What went wrong with the Big 3?

What went wrong with the "Big 3"? If you think of any company being made of three core functions:

1. Marketing - Determining the target market, determining what products the target wants, communication with the target, and ensuring that they live up to their Brand Promises,
2. Finance - Determining how to pay for the inputs, ensuring that the outputs are produced as efficiently as possible, and making sure that there is enough money in the bank to keep things running, and
   
3. Operations - Producing products that meets the needs of the Marketing Team, and doing so in a way to keep the Finance team happy.

Then, where did the Big 3 go wrong?

1. Marketing - They had no Brand Promise. What does GM stand for? Big cars? Little cars? Big trucks? Cheap? Luxury? They are trying to be everything to everyone. Taking on the Luxury German market and the low-cost Kia market. Yuck. Stuck in the middle. They stink, and thier products suck. Why would I buy a "luxury" Cadillac that was based on the same platform as the "work horse" GM truck? The Big 3 lost a grip on who their target market was, what they wanted, and how to reach them.
   
2. Finance - Was no one watching the books? It is disheartening that in light of recent financial scandals like Enron, and with all the subsequent "SOx" and Governance oversight that is supposed to be in place, that NO ONE from these Big 3 was sounding the horn louder and sooner that they were all headed for bankruptcy. Who is at fault here? The Finance teams in these companies should have hit the big red button several years ago. Surely it was evident that costs were spiralling out of control.
   
3. Operations - Are the unions to blame? They clearly need to share the blame. Mind you, some MORON in the Finance department must have agreed to the ridiculous contracts that the unions have negotiated over the years. Also, the MORONS in Marketing continue to get the Operations team to build products that their market might have wanted 3-10 years ago, but doesn't give a rats ass about now. So, as long as the Operations teams are building out the automobiles that they are told to, and doing it under the agreement of the Finance team, I'd have to think that they should carry less of the weight. That said, responsible Unions and Management teams should be constantly working together to figure out the most efficient and practical way to produce.

My verdict ... The auto sector has to be "bailed out" simply to prevent them from bringing down the entire economy. However, conditions on them being allowed to receive bail-outs should include:

• Bail-outs should be either high-interest loans (they are risky after all), or equity
• Executives should be forced to resign (with no golden parachutes) and should be replaced with people with real vision
• Each company and each sub-brand should have to put a REAL marketing plan in place with a real brand position. Overlapping brands should be eliminated. (E.g. Big-ass Chrysler SUVs and Big-ass Jeeps? Big-ass Chrysler cars and Big-ass Dodge Cars? GM, Pontiac, Buick, and Cadillac? GM Trucks, Cadillac SUVs, and Hummer?)

I'm no expert on Finance matters, so I won't comment on those, except to say that the classic Porter strategies state that these companies should either be low-cost, differentiated, or niche. The automobile market is mass-market, so they had better all be thinking Low-Cost. To review ...

Low Cost: The low cost leader gains competitive advantage by being able to produce at the lowest cost. You can sell things for the same price and have more profit, or more cash to do battle with, or win a price war and still make a profit.

There's my rant for today. If you are from one of the Big-3, and want help doing a Brand Audit in order to get on track with your marketing plans, don't hesitate to contact Market GoGo.