What Happens to the Value Chain?

Isuzu Leaving the US Passenger Vehicle Market in 2009

Isuzu Motors America, Inc. will discontinue distributing new Isuzu passenger vehicles in North America effective 31 January 2009. The discontinuation of passenger vehicles results from the prospective cessation of production by GM of the Ascender sport utility vehicle and the i-290 and i-370 pickup trucks.

It has always been our intention to remain in the US market. However, we were unable to secure any commercially viable replacements for these vehicles.

—Terry Maloney, president and COO

Although Isuzu will cease supplying passenger vehicles in North America, it will continue to stand behind its customers and dealers. Specifically, Isuzu will continue to honor all product warranties and roadside assistance programs and will maintain its owner-relations call center.

In addition, to assure long-term service to its customers, Isuzu will be offering all current, US Isuzu vehicle dealers the opportunity to continue on as service dealerships for Isuzu.

30 January 2008 http://www.greencarcongress.com/2008/01/isuzu-leaving-t.html

From Sal: Like Shakespeare, there is always a story within the story. What does this announcement tell us about the Integrated Value Chain that Isuzu counted on? Indeed, what part of that chain did not really deliver? There are dealers who say they were caught totally by surprise. And, what gap in the chain will be left for the auto business and the U.S.?

I had the privilege of working with Stephan Garelli several years ago, for some interesting IBM work.

Each year, Professor Garelli, a senior consultant to the International Management Development Center (IMD) in Switzerland, publishes the World Competitiveness Yearbook. The book analyzes and ranks different countries for characteristics like technology or ease of doing business.

In addition, he states several categories that will affect business in the next year. Several years ago, Garelli added a dramatic category for the first time. Vulnerability.

I wrote Garelli and asked him why he added the category of "Vulnerability" to his list.

Here is his response:

Dear Mr. Rasa,

I am indeed highlighting the fact that vulnerability is a key concern for CEOs today. The outsourcing policies that we have seen during the past decade have lead to a value chain that is leaner but longer. It means that every company is now confronted with a multiplication of partners to work with. As a consequence, the level of complexity has increased and also the level of vulnerability. In the latter case, it means essentially that if a link of the value chain is exposed to a breakdown, it can stop the entire value chain. Even a small business partner can stop a larger company from operating.

I hope that this will be useful.

Any thoughts?

Sal