gm strategic plan
DESCRIPTION
InformativeTRANSCRIPT
Strategic Plan
Derek Davis
Taylor Henrickson
Jeff Vogel
4/30/2012
MGMT 480
Brenda Finger
GM STRATEGIC PLAN
TABLE OF CONTENTS
TABLE OF CONTENTS ..................................................................................................................................... 1
Introduction .................................................................................................................................................. 8
History 8
Creation 1897-1909 .......................................................................................................................... 8
Acceleration 1910-1929 .................................................................................................................... 8
Emotion 1930-1959........................................................................................................................... 8
Revolution 1960-1079 ....................................................................................................................... 9
Globalization 1980-1999 ................................................................................................................... 9
Innovation and Challenges 2000-2008 ............................................................................................. 9
Rebirth 2009-Present ........................................................................................................................ 10
Mission/Vision & Major Goals .............................................................................................................. 10
Mission Statement ............................................................................................................................ 10
Vision Statement ............................................................................................................................... 10
Major Goals ........................................................................................................................................... 11
CEO of Company ................................................................................................................................... 11
SWOT Analysis....................................................................................................................................... 11
Strengths ........................................................................................................................................... 12
Weaknesses ...................................................................................................................................... 13
Opportunities .................................................................................................................................... 13
Threats .............................................................................................................................................. 14
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Redesign ................................................................................................................................................ 15
Industry Environment ................................................................................................................................. 17
Five Forces Model ................................................................................................................................. 17
Macroenvironment ............................................................................................................................... 17
Macroeconomic Forces ..................................................................................................................... 18
Demographic Forces ......................................................................................................................... 19
Political and Legal Forces .................................................................................................................. 19
Social Forces ...................................................................................................................................... 20
Global Forces ..................................................................................................................................... 20
Technological Forces ......................................................................................................................... 21
Strategic Groups.................................................................................................................................... 21
Industry Dynamic .................................................................................................................................. 22
Life Cycle – Rebirth ............................................................................................................................... 23
Global Future ........................................................................................................................................ 24
National Context ................................................................................................................................... 24
Competitive Position ................................................................................................................................... 27
Competitive Advantage ........................................................................................................................ 27
Building Blocks ...................................................................................................................................... 28
Efficiency ........................................................................................................................................... 28
Quality ............................................................................................................................................... 29
GM STRATEGIC PLAN
Innovation ......................................................................................................................................... 30
Responsiveness to Customers .......................................................................................................... 30
Distinctive Competencies...................................................................................................................... 31
The Role of Prior Strategies .............................................................................................................. 32
Strategies GM is Pursuing ................................................................................................................. 33
Barriers of Imitating GM’s Distinctive Competencies ....................................................................... 33
Changing Industry Conditions ............................................................................................................... 34
Company’s Ability ....................................................................................................................................... 35
Efficiency Enhancing Practices .............................................................................................................. 35
Quality-Enhancing Practices ................................................................................................................. 35
Innovation ............................................................................................................................................. 35
Responsiveness ..................................................................................................................................... 36
Competitive Position ............................................................................................................................. 37
Competitive Advantage Through Business-Level Strategy ......................................................................... 39
Differentiated ........................................................................................................................................ 39
Market Segmentation ........................................................................................................................... 39
Distinctive Competencies...................................................................................................................... 40
Generic Business Model ........................................................................................................................ 40
Advantages and Disadvantages of GM’s Business Model .................................................................... 40
Strategic Group ..................................................................................................................................... 41
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Improving General Motor’s Business Model ........................................................................................ 41
Business-Level Strategy and the Industry Dynamic .................................................................................... 42
Industry Environment ........................................................................................................................... 42
Protect and Strengthen ......................................................................................................................... 42
New Strategies ...................................................................................................................................... 43
Advantage in the Future ....................................................................................................................... 43
Strategy and Technology ............................................................................................................................ 45
Dominant Product Technology ............................................................................................................. 45
Technical Standards .............................................................................................................................. 45
Attributes of the Majority of Customers .............................................................................................. 46
Dominant Technology ........................................................................................................................... 47
Dominant Technology on the S-Curve .................................................................................................. 48
Intellectual Property ............................................................................................................................. 48
Strategy in the Global Environment ............................................................................................................ 50
Value Creation....................................................................................................................................... 50
Responsiveness ..................................................................................................................................... 50
Cost Pressures ....................................................................................................................................... 51
Strategy ................................................................................................................................................. 51
Foreign market ...................................................................................................................................... 52
Corporate-Level Strategy ............................................................................................................................ 53
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Horizontal Integration Strategy ............................................................................................................ 53
Vertical Integration Strategy ................................................................................................................. 53
Increasing Profitability through Vertical Integration ............................................................................ 54
Outsourcing ........................................................................................................................................... 55
Corporate-Level Strategy: Diversification .................................................................................................. 56
Restructuring strategy .......................................................................................................................... 56
Exited Industry ...................................................................................................................................... 56
Strategy to exit ...................................................................................................................................... 56
Opinion on exiting ................................................................................................................................. 57
Corporate Performance, Governance, & Business Ethics ........................................................................... 58
Stakeholder Groups .............................................................................................................................. 58
Performance of the CEO ....................................................................................................................... 59
Stockholder Perspective ................................................................................................................... 59
Employee Perspective ....................................................................................................................... 60
Customer Perspective ....................................................................................................................... 60
Supplier Perspective ......................................................................................................................... 61
Evaluation of the Perspectives .......................................................................................................... 62
Governance ........................................................................................................................................... 62
Board of Directors ............................................................................................................................. 62
Stock-Based Compensation .............................................................................................................. 63
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Financial Statements ......................................................................................................................... 63
Major Strategic Decision ....................................................................................................................... 64
Implementing Strategy – Competing in a Single Industry .......................................................................... 65
Size of Business and Levels of Hierarchy .............................................................................................. 65
Authority and Responsibility ................................................................................................................. 65
Organizational Chart –Divisional Structure ........................................................................................... 66
Why Did GM Choose A Divisional Structure? ....................................................................................... 67
Integration ............................................................................................................................................ 67
Control Systems .................................................................................................................................... 68
Top Management’s Role ....................................................................................................................... 68
Distinctive Competencies...................................................................................................................... 69
GM’s Matrix Structure .......................................................................................................................... 69
GM’s Culture ......................................................................................................................................... 69
Coordinating and Motivating ................................................................................................................ 70
Implementing Strategies in Competition Across Industries and Countries ................................................ 71
Multidivisional Structure....................................................................................................................... 71
Integration Mechanisms ....................................................................................................................... 71
Corporate-Level Strategy ...................................................................................................................... 71
International Strategy ........................................................................................................................... 72
Altering the company’s structure ......................................................................................................... 73
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Particular entry mode ........................................................................................................................... 73
Use IT to coordinate .............................................................................................................................. 73
Multibusiness ........................................................................................................................................ 74
Conclusion & Recommendations ................................................................................................................ 75
References .................................................................................................................................................. 76
Appendix ..................................................................................................................................................... 83
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Introduction
History
Creation 1897-1909
General Motors has had a huge impact in the world of automotive design for more than 100
years. In the early 1900s, there were less than 8,000 automobiles in America. This would shortly change
once General Motors started to make innovations in the automotive industry.
General Motors was founded by William “Billy” Durant on September 16, 1908 (General Motors,
2012). Durant was previously known as one of the best horse-drawn vehicle manufacturers in Flint,
Michigan. When General Motors was first created, it was only the Buick Motor Company, but within
only a few years, GM would acquire more than 20 companies including Oldsmobile, Cadillac, and Pontiac
(General Motors, 2012).
Acceleration 1910-1929
When demand for automobiles increased greatly in the 1920s, GM was the leader in production,
design, and marketing innovation. They were a company that all other automobile manufacturers tried
to keep up with, and in a lot of cases, other company’s would even follow them and use their ideas. It
was during his era in GM’s history that they developed a philosophy when it came to making and selling
cars. Their philosophy was “a car for every purse and purpose.” (General Motors, 2012) During this era,
GM also began to become a worldwide company, opening more than a dozen new plants outside the
United States. One milestone that was achieved during this era was the Cadillac LaSalle, it had curves
throughout the body rather than sharp corners, it was one of the first sports cars and it made people
look at cars as more than just a mode of transport (General Motors, 2012).
Emotion 1930-1959
During this era, a number of new innovations in the design of cars were made. Some of the
major improvements that were made included: independent front wheel suspension unibody
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construction, and the one-piece steel roof. Cars that included these new innovations were: the Buick
Roadmaster, the Chevrolet Corvetter, Chevrolet BelAir, and the Cadillac El Dorado.
