Saturn case

Résumé du document

Saturn has introduced new production methods such as the use of the lost foam casting and production processes, the ability to adjust the charge and the capacity, to release a new set of features or product every year and to focus on a unit based working approach. In opposition to other U.S car makers, Saturn succeeded in maintaining close relationship with union representatives and in managing well its human resources (bonuses, empowerment, training). It has also implemented a strong retailing network and new sales processes. The outlets are dedicated to Saturn only and franchise rights are granted without expiration dates. As far as sales are concerned, Saturn wants to build a long-lasting relationship with its customers through a money-back guarantee policy, innovative methods to keep in touch and the settlement of the MIS. Thanks to all these elements, Saturn was able to become a very good alternative to Japanese models in terms of quality, technological achievement and price.

Extraits

[...] Therefore, Toyota would completely access GM's methods, techniques and know-how. To merge Saturn with another GM subsidiary (probably Chevrolet) Merging Saturn with another GM brand would allow a huge cost reduction due to massive economies of scale and would complete the large car lines. As a matter of fact, Chevrolet would be the best option as its offer is quite similar to Saturn's (low cost and low end). However, as we explained earlier, Saturn is so different from other GM brands that it would be difficult to do so. [...]

[...] Train? Bike? Plane? Scooters? Substitutes are not really relevant in that case as the oil price remains low and people will always need a car. But environmental concerns. [...]

[...] A risk of cannibalization As GM is present on several segments thanks to multiple brands, Saturn represents a risk, especially for Chevrolet, another GM brand, to steal some of its market share. Furthermore, internal competition dramatically increased as Chevrolet had to renounce to its S-Car project because the creation of Saturn was considered more strategic. II. Mobilize strategic choices To sell Saturn to a Japanese competitor (apparently Toyota) As Saturn is not as profitable as wished, it might be a solution to sell it to a competitor. [...]

[...] In addition, such a merger would destroy the specific identity of Saturn that cost $ 3.5 billion and years to build. To continue to invest in and develop Saturn Saturn is not at its full capacity, given that it has provided its first profits just a year before. Saturn is at a crossroads and new investments 0.9 billion) would give it a new impulse to achieve a sustainable position. Given the tough competitive environment, such investments prove to be risky because they don't guarantee a satisfying return on capital employed. [...]

[...] Giving up such a successful strategy would not be very consistent. The $ 0.9 billion investments should be attributed as follow: First, these investments should go to the creation of a new plant that would enable the firm to increase its production up to cars per year and to respond to the small car market growth expectation by 1997. Second, the firm should also outsource part of its production to Isuzu, as it has been done with Chevrolet, because the Japanese car maker is able to produce a similar car with a lower cost structure (in 1994, Isuzu produced the Chevrolet Geo cars for $ half of GM cost) Third, an internal audit should be realized to understand why the Spring Hill complex displays such a low productivity. [...]