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Critical Analysis of News Release
On 10th of October 2002, General
Motors and Ford announced their joint venture scheme in which
they would carry out the design, engineering and testing of
their products jointly and that they would be working jointly
with their suppliers. The announcement is basically made to make
people aware of the new areas the two companies are going to tap
jointly. The technological advancement is mentioned in the
product attributes as well as the theme of environmental care
that is propagated very well in the release as it announces that
the joint technology would reduce fuel consumption by 4 to 8%.
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The signing of MOU by the two giant automakers have opened new
avenues for mergers and joint ventures in the filed of
technology. This release also gives way to the economies of
scale that would be met in this competitive arena and that
sharing of technology would enhance their capability in the
market. This has a specific message for other player of
automobiles, and poses a threat for them. These two companies
shall be able to reduce their costs and in the long run end up
having greater profits than others have. This sharing of
resources is no doubt the beginning of sharing of profits, which
the giants have realized.
Also the innovation that drives the two companies is exhibited
well in a news release as they intend to be the most innovative
and quality conscious company taking care of the increased cost
of production and bringing down the cost by economies of scale
obtained by this collaboration. This jest is a very clever one
in the sense that it not only provides information to the
enthusiastic investors but also to the existing shareholders,
who would now be willing to invest in the shares of the two
firms simultaneously. Thus the purpose of gaining the attention
of the investors and the shareholders is also fulfilled. Also as
the environmental activists are becoming more conscious of the
engineering designs that make for the heavy fuel consumption are
also catered.
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This announcement does not only address the investors,
shareholders and environmentalists, but also the loyal customers
for whom the fuel economy is a great challenge. By making the
“6-speed transmission”, the customers would be able to save fuel
and thus would be attracted by their products. The matter of
competition is however grave. As both would be technology and
quality driven, the only thing that lies is with the outer look
of their products. Another type of customer group is the sports
guy for whom the speed matters.
The message is also intended for
the suppliers that would be shared between the two firms. That
would mean the survival of the fittest. The feedback would be
shared and the demands would be almost same.
At the end of the release we can also see that there is a brief
introduction of both General Motors and the Ford, stating that
the first one is the world’s largest automobile manufacturer and
the latter is the second largest automobile manufacturer. It
also gives the information of the products manufactured by both
the companies and the site information. This makes the reader
believe what they say that they would capture the market and
rule the industry by their dynamic move and technological
innovation. It would thus be hard for the competitors to follow
the move. But the announcement that it would be in the market by
mid of this decade is amusing. As there would be a lot of
technological advancements by that time.
References
News release: October 10, 2002, GM, Ford Join Forces to Develop
All-New Fuel-Efficient Transmission
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