Revolution 1960-1079
During the Revolution era, environmental concerns increased as prices and foreign competition
led to a downsizing in vehicles. This was the largest reengineering program ever by the industry. This
program brought in and age of lighter, more aerodynamic and more fuel-efficient vehicles (General
Motors, 2012). This era also led to a couple of key innovations that are still used today. In 1971, GM
created two engines that could run on low-lead or unleaded gasoline. Two years later, they introduced
the airbag. Finally, in 1974, GM created the catalytic converter, which is an important step in reducing
emissions (General Motors, 2012).
Globalization 1980-1999
The globalization era was the era in which GM began a series of reorganizations in North
America which led to a single business unit there (General Motors, 2012). 1995 brought a milestone for
GM; it was the first year in which annual sales exceeded three million units. Five million vehicles were
sold in the U.S. that year. GM also formed NUMMI, a joint venture with Toyota and Saturn. They started
focusing on making smaller cars and a new way of doing business. Along with creating a new line of
smaller cars, there was also a truck boom which saw millions of families buy trucks and SUV’s for their
family vehicles (General Motors, 2012).
Innovation and Challenges 2000-2008
This era brought along one of the most innovative ideas that the automotive industry has ever
seen. It was the idea for an electric car. In 2007, GM shook the industry with a concept car called the
Chevy Volt, a vehicle that could drive on battery power for daily commuting, and then continue
operating with a range extender when the batter was depleted (General Motors, 2012). The first Volts
were sold in 2010. In 2008, things pulled a complete 180 for GM. A major recession and global credit
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crisis drove car sales to near depression levels. GM was operating on very little cash and had even
received a loan from the U.S. Treasury under that conditions that the company further accelerate a
tough restructuring of its U.S. operations (General Motors, 2012).
Rebirth 2009-Present
On June 1st 2009, GM filed for bankruptcy, and a new GM company was created. It took all of
the strong assets of the old GM, and combined them with its new ideas. The new GM was smaller and
leaner than it was before. It has only four brands in the U.S. and they were: Chevrolet, Buick, GMC, and
Cadillac. The smaller GM has continued to grow and expand ever since its creation. More than 70
percent of sales now come from outside the U.S. in the markets of China, Brazil, the United Kingdom,
and Germany (General Motors, 2012). After starting its new and improved company, GM has continued
to be successful, this success has caused them to design, build, and sell the world’s best vehicles
(General Motors, 2012).
Mission/Vision & Major Goals
Mission Statement
When GM created their mission statement they wanted one that would stick in peoples’ minds.
They came up with “G.M. is a multinational corporation engaged in socially responsible operations,
worldwide. It is dedicated to provide products and services of such quality that our customers will
receive superior value while our employees and business partners will share in our success and our
stock-holders will receive a sustained superior return on their investment” (Quintela, 2011)
Vision Statement
A vision statement defines what your company will do and why it will exist tomorrow. GM’s
vision statement is as follows: “Over the past 100 years, GM has been a leader in the global automotive
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industry. And the next 100 years will be no different. GM is committed to leading the industry in
alternative fuel propulsion” (Quintela, 2011).
Major Goals
GM has one major goal in mind that it has been striving for, harder in the past few years than
ever. That goal is to become a globalized company producing and selling its vehicles all over the world.
They are hoping to have their units in many places that were one thought to be unnecessary. GM
believes that if it can become more global that it will be more efficient and lower is overall costs, and
will be better for the company in the years to come. (Gibson, 2009)
CEO of Company
The current CEO of General Motors is Daniel Akerson. It was a surprise to many considering
Akerson had only been a member of the automaker’s board since July of 2009. It is also said that he is
not a usual “car guy”. Some were worried about choosing him for the position just because of that fact
that he is not a self-proclaimed “car guy” like many of the other CEO’s in the automobile industry.
He is no stranger to the CEO position of a company. Akerson has been CEO for three other
companies. Although none of the other three companies were in heavy manufacturing, he does have
other types of manufacturing experience. GM thought that his finance skills would be a big asset to the
company and help them succeed. Akerson is GM’s fourth CEO since May 2009 (Healey, 2010). GM had
needed to make a change in their leadership. The company had already gone bankrupt because the
former CEO did not have a good handle on the company or the economy. GM now needs someone who
will increase sales and increase worker moral.
SWOT Analysis
According to Hill and Jones’s book, Strategic Management: An Integrated Approach, a SWOT
analysis helps “identify strategies to exploit external opportunities, counter threats, build on and protect
company weaknesses, and eradicate weaknesses” (SWOT Analysis and the Business Model, 2010). The
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following table shows a SWOT analysis for General Motors, and following the table is a description of
what each area of the analysis means for GM.
Global experience
Large market share
Diversity of brand names
Declining in market share
Low worker morale
Lack of leadership
Recovering automobile industry
Environmental concerns
Business process expansion
Competitors
Rising fuel prices
Health care costs
Figure 1.1- SWOT Analysis
Strengths
General Motors has strengths that they have used that keep them going strong. According to
other sources that have done in-depth analyses of their strengths, they are indicating that General
Motors has a lot of global experience. GM has factories in Poland, Russia, South Ecuador, Egypt,
Germany, as well as other countries (Marketing Teacher). Cyriac Thomas, who composed a document
from the Amrita School of Business, mentions that GM is established as a global leader in the vehicle
industry. The author also states that GM has been global for over a century (General Motors Strategic
Analysis, 2008).
Another strength that GM has is the large market share they have. According to a post on
January 19, 2011, this large market share translates to the idea that the reason why General Motors has
such a large market share is due to customer trustworthiness and their brand recognition (Business
Review, 2011).
General Motors also has many brand names that range from such brands such as Chevrolet,
GMC, Buick, Pontiac, and Saturn. There are many more brand names that General Motors owns, which
are listed in Thomas’s document. It is this brand recognition that assists in their large market share, as
discussed above. The more brands that are recognized by their customers, the more the customers can
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trust that those vehicles will do well, which shows that the large market share and their numerous
brands tends to go hand in hand.
Weaknesses
Just as General Motors has many strengths going for them, they also have their fair share of
weaknesses. As of January of 2011, General Motors is declining in market share. Business Review goes
on to say that even though that GM is still number one in the market, their market share has been
declining since 1984. In regards to their finances, it is pointed out that GM has insufficient liquidity, with
their liquidity being $14 billion in 2008, and their liquidity in 2007 being $27.3 billion.
General Motors is also having a bit of a problem with worker’s morale on the bottom line.
According to a SWOT analysis provided by Chakar Rind, the author says that the lack of leadership in
General Motors has brought down the worker’s morale (General Motors SWOT Analysis, 2010).
According to employee reviews from people that have worked at GM, some of their cons or advice to
senior management have to do with the managers that were directly over them. One reviewer said,
“Respect the people who work for you and need to make decisions on fairness rather than political
reasons.” Another reviewer said, “Give focus on employee satisfaction their work life balance. upgrade
infrastructure of office area have proper transparency at the time of recruitment (Glass Door, 2012).”
As it is seen on these reviews, this is a definite area that GM should be focusing on improving.
Opportunities
GM also has opportunities that are waiting for them that they can use to their advantage.
According to Business Review, the U.S. automobile industry is recovering, which is a good opportunity
for GM to continue in a successful manner. Because GM happens to be the market leader, it is very
important for them to continue to look for new customer needs so they can continually improve their
vehicles.
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Another opportunity that awaits GM is to continue being concerned about the environment.
Many people are aware of how gas fumes tend to be a negative factor of the environment, so GM
should continue being on the lookout for new ways to produce fuels to keep their cars running. GM is
looking into this, but it is important to keep looking for energy efficient vehicles to put on the market,
such as their very own Chevrolet Volt, which happened to have been named the North America Car of
the Year. By continuing to be concerned about the environment, GM will continue to keep their brand
image positive. In fact, there is a rising demand for hybrid vehicles, such as the Chevrolet Volt. The
website, Marketing Teacher, lists six different cars that GM has been producing that are hybrids, and the
website also goes on to say that they are looking into doing plug-in vehicles as well. This innovation that
GM is pursuing is a good opportunity for GM to boost demand for GM products.
In Chakar’s own SWOT analysis, he mentions that GM should be on the lookout for expansion of
their business processes, while still keeping in mind on how their customers influence their business
models. Having business processes that are up-to-date, and having processes that are promoting
efficiency while keeping in check the environmental impact GM has on their customers as well as the
environment itself is very important for GM, since they happen to be the market lead in the car industry.
Threats
Just like most companies, the threat of competitors is always going to be there, especially if
those competitors have great leadership. For GM, their threat comes from intensive competition from
overseas companies. Business Review mentions that a “majority of the market is now shared by seven
biggest automakers including Detroit Three and four overseas manufacturers. The presence of overseas
automakers in top seven signals increasingly fierce competition and predictable threats to GM’s
position.” Since GM has started reaching out to the global market, this is something that they will have
to face as a company.
