STRATEGIC AUDITBY

EVAN SMITH

History, Development, and Growth

Had its 107th birthday on September 16th. Led global vehicle sales from 1931 – 2007. Introduced the world’s first automatic transmission, mass produced V8 engine, and the first turbo charged engine. Produced vast amounts of vehicles and airplanes for the Allies during WWII, more than any other company. Helped build the Lunar Rover vehicle for missions to the moon. GM's first female CEO, Mary Barra, assumed her role in 2015.

In the 1980's, problems began to develop for GM, eventually resulting in it's filing bankruptcy and bailout by the US gov‘t in 2008. Emergence of Asian brands and small cars into the US market hurt GM. GM's reliance on sales of large trucks and SUVs in the early 2000s demonstrated its lack of understanding of the auto market. Problems with labor groups (UAW). Recent faulty ignition switch lawsuit. Lagged behind Toyota in hybrid public perception. However, GM repaid $39 million of $51 million loaned by taxpayers.

The Problems with GM I Have Found Are: Aside from Chevrolet and Cadillac, GM's brand's missions are still not clearly defined, even after restructuring them. Buick’s

products overlap with Cadillac’s and they compete for the same demographic of buyers. GMC doesn‘t have a clearly defined

segment target or buyer.

Chevrolet is GM's low cost mainstream brand, but it also sells the Corvette Stingray Z06, which sells for over

$100,000 fully loaded.

GM doesn't have a brand that competes with Chrysler's successful Jeep brand.

GM no longer has a dedicated performance line, such as Chrysler’s Dodge brand.

GM's marketing is still “pre-bankruptcy GM”. Chrysler's marketing has turned their hardships as a strength.

Two examples of Chrysler’s successful Imported From Detroit advertising campaign…

Recommendations for Strategic Success: Spin off Corvette into its own full line performance brand to compete with Porsche.

• Last year, Porsche sold 47,000 vehicles in the US using seven different models. Corvette sold 37,000 with one model.• Porsche sells two different SUV models. They sell a 4-door sedan. Corvette can easily compete with Porsche in those segments.• This expansion of Corvette would have to begin in China, where people don‘t associate Corvette with Chevrolet.

Re-brand GMC as an adventure brand to compete head to head with Jeep.• Produce a vehicle to compete directly with Chrysler's Jeep Wrangler Unlimited. (4-wheel drive,

convertible, seats 5, iconic styling).• Produce a mid-size SUV to compete with Ford Explorer and Jeep Grand Cherokee.

Adopt a marketing campaign that doesn‘t shy away from past mistakes.• Don‘t try to emulate foreign brands. Embrace and highlight the fact that GM is a proud American

company that has been through tough times. People like a comeback story.

Sell or abandon the Buick brand, even though it's over 100 years old.• Buick's and Cadillac’s products overlap each other, and they steal buyers away from each other.• Cadillac has been successful in decreasing the average age of its buyers, Buick has not.

Recommendations for Strategic Success:

Enter the motorcycle, lawn mower, and the rapidly expanding UTV market.

• American motorcycles have a good reputation worldwide mainly due to Harley Davidson. BMW has been successful in motorcycles

and Honda has made lawnmowers and generators for a long time. Honda even makes a robot

VW's diesel emissions scandal is a huge opportunity for GM (and others) to gain market share from VW customers looking to change brands over this lie.

Cadillac should abandon the livery industry. (hearses, limos, etc.)

Rewrite mission and vision statements. Vision statement should be short, but ground breaking and revolutionary.

Ex: GM's vision is to relentlessly drive human mobility forward.

STRATEGIC AUDIT