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Gm Presentation3


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  • While we are impressed with this presentation, it, like so many past and current analyses of the difficulties facing GM while offering potential solutions, fails to acknowledge the realities of economic war waged against it and other core elements of the U.S. manufacturing/economic base. One must understand the dynamics of predatory marketing strategies fostered, fomented, encouraged and perpetuated by certain governments; very much inclusive of China.

    The intent of these strategies is not to render their home based firms/enterprises hyper-competitive against their American counterparts, or whichever the target country, but to eliminate them.

    As a colleague said, history has shown that, with few exceptions, whenever U.S. firms are taken over by an offshore firm, the ultimate result is dismantling, not growth and inclusion within the corporate architecture.

    Companies like GM, Ford, Toyota, Honda and Boeing are not to be viewed just as business entities with first allegiances to stakeholders in line with core fiduciary responsibilities, but as entities being akin to nations in influence owing to massive global economic footprints. Moreover, the auto industry is a volume business, sustainable only through mass production and sales as the primary revenue driver.

    Otherwise, a GM would be rendered as nothing more than a profitable cottage industry participant, incapable of reprising its role as the engine of military operational sustainability in a time of War.

    Indeed, it goes without saying that the industrial base and the defense industrial base are one and the same.

    It is only by taking a systemic, holistic approach to difficulties of this magnitude --GM's present issues -- using the ideals of systems science, that equitable and long lasting solutions can be conceptualized and implemented.

    Expansion, not contraction, is more of an appropriate approach here, in line with its true and traditional role.

    Again, a well done presentation otherwise.
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Gm Presentation3