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Rising fuel prices is also another threat facing GM. According to Thomas, “sales have drastically
decreased due to the lack of fuel efficiency.” The reason why sales have “drastically decreased” has
something to do with GM being a large producer of trucks and SUVs (General Motors Strategic Analysis,
2008). The rise in fuel prices has created a larger opportunity for car-producing companies such as GM
to highly consider creating vehicles that are not gas hogs. This goes back to the reason why GM has
started producing hybrids. Not only is GM focusing on being environmentally safe, but this also shows
that they are more concerned about decreasing sales.
Healthcare costs, being as high as they are, tend to also be a threat to GM. The cost of
healthcare for each vehicle that is produced by GM tends to be higher than those vehicles produced by
GM’s competitors (Business Review, 2011). Rind mentions the rising healthcare costs in his discussion of
GM as well. He says that just like other major companies, GM has a quality employee healthcare benefit
for those that work with them. Because they have been hit hard financially, it is hard to make sure that
their health care benefit continues to be of great quality. Management should keep in check that the
healthcare benefit that GM offers continues to be a great benefit and that employees are using their
healthcare benefit to its extent. Having employees that are healthy and are using their benefits when
they are needed are important to ensure that worker morale is going strong, and that leaders are
making sure that employees have a healthcare benefit that can support worker morale and health.
Redesign
After analyzing GM using the SWOT analysis above, it is a concern that the main problem going
on in GM has more to do with those who work within the company. Employees have low work morale,
which is due to GM’s poor leadership. The company needs to provide managers with sensitivity training.
This training will offer managers to learn important skills they need in order to better relate to their
employees. The training should also go beyond the scope of the sessions provided by the training.
Employees should have a stronger voice within the walls instead of having to report to an external blog
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such as Glass Door that top executives are only able to review. By providing an internal blog for
employees to write on, top executives will have a better understanding of what is going on with other
areas of the company.
It would be beneficial for those leaders to gain more experience in working with a diverse set of
employees, which can be done by shifting managers from different areas so they can experience
working with different employees. The employees should also be provided with the same sensitivity
training as well. Employees who work under these particular leaders should receive nearly the same
treatment that their leaders are getting, but more focused at their own levels.
By providing the training and the external blog to report, GM can do much better in many more
areas of the company. When this redesign goes into effect, employees will be able to more effectively
communicate with coworkers, and more importantly, their managers. In the perspective of the
managers, they will have a stronger interpersonal relationship with the employees they supervise and
are then able to more effectively supervise and work with their employees.
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Industry Environment
Five Forces Model
There are five forces in the book that shape the competition within the industry, they include:
(1) the risk of entry by potential competitors, (2) the intensity of rivalry among established companies
within an industry, (3) the bargaining power of buyers, (4) the bargaining power of suppliers, and (5) the
closeness of substitutes to an industry’s products. All of these will play a role in GM’s redesign as the
leadership should do a better job of improving all of them. GM should always be thinking of ways to
improve their company and all of these risks listed should be thought of before they happen. (Hill &
Jones, 2008)
Most of these are present in the manufacturing industry in which GM is involved in. The two
that are least present would be the bargaining power of buyers, and the bargaining power of suppliers.
The risk of entry started in the 70’s when the price of oil quadrupled and Detroit’s “Big Three” car
companies struggled to meet the demands of the American people. Japanese automakers prevailed
through this time and it was the first time Americans started choosing foreign vehicles over ones
manufactured in the U.S. This also goes with the second, the intensity of rivalry among established
companies within an industry, because now there are many established automakers selling cars in the
U.S. The last force that GM has room to improve on would be the closeness of substitutes to an
industry’s products. Other companies have made changes in the industry to make their vehicles
powered more by electricity than by gasoline which in my opinion would be a substitute. (Brown, 2011)
Macroenvironment
As indicated in the SWOT analysis, a few areas in the macroenvironment were noted. These
areas include macroeconomic forces, demographic forces, political and legal forces, social forces, global
forces, and technological forces.
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Macroeconomic Forces
The economy was not doing well for a few years, and it especially affected the automotive industry. As
mentioned previously, GM filed for bankruptcy in June of 2009. The following graph shows the annual
percentage state GDP in automotive manufacturing:
As can be seen in the graph provided above, less than 1% makes up the majority of the states that make
up the automotive industry in each state’s particular economy. It is evident that the automotive
industry tends to make up more in the eastern states. The next graph shows the percentage of
automotive employment manufacturing in automotive parts manufacturing:
.
Figure 2.1 - Average Percentage of State GDP in Automotive
Manufacturing, 1998 to 2008 (Thompson, 2010)
Figure 2.2 – Percentage of Automotive Employment Manufacturing in Automotive Parts Manufacturing
(Thompson, 2010)
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As is seen in this particular figure, the two dominating percentages are 21 states that have a 50% to
74.9% range of employment manufacturing in automotive parts, and 17 states are in the range of 75%
to 100%. These states show the importance of having employees in the manufacturing parts segment of
the automotive industry.
Demographic Forces
The baby boomer generation is aging quickly, and the time for them to retire is climbing up to
5% annually. However, at the same time, the number of drivers aged from 16 to 29 is increasing, and
most of these young adults are postponing getting their driver’s licenses (Investing Thesis, 2010). This is
going to be affecting the automotive industry because those young adults are affecting the purchase of
vehicles. However,
“The median age of the U.S. vehicle fleet is a record 9.4 years, with nearly half of the
250 million cars & trucks on the road at least 10 years old. Historically, nearly 6% of the
U.S. fleet is replaced each year, with an additional 3 million units coming from new
buyers. (Investing Thesis, 2010).”
These new buyers are assisting with the strength of the automotive industry, which shows that the
people who are buying those vehicles are providing the automotive companies such as GM to continue
to provide quality vehicles for young adults.
Political and Legal Forces
It is very important for the government to ensure that the automotive industry keeps the law
when it comes to doing things such as dealership, auto manufacturing, repair, maintenance, recycling,
and sales. The U.S. Small Business Administration’s website has information in regards to vehicle import
regulations, import requirements for vehicles, engines, and equipment; and documents that discuss
emissions standards. Other standards that are important to the automotive industry are fuel economy
and safety standards (Automotive, 2012). As can be seen by the numerous resources provided by the
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U.S. Small Business Administration’s website, the automotive industry needs to follow a set of legal
regulations to ensure that their vehicles are following standards when it comes to manufacturing and
sales of vehicles.
Social Forces
It is important for employees to work in an environment that provides safety and respect. Rind
mentioned that the low worker morale was brought by the lack of leadership. The employee reviewers
who posted on the website, Glass Door, mentioned that they did not feel very well respected and a need
to focus on the people that work there instead of office politics. Another reviewer had mentioned that
workers should feel satisfied with the work they do. A cause of that may be how their managers are
approaching them when it comes to the appraisal process. When the working environment improves
and more studies are done in the larger perspective of organizational behavior, it shall become clearer
to GM so that they can focus on improving worker morale.
Global Forces
It was recognized as part of the SWOT analysis as an opportunity for General Motors to make
sure that they are protecting the environment and it is definite that General Motors does indeed care
about the environment. Gas fumes tend to pollute the air, and General Motors and BMW are
collaborating on fuel cells so that the environment can be much cleaner. In an article posted on
December 12 of 2011, GM spent more than $1.6 billion developing their first sell technology thus far
(Yvkoff, 2011). They have partnered with BMW so that they can bring hydrogen fuels to the mass
market by 2015. However, the Obama Administration wants to end the hydrogen fuel cell vehicles
program. Obviously, those who are for hydrogen fuel are seeing hydrogen fuel as the ultimate clean-car
technology. The reasons against the Obama Administration wanting to end it are because of a decision
by the Energy Secretary, Steven Chu. Chu stated, “cost and durability of vehicle cells, the inability to
store large volumes of hydrogen fuel, the absence of a carbon-free way of generating the hydrogen, and
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the need to build a nationwide refueling infrastructure” (Service, 2009, p. 1258). Unless these
researchers can prove the Obama Administration otherwise, GM needs to pursue different strategies for
being environmentally friendly.
Technological Forces
Technology is always a big macroenvironmental concern for all organizations. One of the
technological gains that GM has used over time has been OnStar. GM partnered with OnStar
Technology so that their customers can see that GM cares for the safety of their customers. However,
according to an editorial submitted by Paul Milo in May 2011, it is relatively easy to hack the system.
Researchers at the University of California utilized OnStar to take control of a number of functions in the
vehicles they used (Milo, 2011). They were able to simply by breaking through the authentication
system. In order to gain access to the car, they made about 130 calls and then uploaded code using 14
seconds of audio. Because this opens the door to illegal activity to hackers, GM should be on the
lookout to different services that have more of a sophisticated system. The employees that work with
the technology especially should look into doing further research on a more sophisticated system. As a
part of their training in worker morale, leadership, and communication, this particular situation can be
brought up and foster a strong team environment so that all levels of management and employees can
work together to create something that could really benefit the technological side of General Motors.
