Over the course of the last two decades, changes in the competitive environment of business have prompted some organizations to develop new business models intended to boost innovation and provide a competitive edge. While many of these business models have succeeded, many have failed overall. Such is the case with the Saturn Car Company. Introduced as a competitor for the small automobile market to compete against Japanese auto manufacturers, Saturn has not been able to effectively overcome foreign competition in the small car niche of the automobile industry.
With the realization that Saturn Car Company has not been able to succeed even despite notable innovation in the organization, there is a clear impetus to examine the failure of the organization and how Saturn has faired with respect to its Japanese competition. Using this as a basis for research, this investigation considers the original challenge of the Saturn Car Company to compete against Japanese. Through a careful consideration of the business practices and models used by the organization it will be possible to garner a more integral understanding of how Saturn was unable to compete successfully in this industry. Further, by exploring the development of the organization from its beginnings, a review of the policies and practices that have been used for the expansion and development of the organization will be garnered.
[...] GM estimates that Saturn lost approximately $700 million in 1992, and although it broke even in 1993, this was only made possible by creative accounting: billion of its start-up costs will go on GM's books rather than on Saturn's” (p. 12). Further analysts examining the operations at Saturn note that while the organization has been able to show a competitive spirit, in the long-term the organization does not have the physical capacity to overcome all of the Japanese competitors in the market. Clearly, by 1994 results on the performance of the Saturn Car Company were a mixed bag. [...]
[...] In addition to the fact that the Saturn Car Company used the blueprints for the Edsel's design and development as a principle means for identifying what steps not to take in the development of a new car company, researchers also note that in order to develop a successful product, the Saturn Car Company developed an innovative culture that sought to bring management and labor together in a cohesive manner. Specifically, Gwynne and Szczesny (1990) report that: The company president walks around in a polo shirt with a pocket logo right out of Star Trek, allows workers to call him ‘Skip' and describes his position as ‘team member.' [ ] As for the rank and file they don't punch a time clock and they get to handpick the people they work alongside. [...]
[...] Welch goes on to note that in an effort to improve the sales of the company, General Motors has turned to its European subsidiary, Opel, in an effort to improve the design and innovation for Saturn cars. Overall Opel will design three cars that will be sold in the US market between 2006 and 2008. Although GM believes that this will give the Saturn organization the boost that it needs to make it more competitive, Welch does note that in recent years, Opel has been a losing proposition for GM. [...]
[...] Although the Saturn Car Company was not launched until 1990, researchers examining the development of the organization note that the values and mission of the Saturn organization were conceptualized and created in the mid-1980s. As noted by Rehder (1994) Saturn began with a mission predicated on two specific goals: 1. To market vehicles developed and manufactured in the United States that are world leaders in quality, cost, and customer satisfaction by integrating people, technology, and business systems; and 2. To transfer knowledge, technology, and experience throughout General Motors (p. [...]
[...] While the company has effectively failed to take over the small car industry, it has created a strong brand presence with its Saturn products. Perhaps GM will be able to parlay this success into profitability for the Saturn organization. At the present time however, it seems reasonable to argue that it is impossible to predict the success of the Saturn organization. Given all of the problems that the company has experienced, the future is still uncertain. References Aaker, D.A. (1996). [...]
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