Auto-By-Tel and General Motor Case Study :David and Goliath

1. Auto-By-Tel and General Motor
Case Study :
David and Goliath
Djadja Achmad Sardjana
STMB MM Biztel
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2. Case Fact
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3. Car Business Model
• Every business looking at new ways to use
information technology to sell and service the product
including on car business.
• In early 90s buying car online was still in the realm of
fiction, but today customer attracted to on-line engine
with attractive offering.
• Internet channel car business expected rise each year
to ~50%.
• On 1995, Auto-By-Tel invented on-line automotive
purchasing and on 1998 has excess of one milion car
buyers.
• On October 1997, GM became the 1st manufacturer on
a consumer focused on-line service GM BuyPower.
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4. Potential Revolution on Car Industry
• Explosive growth of Internet
• Accelerating pace of new inventions
• Increased customer power
Internet intermediaries is growth (inc. Auto-By-Tel)
GM and other car manufacturers are only beginning
to respond dynamic on-line car retailing
GM and other manufacturers question:
How to demonstrate appropriate leadership in
Cyberspace and seize initiative from Internet start-ups?
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5. General Motors: Company Background
• Major portion derived from automotive industry with supported
with financing and insurance operation.
• Business segments:
1. GM-NAO
2. Delphi
3. GMIO
• Competitor is fierce caused by other manufactures also operate
vehicle manufacturing in the US and Canada.
• Tend can’t adapt the change paradigm and still think that the
firm is to big ever to lose it dominance The Economist Quote
Many expert doubt on the success of GM’s attempt leadership in
Cyberspace.
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6. Auto-By-Tel
Peter Ellis, founder of Auto-by-Tel,
"The Internet's opportunities for efficient, rapid communication,
comprehensive disbursement of information, and a cost efficient
marketing model, have made it possible for Auto-by-Tel to grow at a
phenomenal rate."
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7. Auto-by-Tel
Name: Auto-by-Tel
Description: One-stop online car store
URL: www.autobytel.com
Founded:1989, Internet Service-1996.
• Provides car buyers with comprehensive information including
dealer invoice pricing, rebates and incentives.
• Customer can submit a free purchase request for the vehicle of
their choice at the Auto-by-Tel website.
•Purchase is routed to a local Auto-by-Tel Accredited Dealer who
calls the consumer with a low, competitive, no haggle price.
•Joining Auto-by-Tel's network of dealers costs $500-$1500 per
month - a fraction of an auto dealer's typical monthly budget.
•Dealers know that the customers who are attracted to Auto-by-Tel
are more informed and ready to buy.
•Auto-by-Tel's North American network has over 2,600 Accredited
Dealer franchises. Auto-by-Tel also offers insurance, leasing and
financing services.
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8. Auto-by-Tel Business Model
Auto-By-Tel FasTrakSM Car Cyber Store
Customer Website
Auto-By-Tel Financial
Acceptance Corp Institution
Auto-By-Tel Auto-By-Tel
Platinum Plus New Services
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9. GM BuyPower
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10. GM BuyPower
Name: GM BuyPower
Description: One-stop online car store
URL: www.gmbuypower.com
Founded: October 1997, Internet Service- October 1997.
• GM BuyPower does more than just put all of the great GM brands at fingertips.
• GM BuyPower gives the service, information, and tools need to find and
purchase the exact vehicle wanted.
Service
• Customized service from a GM BuyPower Manager at a nearest dealership
and with no obligation to buy
• Over 5,200 participating dealers nationwide
Information
• Comprehensive vehicle information
• Searchable dealer inventory, updated every 24 hours
• Window Stickers for more than 750,000 new GM vehicles
Tools
• GMAC Financing -- estimate payments and apply for credit online
• Third-party vehicle comparisons provided by an independent research firm
• Current Offers section -- keeps up to date on promotions
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11. Auto-by-Tel Business Model
GM BuyPower Search Function Certified GM
Customer Website & Feature Comparison BuyPower
Dealer
Face to Face
Interaction
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12. Analysis Summary
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13. GM BuyPower
Name: GM BuyPower
Description: One-stop online car store
URL: www.gmbuypower.com
Founded: October 1997, Internet Service- October 1997.
• GM BuyPower does more than just put all of the great GM brands at fingertips.
• GM BuyPower gives the service, information, and tools need to find and
purchase the exact vehicle wanted.
Service
• Customized service from a GM BuyPower Manager at a nearest dealership
and with no obligation to buy
• Over 5,200 participating dealers nationwide
Information
• Comprehensive vehicle information
• Searchable dealer inventory, updated every 24 hours
• Window Stickers for more than 750,000 new GM vehicles
Tools
• GMAC Financing -- estimate payments and apply for credit online
• Third-party vehicle comparisons provided by an independent research firm
• Current Offers section -- keeps up to date on promotions
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