This week’s reading has given me some excellent insight into looking at the internal and external environments in which I operate. I work for General Motors in Product Development, so I am directly connected to our products (vehicles) and the content, and integration of that content together in the vehicle. I certainly look at technological trends, and do a great job of benchmarking the competition to stay aware of the competitive landscape. I’m also always keenly aware of economic trends, as they affect pricing, and therefore content that goes in the vehicle. However, I don’t routinely keep a finger placed on the pulse of ecological, demographic, social-cultural, political-legal trends. I aim to research more in these areas and try to integrate them into my daily decisions.
In regards to mission statements, I think it’s very dangerous to have a product-based focus. Yes, it can result in a great product, but there may not be anyone to buy that product! At GM, we’ve certainly had some examples of this in the past and it’s easy to see why – throw a bunch of engineers at something and they will optimize it. But… that optimized product may not be competitive in the marketplace! General Motors has a mission statement: “Design, build, and sell the world’s best vehicles.” This mission permeates throughout the company, and is publicly stated as well. It gets translated into specifications and documents that shape our vehicles with the competition and customer in mind, so I believe it does work to our advantage as a smart mission statement.
Recently the US federal government imposed new Corporate Average Fuel Economy (CAFÉ) standards for all auto manufacturers that sell vehicles in the US market. These standards aim to boost fuel economy to unheard of levels. The new standards will force manufacturers to develop and implement both clean diesel and hybrid technology in all vehicle lines, from small cars to full size trucks. As a result, the implementation of this technology will increase the cost to build the vehicles, but it remains to be seen if consumers will accept paying higher prices for this technology. Therefore, the overall effect may be lower profit markets across the board in the automotive industry.
Similarly, the federal government recently mandated the use of electronic stability control (ESC) and measures the performance using a federal motor vehicle safety standard procedure - FMVSS126. All new vehicles sold in the US must comply. The result of this legislation was a full development plan for all vehicle lines to include the part in the vehicle, develop and tune the system, and validate that it meets FMVSS standards. As a result, many new employees were needed to meet this need, as well as increased parts cost that is eventually passed along to the consumer. In this case, the number of accidents that can be avoided was seen as the driving factor for the National Highway Traffic Safety Administration.
I returned to the Levitt article and re-read it. The information is definitely still as relevant today as when it was written. As it applies to General Motors, our customers expect that their vehicles will serve as quality, reliable transportation for years to come. In addition, many customers aim to satisfy a need or want with their vehicle – be it a mid-life crisis, “green” environmentally-friendly transportation, or as a fashion statement. Our Cadillac customers exemplify this last characteristic – they are historically driven by fashion more than by other factors such as fuel economy or practicality.
In closing for this week, I think it’s very important to develop a superior product internally, but to always keep an eye on the customer and the trends and regulations that are shaping their buying habits.
Wow Joshua. What a cool job you have. It must be exciting times at GM. I have to say the I do lust for a Volt. The whole episode with battery fires was obviously similar to the "unintended acceleration" episode that almost killed Audi about 25 years ago. It is obviously a safe and from what I have heard and an enjoyable car to own. Perhaps the imposition of mileage standards only achievable by increasing the percentage of hybrid/elec vehicles will create some scale across the industry that will bring down prices.
ReplyDeleteActually I work on the Chevrolet Volt and Opel Ampera, as well as a few upcoming hybrids and electric vehicles! The Volt is a great car by any measure. The real question is exactly as you pose it - will mainstream customers change their buying habits to include hybrids on their potential purchase lists? Can customers be "legislated" into buying downsized and/or hybrid vehicles, or will the government's fuel economy standards lead only to decreased profits in the automotive industry?
ReplyDeleteThe european governments in the Europoean Union may have a better idea by setting higher fuel taxes as well as taxes based on the size and fuel economy of vehicles. This leads consumers to buy more fuel efficient vehicles on their own, rather than just legislating more fuel efficient vehicles such as the US's Environmental Protection Agency is currently doing.
- Josh