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Example research essay topic: General Motors Market Share - 1,420 words

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... lans to expand their current dealer base (Child, 2001). GM can offer little but a cash buyout that is currently on the table. Although most dealerships want to stay in business, there is little doubt that some will fail after Oldsmobile fades into the past. Many commentators consider the Alero, Aurora and Intrigue as being some of the best cars offered by GM. Consider Saturn, $ 20 billion has been spent on the division, and it has never generated a profit.

Some consider that Saturn was starved due the efforts to revitalize Oldsmobile. Whether or not this was the case, Saturn will see funds earmarked for its cause as a result of the disappearance of its primary competitor within GM. It has been suggested that incorporation of the Aurora and Intrigue models into the Saturn division would be a smart move to push up dealer volume of what is considered an incomplete model line. Also, scrapping the ill conceived Saturn SUV and replacing it with the Bravada would make sense. The threats to Olds were a lack of forward thinking as to how the automotive market was changing. The response was sluggish allowing for the decline that was experienced.

As GM begins consolidation, other problems internal to the Big General will continue to loom on the horizon. One would have to view the giant as being its own worst enemy. Poor management, underestimation of consumer sophistication, labor relations and a spiraling market share for US manufacturers will plague the company until those at all levels realize that their culture will continue to drive sales and profitability through the floor. Oldsmobile sales were approximately 300, 000 units per year. We are unsure as to the number of consumers that were loyal to the brand.

How many of those that exhibited brand loyalty and now have a feeling of alienation toward GM should be considered a threat to future loss of market share. At an average of $ 20, 000 per unit, 6 billion dollars of sales could be diverted to other manufacturers. Maintaining consumer loyalty needs to be considered. As discussed previously, consideration of consolidating the Olds line with Saturn is a viable alternative. General Motors marketing effort seems to be unfocused. This year the Bravada will pace the Indy 500.

Millions have been spent supporting the Aurora engine as the primary powerplant for the Indy Racing League. Oldsmobile logos are sported on most all entries. The whole episode is bizarre when viewed from a consumer / enthusiast standpoint. Extolling the virtues of a rich heritage, at this juncture, makes little sense and indicates a total lack of identification with a discriminating market that was once the primary focus. One should realize that it was only 3 years ago that strikes at 2 UAW locals in Detroit cost the company 2. 5 billion in net profits. Did this strike weaken GM and help bring about the demise of Oldsmobile?

The actions of isolated parties can create devastating effects that ripple throughout the economies of those seemingly unrelated to the action. For example consider the loss of an Olds dealership in a Florida community of 8000 inhabitants. 40 jobs will be lost, $ 500, 000 in advertising revenue wont be spent, $ 500, 000 in tax revenues are gone, and $ 2, 000, 000 million in wages wont be paid (Truett, 2001). Partially due to the pending loss of the $ 300 million loss of Oldsmobile business, Burnett Worldwide, a Chicago based ad agency, announced the layoff of 200 employees. GMs future will be that of trying to maintain market share more so than making advances. Divisions such as Buick (sales 400, 000 units yearly), Saab (150, 000 units yearly, internationally), and Saturn may be on the chopping block next. The threat faced by overseas competition is real and will continue.

No clear strategy seems to be in place to increase market share by direct competition with those that have eroded GMs markets. An economy that is somewhat in the doldrums along with high-energy prices may also have a negative effect on GMs stalwart truck and SUV market. CONCLUSION AND RECOMMENDATIONS Olds Motor Company was founded on a sound business plan and created a suitable replacement for the horse and carriage. Ransom Olds understood the need in the market and made an item that was well received. General Motors kept Oldsmobile alive in the market place for over 100 years. This longevity was not an accident, but an understanding of the target market.

In the last 5 years Oldsmobile has struggled to keep market share. The company has not kept up with the needs and wants of its customer base, nor has it focused on its original target market. Throughout Oldsmobile's history, they have marketed to a mature age group. This target market was very loyal; however, the management of Oldsmobile wanted to expand the target to younger aged people.

The ad campaign offended its original target market and sales declined. The market decline is almost entirely blamed on the new and virtually inexperienced Oldsmobile's management team in the automobile industry. The poor management team did not see or respond to the warning signs that the target market was beginning to follow other automakers. If the senior leadership acted faster in identifying the fact that the company was going into the declining phase, they might have reversed the downward sales trend and remained a viable company for another 100 years. With the company entering into decline General Motors decided to refocus the company assets and close the Oldsmobile division.

Oldsmobile certainly has introduced some innovative products in the last few years, however this effort comes too late for it to be successful. Based on the information gathered during research, General Motors is substantiated in deciding to close the Oldsmobile division. It is recommended that General Motors focus on two key areas as they begin the process of closing. Make sure loyal customers receive good service from divisions that stay open and take the good traits of Oldsmobile to other divisions.

The first point is targeted at keeping Oldsmobile customers loyal to General Motors. If General Motors focuses on long-term relationships then it will make up the market share they are losing in other key divisions. If General Motors does not treat the Oldsmobile customers as though they care about their future, then GM will certainly lose more market share. The second point is targeted at evaluating what has worked at Oldsmobile. Some of the new cars introduced by Oldsmobile have been successful. General Motors should consider moving any star products to other key divisions for future sales potential and assisting in fostering customer loyalty within the General Motors Company.

Oldsmobile is a perfect example of how a good company can turn bad if it is not constantly monitoring market trends. One final thought, know your target audience and keep your company focused on the target. Oldsmobile lost sight of this one key goal. REFERENCES Buss, Dale; A Critic Looms Large; Automotive News; March 26, 2001, Vol. 75 Issue 5922, p 20. Cantwell, Julie; Olds Model May Get New Life; Automotive News; January 15, 2001, Vol. 75, Issue 5912, p 3.

Chevron, Jacques; Oldsmobile Brand Just Fades Away; Brandweek; February 5, 2001, Vol. 42 Issue 6, p 28. Child, Charles; Where Can Olds Dealers Go? ; Automotive News; February 26, 2001, Vol. 75, Issue 5918, p 3. Fitzgerald, Kate; GMs Olds Takes Write Turn in Support of Bravada SUV; Advertising Age; April 9, 2001, Vol. 72 Issue 15, p 34. Halliday, Jean; Curtain Call for Oldsmobile; Advertising Age; March 19, 2001, Vol. 72 Issue 12, p 48. web Referenced May 15, 2001. Hydra-Matic Drive is Highlight of Oldsmobile Line for 1940; Automotive News (Anniversary Supplement); August 28, 2000, Vol. 74, Issue 5890, p 18.

McGuire, Bill; Oversville for Oldsmobile; Auto Week; February 25, 2000; Vol. 50, Issue 54, p 26. Rothenberg, Al; No More Merry Oldsmobile; Wards Auto World; 2001, Vol. 37, Issue 3, p 86. Sharfman, Bill; One Last Look at Oldsmobile; Brandweek; January 8, 2001, Vol. 42 Issue 2, p 28. Then Jr. , John K. ; Could Well-Timed Deals Have Saved Oldsmobile? ; Automotive News; April 16, 2001, Issue 5925, p 10. Truett, Richard; Dealer in Florida Struggles to Retain Employees and Craft a Future Under GMS Death Sentence Automotive News; Automotive News; January 29, 2001, Vol. 75, Issue 5913, p 3.

Welch, David; GM Warms up Its Branding Iron; Business Week; April 16, 2001, Issue 3728, p 56.


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