Managing Organizational Change: Hyundai and General Motors Company Analysis - Research Paper Example

The company embarked on restructuring its brands in a manner that they were responsive to market needs yet still competitive. It has focused on restructuring its brands while still focusing on its core business: that is they have focused on strengthening the core businesses which are Buick, Cadillac, and Chevrolet, while reducing the focus on other lesser brands which are not the core of the business (GM Company 2010 Annual Report, 2010; Norton, 2008). Hence, while focusing on high-quality and exciting vehicles, they have also focused on affordability and fuel efficiency.

The key focus is mainly providing high-quality and affordable vehicles to the market (General Motors Corporation, 2008). Over the past decade, GM has weathered a dip in its US market share, with the key reason for this being that most of the company’s vehicles did not seem to appeal to younger buyers, nor was it responding fast enough to the changing customer needs. In most parts of the market, the cars were mostly irrelevant (Szczesny, 2009). While sales for some of GM’s cars such as Buick, Cadillac, and Chevrolet were high, performance for other brands such as Hummer, Saturn and Saab were lagging behind.

Furthermore, brands such as the Hummer did not fit the new GM business model of cost and fuel efficiency (GM Company 2010 Annual Report, 2010; Norton, 2008). In essence, GM reduced focus on nonperforming brands and increased its focus on the performing brands, while also shifting its focus to the production of vehicles appealing to a younger demographic such as Grand Prix, G6, and Grand-Am, as well as production of fuel-efficient vehicles such as hybrid, electric and FLEX that respond to high fuel cost pressures and environment consciousness pressures (Norton, 2008).

These changes have resulted in improved contribution margins in various new models as well as increased fuel efficiency where the cars use $6-$8 per gallon gasoline, 15%-55% fuel improvement than other vehicles. For instance, the Chevrolet Volt and Chevrolet Malibu have won car of the year awards in 2010 and 2008, while Cadillac CTS and Chevrolet Malibu generated contribution margins of more than 30% and 50% respectively in 2008 (General Motors Corporation, 2008; GM Company 2010 Annual Report).

These changes have positively impacted GM’s brand value enhance its new business model (GM Company 2010 Annual Report). However, cutting the nonperforming brands also resulted in the loss of jobs in the divisions that were cut. On the other hand, Hyundai motor company, one of the largest Korean automobile companies, has undergone changes in its brand strategy where it has mainly focused on fuel efficiency and fluidic sculpture in its products in response to changing competitive pressures in the marketplace (Cho, 2012).

Years after Hyundai had launched its vehicles in the US market, it was still viewed as a “cheap car suitable for the lower class” customers. Over the past decade, Hyundai has undergone massive changes in its brands to appeal to a wider customer base in the US.