Ford Shows S-Max Concept

[akirby]

Disruptive innovation would dictate that you don't invest in what everyone is doing today, but in where the growth of the segment will be in the future

 

That's a myopic view. They are not mutually exclusive. You can invest in the current market trend if there is an opportunity for profit and market share with a positive ROI. At the same time you can invest in something new to augment or replace it. They're individual decisions.

[RichardJensen]

yet the customer may want something bigger, something smaller, or something sportier.

 

Nissan and the Koreans have tried going the smaller route, and it didn't work.

 

As they say, 'there are no hundred dollar bills lying in the street': If the segment is in need of innovation, that innovation is far more likely to come from a company that thoroughly understands the segment.

 

Examples of this would be when Ford introduced the 3rd & 4th doors on pickup cabs, or Chrysler with the second sliding door on minivans. Or 'stow-n-go- seating on minivans. These companies understand their markets, and have maintained decades long relevance by knowing what the market would want next.

[Biker16]

Nissan and the Koreans have tried going the smaller route, and it didn't work.

 

As they say, 'there are no hundred dollar bills lying in the street': If the segment is in need of innovation, that innovation is far more likely to come from a company that thoroughly understands the segment.

 

Examples of this would be when Ford introduced the 3rd & 4th doors on pickup cabs, or Chrysler with the second sliding door on minivans. Or 'stow-n-go- seating on minivans. These companies understand their markets, and have maintained decades long relevance by knowing what the market would want next.

 

Nissan has only sold 12,000 Quests this year, and it meets every check box for a minivan, how would a ford me too Minivan fare any better? remember the current Quest is not all new but a new top hat on the old quest minivan, Ford would be starting from scratch, with no guarantee of success.

 

the alternative of not attacking the segment with a me too product and picking around the edges of the segment with Asymmetrical products that are cost effective to develop and produce, sound s like a more practical plan at this point.

 

the Stalwarts in the minivan segment Chrysler, Honda and Toyota have been carrying over the same floorpans and Structures with minor changes at each model change the tooling and development costs are paid for in times when the Segment was larger.

 

In closing this segment needs to grow from the edge not the middle. offering the S-max, Tourneo and maybe the Galaxy allows for to act disruptively in this segment, bringing more buyers into the segment.

 

honestly what can ford bring to this segment that isn't already there?

 

http://www.youtube.com/watch?v=fjRRtpL1ViI

[Biker16]

That's a myopic view. They are not mutually exclusive. You can invest in the current market trend if there is an opportunity for profit and market share with a positive ROI. At the same time you can invest in something new to augment or replace it. They're individual decisions.

 

Really? how long did it take for ford to replace the BOF explorer, with a unibody explorer? the trend towards Unibody CUVs was established over a decade ago, it was the higlander, Pilot, and murano, that allowed the imports to turn a segment dominated by domestic makers into one dominated buy Imports.

 

the issue with doing something different is investment dollars are finite and when faced with the prospect of spend 300 million on a proven product or 300 million dollars on an unproven product 90% of the time you go with the proven product. look at the Explorer and the freestyle, ford could have made the freestyle more trucky and less wagon-y, but they did not want to have direct competitor to the explorer, they made decision not to make the freestyle a UB SUV, but to make it a high riding station wagon.

 

The example set by this would dictate that Ford not go with a me too product but do something different.

 

to attempt to enter the market with a direct competitor to the class leaders, will lead to reduced margins for the entire segment, especially since this segment has such high owner Loyalty. ford will have to offer a truly innovative product to make a dent in this market.

 

ROI and profit are not absolute term but can be very flexible. depending on the time, volume, capital, etc.

[bzcat]

Maybe that is the reason the segment is shrinking, everyone plays to the heart of the market, yet the customer may want something bigger, something smaller, or something sportier. that is where the growth will come from not from the meat and potatoes of the segment.

 

Disruptive innovation would dictate that you don't invest in what everyone is doing today, but in where the growth of the segment will be in the future.

 

there aren't any large, small or sporty minivans in the US, If ford can make these sales as marginal increase on established global products, than selling

20,000 S-maxes, 25,000 galaxies and 15,000 Tourneos.with minimal investment. or 50,000 is only minivans?

 

 

 

It will never be a good starting point for a minivan, EUCD is a better place to start.

 

Are you being deliberately ignorant of recent history?

 

Disruptive innovation in the minivan markets... let see...

 

More sporty looking: Chrysler Pacifica (failed)

Smaller: Mazda5, Kia Rondo (failing, failed)

Bigger: Nissan Quest (failed, and the new generation is back to being a conventional van)

More SUV like: GM Lambda quadreplets (successful)

More stylish: Ford Flex (failing)

Less practical: Toyota Venza (jury is still out)

 

Looks to be there is one successful formula here for the US market and it is not what your are prescribing.

