d’s premium cars such as Mercedes, BMW and Lexus.As being the industry leader, GM has the advantage of high brand loyalty from its customers. Even though the quality level had decreased in the last few years, its products still have remarkably good image in consumers’ minds in the U.S. market. However, it is obvious that GM has big problems in its product, price and distribution. These will be mentioned in the next section.IV. Problems found in Situation Analysis A. Statement of ProblemsGM is selling specialty products in a horizontal market so it must have a complete product differentiation in its products. Price ranges came closer compared to GM’s traditional way of doing business and similar parts were used in similar cars under different brand names. The assembly plants were planned and managed poorly so, quality standards did not match in the cars which were produced in different plants. The problems in distribution channels caused long delays for the delivery of the products. Another big problem for GM was its poor marketing decisions and loosing touch with the consumer. The dealerships or “company’s hands” were not supported, salespeople did not train well enough to inform the customers and finish the sale. These factors dropped the sales and gave the company bad image in consumers’ minds.As the profits matter, not only the labor cost per vehicle was still higher but the average time to design the new model was longer compared to competitors. These factors affected the profits decrease. V. Strategic Alternatives for Solving ProblemsA.Description of Strategic Alternative 1GM should emphasize in increasing sales by more promotion, changing products’ characteristics, match or lower the price to its competitors, offer more promotion. The objective is to maximize total revenue and market share.B.Description of Strategic Alternative 2GM should invest on its plants to standardize the...
