Strategies of General Motors and Toyota Motor Corporation Case Study

Strategies of General Motors and Toyota Motor Corporation - Case Study Example Strategies are usually tailored to take advantage of the various opportunities in the firm's environment while harnessing its strengths and competencies. Currently, General Motors Corporation (GM) leads the automotive industry with total revenue of US$192.60 billion during 2005. This is amidst the US$2.6 billion loses incurred during the same year which is due to the weak demand in North America. Following GM is Ford Motor Corporation (US$178.10 billion), Daimler Chrysler AG (US$177.37billion), and Toyota Motor Corporation (US$162.92 billion). Even though smaller in terms of revenue, it is notable that Toyota recorded the largest net income at US$10.61 billion during 2005 (Yahoo Finance 2006). It is apparent that there is an intense competition between the four largest players in the industry. Toyota was able to dislodge the Ford during 2003 and is widely regarded to as having the aspirations to become the future industry leader next to GM. From here, we can see a struggle between the companies as they are both challenged to devise winning strategies. For GM, the challenge is to craft and implement an effective strategy to maintain its position in the global market, while for Toyota a strategy to battle head-on with GM and increasing its market share. The company has a wide array of product line under the brands Chevrolet, Pontiac, GMC, Oldsmobile, Buick, Cadillac, Saturn, and HUMMER. The company's marketing arm is supported by retail dealers and distributors in the United States, Canada, and Mexico as well as dealers overseas. GM is recognized as the largest vehicle manufacturer selling 8.5 billion cars in 2001 while its sales in 2002 account for 15% of the trucks and vehicles sold globally (Yahoo Finance 2006). Traditionally, GM's approach to marketing its products is targeting a specific market segment for a specific brand so that the company's products do not compete with each other. These were profitable for the automotive firm as the brand's shared components and common corporate management gave way to substantial economies of scale while the distinctions between the brands created an "orderly upgrade path." Before 1995, the company has a full range of products ranging from Chevrolet which is offered to an entry-level buyer who is more concerned on a more practical and economical vehicle to the upscale Cadillac which is targeted to the elite market as it is regarded as the "standard of luxury (General Motors 2006)." Nevertheless, this strategy did not persist as the GM started to implement a gradual blurring of its divisions during 1995. This strategy leads to cannibalization in the market share of GM as each division competes with each other (General Motors 2006). During 2004, the company has announced a new strategy for its product lines which is apart from the traditional marketing and positioning it employs. This shift in brand strategy is targeted at â€Å"building sales, cutting costs, and bolstering brand identity (Garsten 2005).†Ã‚  Ã‚