Strategic Groups
In the automotive industry, there is competition across many automotive companies. The
competition basically is which company can provide vehicles that are easy to afford and have great
quality. Figure 1.1 below shows a strategic group map in the automotive industry.
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According to the figure above, GM is located towards the medium in regards to price and
quality, and falls above the product line diversification line at full mass production. This shows that the
company is doing well in regards to their production, and has relatively good prices in regards to their
vehicles. Though production, price, and quality are all good factors when it comes to business, making
sure that employers are not being overworked and experiencing stress at work does not happen.
Industry Dynamic
There is evidence that innovation is reshaping the automobile industry. One of the biggest
innovations in the car industry over the past few years is the hybrid cars. When they first came out,
they were expensive and not many people could justify purchasing one with their price tag. The car
industry quickly became aware of this and found ways to make their cars cheaper and easier for more
people to afford. GM was one of the first automakers to make a hybrid in the way that the gas powered
motor does not drive the rear tires; it is used to keep the lithium-ion battery pack charged. A survey
done in 2006 by the influential J.D. Power and Associates indicated that 57 percent of respondents
would consider buying a hybrid car for their next vehicle. In 2006, hybrids only made up one percent of
the market but are expected to become more popular as the price of gas continues to increase
(Motavalli, 2007).
Figure 2.3 - Strategic Group Map 1 (Alfanzo, 2007)
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GM could use some innovation in the manufacturing plants to their advantage. Although they
have introduced things like robot welders there is always room for innovation to decrease the cost of
making vehicles. This can be a dangerous part of managing the company because the CEO will not want
to give the wrong idea to employees that their jobs may be in jeopardy.
Life Cycle – Rebirth
After filing for bankruptcy on June 1, 2009, General Motors Company had to start over and get
their business back on its feet. When GM reformed itself after the bankruptcy, it kept all of the strongest
assets from the old company, and implemented them into the new company along with all of the new
and improved ideas.
On July 10th, 2009, the new GM was created with the U.S. Treasury, Canadian Governments, and
the UAW Retiree Medical Benefit Trust as its major shareholders (General Motors, 2012). The new GM
was smaller and leaner than the old GM. The newly formed company was comprised of only four brands
in the U.S. They were: Chevrolet, Buick, GMC, and Cadillac. The network of dealers was also slimmed
down to be more efficient. It slimmed down to 4,500 dealers.
Although, GM is getting smaller and more efficient in the U.S., they are still continuing to grow
exponentially globally. More than 70 percent of its sales now come from overseas. The top five markets
by sales are now China, the United States, Brazil, the United Kingdom, and Germany.
General Motors has been through some tough times in the last few years with having to file for
bankruptcy, but the company just would not quit. GM got back on its feet and became more powerful
than ever. Sales in the U.S. are climbing and the sales overseas are also increasing, making GM one of
the leaders of the automotive industry, and they will likely be on top for a long time due to their
passion, design, innovation, and build.
The biggest thing that GM can do to help their continued rise back to the top is by redesigning
their customer support system. In the past, before they went bankrupt, GM treated their customers
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very poorly and this caused them to lose a very large number of customers, which also caused them to
lose money and eventually end up bankrupt. So in order for GM to be successful, they must focus their
new efforts on keeping their customers happy by being responsive, helpful, and giving back to them. If
GM does these things, the customers will be much more loyal to GM in the future.
Global Future
The automobile industry is in fact a global industry. As the world trend change, automobiles are
introduced to more people all the time. The one global trend that seems to be happening more than
any other is fuel efficiency. Technologies that were once used to achieve the most horsepower in its
class are now being focused more towards fuel economy. If an automobile is planning on selling its
product anywhere in the world today a strong selling point will be its good fuel efficiency.
As far as GM being a global automaker, this is one of their biggest goals. They already have
locations in Brazil, China, and Russia. Part of their plan to globalize also included consolidation. GM
eliminated 300 applications in 2008 hoping to reduce the overhead cost and become more streamline in
certain products. With all of this ambition towards getting plants going in other countries GM should
have let their current employees know if they should be concerned about losing their jobs. If the
employees think layoffs are coming, chances are they have already begun a search for a new job and are
not happy with the current situation (Economist, 2008).
National Context
There have been battles between brands since the beginning of time. Whether it is Coke vs.
Pepsi, or Nike vs. Adidas, each of these brands is trying to be the best in their industry. This is no
different in the war between General Motors and Ford Motors. GM and Ford have been rivaling each
other for over 100 years now, ever since cars were invented, each company having new ideas and
innovations that will help them be the best automotive company in the United States.
GM STRATEGIC PLAN
When comparing these two automotive giants, there are three things that are compared:
annual profit, market capitalization, and the U.S. market share. Customers are what give a company an
advantage in these segments of a business, without customers, a company will die and they will not be
successful in any of these three things. At the moment, the two companies are in a battle over market
share. The company that has the strongest leadership will likely have the advantage in market share.
When a company has a strong leader, the workers will work harder to please him or her; having a strong
leader also causes customers to trust the company more, and makes them more willing to spend their
money at that company opposed to the other. GM needs a strong leader to make sure that they
redesign their customer support. The only way to have a large number or loyal customers is to have a
strong leader, which in turn will create a strong, trustworthy business. GM is currently in the lead but
analysts are divided on who is the actual winner (III, 2011). Over the last Century, these two companies
have gone back and forth controlling the automotive industry in the United States. Ford held the lead
until the late 1920s when the Model T lost its popularity, after that they fell permanently behind GM.
GM held this lead until they began to skid into bankruptcy in 2009 (III, 2011).
Since GM created its newer, leaner company, they have become a fighting machine. Using ideas
from the old company and combining them with new, innovative ideas behind the new CEO, Dan
Akerson. At the moment, Ford holds a small advantage in annual profits at $6.6 billion in 2010,
compared to GM’s $6.2 billion in 2010. A larger lead is held by Ford in market cap, Ford was at $55
billion to GM’s $50 billion in 2010 (III, 2011). The U.S. market share however, has been much closer. GM
had a commanding lead at the end of 2010, but since then Ford has begun to battle back, almost
catching up to GM, but GM still remains at the top.
According to Alex Taylor III’s article titled “GM vs. Ford: The Hundred-Year War,” most observers
expect GM to stay ahead of Ford in overall share for the rest of this year. It is getting a big lift from the
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new cars they have unveiled. Another factor is that because of the rising oil prices, Ford will struggle
with selling their trucks, something that they have been beating GM in for years (III, 2011).
Overall, these two brands are clearly the front runners in the United States. They have been
going back and forth in the lead for dominance, and will likely continue to do so for the rest of time. As
of right now, GM is still the dominant company and according to analysts, they will remain that way for
a while. So if you are looking for the most popular, most dependable brand, go with General Motors.
GM STRATEGIC PLAN
Competitive Position
Competitive Advantage
As stated before, General Motors (GM) is in the automobile industry. For 104 years, the
company has focused their company on the production of vehicles, starting in 1911 with a “colossal six-
cylinder, $2,500 beast” (Titanic, 2009). Since then, they have competed with many automobile
companies, including companies that no longer exist, such as Acme, Berkshire, Chrysler, and Ford, just to
name a few. When GM started out, they had a competitive advantage over these companies. Some
companies that started around the same time that GM started are no longer, but GM lasted as long as
they have because they had vertical integration with Fisher, causing GM to coordinate management of
inventories, production and purchasing given transportation, communications and data processing costs
at that particular point in time (Casadesus-Masanell & Spulber, 1999).
Today, GM still has competitive advantage over their competitors. Chrysler and Ford still exist,
but GM’s competitive advantage at that time has changed. In 2011, GM and the United Auto Workers
pledged together to make GM competitive. In Kreb’s article written in 2011, Dan Akerson says, “We
want the new GM to succeed and when it does, everyone will benefit. We are playing to win, and we’re
counting on our workforce -- hourly and salaried -- to take on the challenges together and forge new
partnerships as a competitive advantage” (GM and UAW Launch 2011 Contract Talks, 2011). Keeping in
mind that GM’s workers are facing a low morale, it may partly be due to these challenges to the
workforce that could be causing the low morale facing GM’s workforce, even though forging new
partnerships is a competitive advantage for GM.
Although some things in regards to staying competitive are great, such as forging partnerships
as mentioned earlier, other things may be the cause for GM’s low worker morale. According to Paul
Gregory’s article in 2011, it is stated, “the new GM appears to be doing a lot of things right. It has
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reduced its labor force from 263,000 to 208,000. It operates fewer plants. It made slightly more cars,
and it has reduced its buyer incentives” (Gregory, 2011). The item to look at in regards to what GM is
doing right is the labor force reduction. While it may keep GM going strong in 2011 and in 2012, it might
not be helping with the worker morale. Workers are worried about if they are going to be losing their
jobs, just to keep GM competitive. Though competition is good for companies’ life, competition should
not override the importance of having low worker morale.
