General MotorsPresented by-
Reena dewanganShiladitya sen
guptaRashmi nidhi sahu
Prahlad SahuShashi Bhagat
Pratiksha dewangan
SIMER
Grand strategy for GM
Introduction– Grand strategies , often called master or business
strategies, is an extension of the existing BCG matrix which helps determine the strategies which can be adopted for a particular set of situations and provide basic direction for strategic actions
– Indicate the time period over which long-range objectives are to be achieved
– Firms involved with multiple industries, businesses, product lines, or customer groups usually combine several grand strategies
– Any one of these strategies could serve as the basis for achieving the major long-term objectives of a single firm
Four Alternatives• Stability
• To remain in the same size or• To grow slowly and in a controlled fashion
• Growth• Internal growth: can include development of new or changed products• External growth: typically involves diversification – businesses related to
current product lines or into new areas
• Combination -It involves deliberate use of different strategies for different units or divisions at the same time or chronological use of different strategies over the period of time.
• Retrenchment -The organization goes through a period of forced decline by either shrinking current business units or selling off or liquidating entire businesses.
Fig. 8-5: Model of Grand Strategy Clusters
Rapid Market Growth
Slow Market Growth
Market Development Market Penetration Product Development Horizontal Integration Divestiture Liquidation
Retrenchment Concentric Diversification Horizontal Diversification Conglomerate Diversification Divestiture Liquidation
Market Development Market Penetration Product Development Forward Integration Backward Integration Horizontal Integration Concentric Diversification
Concentric Diversification Horizontal Diversification Conglomerate Diversification Joint Ventures
Strong Competitive Position
Weak Competitive Position
I II
IIIIV
• MARKET PENETRATIONThe main task here is to increase sales by encouraging wider usage of existing products by existing customers --for example, this could be achieved in the market for sunglasses by promoting the product as a fashion accessory, or by formulating an extra-mild shampoo with the directive to consumers to wash their hair every day.
• MARKET DEVELOPMENTThe entering of new markets could involve expansion into new geographic areas, both local and foreign, a shift from consumer to industrial markets or, possibly, marketing the product or service to new segments or demographic groups.Ex: Hallmark cards, who regard themselves as being in the "social greetings business". A casual glance at their product range demonstrates a large variety of circumstances in which a card could be purchased, e.g. secretaries' day, pets' day, and congratulations on your divorce!
• PRODUCT DEVELOPMENTThis is sometimes referred to as a continuous innovation strategy, the intention of which is to protect or develop market share by the use of product modifications and enhancement.Ex: Sony Corporation who market dozens of models of the Walkman, ranging from "My First Walkman" for children which is a brightly coloured, easy-to-use, fun model, to the "Professional Walkman", which sports numerous features that reflect the technical wizardry of the manufacturer.
DIVERSIFICATION
• Diversification has the primary objective of reducing risk by moving into new areas that afford good growth opportunities, better profit prospects and greater levels of certainty. Such a strategy is commonly adopted in a "cash cow" situation when there is reason to believe that the golden days of profitability are gone for good.
• PRODUCT/ CONCENTRIC DIVERSIFICATIONProduct diversification may sometimes be referred to as concentric diversification. This requires a firm to develop, or acquire, new products which have market or technological synergies with current products. These products may, or may not, be intended for sale to the company's present markets.
• HORIZONTAL DIVERSIFICATIONThe firm adds new products that could appeal to existing clients, e.g. a producer of sunglasses distributing tanning lotion
• CONGLOMERATE DIVERSIFICATIONThe adding of products or businesses that have no relation to current technologies, products or markets. The Mitsubishi Corporation manufactures an immense range of products, ranging from disposable ballpoint pens to bulk carriers.
INTEGRATION• Commonly confused with diversification, integration relates more precisely to
the vertical aspects of manufacturing and distribution logistics.
• BACKWARD INTEGRATIONIf a company were to undertake a strategy of backward integration, investment would result in the acquisition of vendors--for example, 7-Up purchasing their flavour supplier.
• FORWARD INTEGRATIONThis strategy usually involves the movement into logistical, distributive, or retailing activities.
• HORIZONTAL INTEGRATIONA pure form of growth, horizontal integration encourages ownership or control of other firms in the industryEx: Ford's acquisition of Jaguar, and Fiat's acquisition of Ferrari.
RETRENCHMENT
Retrenchment is a common strategic response in markers that are subject to adverse economic pressures, uncertainty, or cheap foreign competition. Retrenchment can be differentiated from divestment, in that the former is a reaction to temporary hardships whereas divestment has the element of permanency about it.
