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Situation analysis:
When you think power or tough, think hummer; when you see yourself
as a giant or a knight, ride a Hummer. These two sentences can be
summarized the essence of what AM general and General Motors
Corporation worked for.
The contract between the two companies gives GM use of the Hummer
brand name and responsibility for design, sourcing of components and
tooling, production engineering, and marketing and distribution. AM
General’s is responsible for manufacturing engineering, assembly and
brand management. It also retains the right to market and distribute
military vehicles such as the H1, known to the army as the "HUMVEE."
The problem existed when the company saw that H2 was heavier
than other SUV as well as more fuel consumption. Later on, the
company was extended the line of H2 by producing sport utility truck
and pick up tuck style cargo
TOWS analysis:
Threats: Hummers produce greenhouse gas (GHG) emissions from its
facilities. They damage the environment. GM tried to reduce it and
until now it couldn’t. Also, offensive strategies from the competitors
play a major role to reduce its intention to not produce more..
4. Why do you think some consumers will pay $40,000 or more for
an off-road vehicle that 90 percent of them will never take off-road?
Some consumers pay that amount because of their behavioral attitude
toward these vehicles. Some people feel that they have power,
authority and complete control.
There are two distinct groups of people who purchase Hummers: those
who use it for practical purposes and those who drive the vehicle as a
status symbol. Therefore, a segment of the Hummer enthusiast
population are the type of people that enjoy driving these vehicles off
road, as well enjoy the power the vehicle provides to drive up steep
hills, rough terrain obstacles, and even drive it through shallow water.
The second group of people is those that drive the vehicle as a status
symbol. For example, the rugged individualist will be more likely to
take it off-road and exploit capabilities. The successful achievers are
more likely to drive it on-road as a symbol of their daring and success
Finally, some consumers explain that after the attacks on the World
Trade Centre, Hummers became an overconfident symbol of American
greatness”.