General Motors and OnStar: The Business Case for Automobile Internet-Based Services

General Motors is appealing to the consumer market by offering in-car Internet and cellular services in hopes to recharge sales. Their goal is to making GM the leading provider of Internet-based information services efforts to increase revenue. They propose to do this by delivering internet-based services through its OnStar system provided to potential drivers of web ready cars. This initiative includes subsidiary help through Global Positioning System, cellular technology, and 24-hour customer service center. OnStar fees start around $195.00 annually. With OnStar drivers have several options at their finger tips such as ability to have their car doors unlocked, step by step instructions for any problem that might arise, emergency assistance, and a location of a stolen car. With the invention of the cellular option drivers could send and receive e-mail and have voice activation from their car. Some concerns are arising from outsiders on this issue. Sources saying that an outside provider could provide the service more economically. In essence this innovation is a drive for GM to increase revenue remaining in the strategic market of car selling. This innovation is a response to the consumer market wanting more out of a new car and not settling for the status quo.

1. Car buyers want the biggest and best things in a vehicle when the decision is made to purchase. Granted that the OnStar system with built-in Internet, GPS, and cellular services probably only appeal to the older generation. The older generation usually spends more time traveling around the United States in which these individuals would utilize a system like OnStar. The younger generation would more than likely not use all the services provided by OnStar. Realistically looking at the web page about OnStar most of the cars equipped with the new system are typically very expensive and purchased by the older generation.

2. I think GM’s OnStar is both a strategic competitive move and also a technological diversion. The strategic competitive advantage stems from innovation of a new idea in which other car selling companies will follow. In addition, technological diversion for the new advance of including systems likes Internet-based, cellular use, and 24-hour assistance from the car.

3. GM should regain market share by keeping up with competitive forces by differentiation, cost leadership, innovation, growth, and alliance. They need to realize the power of customers, suppliers and competitors.

O’Brien, James A. Introduction to Information Systems. Essentials for the Internetworked E-Business Enterprise Tenth Edition. Page 223. McGraw-Hill Irwin. 2001.