In the training program that will be offered to management and to employees, making sure that
healthy competition and balancing worker morale needs to be the focus for all activities done in the
program. As employers focus on being ethical decision makers and working in a team environment that
offers competition in a healthy manner, the perspective they have should start showing in other areas of
work, therefore creating more competitive advantage within the company walls and also with
competitive advantage in terms of which company to work for.
Building Blocks
The redesign that is taking place at General Motors will focus on two of the four building blocks,
quality and responsiveness to customers. The main goal of the redesign is to care more for their
customers so that they will be happier and more loyal. Loyalty will help them bring in money year after
year when customers come back for more of their products. When more people are loyal to a business,
it helps add to the quality of that business in the eyes of other people. When other people see this, they
may be persuaded to become a customer of GM. The responsiveness to customers’ building block
speaks for itself on the redesign, being more responsive to the customers is what GM needs to achieve
to be the most successful business that it can be.
Efficiency
The General Motors Plant in Lansing, Michigan has an energy intensity that is 18 percent lower
than the industry average, because of this; they have received an EPA Energy Star Certification (Basel,
GM STRATEGIC PLAN
2011). The Lansing Company is the first GM Company from the United States to receive and Energy Star
Certification for superior energy efficiency from the U.S. Environmental Protection Agency. In order to
receive this award, the plant had to perform in the top 25 percent of similar facilities nationwide. This
facility is the place responsible for building the Buick Enclave, GMC Acadia, and Chevrolet Traverse. To
achieve this award it must:
Designed the plant to meet LEED Gold standard for energy efficiency in heating, ventilation, and
air conditioning without using steam.
Integrates energy management into monthly performance scorecards.
Uses efficient lighting and daylight harvesting to conserve energy.
Monitors hourly energy use and plant controls to keep non-production energy to a minimum.
Engages employees to think green through an energy quality suggestion program (Basel, 2011).
Energy Star was introduced by EPA in 1992 as a voluntary, market-based partnership to reduce
greenhouse gas emissions through energy efficiency (Basel, 2011). Today, the Energy Star label can be
found more than 60 products as well as new homes and commercial and industrial buildings that meet
energy-efficiency specifications set by the EPA.
Quality
Quality and Safety are the most important things at GM. GM has used their new technology to
make their cars safer and more dependable than ever. One of the things that GM has done to add safety
and quality to their vehicles is add OnStar. OnStar is a subscription based in-vehicle security, hands-free
calling, turn-by-turn navigation, and remote diagnostics system that is installed in their vehicles (Motors,
2012). This adds to the quality of the vehicle because it makes it more trustworthy. For example, if
someone were to get in an accident, OnStar would notify the police and ambulances of your crash and
send you help, even if you were unconscious. GM also uses a wind tunnel to help them engineer a
vehicle that is more efficient and has less wind noise. By reducing wind noise the car sounds much more
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solid, adding to the quality of the vehicles. GM also uses what they call Glidepath. This is a testing
system that puts several hundred thousand miles on new models throughout the design and
development process (Motors, 2012). StabiliTrak also helps GM’s vehicles in the quest to be a quality
product. StabiliTrak is a system in the vehicles that helps in low-traction conditions like ice, snow, gravel,
wet pavement, and uneven road surfaces. StabiliTrak is proven to help reduce single vehicle crashes
(Motors, 2012).
Innovation
General Motors has always been driven by bold imagination and focused, disciplined action to
realize the power of those ideas. The people at GM are designing cars that most people do not think are
even possible, everything they do is in the future. GM is looking into the future to a time where cars no
longer pollute; when they use only fuels made from renewable sources or run on electricity (Motors,
2012).
One of the things that GM is looking in to is autonomous driving, a car that can drive itself. GM
says that this technology is actually closer than people think. According to GM’s website, they expect
semi-autonomous vehicles to be available to customers by the end of this decade, and for fully
autonomous vehicles to be available in the next decade.
Some of the technologies that GM has already introduced are things like active park assist,
adaptive cruise control, and side blind zone warning (Motors, 2012). These technologies make it easier
for people to do everyday tasks in their vehicles.
Responsiveness to Customers
Customer responsiveness is what GM is trying hardest to improve, and when the redesign is
complete, it is certain that GM will treat its customers with the respect and care that they deserve. In
the past they have had a lot of trouble with this area and it has caused them to have to lay off thousands
of employees, and even go bankrupt. One thing that GM has done to try to solve this problem is hire a
GM STRATEGIC PLAN
new Customer Service agent. Her name is Alicia Boler-Davis (Staff, 2012). North American GM President
Mark Reuss says “The breakthrough change that Alicia led as plant manager at Orion Assembly, while
launching the all-new Chevy Sonic and Buick Verano, needs to be brought to our customer experience.
What I admire about her is her candor with leaders and strength of commitment she engenders among
her team” (Staff, 2012, p. 1).
Distinctive Competencies
GM has many competencies that keep them running smoothly and at a competitive advantage.
The core competency GM has is their innovation. This is the driving force behind the company’s $190
above turnover. Since GM’s start in 1908, they have always been an innovative automobile company,
and will most likely remain an innovative automobile company (Thomas C. , 2008). As GM continues to
add new and emerging technologies to their products, they will continue to be innovative.
Just as GM strives to be innovative with their vehicles, they should also be innovative with the
training sessions that will be provided to their managers and employees. Instead of merely lecturing,
the training should have a variety of technologies and methods for making the company much more
competitive and, at the same time, creating a working environment that allows for competition along
with teamwork, ethical behavior, and allowing for many diverse opinions without the threat of feeling
their job would be in jeopardy or feeling uncomfortable.
Another competency that GM has which helps them with their advantage is their reliability of
their vehicles. One can tell the difference between a Toyota and a GM car because Toyotas have more
defects than a vehicle produced by General Motors (McGraw-Hill Higher Education, 2006). Because GM
has vehicles that are reliable, it makes customers happy and willing to buy more vehicles produced by
GM in the future.
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The Role of Prior Strategies
As mentioned previously, GM is competitive in the sense that they have been innovative since
their start. GM looks for new ways to be innovative in their vehicles, especially in design and
technology. According to their website, “Our engineers, designers, and planners live years in the future,
imagining a future where cars carrying our loved ones never crash; where empty cars can be sent to pick
up our friends; and where cars don’t break down, leaving us stranded (Emerging Technology: Driving
Safety, Efficiency and Independence, 2012).” The website lists the ways that they are innovative in
design and technology:
Autonomous Driving: Reducing Accidents and Increasing Independence
Electric Vehicles (EV): Fully Electric, Emission-Free Driving
Hydrogen Fuel Cells: Reducing Dependence on Gasoline
Mobile Applications: Keeping you Connected
It is because of these designs and technology that helps explain GM’s competency in regards to
reliability. Without these things, GM vehicles would not be as reliable as a Toyota; in fact, if they did not
have those designs and technological pieces, Toyota would be more reliable than General Motors, and
would have an advantage over GM.
Things do not change just by watching and observing managers at work, especially when
managers are doing their best to make changes for the better. In many corporate strategies, companies
have had the mentality that employees will reflect the behavior of their general managers, and that will
create change all over the company, but this isn’t how behavior modification works at all. General
Motors does throw events for their employees from time to time, but even these events only go so far
to help with worker morale. Considering that company events and observation can only help morale at
a limited level, General Motors should be finding out what their employers are wanting from their
company and use that to the advantage of the employees so that they boost the worker morale.
GM STRATEGIC PLAN
Strategies GM is Pursuing
General Motors has been on a successful rise because of its competitive advantage. They are
using the power of their brand name, and the fact that they are a global company also helps them
tremendously. General Motors is using its Chinese partner Shanghai Automobile Industry Corporation
(SAIC) across geographies to successfully compete in markets where it would struggle to do so alone
(Hodges & Russo, 2010). GM has also leveraged its partnership with Daewoo; this has made it possible
for GM to introduce a lower-priced Chevrolet branded vehicles to China through its partnership with
SAIC. By redesigning their customer support section of their business, GM will only add to their
competitive advantage over the other companies. GM is already the top vehicle manufacturer, and
that’s without this redesign, so after they start treating their customers right and make sure they are
happy, GM will be an unstoppable force in the world of automotive manufacturing.
Barriers of Imitating GM’s Distinctive Competencies
One of the distinctive competencies GM has is their innovation. GM is the first car company to
make a vehicle that functions with a fuel powered engine only to charge its battery packs, not to power
the tires of the vehicle resulting in overall better efficiency. They are not afraid to try something new
and be the first in the car industry to come out with a different type of product. If GM did not have new
innovations they would not be in business today. Before its bankruptcy GM had started some focus on
“crossover” vehicles or vehicles that combine features of sedans, vans, and sport utility vehicles. GM’s
vice president at the time, Jay Wetzel, thought that this was the fastest growing trend in the market and
that GM should pursue it. Because GM was thinking ahead and realizing that people are spending more
time in their vehicles they were one of the first to introduce this type of “crossover” vehicles. There is
no way to stop another company from making a “crossover” vehicle like this but because GM was one of
the first to realize this trend and market their product it created a barrier that the other car companies
will have to take down to sell their vehicles (Maloney, 1999).
