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Tag Archive 'gm'

The general consensus is that General Motors operates a Product Pyramid profit model. This model is characterized by offering a myriad of product options that cover a wide range of buyer preferences. High volume, low profit products make up the bulk of sales, with low volume, high profit products providing excellent margins.

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There are four stages in the typical evolution of an industry: emerging, growth, maturity, and decline. Mature industries are marked by slow growth. Firms involved in a mature industry focus on market segments that represent high growth, further refining their strategy as a differentiator, and generally manage to cut costs by streamlining processes.

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Although General Motors is pursuing a strategy of differentiation in the car and light truck industry, their primary strategic focus, in terms of Treacy and Wiersema’s value disciplines, is customer intimacy. Customer intimacy “concentrates on building customer loyalty”.

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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.

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Primary Drivers of Change at GM

Mary Barra is the primary driver for change at GM. This is actually counter-intuitive, since Ms. Barra has been working for GM for over 35 years. That being said, during her tenure at GM, she has held positions of responsibility in many different departments and has a wide-ranging understanding of the automotive industry.

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