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• Marketing: GM Vs. Toyota. So why the difference?
• Finance: Breaking even – a big deal!
• Organizational Design: Leadership and Individual Capability

GM vs. Toyota. So, why the difference?

Did you read these two news stories?

Story 1: Sun., June 3, 2008
By Chris Isidore, CNNMoney.com senior writer
Automaker plans to shut 4 pickup and SUV plants, build more fuel-efficient vehicles, and may dump the Hummer brand.

NEW YORK (CNNMoney.com) -- General Motors announced plans Tuesday to shut four truck and SUV plants that employ thousands of workers. It also said high gas prices are here to stay - and, with them, consumers' growing preference for more fuel-efficient vehicle.

Story 2: ONE YEAR EARLIER

Fri., June. 1, 2007

DETROIT - The gas-electric hybrid car, once the domain of your granola-crunching, environmentally conscious neighbor, moved into the mainstream last month as $3 per gallon gasoline helped to nearly triple Toyota Prius sales.

Motor Corp. sold just over 24,000 Priuses in May, boosting the car into ninth place among all vehicles for the month and cracking the list of 10 top sellers for the first time, the company said. Prius sales helped Toyota post a U.S. sales gain of 14.1 percent in May compared to the same month last year as gas prices also pushed up sales of its Corolla, Yaris and Camry models.

How is it possible that such huge companies can have such different mindsets and results? And pretty much everything they both do is public knowledge, and has been for years?

One thing is very clear: the Japanese manufacturers are giving the US car companies a damn good hiding. The planning at Toyota (and the other Japanese car manufacturers in general) has been spot on. Whether their planning is better or whether the manufacturers like General Motors are just not reading the signs is not clear. But "reading the signs" is part of planning. So is competitor intelligence and competitor research.

This is not a new phenomenon. It has been going on for years. And it appears that only now is a company like General Motors waking up. Boy, have they got a job to do to catch up! If they don't get started quickly, they may become one of the largest dinosaurs of our time – maybe we will even be calling them GenMotosaurus in our books on business history. And we will ask ourselves – what could they have done differently?

I'd like to suggest one thing they should have been done properly for many years. And I bet it's the one thing that the Japanese manufacturers have done really well. It's called Strategic Marketing Planning. And it addresses a number of areas of business that would have offered real clues that (if taken seriously) could have impacted their decision-making years ago and could have changed the current scenario. Here are some of the areas of Strategic Marketing Planning that would have helped – a lot:

1. An environmental scan – this would have identified changing consumer behaviour years ago and a rapid increase in environmentalism that would have pointed directly to more environmentally friendly vehicles much earlier. The signs were there – the Japanese manufacturers picked them up.
2. Competitor analysis – if the environmental scan was not compelling enough, a detailed competitor analysis would have provided enough direct clues about where the competitors were headed, and quite a long time ago.
3. Scenario planning or alternative strategies – one thing that good businesses do is plan for "what if scenarios". These are the kinds of strategies that can be implemented quickly and quietly if things go wrong. I don't see any signs of that with General Motors. Slash and burn seems the only alternative right now.
4. SWOT analysis – the identification of strengths, weaknesses, opportunities and threats should give rise to specific strategies that take advantage of strengths and opportunities, as well as a different set of strategies to address or defend against weaknesses and threats. This is a really good place to begin.

Marketing Tip of the Month

So why is this lesson about General Motors so important? Am I trying to be hyper-critical of the organization? Absolutely not. Who says running such a complex business is easy? However, we can and should take this lesson and learn from it. Just about any business (no matter what size or complexity; no matter what industry) can apply the principles of Strategic Marketing Planning and make it work for them so that they can prevent such dire results in their organization.

Don't wait till it's too late. Do your planning ahead of time and try to see into the future. Build your future on good market and competitor intelligence. Only if you make the attempt are you likely to succeed. Don't end up looking backwards and finding yourself saying: "if only we had done proper planning". By then it may just be too late.

Article by Neville Pokroy – Principal, Mastermind Solutions Inc.
Neville consults in the areas of strategic marketing planning, as well as in the development and execution of marketing strategies and plans. He assists companies who require marketing expertise to plan and fully execute marketing programs.

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