General Motors Diversification

1215 WordsDec 9, 20135 Pages
GM describes their brand politics as having "two brands" which "will drive our global growth. They are Chevrolet, which embodies the qualities of value, reliability, performance and expressive design; and Cadillac, which creates luxury vehicles that are provocative and powerful. At the same time, the Holden, Buick, GMC, Baojun, Opel and Vauxhall brands are being carefully cultivated to satisfy as many customers as possible in select regions. As it emerged from bankruptcy and company reorganization in 2010, GM reorganized the content and structure of its brand portfolio. Some nameplates like Pontiac, Oldsmobile, Saturn, Hummer, and service brands like Goodwrench were discontinued. Others, like SAAB, were sold. Main brands: -…show more content…
In neither of these cases did the manufacturing departments expect to take all the output of the parts and accessories farms. Soon both companies by selling such supplies to outsiders had greatly enlarged their product line. Supplements are by no means the same as extensions. When British Aerospace bought Rover, wondrous guff was babbled about the transfer of aerospace technology to car manufacture. If any such transfer took place, it was totally insignificant. Similar false claims were made by General Motors when it diversified into computer services and electronic defence systems by buying, respectively, Electronic Data Services and Hughes Aircraft. Both buys, however, proved to be enormous successes, earning GM large profits both from operations and from the billions eventually made by spinning off the buys. This doesn 't disprove the argument against diversification. It proves something else: that GM is very good at this game (much better, in fact, than at making and selling cars). There are businesses which specialise in diversifying, including one - Warren Buffett 's Berkshire Hathaway - which is among the most spectacular investments of all time; $10,000 invested in the shares in 1965 was worth $51 million in 1999. Buffett has bought and kept businesses in furniture retailing, ice cream parlours, shoe manufacture, newspapers, insurance, executive jets, etc., etc. They

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