| The Battle of Ideas |
| The U.S. Automaker’s Possible Strategy to reclaim its High Position |
This is not a proposal to blast Ford Motor and General Motors as so many doomsday cynics are lining up to do.
Instead, I’m going to do what all cynics can’t do, “solve the problem”! The U.S. Auto makers are clearly at a fork
in the road. Competitiveness is at an all-time high in the car industry, however many other industries have
endured greater competition and have survived with good strategic management. When companies come to a
fork in the road, it’s time to adapt and evolve to the changing environment. It’s important to recognize these
times of change at an early stage so the planning and organizing can flow more smoothly in a smaller incremental
process. When the planning and organizing function flows smoothly, naturally the execution stage has a better
chance at success.
In today’s business environment large corporations must think like a small company. Companies must have a
tighter grip on cost control and have the ability to adapt quickly to market trends, as well as supply and demand.
Believe it or not, this is an excellent opportunity for U.S. Auto makers! While the foreign competition is heating up
in the car building sector, tremendous opportunity in the external environment is exciting. While the competition
focuses on market share and revenue, it’s time for Ford and General Motors to focus on net income and the
percentage source of revenue.
By focusing on the percentage source of revenue, U.S. Auto makers will decrease its volatility during economic
downturns. U.S. Auto makers must enter into industries that thrive even during economic downturns. One of the
few industries which maintain stability during these times is insurance companies. By focusing on the auto
insurance industry, U.S. Auto makers will be able to integrate into the identity and business culture of the auto
market. This vertical integration strategy would position the U.S. Auto makers to profit from the conception to the
ending life of the vehicle.
The auto dealership would not only offer loans for vehicles, but also insurance.
All cars on U.S. roadways are required to maintain some form of auto insurance. That fact alone will generate a
continuous amount of cash flow within the company. Through the advancement of the Internet the auto
insurance companies like Progressive Insurance have found a great way keep costs low, while building a larger
market capitalization.
It would be wise to first enter into a joint-venture with a company like Progressive Insurance for the first 3 or 4
years. This would dry test the market and actively prepare the workforce for a bolder position in the insurance
market at a later date.
The goal should be to have an independent insurance subsidiary within a five year period. The company name
would be Ford Motor Insurance (FMI), or General Motors Insurance Corporation (GMIC).
This would be a bold new step to show your investor’s and the world that the U.S. Auto makers are still the apple
of America’s eye.
-Matthew Best (July 2004)
Instead, I’m going to do what all cynics can’t do, “solve the problem”! The U.S. Auto makers are clearly at a fork
in the road. Competitiveness is at an all-time high in the car industry, however many other industries have
endured greater competition and have survived with good strategic management. When companies come to a
fork in the road, it’s time to adapt and evolve to the changing environment. It’s important to recognize these
times of change at an early stage so the planning and organizing can flow more smoothly in a smaller incremental
process. When the planning and organizing function flows smoothly, naturally the execution stage has a better
chance at success.
In today’s business environment large corporations must think like a small company. Companies must have a
tighter grip on cost control and have the ability to adapt quickly to market trends, as well as supply and demand.
Believe it or not, this is an excellent opportunity for U.S. Auto makers! While the foreign competition is heating up
in the car building sector, tremendous opportunity in the external environment is exciting. While the competition
focuses on market share and revenue, it’s time for Ford and General Motors to focus on net income and the
percentage source of revenue.
By focusing on the percentage source of revenue, U.S. Auto makers will decrease its volatility during economic
downturns. U.S. Auto makers must enter into industries that thrive even during economic downturns. One of the
few industries which maintain stability during these times is insurance companies. By focusing on the auto
insurance industry, U.S. Auto makers will be able to integrate into the identity and business culture of the auto
market. This vertical integration strategy would position the U.S. Auto makers to profit from the conception to the
ending life of the vehicle.
The auto dealership would not only offer loans for vehicles, but also insurance.
All cars on U.S. roadways are required to maintain some form of auto insurance. That fact alone will generate a
continuous amount of cash flow within the company. Through the advancement of the Internet the auto
insurance companies like Progressive Insurance have found a great way keep costs low, while building a larger
market capitalization.
It would be wise to first enter into a joint-venture with a company like Progressive Insurance for the first 3 or 4
years. This would dry test the market and actively prepare the workforce for a bolder position in the insurance
market at a later date.
The goal should be to have an independent insurance subsidiary within a five year period. The company name
would be Ford Motor Insurance (FMI), or General Motors Insurance Corporation (GMIC).
This would be a bold new step to show your investor’s and the world that the U.S. Auto makers are still the apple
of America’s eye.
-Matthew Best (July 2004)