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Changing Industry Conditions
There is evidence that GM has had difficulty adapting to the changing industry compared to
other car companies. In the 1980s the chairman at that time, Roger Smith, invested in robots and
automation. Smith also started two new adventures, NUMMI with Toyota, and CAMI with Suzuki.
These plants were supposed to teach GM about lean manufacturing. GM did not take their information
and use it like they should have. When GM’s senior engineers and product developers returned to
Michigan to explain what they have learned from the others and make suggestions the type of
responses that they got were “We don’t do that here, so go sit in the corner,” said Joseph Phillipi, a long
time industry analyst (Brown, 2011). If GM had used this information correctly they may have been able
to significantly reduce the cost it takes to make every vehicle. The employees may not be happy with
how GM is currently manufacturing their vehicles. If the leadership in GM will not listen to their
employees and try to keep them happy low moral occurs in the company, which is currently the
situation GM is having.
GM STRATEGIC PLAN
Company’s Ability
Efficiency Enhancing Practices
After filing for bankruptcy efficiency is one of the biggest things GM should improve to boost
sales, and become more profitable. The company has plans to reduce some of its overhead costs and
concentrate on certain models of vehicles while cutting other models from production. Fritz Henderson
was the CEO at the time GM was working toward becoming more efficient. Henderson decided it would
be best for GM to reduce the scale of its operations in the US. GM has stopped the production of
certain models and is still looking for a buyer for the Hummer and investors for its European operations
(Automotive Engineer, 2009).
Quality-Enhancing Practices
In 2005, GM manufacturing facilities won first place awards for quality products. GM led the list
of award recipients done by Power and Associates Initial Quality Study. GM took the top three spots for
manufacturing plants in North and South America. Some of GM’s brands that performed very well in
the survey were Buick, Cadillac, and Hummer. This was the fourth year in a row that GM was in at least
the top two plant awards in North and South America (Advanced Materials & Processes, 2005). GM
employees may have been happy at this point in time in order for GM to win awards like this, but when
the company is in jeopardy, people worry. GM management at the time could have kept implementing
these techniques to all of their plants to increase worker moral in the whole company.
Innovation
One of the distinctive competencies mentioned earlier was GM’s innovation. In fact, innovation
is GM’s core competency. It is that innovation that is the reason behind their $180 turnover. When it
comes to their vehicles, GM differentiates its products and charges a high price for those vehicles. The
table below presents price data on several Toyota vehicles and their prices, compared to the GM
Chevrolet vehicles.
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Toyota Prius (Toyota, 2012) Prius 2 Prius 3 Prius 4 Prius 5
$24,000 $25,565 $28,235 $29,805
GM Chevrolet (General Motors, 2012)
2012 Cruz 2012 Malibu 2012 Corvette Coupe 2012 Avalanche
$16,800 $22,110 $49,600 $36,800 Figure 4.1 – Comparing Price data on the Toyota Prius vs. the GM Chevrolet
The data above supports the fact that their products happen to have a relatively high and low
price when it comes to vehicles. As you can see, the range in regards to the Toyota Prius’ come to
$24,000 to $29,805, while the GM Chevrolet’s range runs from a relatively inexpensive $16,800 to a
$49,600. As seen on GM’s official website, the design and technology may be playing a role in their
innovation and their prices. Because GM strives to have current design and technology in their vehicles,
it is of no wonder that the prices fall in that particular range, even with their most current vehicles. In
addition, taking into account that GM is environmentally aware and that they want to produce vehicles
that are of high quality and safety, this also comes at a high cost to the GM consumer. Without these
prices, GM would not be successful and without keeping their innovative factors going, they would not
be producing excellent vehicles.
Responsiveness
General Motors went through a very tough time in 2009 when they went bankrupt. The cause of
this bankruptcy was because the managers at the time were not doing a very good job. Their lack of
leadership skills caused GM to have to get rid of thousands of employees, which caused their reputation
in the eyes of the public to take a big hit. People thought of GM as being a company that lacked caring
about their employees or their customers, which caused their sales to drop significantly, and ultimately
go bankrupt.
What GM is trying to do now is completely start over by taking the things that the old GM did
well, and incorporate them into an entirely new system that strived to be the best company they could
GM STRATEGIC PLAN
be. One of the things that they are doing differently now is there are paying more attention to what the
customers want. New management saw that this was one of the big reasons that GM went bankrupt in
2009 so that was something that needed to be changed. GM needs to focus on their customers and
keep them happy. Without customers, GM would be nothing, so they need to make sure the customers
get everything they want and more, and this includes things like respect, honesty, loyalty, and care.
Another thing they are doing is trying to be even more innovative than before, putting out newer cars
and technology all the time, and looking at their ideas as being limitless and having anything be possible.
As mentioned previously, GM is working on an autonomous car, which is a car that drives by itself; they
believe that a semi-autonomous car will be available by the end of this decade, and that the fully
autonomous version will be available in the next decade. Along with having these futuristic ideas, they
have also already released new technology that was previously thought too far from our time, such as
active park assist, adaptive cruise control, and side blind zone warning (Motors, 2012).
Competitive Position
GM is still making their way back on top of the automobile industry by being innovative and
responsive to their customers, as evidenced in the information provided above. GM vehicles are doing
well because GM is innovative with their products and that they have a distinctive price advantage over
other vehicle companies. GM’s financial record during the 2011 fiscal year also shows that they are
doing well competitively. Brown’s article states that a year after GM’s bankruptcy, the company is doing
better than before. In the 2011 fiscal year, GM produced $1.7 billion in profits, making that particular
quarter quite successful (Under the Hood at GM, 2011).
It looks like now that the company is rebuilding themselves with their finances that they might
be able to do well competitively against their competitors. However, the question still lies if GM can be
competitive with other companies so that they do not lose their workers to other companies. If they
focus too much on being competitive with their competitors in regards to innovative products, they may
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be losing some of their best workers, causing the already low morale to go even deeper. If GM
continues to be competitive in their market while making sure their employees are being productive,
have a healthy work environment, and enjoy the work they do, then GM will be able to strive and live
through another great fiscal year like the one they had in 2011.
GM STRATEGIC PLAN
Competitive Advantage Through Business-Level Strategy
Differentiated
Part of being a successful business is making sure that your product or service is different from
everyone else’s. By different, they mean better. When a product or service is different, they want it to
be better than the others so that they will be ahead of the other companies.
GM stays differentiated from other vehicle manufacturers by being innovative. They are always
working to stay ahead of the game and come out with the latest and greatest products. In fact, GM is
currently working on a car that can drive and park all on its own. They also believe that there will be a
semi-autonomous car by the end of this decade (General Motors, 2012). Some of the things that GM has
already added to stay differentiated from its competitors are: adaptive cruise control, side blind zone
warnings, and Automatic Park assist (General Motors, 2012). These innovations are part of why GM is
the industry leader in sales.
GM’s newest technology that they are working on is the Chevrolet EN-V (Electric Networked-
Vehicle). It is a short range, low speed vehicle that can drive on its own, avoid crashes, and even park
itself. It is also a fully electric vehicle, so it has zero emissions, making it very healthy for the
environment (General Motors, 2012). The Chevrolet EN-V is expected to be available in 2013.
Market Segmentation
GM has changed its market segmentation, they used to have too many models of cars, too many
duplicates, and they lacked a product policy. GM reduced the number of cars they had on their line and
separated them by price grades, and emphasized individual brand image to entice customers (Daye,
2007). Another thing that GM has done is use price segmentation. They have separated Chevrolet,
Pontiac, Oldsmobile, Buick, and Cadillac. They separated them by price and by status, and they clearly
define a spectrum to appeal to successively higher income groups (Thomas J. W., 2007).
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Distinctive Competencies
When it comes to GM, efficiency, quality, and innovation are huge driving factors behind their
success. They have always been very efficient in the way they produce their cars, making them
trustworthy in how quick they can produce new cars. The quality factor has been with GM since the
beginning. Their vehicles have always been safe and trustworthy, quality and safety are at the top of the
agenda at GM (General Motors, 2012). The redesign of GM needs to improve on is their responsiveness
to customers, the lack of responsiveness is what got them in trouble in the first place, and eventually led
to GM going bankrupt. GM needs to treat its customers with respect and loyalty if they want to keep
them and if they want to add new customers. People like being treated like the business cares, so by
showing its customers that they really do in fact care, GM can take its advantage over their competitors
even further.