[akirby]

Really? how long did it take for ford to replace the BOF explorer, with a unibody explorer? the trend towards Unibody CUVs was established over a decade ago, it was the higlander, Pilot, and murano, that allowed the imports to turn a segment dominated by domestic makers into one dominated buy Imports.

 

the issue with doing something different is investment dollars are finite and when faced with the prospect of spend 300 million on a proven product or 300 million dollars on an unproven product 90% of the time you go with the proven product. look at the Explorer and the freestyle, ford could have made the freestyle more trucky and less wagon-y, but they did not want to have direct competitor to the explorer, they made decision not to make the freestyle a UB SUV, but to make it a high riding station wagon.

 

The example set by this would dictate that Ford not go with a me too product but do something different.

 

to attempt to enter the market with a direct competitor to the class leaders, will lead to reduced margins for the entire segment, especially since this segment has such high owner Loyalty. ford will have to offer a truly innovative product to make a dent in this market.

 

ROI and profit are not absolute term but can be very flexible. depending on the time, volume, capital, etc.

 

There is no universal answer - it varies by vehicle and by market segment. Ford made a bad business decision not updating the BOF explorer sooner just as they did not having competitive small cars.

 

The cost to enter any market depends on whether a suitable platform already exists or not along with production capacity and you do have to consider the net sales impact. It doesn't do any good to come out with a new vehicle if all it does is cannibalize other existing Ford sales.

 

It really comes down to a 5 year view (or 3 or 7 - whatever is appropriate) of where the market will be and where Ford wants to be then and the cost to get there. Ford gave up market share on minivans and small trucks, but in the process they were able to close at least one plant and give up 2 platforms and that capital was used to develop C-Max hybrid and Energis and support global platform consolidations among other things.

 

Capital is always limited and you have to make choices where you spend money and that goes far beyond existing markets vs. emerging markets.

[grbeck]

There is no universal answer - it varies by vehicle and by market segment. Ford made a bad business decision not updating the BOF explorer sooner just as they did not having competitive small cars.

 

The cost to enter any market depends on whether a suitable platform already exists or not along with production capacity and you do have to consider the net sales impact. It doesn't do any good to come out with a new vehicle if all it does is cannibalize other existing Ford sales.

 

It really comes down to a 5 year view (or 3 or 7 - whatever is appropriate) of where the market will be and where Ford wants to be then and the cost to get there. Ford gave up market share on minivans and small trucks, but in the process they were able to close at least one plant and give up 2 platforms and that capital was used to develop C-Max hybrid and Energis and support global platform consolidations among other things.

 

Capital is always limited and you have to make choices where you spend money and that goes far beyond existing markets vs. emerging markets.

 

 

The old body-on-frame Explorer was still a big seller during that timeframe (the "over a decade ago" timeframe referenced by Biker16 in his post), so there wasn't the immediate pressure to reconfigure it as a unit-body crossover.

 

The most likely route would have been to have kept the old Explorer in production while introducing a new unit-body crossover. I believe that is what Toyota did - the 4Runner is still in production, and the Highlander was introduced as an entirely separate vehicle.

Edited September 11, 2013 by grbeck

[silvrsvt]

Really? how long did it take for ford to replace the BOF explorer, with a unibody explorer? the trend towards Unibody CUVs was established over a decade ago, it was the higlander, Pilot, and murano, that allowed the imports to turn a segment dominated by domestic makers into one dominated buy Imports.

Seriously? Keep in mind the unibody Escape launched in 2001 and the Edge launched in 2006...and in the Edge's case was the best seller in its segment and the Escape was one of the top 3 in its segment also

The most likely route would have been to have kept the old Explorer in production while introducing a new unit-body crossover. I believe that is what Toyota did - the 4Runner is still in production, and the Highlander was introduced as an entirely separate vehicle.

 

Ummmmm...forget about this?

 

 

It eventually morphed into the Explorer anyways...and last time I checked isn't the Explorer one of the best, if not the best selling unibody CUV nameplate on the market now?

 

 

Edited September 11, 2013 by silvrsvt

[grbeck]

Seriously? Keep in mind the unibody Escape launched in 2001 and the Edge launched in 2006...and in the Edge's case was the best seller in its segment and the Escape was one of the top 3 in its segment also

 

Ummmmm...forget about this?

 

 

It eventually morphed into the Explorer anyways...and last time I checked isn't the Explorer one of the best, if not the best selling unibody CUV nameplate on the market now?

 

 

Yes, I did forget about the Freestyle/Taurus X! Thanks for reminding me.

 

Odd that I would forget it, considering that our friends met with us over the Labor Day weekend, and drive a Freestyle (and love it).

[Biker16]

Are you being deliberately ignorant of recent history?