  1. 1. Abdurrahim Musleman
  2. 2. Agenda <ul><li>Background </li></ul><ul><li>Identify Problem </li></ul><ul><li>The Macro-environment situation </li></ul><ul><li>The Competitive situation </li></ul><ul><li>SWOT Analysis </li></ul><ul><li>Marketing Research </li></ul><ul><li>Project Objectives </li></ul><ul><li>Alterations to the Marketing Mix </li></ul><ul><li>Q & A </li></ul>
  3. 3. Background <ul><li>Multinational automobile manufacturer founded in 1908. </li></ul><ul><li>Was the world’s largest automaker until last year. </li></ul><ul><li>GM is the ninth largest publicly traded company in the World. </li></ul><ul><li>GM today employs about 266,000 people around the world. . </li></ul><ul><li>With global headquarters in Detroit, GM manufactures its cars and trucks in 35 countries and its vehicles are sold in 200 countries. </li></ul><ul><li>Currently, the United States holds the “largest national market” for General Motors. China, Canada, the UK, and Germany follow the United States for GM’s largest markets. </li></ul>
  4. 4. Brands
  5. 5. objectives <ul><li>position the company for sustained competitiveness, profitability and growth. </li></ul><ul><li>satisfy customers based on the design, quality, technology and value of our cars and trucks. </li></ul><ul><li>Continue solid growth in global vehicle sales. . </li></ul><ul><li>Investing dedicated to improving cultural, economic, educational, environmental, and social aspects of our communities. </li></ul>“ G.M. is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment.&quot; Mission Statement:
  6. 6. Identified Problem <ul><li>Falling car sales has been a problem for GM due to increased competition from foreign manufacturers & rising oil prices. </li></ul>
  7. 7. The Economic Situation <ul><li>The combination of the sharp run-up in oil and gas prices, rapid declines in the housing/mortgage/credit sectors, and the lowest levels of </li></ul><ul><li>consumer confidence in nearly 30 years have all dramatically reduce both the economic and automobile industry outlooks. </li></ul><ul><li>over the past few months, U.S. auto sales have declined by more than 30%. </li></ul>
  8. 8. <ul><li>November 2008, GM stated that it was dangerously low on cash, and weeks away from collapse if the government refused to bail the company out. </li></ul><ul><li>December 19, 2008, Congress approved $17.4 billion for the companies. </li></ul><ul><li>* Why didn’t the government let the company bankrupt? . </li></ul><ul><li>A failure by GM will likely trigger catastrophic damage to the U.S. economy, rapid failures among component and logistic suppliers, other domestic car manufacturers, raw material suppliers, technology and service providers, retailers and their suppliers, and GM creditors and financial institutions. </li></ul><ul><li>an estimated 3 million Americans could find themselves jobless within a year of GM’s collapse. </li></ul>The Macro environment situation The Economic Crisis
  9. 9. <ul><li>The automobile industry is highly competitive. The North American automobile industry is dominated by what’s known as the ‘Big Three’: General Motors, DaimlerChrysler, and Ford Motor Company. </li></ul><ul><li>The two largest foreign competitors include both Toyota and Honda. </li></ul><ul><li>Since Toyota’s introduction of the Prius, an innovative gas electric hybrid car, GM has been struggling to keep up with competition. </li></ul><ul><li>US auto makers lost 8% of the US auto market last year, while Asian manufacturers gained 5% and European companies gained 3% </li></ul>The Competitive Situation
  10. 10. Competitive Situation How Does GM compete? 2008 Sales Revenue Employees At 2008 Year-end $182 Billion $230 Billion $177 Billion $172 Billion 266,000 316,000 274,999 245,000
  11. 11. The Competitive Situation 2006 GCC Market Share
  12. 12. S.W.O.T. analysis <ul><li>Strengths </li></ul><ul><li>Name recognition </li></ul><ul><li>Corporate Social Responsibility </li></ul><ul><li>Quality improvements and perception thereof. </li></ul><ul><li>Opportunities </li></ul><ul><li>Cut health-care costs and move production overseas. </li></ul><ul><li>Concentrating on smaller more fuel efficient cars </li></ul><ul><li>Expansion of their global presence . </li></ul><ul><li>Weaknesses </li></ul><ul><li>The decline of market share. </li></ul><ul><li>High pension obligations and health care costs. </li></ul><ul><li>Lack of differentiated products. </li></ul><ul><li>Unfocused product line </li></ul><ul><li>Unresponsive corporate culture. </li></ul><ul><li>Too much investment in SUVs and Trucks. </li></ul><ul><li>Threats </li></ul><ul><li>Intensity of rivalry among competitors worldwide. </li></ul><ul><li>Weak consumer confidence and tight credit. </li></ul><ul><li>The UAW can hurt General Motors if unhappy. </li></ul><ul><li>The Volatility in fuel prices. </li></ul><ul><li>Government legislation. </li></ul>
  13. 13. Research Plan <ul><li>Primary Research </li></ul><ul><li>Limited to Qatar university </li></ul><ul><li>Survey Research: Focus Group Amendment </li></ul><ul><li>Simple Random Sample: 15 students </li></ul><ul><li>Secondary Research </li></ul><ul><li>Official Websites </li></ul><ul><li>Business Magazines </li></ul><ul><li>Journals </li></ul><ul><li>GM’s annual reports </li></ul>
  14. 14. Findings of Market Research <ul><li>Primary </li></ul><ul><li>60% of the sample have expressed their impression by GM design. 20% have appointed to the company’s spare parts cost , followed by 10% which have stated that they worried about the reliability of the GM cars. </li></ul><ul><li>Secondary </li></ul><ul><li>going for smaller cars is not only smart, but also trendy. And because fashion is of high importance with the upper classes, the little green cars with luxury trimmings become quite plausible . </li></ul>
  15. 15. Marketing strategy development Project objectives <ul><li>Modify the company’s U.S. product portfolio, toward more fuel-efficient cars and crossovers. </li></ul><ul><li>Reduction in brands, nameplates and retail outlets, to focus available resources and growth strategies on the company’s profitable operations. </li></ul>
  16. 16. Alterations to the Marketing Mix: Product <ul><li>Close or sale up to six of GM brands: </li></ul><ul><li>Pontiac, Buick, Saturn, Saab, GMC, and the Hammer. </li></ul><ul><li>Keep: </li></ul><ul><li>Cadillac </li></ul><ul><li>Chevrolet </li></ul><ul><li>* GM could save $8 billion a year by cutting back to just these two brands that represent the soul of GM. . </li></ul><ul><li>* With fewer brands, GM would no longer have to maintain 7,000 dealerships . </li></ul>
  17. 17. <ul><li>Differentiation strategy: </li></ul><ul><li>Cadillac: </li></ul><ul><li>Full-line, edgy-styled, high volume luxury brand that competes directly with BMW and Mercedes-Benz. </li></ul><ul><li>Chevrolet: </li></ul><ul><li>Remain GM’s high-volume brand, mainstream-oriented, offering vehicles in every major segment. Competes with Ford, Toyota, Dodge and Nissan. </li></ul>Alterations to the Marketing Mix: Product
  18. 18. Alterations to the Marketing Mix: Product <ul><li>launch predominately high-mileage, energy-efficient cars </li></ul><ul><li>and crossovers. </li></ul><ul><li>During the 2009-2012 Plan, General Motors should invest </li></ul><ul><li>approximately $2.9 billion in alternative fuel technologies. . </li></ul>
  19. 19. Alterations to the Marketing Mix Cont. Price <ul><li>Abandon the employee pricing discounts as they prove to be very harmful to the company and its image. </li></ul><ul><li>Selling lots of vehicles doesn't necessarily translate into higher profits unless the cars and trucks are sold at the right price. </li></ul><ul><li>begin pricing all the new models in a more rational way, at the actual price for which they usually sell. </li></ul><ul><li>Cadillac: </li></ul><ul><li>Very expensive </li></ul><ul><li>Chevrolet: </li></ul><ul><li>Economy-priced </li></ul>
  20. 20. <ul><li>reduce GM retailers to 3,000 by 2012; This will occur primarily in metropolitan and suburban areas where GM has too many dealers. </li></ul><ul><li>This will lead to increase annual throughput for the remaining outlets to a more competitive level. </li></ul><ul><li>GM’s distribution strength in rural areas, which is a significant competitive advantage, will be largely preserved. </li></ul>Alterations to the Marketing Mix Cont. Place
  21. 21. Alterations to the Marketing Mix: Promotion <ul><li>The company is perceived as a gas-guzzling company. </li></ul><ul><li>pursues a &quot;green&quot; promotion strategy that addresses global energy and climate issues to improve its overall corporate image. </li></ul><ul><li>We propose a cost-effective campaign, focused on direct marketing, publicity, and Internet web page. </li></ul><ul><li>We suggest that the company partner with an environmental icon like for example Algore, and sponsor environmental awareness campaigns. </li></ul>
  22. 22. Thank You
  23. 23. Q & A