Using the methodology illustrated in Table 4.3 and your knowledge as an automobile owner, prepare a competitive strength assessment for General Motors and its rivals Ford, Chrysler, Toyota, and Honda. Each of the five automobile manufacturers should be evaluated on the key success factors and strength measures of cost-competitiveness, product-line breadth, product quality and reliability, financial resources and profitability, and customer service. What does your competitive strength assessment disclose about the overall competitiveness of each automobile manufacturer? What factors account most for Toyota’s competitive success? Does Toyota have competitive weaknesses that were disclosed by your analysis? Explain.
GENERAL MOTORS COMPANY
(further GM) is a multinational automotive company based in Detroit, U.S. The company designs, manufactures and sells various vehicles, including cars, trucks, commercial vehicles, crossovers and automobile parts. It is the second largest automobile manufacturer in the world. In 2015, GM produced 9.958 million vehicles and captured 11.2% of the global automotive market share.
GM controls a strong brand portfolio and sells its vehicles under 10 different brands, such as: Chevrolet, Buck, GMC, Cadillac, Opel, Vauxhall, Holden, Baojun, Wuling and Jiefang. GM’s primary markets are China and the U.S.
1. Joint ventures with local Chinese automotive companies
2. Strong position in the U.S. automotive market
3. Sustainability and environmental policies
4. Safe and eco-friendly vehicles
5. Strong brand portfolio
6. OnStar all-in-one assistant
7. Rare product recall
FORD Strengths
1. Ford is the second largest family-owned company in the world.
2. Global Recognition – Ford is a well-known brand in the automobile industry and is also recognized in the global markets because of its success
in marketing and advertising. It operates two brands under Ford Motor Company i.e. Ford and Lincoln. Its brand value is
$10.44 billion
according
to the 2021 report of Statista.
3. Automotive Segment – Ford is currently the second-largest automaker in the U.S. (behind GM) and fifth largest (behind Toyota, Volkswagen, Hyundai, GM) in the world. Ford Motors sold a total of 4,187,000 vehicles in 2021 worldwide. 4. Research and Development – Ford’s research and development is one of its key strengths because the company is committed to make and develop new products. They are continuously trying to improve the performance of their vehicles. The factors that are evaluated include fuel, efficiency, safety, and customer satisfaction.
5. Diverse Offerings – Ford caters to all kinds of demographic groups with their diversified brands and car models. They take care of the needs and wants of their consumers by providing them with more variety of cars and commercial vehicles.
6. Adaptability – Ford has a wide product and services portfolio which gives them strong leverage and less dependency on just one product range.
Their commitment to adopting new technologies also gives them a boost in the competitive automobile market. They are also working on light weighting, cabin technology, and powertrain to enhance their product quality.
7. One Huge Network of Dealers- The company is also diverse in its operations and distribution, as they have a huge network of about 10,717 dealers across the world. Ford develops its cars on standardized procedures. They also invest heavily in various fuel sources.
8. Strong Financial Position – Ford’s strong financial position driven by the demand for pickups and SUVs. In 2020, the company has posted a better-than-expected annual revenue of $127 Billion. The fact that Ford is going strong despite the turmoil in 2020 highlights the company’s growth in the future will be even bigger.
CHRYSLER
Strengths
The strengths of Chrysler looks at the key aspects of its business which gives it competitive advantage in the market. Some important factors in a brand's strengths include its financial position, experienced workforce, product uniqueness & intangible assets like brand value. Below are the Strengths in the SWOT Analysis of Chrysler:
1. Chrysler is one of the leading automobile brands based out of USA
2. Chrysler company manufactures cars like sedans, vans, SUVs, commercial vehicles, automotive parts etc.
3. The company has more than 90,000 employees worldwide
4. The brand has a strong brand legacy since it was formed in 1925
5. Chrysler has recorded and manufactured more than 2 million cars in a single year
6. The company positions itself as a strong and beautiful American car manufacturer
7. Chrysler advertises its cars via TV, online ads, print media and digital marketing
8. The company has also been investing in hybrid and ecofriendly car models
TOYOTA’s Strengths
1. Global presence-
Toyota
sells its cars in more than 170 countries and sells more than 9 million vehicles every year. The strong foothold over the market can provide it with a competitive edge.
2. Strong financials- Toyota group generated $245 billion in revenue in 2021. It has a free cash flow of 10, 40,783 yen and it has an excellent debt
to equity ratio of 1.007, meaning that the company is not much in debt. The financial power can benefit a company while overcoming market threats and exploring new opportunities.
3. Impressive Product range- Toyota has a full range of vehicles including hatchbacks, sedans, SUVs, and pick-up trucks. Its most popular hatchback is Corolla with more than 1.1 million units sold worldwide in 2021 while Camry is most sold in the Sedan category with more than 300,000 units sold annually and RAV-4 is the most sold SUV with more than 1.1 million units sold annually and it occupies more than 3% market share in the pick-up segment. Toyota also owns a luxury vehicle brand named Lexus.
4. Technology and innovation capabilities- Toyota is innovating with its products and has recently launched two new models of Lexus and Mirai that are equipped with autonomous driver technology wherein the car would automatically be able to maintain a safe distance from the vehicles ahead by detecting the traffic through sensors that would help in the reduction of accidents (Reuters, 2021).
