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Gm Tries To Sharpen Its Car Images

2286 words - 9 pages

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 prices started dropping after Gulf War and reached its lowest price in 1994. These were surely good signs for auto industry.

B. Industry

General Motors is in vehicle manufacturing, designing, building and marketing cars and trucks business.

Chrysler Motor Corporation, one of GM’s major competitors created Chrysler for fulfilling market’s luxury car demand, Dodge is offered as a middle-priced car as well as trucks, Plymouth for the market’s low budget or entry level segment and the DeSoto as a step-up from the Dodge.

Ford, after losing its big market share and technological...

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