DIVERSIFICATION STRATEGIES

Diversification Strategies

Diversification Strategies

The purpose of this paper is to compare and contrast two companies; One successful and one unsuccessful. The two companies chosen for this purpose is General Motors (unsuccessful) and Toyota Motor Corporation (successful). The content of this paper will analyze, compare and contrast the outcomes, and recommend actions that General Motors could have made to make their diversification venture more successful. The analysis will include the company's core business, the size of the companies, and the 2009 financial statements of the companies, the company's global presence, and their use of e-business. The analysis will also contain the primary reason for the different outcomes.

History of General Motors

General Motors was founded by William Durant on September 16, 1908, in Flint Michigan. GM's core business is making and selling automobiles. At the beginning, General Motors designed automobiles for the Buick Motor Company, but in a short amount of time General Motors acquired more than 20 companies. These companies include Oldsmobile, Cadillac, and Pontiac, to name a few. General Motors went through many phases of development from 1910-1929. General Motors new design over Ford's Model T design set the pace for production, design, and the marketing innovation of vehicles. General Motor's first diversification took place when it added Chevrolet, Vauxhall, and Opel. General Motors used its philosophy and strategy for marketing by stating “A car for every purse and purpose” (General Motors, 2011).

Today General Motors is one of the largest automakers in the world. GM's global headquarters is in Detroit, Michigan, and General Motors employs 209,000 people across the world. General Motors does business in 120 countries also. General Motors produces vehicles in 31 countries, and sells and services vehicles through Buick, Cadillac, Chevrolet, GMC, Daewoo, Holden, Isuzu, Jiefang, Opel, Vauxhall, and Wuling. China is General Motors largest national market along with the United States, Brazil, Germany, Russia, Canada, and the United Kingdom (General Motors, 2011).

Toyota's History

In 1935, Kiichiro Toyoda created the A1 prototype passenger car and founded Toyota Motor Corporation. In 1937, Toyota Motor Company became established in Japan, and by 1947 Toyota built its first BM truck, SB small truck, and SA compact passenger car. In 1950, Toyota Motor Sales Company, Ltd was established in Japan (Toyota Motor Corporation, 2011).

Toyota introduced its Toyopet Crown for taxi service in 1955, and it introduced its first luxury car called the Toyopet Crown Deluxe car the same year. Later in October 1960, Toyota became established in the United States of America, and it began its first vehicle production in 1986. Toyota's headquarters was established in Hollywood, California. However, in 1961 sales were stalled and discontinued because the Toyopet was overpriced and underpowered. Toyota was able to survive with the help of the Land Cruiser and the introduction of the Corona. By 1967 Toyota became the third best selling imported vehicle in the United States. As Toyota's sells continued to climb Toyota became the number one import brand vehicle in 1975 by out selling Volkswagen ...