While it is no secret that the small car market niche in America has been largely dominated by sales of foreign car manufacturers, the Saturn company's appearance on the scene sought to change that reality. As general knowledge and common sense might attest, purchasing issues of smaller-car buyers are sensitive to economizing given the stance of rising petroleum prices, and Japan's foothold on the auto imports market with models such as the Nissan Leaf which cut into American billion-dollar profit margins. The purpose of this report centers around making a value chain for the Saturn company, in order to boost market and product performance in the market. Market positioning shall also be addressed in terms of creation of ongoing image and identity branding to make an imprint upon the minds of Saturn's target market. A table of Saturn's Market Positioning status shall be included to evaluate its standing among the luxury, family, economy, and sporty segments of competition. Categories of the value chain shall be explored as well.
In terms of balancing standards, it is important to arrive at the best possible options for choices in primary activities and support activities in the value chain. Cost benefits considerations play a role including raw materials, inbound/outbound logistics, operations, marketing sales, follow-up service, research/technology development, human resources, and general firm infrastructure. The making of a value chain designed for the Saturn company can be modeled upon. Depending upon the industry, as in this case the smaller-car segment, competitive advantage of the Saturn must be weighed upon the fact that customers are willing to pay more if the product ranks above the average in low cost and/or differentiated with respect to let's say, Toyota.
The following table(s) may be useful to understand the making of a Saturn value chain:
(Table omitted for preview. Available via download)
To explicitly evaluate costs and benefits is important after deciding upon a recommendation with rationale. Since the Saturn company is situated between the economy-family vehicle segment and the sporty segment, an emphasis on both economy and innovation in appealing design makes good business sense. Market positioning and value chain coordination will come together well with a new recommendation of cost(s) allocation. To gain a competitive advantage in terms of cost advantage and differentiated advantage the following is recommended. Streamline input costs, including raw materials, but regulation of the best quality materials for the least expenditure. Specifically increase 15% of company budget towards monitoring of ratio of fixed costs to variable. To make sure this occurs in an effective and efficient way, hire software developers to create a unified system for accounting to track, and update measurements of these records.
Additionally, adjust cost benefits by re-allocation of 7% to 15% increase of expenditures for: a) managerial effectiveness in terms of rewarding innovation in social media marketing techniques that get results, and b) invest in employees' individual skill base to stay on top of expertise in usage of available business tools. Rewards to managers and their teams are very important, be they monetary or other valuable perks such as free tickets to choose events, travel or pro-active workforce involvement in charitable events that are fun. On this basis, is Saturn well-positioned for the future? It may be. But the key is to continuously move forward, improving forecasting, tools and technology, and training.
What might be recommended of management specifically to do to continue Saturn's success? Besides engaging in paying attention to the production and marketing process of value chain and positioning, rewards and teamwork are vital to company morale and improved coherence of fundamental operations. Strategy is a term in business that has perhaps been overused and under-appreciated. Strategies in today's modern-day globally competitive marketplace demands constant updating and the courage to reengineer a corporation on-a-dime something that is not working. Employee rewards cannot be stressed enough. Precision in dollar for dollar amounts in spending, as well as tracking net revenues are vital when coordinated with categories of the value chain.
Chemawat, Pankaj, and Jan Rivkin. Creating Competitive Advantage. Boston, MA: Harvard Business School. 2006. Print.
Grant, Robert M., and Judith Jordan. Foundations of strategy. Hoboken, N.J.: Wiley and Sons, 2012. Print.
Keller, Greg. Saturn: A Different Kind of Car Company. Boston, MA: Harvard Business School, 1994. Print.