Ford Motor Co.: The Product Warranty Program (A)

Case Solution

Melvyn A.J. Menezes
Harvard Business School ()

It raises important questions about product warranty policies as a strategic marketing variable. It also raises several interesting questions related to the role of product policy in competitive battles, product line issues, cross-functional coordination issues, and some ethical issues. Ford Motor Co., America’s third-largest industrial group, is faced with the question of how to react to a fundamental change in the warranty policy and philosophy of its main competitor, General Motors. Ford executives know that their decision will affect not only sales, costs and profitability, but also multiple departments (such as manufacturing, quality assurance, parts and service, and extended service plans) and their dealer network.

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