 

Disruptive innovation in the minivan markets... let see...

 

More sporty looking: Chrysler Pacifica (failed)

Smaller: Mazda5, Kia Rondo (failing, failed)

Bigger: Nissan Quest (failed, and the new generation is back to being a conventional van)

More SUV like: GM Lambda quadreplets (successful)

More stylish: Ford Flex (failing)

Less practical: Toyota Venza (jury is still out)

 

Looks to be there is one successful formula here for the US market and it is not what your are prescribing.

 

what do you define as Failure? Sales? profit? ROI? You could argue that lower slaes volume in the US is not a good measurement of success, espcailly when the product is global like the Mazda5, where 90% is sold everywhere but here.

 

More sporty looking: Chrysler Pacifica (failed) was this really sporty?

Smaller: Mazda5, Kia Rondo (failing, failed) Define Failure, is it profitable?

Bigger: Nissan Quest (failed, and the new generation is back to being a conventional van) I don't think it was any larger before than it is now, and it Still has only sold 12,000 unit this year, so being the right size isn' t making it a class leader.

More SUV like: GM Lambda quadruplets (successful) they are not minivans, they are CUVs like the explorer.

More stylish: Ford Flex (failing) maybe, but why, it isn't a true minivan.

Less practical: Toyota Venza (jury is still out) outsells the Flex 2-1 It is only a Camry Station wagon on Stilts, BTW it only has 5 seats.

[Biker16]

Seriously? Keep in mind the unibody Escape launched in 2001 and the Edge launched in 2006...and in the Edge's case was the best seller in its segment and the Escape was one of the top 3 in its segment also

 

Silver neither the Edge or escape could be considered replacements for the Explorer, in fact the Freestyle which should have been the next explorer and as you noted did evolve into the current explorer was designed NOT to compete with the explorer and to support but not supplant the best Selling Explorer. therefore in towing, styling, off-road Capability, Equipment and performance it never matched the Explorer.

 

the famous Quote about this is: Either you marginalize your own products or watch the competition do it for you.

 

Ford has the opportunity to change the minivan segment with the S-max and FWD transit, and do so with minimal risk and investment.

[Biker16]

The old body-on-frame Explorer was still a big seller during that timeframe (the "over a decade ago" timeframe referenced by Biker16 in his post), so there wasn't the immediate pressure to reconfigure it as a unit-body crossover.

 

That is the innovator's dilemma why risk changing a best selling product, when it is successful. even though you know it cannot survive without major change, your cost benefit analysis always tells you not to risk change with a successful product.

 

you want an example of what happens when a company tries to change a successful product look at windows8.

 

The most likely route would have been to have kept the old Explorer in production while introducing a new unit-body crossover. I believe that is what Toyota did - the 4Runner is still in production, and the Highlander was introduced as an entirely separate vehicle.

 

Toyota did not try to protect the 4runner like ford tried to protect the Explorer.

[akirby]

Silver neither the Edge or escape could be considered replacements for the Explorer

 

I beg to differ. We went from explorers/aviators to an edge in 2008. And so did a lot of others.

[Biker16]

I beg to differ. We went from explorers/aviators to an edge in 2008. And so did a lot of others.

 

but did ford intend for the edge and escape to replace the explorer?

[akirby]

but did ford intend for the edge and escape to replace the explorer?

 

They intended for them to keep Ford owners who were looking for crossovers and smaller more fuel efficient CUVs and SUVs who would have otherwise gone to a competitor if Ford didn't have the Edge and Escape.

[rmc523]

Silver neither the Edge or escape could be considered replacements for the Explorer, in fact the Freestyle which should have been the next explorer and as you noted did evolve into the current explorer was designed NOT to compete with the explorer and to support but not supplant the best Selling Explorer. therefore in towing, styling, off-road Capability, Equipment and performance it never matched the Explorer.

 

I took his comment to be directed at the part where you said the import vehicles took over the segment from domestic vehicles, which Ford reversed when it debuted Edge, Escape, etc.

[Biker16]

I took his comment to be directed at the part where you said the import vehicles took over the segment from domestic vehicles, which Ford reversed when it debuted Edge, Escape, etc.

 

 

 

Let's put it this way what was the SUV/CUV market share of the domestic makes vs the imports in 1995 vs today? Ford and GM held on so long to the BOF SUV that they allowed the imports to bring to market the first CUVs that gave them the market share they have today.

 

Look at the lambada CUVs they were supposed to replace both the BOF SUVs and minivans, they sell well but far less than the products they replaced. The same could be said for the explorer.

 

One could argue that the SUV market has fragmented from the days when it w's dominated by mid-sized SUVs to today where the diversity of the segment ranges from sub compact to extra large and that the traditional mid sized CUV/SUV is now a small player in overall CUV segment.

