culture. Ford also constantly introduced innovations to the F-Series to make the trucks more suitable to the changing needs of its consumers.In 2018, Ford's management decided to retreat from the low-margin cars segment and focus on trucks and SUVs. Ford was also working toward robot taxis and driverless delivery by 2021. These two parallel trajectories converge to pose a pivotal challenge for Ford: Should the company invest in developing driverless capabilities for its best-selling and highest-margin product, the F-150? The case provides students with a context in which to discuss the changing technologies in the auto industry and their implications for industry structure, along with the specific aspects of software-driven business models, consumer preferences, and brand identity. It also offers an opportunity to explore the challenges faced by traditional businesses as they develop digital capabilities and reimagine their business models to fully leverage artificial intelligence (AI). The competition among Ford, Google Inc. (Google), Uber Technologies, Inc. (Uber), and Tesla, Inc. (Tesla) in the automonous vehicle industry highlights the different routes these companies have taken to obtain develop autonomous vehicle capability that leverages their respective strategic capabilities. Excerpt UVA-M-0967 Rev. Jul. 10, 2020 Driverless Trucks at Ford: Cruising into a Compromised Brand Identity? In the summer of 2018, iconic American automaker Ford Motor Company (Ford) created a new limited liability company, Ford Autonomous Vehicles LLC (Ford AV). Ford charged the organization “with accelerating [Ford's] AV business to capitalize on market opportunities.” As members of the newly appointed management team at Ford AV considered the best way to guide Ford, the second-largest automaker in the United States, toward its well-publicized robot-taxi and driverless delivery services slated to debut in 2021, they had several important decisions to make regarding the company's strategy and driverless car product offerings of the future. Alongside its goals in the self-driving space, Ford had made a seminal product decision several months earlier, when the company announced it was retreating from the American car business and dropping several sedans, such as the Fusion, Fiesta, and Taurus (while preserving the Mustang and Focus Active crossover launching in 2019), in order to improve its profit margin. The company's decision to turn away from its slow-selling car models and instead focus on its more lucrative line of trucks and SUVs was in line with Ford's long-standing reliance on the success of its trucks division, especially the F-Series (which included the classic F-150 pickup truck and “super duty” F-250 and -350 trucks) that the company had first released in 1948. . . .