General Motors Company is the largest automobile manufacturer in the United States and one of the largest in the world as well (Marr, 2009). It is a US-based multinational corporation with headquarters in Detroit, Michigan. The company designs, manufactures, and markets various vehicles and vehicle parts. The company was found in 1908 by William C. Durant. General Electric produces vehicles under various brand names such as Chevrolet and Cadillac. The company has also invested in various other international automobile manufacturing brands. The company sells more than ten million vehicles every year. In 2018, the company earned revenue of $147.049 billion and had more than 170,000 employees (US SECP, 2019). General Electric has various production and sales units in the US and other nations.
Following are the four dimensions of the Ansoff Matrix for General Motors:
Market Penetration
When an organization works on promoting existing products in existing markets, the company is carrying out market penetration. The first strategy General Motors uses is to market its products through various marketing channels in a creative and innovative way. The company also launches various product variants that are aimed to entice current users to upgrade their vehicles. The company has also acquired or invested in various other automobile manufacturers to reduce its competition and increase market share. The company also motivates its current users to upgrade to newer versions of the vehicles by offering trading facilities at its showrooms where customers can drive in on their old car and drive away in a new model vehicle. General Motors also offer promotions in the form of discounts during holidays and other similar events. The company has increased its market share to a high value that allows it to create barriers for new entrants as well.
Market Development
Market development is the act of promoting existing products in new markets. The prime strategy employed by General Electric in this regard is to enter into new geographic markets with its existing products. For example, since General Motors products are not sold in Pakistan, General Motors can establish its showrooms in the country to gain market share. This will require investment in the form of importing vehicles into the country or establishing a production unit. Another strategy the company uses is to launch models based on consumer needs for each market the company operates in. When new models are established, they can be used to target a certain market niche. The company also creates price segments with the help of luxury vehicle models or current models equipped with premium functions. These allow the company to focus on new market segments. Each of these actions allows General Motors to enter into new markets and gain greater revenue.
Product Development
This strategy requires an organization to launch new products in its existing markets. The first strategy that General Motors uses in this regard is to launch new models of vehicles annually. This can include new models of existing product lines or new product lines. Each category requires the company to extensively work on research and development efforts to ensure each new model passes various safety tests before it can be introduced into the market. Existing models are also revamped to include numerous new functions that are innovative. The design of a new model takes great efforts in the form of steps in product development. Prototypes are first developed and then tested before mass production starts. It is also a requirement under law to test various models before they are launched. Product development is the best way to earn revenue for the company,
Diversification
This is the riskiest strategy and refers to the launch of new products in new markets. The first strategy that General Motors can use is to vertically diversify and manufacture its own spare parts rather than procuring them. It can also establish its own retail stores rather than selling to vehicle dealers. Another strategy can be to diversify into related fields such as boats, racing cars, and so on. It can also enter into an unrelated industry such as garments, lubricants, fuel, sports, and so on. Each diversification opportunity presents the company with a chance to increase its sales and enhance its brand image.
References
Marr, K., 2009. Toyota Passes GM as World’s Largest Automaker. [Online] Available at: https://www.washingtonpost.com/wp-dyn/content/article/2009/01/21/AR2009012101216.html [Accessed 12 Jan. 2020].
US SECP, 2019. GENERAL MOTORS COMPANY. [Online] Available at: https://www.sec.gov/Archives/edgar/data/1467858/000146785819000033/gm201810k.htm [Accessed 12 Jan. 2020].