At One Time, Management at General Motors Decided to Improve

question 9

Essay

At one time, management at General Motors decided to improve the competitiveness of its products by stressing product quality, style, and innovation. The objective was to improve the image of GM vehicles and thus improve sales and brand loyalty. Managers decided to push this strategy in both the manufacturing and marketing divisions of the firm. One of the key moves to implement this strategy was to insist that GM dealers stop price-cutting and push brand value and image instead. GM exerted some control over dealers' pricing/selling strategy in part by reducing the money it set aside for dealers to use in local ads.
Required:
Was General Motors following a strategy of cost leadership or differentiation at this time? Comment on how effective you think the new strategy in dealer relations is likely to be.

---

Definitions:

Gains

The monetary increase in value of an asset or investment over its purchase price.

Maximum Possible Gain

The highest profit that can be achieved in an investment.

SEC Rule 415

Known as "shelf registration," this SEC rule allows companies to register a new issue of securities without selling the entire issue at once.

Shelf Registration

A regulatory provision that allows an issuer to register a new issue of securities without selling the entire issue at once, facilitating future sales.