Your job as a marketing manager at GM certainly has been challenging. Through government bailouts, bankruptcy, and a thorough reorganization, you have had the unenviable job of trying to persuade the buying public that your cars have high-quality
Your job as a marketing manager at GM certainly has been challenging. Through government bailouts, bankruptcy, and a thorough reorganization, you have had the unenviable job of trying to persuade the buying public that your cars have high-quality and are high-value products. Some of your campaigns went off better than the others—who can forget the disastrous ad campaign that tried to convince married women to buy more pickup trucks? But with exciting new models coming out of factories and a renewed sense of determination from senior executives, you are quite excited about getting the word out about how great GM cars are.
One particular day, you get a phone call from your supervisor, who asks for your help to solve a little problem. It turns out that GM wants to offer an industry-leading warranty on its Opel- and Vauxhall-branded cars that are sold in Europe. The warranty would cover any issues, except for accidental damage, for 100,000 miles, with no limitations on the date. Managers are even exploring ways for the warranty to be fully transferrable so that people who buy a used car will be protected by the warranty.
“Sounds like a great way to sell cars,” you tell your boss, “so what do you need me for?” The problem, he tells you, is that some executives in the company want to market the warranty as a “lifetime warranty.” How is it that a warranty with a mileage limit qualified as a “lifetime” warranty? According to GM research, drivers in Britain only drive about 8,200 miles a year, meaning that the 100,000 mile limit would last for about 12 years. Plus, they’ve found that 95 percent of car owners in Britain don’t use their cars for more than ten years. So, they argue that although the warranty has a limit, it’s essentially a “lifetime” warranty because most owners will never use their cars long enough.
Being the ace manager that you are, your supervisor has asked you to make the decision as to whether GM should go ahead with labeling the warranty as “lifetime.” The phrase “lifetime warranty” certainly has a nice ring to it, and your head is full of great ideas about how to take advantage of it to sell more cars. At the same time, you wonder whether, and maybe even when, consumers will get angry about being misled. Is it really a lifetime warranty if it comes with an expiration date? What should you do?
Questions:
What recommendation would you make as to how to label the warranty in marketing campaigns? Why?
In making the decision, how could you benefit from the various group decision-making techniques described in the chapter? Which group decision-making technique might be most effective for the decision you face?
In your post please provide at least two APA references to support your answer (You can utilize the textbook). You can utilize the Purdue Online Writing Lab (OWL) (Links to an external site.) website for the correct way to reference the articles used.
DQ2 What Would You Do?
Prior to the completion of this discussion board post, please review:
Reading: Chapter 6 Organizational Strategy Pg. 112
Chapter 6 Organizational Strategy PowerPoint Presentation Preview the document
Background: Walt Disney Company
Over two decades, your predecessor and boss, CEO Michael Eisner, accomplished much, starting the Disney Channel, the Disney Stores, and Disneyland Paris, and acquiring ABC television, Starwave Web services (from Microsoft cofounder Paul Allan), and Infoseek (an early Web search engine). But his strong personality and critical management style created conflict with shareholders, creative partners, and board members, including Roy Disney, nephew of founder Walt Disney.
One of your first moves as Disney’s new CEO was repairing relationships with Pixar Studios and its then CEO Steve Jobs. Pixar produced computer-animated movies for Disney to distribute and market. Disney also had the right to produce sequels to Pixar Films, such as Toy Story, without Pixar’s involvement. Jobs argued, however, that Pixar should have total financial and creative control over its films. When Disney CEO Michael Eisner disagreed, relations broke down, with Pixar seeking other partners. On becoming CEO, you approached Jobs about Disney buying Pixar for $7 billion. More important than the price, however, was promising Jobs and Pixar’s leadership, President Ed Catmull and creative guru John Lasseter, total creative control of Pixar’s films and Disney’s storied but struggling animation unit. Said Jobs, “I wasn’t sure I could get Ed and John to come to Disney unless they had that control.”
Although Pixar and Disney animation thrived under the new arrangement, Disney still had a number of critical strategic problems to address. Disney was “too old” and suffering from brand fatigue as its classic but aging characters, Mickey Mouse (created in 1928) and Winnie-the-Pooh (licensed by Disney in 1961), accounting for 80 percent of consumer sales. On the other hand, Disney was also “too young” and suffering from “age compression,” meaning it appealed only to young children and not preteens, who gravitated to Nickelodeon, and certainly not to teens at all. Finally, despite its legendary animated films, over time Disney products had developed a reputation for low-quality production, poor acting, and weak scripts. Movies “High School Musical 3: Senior Year,” “Beverly Hills Chihuahua,” “Bolt,” “Confessions of a Shopaholic,” “Race to Witch Mountain,” and “Bedtime Stories” disappointed audiences and failed to meet financial goals. As you told your board of directors, “It’s not the marketplace, it’s our slate [of TV shows and movies].”
With many of Disney’s brands and products clearly suffering, you face a basic decision: Should Disney grow, stabilize, or retrench? Disney is an entertainment conglomerate with Walt Disney Studios (films), parks and resorts (including Disney Cruise lines and vacations), consumer products (i.e., toys, clothing, books, magazines, and merchandise), and media networks such as TV (ABC, ESPN, Disney Channels, ABC Family), radio, and the Disney Interactive Media Group (online, mobile, and video games and products). If Disney should grow, where? Like Pixar, is another strategic acquisition necessary? If so, who? If stability, how do you improve quality to keep doing what Disney has been doing, but even better? Finally, retrenchment would mean shrinking Disney’s size and scope. If you were to do this, what divisions would you shrink or sell?
Next, given the number of different entertainment areas that Disney has, what business is it really in? Is Disney a content business, creating characters and stories? Or is it a technology/distribution business that simply needs to find ways to buy content wherever it can, for example, by buying Pixar and then delivering that content in ways that customers want (i.e., DVDs, cable channels, iTunes, Netflix, social media, Internet TV, etc.)?
Finally, from a strategic perspective, how should Disney’s different entertainment areas be managed? Should there be one grand strategy (i.e., growth, stability, retrenchment) that every division follows, or should each division have a focused strategy for its own market and customers? Likewise, how much discretion should division managers have to set and execute their strategies, or should that be controlled and approved centrally by the strategic planning department at Disney headquarters?
Question: If you were CEO at Disney, what would you do? (consider the information in the text and references to support your claim).
In your post please provide at least two APA references to support your answer (You can utilize the textbook). You can utilize the Purdue Online Writing Lab (OWL) (Links to an external site.)website for the correct way to reference the articles used.
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