Generic Business Model
GM is changing their business model so that they will be more responsive to its customers. The
steps involved in finding a business model include: (1) customer needs, or what is to be satisfied; (2)
customer groups, or who is to be satisfied; and (3) distinctive competencies, or how customer needs are
to be satisfied. By going over all of these, GM decided that because they went bankrupt, they should
probably change something about their business model. So they re-staffed and are now focusing on
being more attentive to their customers and doing more things to make sure the customers are always
happy.
Advantages and Disadvantages of GM’s Business Model
The main advantage to the redesign that GM has pursued is that by making the customers
happy, it will likely keep them loyal, which means they will continue to make money, and money is
business. There really are not any disadvantages to this strategy because the customers are what matter
most. If the customers are happy, everything else will fall into place. They have always had quality, and
GM STRATEGIC PLAN
efficiency in their company, the weak point has been their relationships with their customers. Now that
the relationship is changing, everything else will work out.
Strategic Group
General Motors would belong in the same strategic group as the other car manufacturers. They
all have the same goals of being the best manufacturer in the industry. They all strive to make the best
cars, have the newest technology, and have the happiest customers, because happy customers mean
good business.
Improving General Motor’s Business Model
In the redesign of the company, GM needs to make sure they commit 100% to their customers;
this is something they have struggled with in the past. When they filed for bankruptcy, it was because of
the lack of sales, and they lacked sales because the customers were not happy. To try to save money,
they laid off thousands of employees, and the customers were also not happy to hear about that. So in
the future, GM must stick to their plan and do everything they can for their customers, because without
customers, there is no business, and without business, there is no General Motors.
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Business-Level Strategy and the Industry Dynamic
Industry Environment
General Motors is a unique company when it comes to industry environment. Before they went
bankrupt, GM was in the shakeout stage. Rivalry between GM and its competitors was very intense and
the rapid growth was still there. During the shakeout stage, there can be a price war, and usually the
most inefficient company can be driven all the way into bankruptcy (Hill and Jones). This is what
happened with GM; they did not please their customers and therefore were the least efficient and went
bankrupt. As mentioned earlier, GM is a unique company. They went through the shakeout stage and
ended in bankruptcy, but now they are in what could be called a rebirth stage. They have made a very
strong comeback from their bankruptcy. They got off to a good start on November 18, 2010, when they
completed the world’s largest initial public offering, emerging with a solid financial foundation that
enables them to produce great vehicles for their customers and build a bright future for employees,
partners and shareholders (General Motors, 2012). So GM has been through the typical stages of a
business, and even made a new one with their rebirth.
Protect and Strengthen
In order to protect and strengthen GM’s new business model, they have started over from
scratch. They got rid of all high end employees and replaced them with people who will do a much
better job than the people who were there previously. They then took all of the ideas that worked well
with the old GM, and then used brand new ideas to ensure success. On the website it says “At the new
GM, we make a strong commitment to our customers, employees, partners and other important
stakeholders. We state proudly our five principles that guide us in everything we do (General Motors,
2012):”
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1. Safety and Quality First
2. Create Lifelong Customers
3. Innovate
4. Deliver Long-Term Investment Value
5. Make a Positive Difference
New Strategies
New strategies that GM should use to make sure that they stay up on top of the car
manufacturing industry would include: First of all, they need to make sure that they are being good to
their customers. Ever since their bankruptcy, they have been trying to change the way that they treat
their customers and that is why they are working their way back to the top. The other recommendation
is to make sure they keep being innovative. Being innovative is huge in any industry today, whoever has
the latest and greatest gadgets and technology will always be the leader of the industry. People like new
things and they like high tech things, so the better and faster that GM can put out new technology, the
better.
Advantage in the Future
General Motors will be very successful in the future. GM already has a great reputation as far as
quality of their products goes; all they need to work on is making their social reputation better. People
have always trusted GM’s vehicles to be safe, fun, attractive, innovative, and technologically sound.
Even though it sounds like they have enough, being popular in the eyes of their customers is the most
important thing, and it is also the most difficult thing to do. GM is working to rebuild their relationships
with their customers after going bankrupt and laying off thousands of employees, once they regain
these relationships, they will only grow stronger. By having happy customers, GM will have loyal
customers, which means that when people are ready to buy a new vehicle, they won’t even look
anywhere else. If they build customer loyalty, those customers will likely tell friends about how much
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they love GM and maybe even convince them to buy from GM, and if that trend continues, they could
have many, many new customers to buy from them causing them to head straight to the top of the
game.
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Strategy and Technology
Dominant Product Technology
General Motors, in the automobile industry, has been making quality vehicles for years now.
When it comes to creating their vehicles, and not just at General Motors, there are certain technologies
that usually are used. The following list is typically the dominant technologies used in the automobile
industry (Business & Economics Research Advisor, 2004):
Programmable machines and tools;
Near-Net Castry;
High speed data communication and data management;
Supercomputing;
Virtual manufacturing and complex visualization techniques;
Advanced forging techniques
Another particular dominant technology that was not in this listing which is also important to
the creation of automobiles is automatic transmission. According to Figure 3.1, which can be found later
on in this report, automatic transmission became part of the automobile industry around 1930 to 1940.
During this particular decade, the automobile industry was in the shakeout stage (Alexander, 2001). By
this time, customers already had a vehicle, and it is possible that those customers did not want to
continue to shift gears. In fact, it was GM who introduced this technology in 1941 with the Hydra-Matic
in their Oldsmobile vehicles (Peele, 2010). Since then, automatic transmissions are now found in every
vehicle.
Technical Standards
There are definite standards when it comes to creating vehicles. SAE International has a listing
of over 500 standards that need to be followed in order for vehicles to follow suit under the legal and
regulatory environment. The standards range from flywheels for engine mounted torque converters to
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automotive printed circuits. Though a complete listing of all 532 standards for the automotive industry
is beyond the scope of this report, providing an abridged list of what the standards are can give an
example of how detailed the standards are for the automotive industry. It is also important to note that
these standards are still in development (SAE International, 2012).
SAE 17.6 Cubic Inch Spark Plug Rating Engine
Flywheels for Engine-Mounted Torque Converters
Test Method for Determining Power Consumption of Engine Cooling Fan Drive Systems
Shelf Storage of Hydraulic Brake Components
SAE Electric Vehicle and Plug in Hybrid Electric Vehicle Conductive Charge Coupler
Low Speed Enveloping Test with Perpendicular and Inclined Cleats
Ignition Cable Assemblies
Ignition System Nomenclature and Terminology
Devices for Use in Defining and Measuring Vehicle Seating Accommodation
V-Belts and Pulleys
Automotive Synchronous Belt Drives
Attributes of the Majority of Customers
General Motors sells many different kinds of vehicles. Currently, the new vehicle that GM has
created is known as the 2013 Cadillac XTS (General Motors, 2012). This particular vehicle is known by
General Motors to be a luxury car, so those customers who fit the middle- to high-class would be the
kind of customer to buy that particular car. When this vehicle comes out, those people would be known
as an early adopter because this car is new, and customers are not exactly sure if they would stick with
that particular vehicle.
However, vehicles have been around since the start of the twentieth century. Back when
vehicles were being created by Ford, those customers were known as early adopters. Customers were
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used to the horse-and-buggy mode of transportation, so when General Motors started creating vehicles
in 1911, they were seeing customers at the early adoption stage.
Due to the change of the industry, those that are now buying GM vehicles are now known as the
late majority, but as GM continues to create new vehicles, those customers start becoming early
adopters of those new vehicle series, such as the Chevrolet or the Cadillac. As mentioned earlier, GM
has created a new vehicle in the Cadillac series, so they are facing customers in the early adoption phase
for their 2013 Cadillac XTS.
General Motors is doing well for their customer base as they continue to release new vehicles in
their vehicle series. The one foreshadowing event that can be seen as GM continues to create new
vehicles in their series would most definitely be creating new vehicles that will please new customers
coming in.
Dominant Technology
As listed before, there are multiple dominant technologies that are found in the automobile
industry. Over time, the technologies that are used to create vehicles tend to diffuse somewhat rapidly,
but not too rapidly. Automobiles are extremely complex and the technology used to piece together
each vehicle tends to be rather sophisticated. The processes and methods that go into making vehicles
need to be up-to-date, which would definitely imply that the dominant technologies that are used to
create vehicles diffuse rapidly (Business & Economics Research Advisor, 2004).
It is making sure that vehicles are using state-of-the-art technologies while keeping in check they
are following the standards for automobile creation that cause the speed of diffusion that the
automobile industry goes through. As stated previously, there are over 500 standards to follow when
vehicles are being created, and it definitely is no exception for any vehicle, especially vehicles created by
General Motors. On the company website, it is mentioned extensively how the company strives to be
innovative when it comes to the latest technologies by making them safe and high quality and making
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sure the vehicles are environmentally friendly. Because GM keeps those factors in check as each new
vehicle is assembled, it is no question that the dominant technologies used in creating vehicles would
diffuse somewhat rapidly.
