General Motors Re-Considers Its Brand Product Strategy

General Motors (GM) is struggling with its brand product strategy. With all three major U.S. automakers struggling with survival strategies, GM is the most recent to announce plant closers and to discuss the value of its brand portfolio.

The survival question for GM is whether to hang together as a team of brands to fight off the likes of Toyota, or to sell off some (many?) of its brands to become a leaner, more profitable company.

GM owns eight brands (in order of market share), Chevrolet, GMC, Pontiac, Saturn, Cadillac, Buick, Hummer and Saab. The largest, Chevy, has only a 12.9% market share. The smallest, Saab, only sells 35,000 cars a year (about the same number of Honda Accord sedans sold in a month!).

Top executives at GM are said to be considering all options for its brands. They've already announcd that Hummer is for sale, and say that only Chevy and Cadillac (who they believe to be their core brand products) are safe from future sales or shutterings.

On one side, they must consider the drain on resources, and competition among its brands that a full portfolio presents. On the other side, they must consider that losing  such a broad brand portfolio could (long term) prove to be its undoing, as Toyota keeps its "cradle to grave"  lifetime value strategy alive and well. Critics of the decoupling of GM site the shuttering of the Oldsmobile division earlier this decade, which left many of that brand's customers defecting to brands other than GM's.

So, at the end of the day, the decision is a monumental one, not unlike decisions made every day at brands around the world--can we stay big and risk total failure or huge success, or do we need to shrink in size, re-group and live to fight another day, but on a smaller scale? Risky and humbling decisions.

Source: The Wall Street Journal