GM Tries to Sharpen Its Car Images
Executive Summary
General Motors, the world’s largest vehicle manufacturer took the industry leadership from Ford Motors Company in 1931. With its customer oriented objective and significant marketing programs, GM protected its position since then.
Starting from 1990, GM became industry’s biggest money loser in the U.S. market by tracking out of the road it always had been and forgetting how it became and protected its leadership for over 60 years. Top management moved slowly by taking important decisions, lost control over the divisions and did not stop the production of the dogs on time. GM also lost touch with its customers and dealerships, so, the well-respected brand name became a dog itself in consumers’ minds.
After assigning a new CEO and top management team, GM tried to recover as soon as possible. To mend the broken brand, a new marketing manager, a brand guy himself was needed. Ron Zarella was transferred from Bausch & Lomb to change the image of GM products. Zarella took long and short-term decisions successfully and ended the arguments inside of the company. He changed marketing structure by creating brand manager positions to work with the services such as design team, public relations, customer satisfaction, sales, service and distribution. Five-Phase Vehicle Development Process was created, engineers and marketing groups from different brands combined to work with each other. As results of these innovations, GM was able to design new cars shorter; although still not shorter than its competitors, market its products more successfully and gained consumer confidence back again.
Situation Analysis
A. Environment
Fast technological changes and increasing affordability changed consumer expectations in 90’s. Big, heavy cars had still market share but the cars which are smaller and have low gas mileage were stars for the Generation Y. Power doors, power windows, power steering and air conditioning became standards for all consumers which were found in luxury cars or offered as an extra in 70’s and 80’s.
Starting from 1990; especially following the Gulf War, The U.S. economy started recovering after recessing in 80’s. The federal budget deficit was getting smaller, long-term interest rates were lower and U.S. businesses had equal cost of capital compared to their foreign competitors. Oil ...
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...ing should work together as one body and help each other as possible as they can and the time for designing products should be shortened. For brand management positions, not only insiders but also outsiders should be installed to get new and fresh ideas. The teams containing brand managers and engineers from different divisions should be made up to share ideas and experience to solve the quality, production and distribution problems of every division.
Consumer confidence can be gained back by changing products’ characteristics, smart pricing strategies by concentrating cost administration or cost management, training salespeople and dealerships in consumer friendly way, offering flexible financing solutions with promotions and, teach the consumer the benefits of the product.
Summary and Conclusion
GM can be successful in its profit-maximization and “A car for every purpose, a car for every pocketbook” objective by using these solutions. The company will have better operation, production design will be faster, employee participation and motivation will be high, customer oriented approach will be applied and protect its industry leader position against its competitors.
Entering the 1950s, no corporation even came close to General Motors in its size, or it's profits. GM was twice as big as the second biggest company in the world, Standard Oil of New Jersey (father of today's Exxon Mobil), and had a vast diversity of businesses ranging from home appliances to providing insurance and building Buicks, Cadillacs, Chevys, GMCs, Oldsmobiles, Pontiacs and trains. It was so big that it made more than half the cars sold in the United States and the U.S. Department of Justice's antitrust division was threatening to break it up(to prevent Monopolies, Like how Standard oil was broken up). In the 21st century, it's almost hard to imagine how powerful GM was in the 50s and 60s. Sports cars from Europe were getting popular, because of servicemen coming back from WWII, and wanted sports cars, but American Automakers didn't make sports cars, so they would either buy foreign, or go without. A man named McLean would still try to make a low priced sports car. But it didn't work. The idea of a car coming from GM that could compete with Jaguar, MG or Triumph was pretty much considered stupid and insane. C1:Generation: Bad but valuable. Just 300 Corvettes were made in 1953. Each of these first-year Corvettes was a white roadster with red interior. The Corvette was made of fiberglass for light weight, but the first cars were made with a really weak, (and kind of pathetic for a “sports car”) 150 horsepower 6-cylinder engine and an automatic transmission. The result was more of a look at me, I’m rich car than a race car. The first generation of the Corvette was introduced late in 1953. It was originally designed as a show car for GM's traveling car show, Motorama, the Corvette was a Show Car for the 1953 Motorama display...
Standard & Poor’s. General Motors (GM). (1999) Standard Corporation Descriptions. (pp. 6000 – 6003) New York, NY: McGraw-Hill.
The 1980’s is one of the most interesting decades that was experienced in the United States. Dealing with the stock market, the coming up of new inventions, all the way to the types of music people listened to. During the 1980s, the only thing that made Americans be “Americans” was because of the things they were provided with. Many Americans had fun throughout the 1980s with materialistic, glamorous, and technological life styles; therefore there were different economical problems that Americans faced.
