General Motors - Strategic Analysis Group 1

The Bottom Line

Market Penetration of OnStar 4G LTE Service
  • Product Development: Develop a device to allow 4G connectivity in older GM vehicles
  • Marketing Campaign: Promote new product and 4G connectivity service to GM vehicle owners

It will cost $2.57 Billion and make $3.11 Billion in the next 3 years

The Strategy

Advertise and appeal to current GM owners, as well as, those in the market for a new vehicle

Modify existing OnStar Wi-Fi connectivity hardware into a package that can be easily installed and integrated by dealership mechanics

  • Newer GM's : Increase subscribers to 4G LTE Data Plan
  • Older GM's : Installation of router and gaining monthly subscribers
  • Approximately 45 million GM vehicles in the US


  • Hurdle Rate 7.75%
  • NPV: $246 Million
  • IRR: 12.45%
  • Year 3 EPS: $9.61
  • Revenue per product: $390
  • Variable cost per product: $205
  • Contribution Margin: $185
  • Break-even: Approximately 500,000 subscribers
Bonds & Cash
  • $100 million per year
  • Covers fixed costs and initial inventory development


  • Year 1 : Research & Development, Promotion & Advertisement, Installation and Subscription Sign-Up
  • Year 2 : Promotion & Advertisement, Installation and Subscription Sign-Up
  • Year 3 : Promotion & Advertisement, Installation and Subscription Sign-Up

Yearly Evaluation - Effectiveness of Marketing Campaigns


GM markets the device and OnStar 4G LTE service nationally. Gives dealerships the power to market the device locally.

Promotions Platforms: National Cable TV ads, Radio Talk Show spots, Social media ads, and Google ads

Continually creating new content year-to-year and updating content to best reach our target market based on feedback from previous years


  • Demand is increasing for vehicle connectivity in the U.S.
  • Once autonomous vehicles become commercially viable infotainment systems will be necessary accessories in vehicles
  • Competitive Advantage is broadened as other automakers do not have in-house connectivity

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