 

 

 

[silvrsvt]

Let's put it this way what was the SUV/CUV market share of the domestic makes vs the imports in 1995 vs today? Ford and GM held on so long to the BOF SUV that they allowed the imports to bring to market the first CUVs that gave them the market share they have today.

 

I think your leaning far too much on BOF vs CUV sales...esp when it comes to Ford. Ford had the CUV market space more or less covered by 2006 with the Escape (2001) ,Edge (2006) and Freestyle/Taurus X (2005)...The Freestyle/Taurus X where sorta duds, the Flex never took off and was dud and the Explorer finally checked off the right boxes with buyers, but it was "late" to the game..The Edge has always been class leading in sales and the Escape has been in the top 3 since its introduction and well I think it might be the best seller now since its redesign.

 

The market has changed since gas prices spiked in 2004 or so? Lots more smaller cars out there...

[jpd80]

Let's also not forget the growth in size of the Explorer from the almost compact looking 1990s version to the much bigger BOFs in the 2000s.

When that happened, Ford saw an opportunity to add the Escape and then Edge whilst also offering the Freestyle.

If you listen to Ford, most of the former Ranger buyers headed towards Utilities, where Ford had invested heavily.

Edited September 12, 2013 by jpd80

[grbeck]

That is the innovator's dilemma why risk changing a best selling product, when it is successful. even though you know it cannot survive without major change, your cost benefit analysis always tells you not to risk change with a successful product.

 

you want an example of what happens when a company tries to change a successful product look at windows8.

 

 

Toyota did not try to protect the 4runner like ford tried to protect the Explorer.

 

I don't believe that the 4Runner was ever as important to Toyota as the Explorer was to Ford.

[bzcat]

what do you define as Failure? Sales? profit? ROI? You could argue that lower slaes volume in the US is not a good measurement of success, espcailly when the product is global like the Mazda5, where 90% is sold everywhere but here.

 

More sporty looking: Chrysler Pacifica (failed) was this really sporty?

Smaller: Mazda5, Kia Rondo (failing, failed) Define Failure, is it profitable?

Bigger: Nissan Quest (failed, and the new generation is back to being a conventional van) I don't think it was any larger before than it is now, and it Still has only sold 12,000 unit this year, so being the right size isn' t making it a class leader.

More SUV like: GM Lambda quadruplets (successful) they are not minivans, they are CUVs like the explorer.

More stylish: Ford Flex (failing) maybe, but why, it isn't a true minivan.

Less practical: Toyota Venza (jury is still out) outsells the Flex 2-1 It is only a Camry Station wagon on Stilts, BTW it only has 5 seats.

 

You can't have your cake and eat it too.

 

I was replying to your claim that no one tried to disrupt the US minivan market with new ideas. That is 100% false.

 

All these are examples of different attempts at disruptive products and they all pretty much failed except making it more SUV like.

 

The definition of fail is pretty simple... if it doesn't change the underlying dynamic of the minivan market, then it failed as a disruptive product innovation. Sales and/or profit from international markets is irrelevant. You were talking about the US market.

[Biker16]

You can't have your cake and eat it too.

 

I was replying to your claim that no one tried to disrupt the US minivan market with new ideas. That is 100% false.

 

They weren't trying to make a better minivan, they were trying replace the minivan. There is a subtle difference, one tries to substitute the minivan with a different product, and the other that seeks to expand the minivan segment redefining the minivan, but still being a minivan/MPV.

 

The lambdas will never be called a minivan, neither will the flex, or Pacifica, they are not MPVs.

 

The S-max and Transit are MPVs, they are not running away from being people movers, by adding AWD, more ground clearance, or Trucky styling.

 

 

All these are examples of different attempts at disruptive products and they all pretty much failed except making it more SUV like.

 

They became SUVs, not simply SUV like.

 

The definition of fail is pretty simple... if it doesn't change the underlying dynamic of the minivan market, then it failed as a disruptive product innovation. Sales and/or profit from international markets is irrelevant. You were talking about the US market.

 

They did change the dynamic, fewer minivans were being bought and the segment itself consolidated around one format (FWD, 2+2+3 seating, 4x8 sheet of plywood, etc. ) where 15 years ago you could buy a RWD minivan, a Short wheelbase minivan, and smaller minivans, today you really only have slightly different flavors of the same Van. those buyer of the outlier minivans from 15 years ago didn't always migrate into the Conventional minivan, most left the segment completely and bought CUVs and other non minivans.

 

the Astro/Safari would be a good example of this those buyer needed to Tow and FWD van don't cut it, so they left the segment. because o the lack of options with in the segment there could be latent demand for alternatives to the conventional van, and ford could enter that market with far less risk than by developing a me too product.