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Raises powerful issues concerning product warranty policy as a strategic marketing variable. Also raises several exciting issues concerning the role of product policy in competitive battles, product line issues, interfunctional coordination issues, and some ethical issues. Ford Motor Co, America''s third largest industrial organization, is faced with the question of how to respond to a major change in the warranty policy and philosophy of its major competitor - General Motors. Ford executives realize that their decision will have implications not only for sales, costs, and profitability, but also for several departments (such as manufacturing, quality assurance, parts and service, and extended service plans) and their dealer network.