Which Auto Brands Should Go?

When you were a CEO of a car company and you can see some of brands are not doing well, what would you do? You might kill off or sell the brands to reduce cost and focus on the brands that are doing well. However, it is not easy to do that because of three big problems. alienating customers, angering dealers, and incurring substantial costs for laying off workers and shuttering plants. Relationship is important with customers, dealers and workers. If you sell your brand to other company or kill off, workers who are potential customers will lose their jobs and they will have bad image of your brand.


Repositioning
One way to solve this problem is repositioning. In the U.S. market, Buick is a near-luxury brand at best, but in China, Buicks are big enough and prestigious enough to be driven by a chauffeur, which is popular with the country's wealthy new capitalists.

Reorganization
Volve is a good brand of Ford co. because it is set as the safest car in customers mind. However, its cost structure is too high. Even though you sell your car with high price, if the cost of making car is too high, you wouldn't get profit. You need to reorganize to make profit.

Opinion
I learnt that there are many things to think about manage your brand rather than just number. I had thought that if I saw the declining number on a brand and I already have too many brands such as GMC, I would think why wouldn't they sell or kill off the brand. However, I learnt that relationship is important facts to keep their brand.

Source: Jim Henry, 'Which Auto Brands Should Go?', Business Week, May 5, 2008
http://www.businessweek.com/lifestyle/content/may2008/bw2008052_143266.htm?chan=rss_topStories_ssi_5
Student #: 20400152 - Entry 12