In the United States, modern car manufacturing has been historically dominated by the American companies including Ford Motor Co., Chrysler Group LLC, and General Motors Co. These three companies, known as the Detroit Three, controlled 95% of the market in the 1950’s and the dominance continued until the beginning of the 21st century. In the 1980’s Japanese auto manufacturers entered the United States, a decade later the Germans, and finally in 2000’s the Koreans. By the end of 2009, the Detroit Three only accounted for 45% of the total U.S. auto market. Another factor that had influence on this was constant fluctuations in gasoline prices and price sensitive consumers. According to the U.S. Department of Energy, gas prices hit record high averaging $3.07 per gallon in May 2007 and kept climbing up to $4.08 in July 2008. As gas prices kept increasing, consumer buying trends have been changing. In 2006 sales for SUVs, pickup trucks, and vans dropped 16%, while the market for compact cars rose by 3%. Unfortunately, the Detroit Three were not prepared for this since their...
During the 70?s the world entered a recession because ?the cost of economic growth of other industrialized nations began to rise rapidly?, the United States felt the effect. (AMSA, 2004, ¶ 14). With the development of other nations, came lose of industrial production for the United States of America. American Medical Student Association (2004) stated ?In 1950 we had 60% and by 1980 we only claimed 30% of the world production?, this brought higher prices as well as loses of jobs.
The world of technology is ever changing and advancing. With the automotive industry in play technology is constantly surpassing what is available today with what can be done for tomorrow. Technology and the automotive industry go hand in hand with constant improvement to components of cars. Due to technology advancement there is competition within the car industry, especially between American car companies and European car companies. European car companies provide their buyers with innovative variety and revolutionary luxuries. European car technology is superior to American car technology due to their safety, entertainment, and luxury features.
Aside from national security interests domestic thirst for oil boomed. The war brought us out of the Great Depression. During the Depression a traditionally capitalist American society embraced a kind of socialism with the New Deal. WWII transformed the bear turned in a raging bull. Capitalism was back with a vengeance, charging forward stronger than it had ever been before. The heavy industry built up to sustain the war effort was retooled to meet the demands of the emerging consumerist culture of the 1950s. The new explosion of industrial output became so pervasive that the decade ended with President Eisenhower warning of the dangers of the growing “Military-Industrial Complex.”
Achieving world class business performance is a major challenge in today’s society. Manufacturing companies continue to face increased competition and globalization from its competitors. (1, p. 148). The automotive industry is one of the most volatile manufacturing industries that we have, which was evident in the 2008 – 2010 automotive industry crisis. (2) This global financial downturn served notice to the American automotive manufactures to raise the bar, in order to achieve word class business performance. General Motors, one of the country’s largest automotive manufactures, had to receive a government bailout to survive. During this time many with the corporation asked themselves, if we were a world class business, would we be facing this pending crisis. The answer was a resounding “NO”. General Motors has come out of bankruptcy and is focused on being a world-class business organization.
General Motors sells vehicles in more than 120 countries CITE. GM customers live in varied climates and terrains and use their vehicles for a variety of applications. This means that GM’s fleet must contain vehicles that span a...
General Motors is one of the world's most dominant automakers from 1931. After 1980s economic recession the main goal for automobile companies was cost reduction. Customers became more price-sensitive. Also Japanese competitors came into market with the new effective system of production. So market was highly competitive and directed toward price reduction. The case states that in 1991 GM suffered $ 4.5 billion losses and most part of the costs of manufacturing was due to purchased components. GM NA hired Lopez in order to find the way from "extraordinary" situation and reduce costs.
Roger & Me shows that GM's board of directors used company profits not to create new jobs, but to buy already existing assets, such as data processing companies (EDS) and weapons manufacturers (Hughes Aircraft) at inflated prices, and to automate their current assembly lines, and build new plants in Mexico and in Asia -- destroying jobs in the United States in the process. In Mexico, GM pays the worker...
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The company must continuously keep up with automobile trends, new technology, and government and safety demands. According to General Motor’s SWOT Analysis provided by MarketLine, the company’s “robust technological capabilities enhances new product development,” ( Marketline, Pg. 32). The SWOT Analysis also outlines a company opportunity for the advancement of hybrid electric and alternate fuel vehicles (Marketline, Pg. 32). GM has strong capabilities for new product designs and research and development. The company has spent nearly $15 billion on research and development activities in the last two years with the focus of developing new products and services, improving existing products and services, and improving fuel economy and safety of vehicles (Marketline, Pg. 33). The company’s top innovation priorities lie in development and advancement of alternative propulsion strategies, fuel efficiency. They now offer the FlexFuel vehicle that can run on gasoline-ethanol blend fuels as well as electric cars and hybrid cars (Marketline, Pg. 34). General Motors maintains its spot as an industry leader of innovation and development, which in turn gives it a strong competitive
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