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The Ford Contour was a product of a global initiative aimed at creating a mid-size family car appealing to diverse markets, starting in 1988. Known as the Mondeo in Europe, it represented Ford’s technological peak. Despite early success, production was scaled back after 1999, ultimately leading to its discontinuation in 2000. Factors contributing to its decline included fierce competition, changing consumer preferences, and challenges in predicting demand. This case study analyzes the Contour's market journey, exploring successes and missteps along the way.
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“Why Ford No Longer Makes the Contour…” CM02 Jim Barton Kevin Potter Eric Ramey
Background of the Contour • Started as a global project in 1988 to make one car that appeals to the global market. • Project was code-named CDW27. • Mid-size family car was called “Mondeo” in Europe, “Contour” in America.
Background of the Contour • The Contour represented the pinnacle of Ford’s technology initiatives. • Ford cut back on Contour production in 1999, and stopped offering new models in 2000. • The demise of the Contour may have been because of its emphasis on general appeal.
Comfort Safety Initial Round: 4th in overall revenue 1st in contribution 1st in % of sales Economy Price Ideal Position to Lose Market Share Because of Fierce Competition Strengths and Weaknesses
Our Overall Strategy • Try to maintain as much of our initial position as possible. • Cumulative Contribution • Revenues • % of Sales • Stabilize the Contour performance measurements. • Cater to Safety & Traditional Segments
Start of Simulation / Round 1 • Sales: $960.1M, Contribution: $290.3, % of Sales: 30.2% • Started to offer factory rebates. • Moderate increase in advertising. • Moderate changes to our advertising mix and targets. • Very conservative opening strategy.
Round 2 • Sales: $971.2M, Contribution: $255.7, % of Sales: 26.3% • Overestimated demand. • Significant inventory buildup. • Altered our production plan as a result. • Started watching the “underdogs.”
Round 3 • Sales: $978.0M, Contribution: $237.7, % of Sales: 24.3% • Inventory situation worsened. • Shifted some focus away from Safety Conscious to Traditional. • LX model becoming more popular than base model.
Round 4 • Sales: $865.4, Contribution: $235.3, % of Sales: 27.2% • Lessons learned about cutting back on production. • Traditional segment surpasses Safety Conscious segment. • Key threat: Neon. • Decision time: New model introduction.
Round 5 • Sales: $910.5M, Contribution: $222.3, % of Sales: 22.4% • Scared of our own shadow: threat from Neon dissipates. • Major dilemma on how to handle the introduction of our LX+ model.
Endgame • Sales: $813.8M, Contribution: $183.3, % of Sales: 22.5% • Pre-simulation contribution average: $193M (approx). • Post-simulation contribution average: $227M (approx). • Lost top position for period contribution in the final round.
But Seriously… • Intense competition and price & promotion wars among other players. • Difficulties predicting demand conditions and ideal inventory levels. • Final round: difficult to predict and handle the introduction of the LX+, poor timing.
What We Did Well… • We were able to stabilize the Contour performance measurements. • We improved average contribution over previous 5 periods. • We ended up with the highest overall cumulative contribution. (approx. $2B) • We ended with the highest % of sales figure. (22.5%)
In Case You Just Can’t Get Enough of Contour… http://www.contour.org
