Sep 21st, 2015 by Scott Hebert
Porter defined two variables to describe generic business strategies — strategic advantage and targeted industry segments. Strategic advantage defines whether the company will pursue a low-cost provider strategy or instead try to differentiate based on uniqueness. The number of targeted industry segments determines whether the company will focus on all segments of the market or instead focus on a smaller niche (De Kluyver & Pearce, 2012). Although these are only generic strategies, it is useful to begin strategy formulation or analysis based on these generic business unit strategies.
Both Daniel and Tyler have adequately pointed out that GM is employing a differentiation strategy to separate themselves from their competitors. What has not been addressed as closely is how many market segments GM is targeting in the car and light truck industry. GM is using its various brands to target all segments of the industry. Chevrolet is the flagship brand and targets the largest segment of consumers. Cadillac is a luxury brand and focused on high-end buyers. The GMC brand is focused on buyers that need higher quality vehicle construction. Finally, Buick targets mid-range consumers looking for something more stylish than a traditional Chevrolet, but too cost-conscience for the Cadillac brand (General Motors, 2015). If you look at each brand individually, they are operating in a focused, niche in the industry. But, as a whole, General Motors is clearly targeting the entire car and light truck industry with their multiple brands.
De Kluyver, C. & Pearce, J. (2012). Strategy: A View From the Top (4th ed.). Boston: Prentice Hall.
General Motors. (2015). 2014 Annual Report. Retrieved September 21, 2015, from http://www.gm.com/content/dam/gmcom/COMPANY/Investors/Stockholder_Information/PDFs/2014_GM_Annual_Report.pdf.