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Case Example 4

Management Control Systems

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Broad Motors Driven to be the Best A Case Study on the Theory of Constraints Accounting 858 Dr. James Brown April 24, 2007
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History of Broad Motors Broad Motors (BM) dates back to the early 1900s when Jay Leno, a car enthusiast, decided to start his own corporation. Leno owned Oldsmobile Motor Works which had built a plant in Detroit, Michigan in 1899. By 1908, Leno formed Broad Motor Corporation with a dream that the corporation would provide a variety of vehicles for the American consumer. After a year of establishing the corporation, Pontiac and Cadillac Motors joined BM. At this point, Leno wanted to purchase Ford Motor Company, one of Leno’s greatest competitors, for 9.5 million dollars. Leno was unable to convince the bank BM was the real deal and that Ford would help with the continuance of the company. In 1911, Rapid Motors joined Broad Motors. Rapid Motors would later become known as GMC. By 1918, Broad Motors finally acquired its last money-maker vehicle line, Chevrolet. Leno hired his new son-in-law, David Letterman, to run Chevrolet. Jay Leno later left his company to his family in order to pursue his dream of becoming a comedian. BM has served as one of the leading automobile manufacturers in the market. Today, BM is run by CEO Patrick Dempsey (GM web-site, 2007). Broad Motors Product Lines BM produces a variety of vehicle lines: Buick, Cadillac, Chevrolet, GMC, Pontiac, and Saturn. All of these cars have similar bodies and product parts that have helped BM lean out its manufacturing processes. BM focuses its Buick line towards the aging consumer; however, Buick has come out with the Buick LuCerne to attract the middle-aged consumer by adding luxurious, sporty features. Cadillac has always been a product for the wealthy consumer. Cadillac produces such products as the CTS, Escalade, and DeVille. Cadillac was BM’s first full-bodied car. Chevrolet is known for 2
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its pickup truck line in the Chevy Silverado. Chevrolets have been the pickup of choice for farmers across America for many years. Chevrolet markets its trucks as the American patriot’s truck. GMC produces pickup trucks and other SUVs such as the GMC Yukon. GMC designed the first truck to make it up Pike’s Peak in Colorado Springs. Pontiac serves the needs of many young professionals looking for affordable cars. It makes the Pontiac G6, the Grand Prix, and the Vibe. Finally, BM makes Saturns for the middle- class economically conscious people. Saturn is the first BM line to attempt the Hybrid Challenge ( http://www.gm.com ). BM Competitors BM faces a lot of competition from four other competitors: Ford Motor Company, Daimler Chrysler, Toyota, and Honda. Ford and Chrysler are both American made automobiles while Toyota and Honda are foreign competitors. Ford challenges BM in the SUV market, while Chrysler possesses a strong hold on the van market with its Town & Country. Toyota and Honda are beating BM in the car market with their newfound
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Case Example 4 - Broad Motors Driven to be the Best A Case...

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