Reduce Price to Improve Revenues and Margins
CHOICE 1 OBJECTIVE: ATTRACT CUSTOMERS
CHOICE 2 ISOLATE SEGMENTS: INDIVIDUAL CUSTOMER SEGMENT
CHOICE 3 COMPONENT: EXTEND A PAYMENT TERM
| No. | SIC | Year | Notes |
| 1 | 3714 | 2004 | DaimlerChrysler announced plans for a $1.2 billion factory expansion in Ohio under an unusual agreement that would allow it to share the cost of rolling out new models for the U.S. with its contractors. The agreement allows contractors to own vital parts of the manufacturing process. Suppliers will pay $300 million to construct three buildings, including the paint shop and the body shop that will help in the assembly of two new vehicles. DaimlerChrysler hopes such agreements could reduce the investment required to develop new models and help it produce a broader array of vehicles down the road. |
| 2 | 3751 | 2008 | In a pattern eerily similar to the housing bust, the $5.7 billion Milwaukee Harley Davidson used its in-house finance unit to chase after subprime borrowers, making it easy for them to buy $20,000 hogs with no money down. The risky lending—which forced Harley Davidson to take a $6.3 million write-down amid rising default rates and decreasing interest among buyers for its securitized loans—could foreshadow problems in other industries. Harley Davidson Financial Services offers loans both to retail customers and Harley dealers, who finance the bikes that sit in their showrooms. While HDFS made 38% of all retail loans for Harley five years ago, that proportion now exceeds half. |
<< Return to Choice 3