Cadillac
Internal & External Analysis
Strengths -Extensive cash reserves-Global network of suppliers and distributors-Economies of scale and scope-Quality improvements-Low cost suppliers through competitive bidding process-Technological know-how for SUVs-Only company to have invested in all 5 alternative fuel technologies-Developed internet distribution channels
Weaknesses -Legacy costs/unionized labour force-Brands require large investments to maintain equity and are a barrier to innovative thinking-Poor corporate reputation for green technology-Customer perception of low quality-Bureaucratic processes create delays-Fixed investment in SUV production-Inadequate experience in smaller vehicle production
Opportunities -Increasing demand for smaller cars and CUVs-Emerging world markets-Reduce costs through JIT-Demand for environmentally friendly cars-Government subsidies-Increasing public awareness of green technology
Threats-Economy fluctuations affect sales-Increasing regulations on CO2 emissions and recyclable parts-Decreasing demand for SUVs-Increasing oil prices-Rise in commodity prices
Launched On Model Rate (Rs. In Lakhs)
Competitor
2003 Chevrolet Optra 7.81-10.29Honda Civic,Skoda Octavia,
Maruti Verna
2004 Chevrolet Tavera 7.66-9.4Toyota Innova,Tata Safari,
Mahindra Scorpio
2006 Chevrolet Aveo 5.99-7.05Honda City,
Maruti Swift Dzire, Ford Fiesta
2006 Chevrolet Aveo U-va 3.8-4.25Maruti Swift,
Skoda Fabia, Hyundai I20
2007 Chevrolet Spark 3.09-3.70Maruti WagonR, Tata Indica,
Maruti WagonR
2008 Chevrolet Captiva 17.40-19.22Ford Endeavour, Honda CR-V,
Mitsubishi Pajero,outlander.
2009 Chevrolet Cruze 10.93-12.56Honda Civic,
Skoda Octavia, Skoda Laura
2010 Chevrolet Beat 3.42-4.03Maruti Ritz, Fiat Grand Punto,
Hyundai i10,i20
GM India Product launches
MODEL TYPE
Chevrolet Spark Small Size
Chevrolet Beat Small Size
Chevrolet U-VA Small Size
Chevrolet Optra Mid Size
Chevrolet-Aveo Mid Size
Opel Corsa Mid Size
Opel Astra Mid Size
Chevrolet Tavera SUV
Chevrolet Tavera Neo SUV
Chevrolet Captiva SUV
Product Positioning
Optra Magnum
Cruze Altis Civic Octavia Cedila Linea Verna
Price Range 7.81-10.29 10.93 to 12.56
11.76-13,93 12.18-13.45 12.34 – 14.91
8.96 -11.09 6.36-8.62 7.70-9.04
Units Sold 5,025* 12,500 14,000 12,700 -NA- 2000 11,300
Aveo Logan Fiesta SX4 Dzire City
Price Range 5.99-7.05 4.90-6.92 6.66-9.04 6.85-8.55 4.86-6.98 7.71-8.95
Units Sold 5,025 * 23,465 -NA- 2,09,000 14,400
Beat Spark Wagon R A-Star Alto Estillo Santro I10
Price Range 3.42- 4.03 3.09- 3.70 3.23-4.45 3.55-4.23 2.31-2.96 3.21-4.11 3.57-3.76 3.61-4.46
Units sold 62,700 4,38,000 3,52,000
U-VA Swift Ritz Grande Punto
Vista I20 Fabia
Price Range App 4.00 4.17-5.40 4.01-4.95 4.27-6.43 3.72-4.53 5.27-6.13 5.11-7.32
Units sold 5,096 2,17,409 -NA- 51,500 73,000 -NA-
Neo 2/Old Tavera
Innova Sumo Grande
Safari Scorpio Xylo
Price Range 7.66-9.40 8.75-12.39 5.29 – 7.25 7.51 - 11.92 5.15 -9.50 7.64 8.75
Units Sold 22,474 28,600 37,500 1,10,000
GM India Product Line Up
• Cars• Trucks
• SUVs• Hummer
Star Question Mark
DogCash Cow
foreign brands such as Holden, Vauxhall, and Opel, and full-size trucks and SUVs due to their large consumption of expensive fuel.
Hybrid vehicles such as the 2006 Chevy truck, and smaller SUVs and crossover vehicles such as the current Pontiac Vibe.
3 pillars to create high impact and recognition for brands:
1. Integrations and Innovations 2. Strategic Partnerships 3. Sustenance and Continuity
Marketing strategy of GMI
Thank you