Essay on Diversification Strategy

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Pages: 6

Assignment 2: Diversification Strategy The purpose of this paper is to compare and contrast two companies; One successful and one unsuccessful. The two companies chosen for this purpose is General Motors (unsuccessful) and Toyota Motor Corporation (successful). The content of this paper will analyze, compare and contrast the outcomes, and recommend actions that General Motors could have made to make their diversification venture more successful. The analysis will include the company’s core business, the size of the companies, and the 2009 financial statements of the companies, the company’s global presence, and their use of e-business. The analysis will also contain the primary reason for the different outcomes.
History of General
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Toyota has since made the Corolla, Camry, Toyota trucks, Scion, and Lexus. Toyota became synonymous for its creation of the first gas/electric hybrid Prius in December 2002 stating to the public, “We built a car for the 21st century.” As Toyota moved into the decade
2000, it continued its vision as “The relentless pursuit of perfection” by offering buyers more luxury vehicles and hybrids to choose from (Toyota Motor Corporation, 2011).
General Motors versus Toyota Motor Corporation In December 2008, General Motors and two other auto companies requested bailout funds from the government to avoid bankruptcy. General Motors requested funds totaled $34 billion from the government, $18 billion in loans, and General Motors received another $6 billion from GMAC (Amadeo, 2011). The government complied with General Motors’ request for funding and gave the company bailout funds in January 2009. During 2009, General Motors’ total revenue was $104,589.0 billion and its gross profit was -$8,079 (General Motors Co., 2011). In March 2009, the Federal Government gained control of General Motors and during this takeover the Federal Government terminated the Chief Executive Officer Rick Wagoner before releasing funds to keep the company afloat. The government also nationalized General Motors to for the company to become more competitive (Amadeo, 2011). In 2007,