Dominant Technology on the S-Curve
S-Curves in the automobile industry typically focus on innovation, growth, and maturity over
time. Because of the multiple dominant technologies that are found in the automobile industry, those
interested in how technology has been done over time so that today’s vehicles are innovative, growing,
and maturing as new things arise can take a look at graphs, similar to Figure 3.1.
Figure 7.1 – Anatomy of the Economic Cycle (Alexander, 2001)
This particular graph shows two S-Curves with basic auto, from 1900 to 1940. As stated before,
the automatic transmission originated in 1941 with General Motors, so then that particular dominant
technology started taking over in 1945 to today. It is also important to note that for this particular
industry that automatic transmission played a role in the maturity boom of the life cycle, which shows
the importance of this particular dominant technology today.
Intellectual Property
The General Motors website discusses intellectual property in their webpage on Website User
Guidelines. Intellectual property at GM is defined as anything that is used on their website, such as
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graphics, and their copyrights and trademarks of their vehicle names. Another page of their website,
which is devoted to copyrights and trademarks, also discusses notices. This page states that “We
reserve the right, however, to make changes at any time, without notice, in prices, colors, materials,
equipment, specifications, models and availability” (General Motors, 2012). The specifications and
everything else would be the intellectual property of GM, and if they do decide to make any changes
whatsoever, they are more than inclined to do so. These specifications inform not only customers, but
also informs employees
To make sure that they are protecting their intellectual property, GM has statements within
their website that inform their website visitors about their intellectual property. The webpage that
discusses their copyrights and trademarks states that if any of these things are to be used, the person
would need to express the use of those in writing. This seems to be enough to express their intellectual
property rights.
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Strategy in the Global Environment
Value Creation
According to a study done in 2008 by Oliver Wyman, in 2007, Toyota made $922 in profit from
every vehicle it manufactured in North America. GM lost $729 on every vehicle they made that year.
The difference between these numbers starts with what each company is known for. Toyota is known
for quality in the industry. GM is known for having cars that are best in the middle of the pack. This is
surprising because usually during tough economic times, people prefer middle class over upper class.
This could represent poor management because of the fact that GM did not take advantage of this.
One critical value that GM continues to overlook in their company is the importance of its
employees, especially the manufacturers. They are the core of GM and must be kept happy to do their
job effectively. Giving them higher pay may not seem like it will make the company more profitable, but
it could, by increasing productivity because of higher worker morale.
GM has a higher labor cost than Toyota which contributes to GM having a greater profit on their
vehicles. One thing that GM should have been taking notes on from Toyota is decisions with regard to
pricing based on utility, prices, demand, and costs (Hill& Jones, 2010).
Responsiveness In December of 2010 GM appointed a new chief marketing officer, Joel Ewanick. They did this
because they felt a greater need to make their product more globalized and thought this was the man
that could get it done. Ewanick wanted to make GM truly global, rather than what is has been a
somewhat haphazard assortment of vehicle designs, brand images and advertising strategies spread
over the globe.
GM realizes that it is important to know the local markets because they will add to developing
and launching vehicles. One vehicle model that varies among countries is the Colorado. It is a very poor
seller in the United States but in Thailand it tops the charts. GM did their homework before unveiling
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the new mid-sized pickup. Thailand is the world’s largest market for mid-sized pickups so that is where
GM decided to unveil the Colorado (GUILFORD & Colias 2011). GM has not addressed the issues raised
from employees about not being satisfied with their jobs. If GM does not respond to its employee
issues, it may not have cars to sell.
Cost Pressures
In the past three years strong demand from Asia has made basic metal supplies harder to come
by, which raised prices. When these prices went up OEM profit margins suffered. Because of the prices
in metals it lead to interest in replacement materials in an effort to reduce costs of making vehicles.
GM’s main strategy in this effort to reduce costs is to develop materials’ options before vehicles are
designed, so they can shift gears down the road is imbalances develop between materials’ prices. GM’s
top supply chain executive, Bo Anderson, says the focus is on four materials under significant price
pressure: palladium, aluminum, steel, and plastics (Smock, 2008). The customer cares about two main
things: low cost and good quality. These are two things that are very opposite of each other yet the
customer wants GM to have the best of both. Some things just are not possible but if GM can find a
happy medium they will do well.
Strategy
GM has been pursuing a strategy they call their global product development strategy and it is
adding up to real savings. With this strategy GM has received sizable price reductions on certain parts
and components for its global mid-sized car architecture. GM will not actually see a dollar amount
increase in the savings because they will be using the money by meeting new regulation requirements
and adopting fuel-saving technologies. Volume is a big part of why GM is getting up to 15 percent
reductions on some components. With their strategy GM sources components from fewer suppliers in
exchange for big discounts.
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In my opinion, this strategy may not be as successful as if they were to give the customer more
of what they ask for. Even though I may not agree with their strategy the facts are that it is working so
GM should continue with it until they feel the need to peruse a different strategy (Stein, 2007).
Foreign market
A major foreign market that GM serves is China. In 2006, GM passenger vehicles in China rose
28.5 percent. GM planned to keep the sales rising by strengthening the brand images of Chevrolet and
Buick. GM annually invests $1 billion in China marketing and plant improvements. It seems odd that
GM is selling vehicles better in China and Chinese vehicles are selling better than ever in the United
States. GM having manufacturing plants in China reduces their costs of making vehicles and allows a
greater profit margin so it is a smart plan. If they can sell vehicles in the same country they are made it
will reduce on shipping costs and make greater profits (Webb, 2007).
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Corporate-Level Strategy
Horizontal Integration Strategy
Since General Motor’s start in the twentieth century, General Motors has acquired and merged
with many automobile companies. The website, The Heritage Center, has a page that lists many of GM’s
mergers and acquisitions. One of the first acquisitions that GM participated in was the acquisition of the
automobile company, Oakland, in 1909. During this time, Billy Durant noted that Oakland was not doing
well with their sales and Oakland’s debt was growing larger. Durant purchased a 50% interest in
Oakland, and when Oakland’s founder died, Durant increased the interest to 100% (The Heritage
Center).
In 1931, GM made a merger that would soon be a cornerstone for the company. This year,
Lawrence decided that it would be good for the company to merge with Holden’s, which was based in
Australia. The reason for this particular merger had something to do with the Great Depression.
Holden’s was not doing well financially, and the Australian government had frozen their currency so that
their money could not be distributed outside of the company (Unique Cars and Parts, 2011).
These two examples of acquisitions and mergers in which GM has participated over the years
shows that GM cares for how other automobile companies are doing. When GM recognizes that a
certain company is not doing well, they are more than willing to help them out, whether it is by
participating in a merger or an acquisition. This discernment that GM has for other vehicle companies
has helped them before, and will help them out as they continue to thrive.
Vertical Integration Strategy
For a long time, General Motors had produced their own materials for their products. The
company operates about 41 factories that produce parts for their vehicles, and 11 of those factories are
for general assembly (Romero, 2010). Wikipedia has a list of those factories on their webpage, List of
General Motors Factories along with those factories that have closed down. GM has used vertical
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integration for some time now. In fact, they promoted their vertical integration strategy in the 1970s
because it was a “source of financial strength and savings” (Bradsher, 1998). On August 3, 1998, they
had announced that they were planning on spinning off their gigantic auto parts subsidiary to their
shareholders. This particular article, written by Keith Bradsher, states that the “spinoff of the auto parts
subsidiary, Delphi Automotive Systems, ‘represents nothing less than a fundamental shift away from
vertical integration.'”
There have been some interesting things that have happened after this particular
announcement. In 2005, GM announced that they had a “far-reaching restructuring plan to close nine
plants and three service and parts facilities, cut 30,000 jobs, and reduce North American production
capacity by 1 million vehicles a year (Gross, 2005). Another area of interest to note is that in 2009, it
was reported that GM had bought back Delphi factories (Lariviere, 2009) . Because of GM’s decision to
spinoff their auto parts subsidiary, they were shifting away from vertical integration, only to return back
to it. It seems that within the past decade, GM has made some radical decisions that may possibly have
influenced the low worker morale. With the cut of the 30,000 jobs in 2005, employers were still worried
about their own particular jobs, which would in turn cause morale to become low.
Increasing Profitability through Vertical Integration
Vertical integration has been a major part of GM’s past, and as stated previously, they had
shifted away from vertical integration for a few years, but then coming back to it around 2009. The
following table illustrates GM’s gross profit from 2005 to 2011.
2005 2006 2007 20081 2009 2010 20112
Gross Profit
$49,102 million
$38,482 million
$54,638 million
$8,390 million
7.36 billion 23.9 billion 26.6 billion
Figure 9.1 – GM Gross Profit from 2005 – 2011
1 Data from 2005 to 2008: (Hot Stocked, 2012)
2 Data from 2009 to 2011: (wikinvest, 2012)
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As evidenced by the table, there has been growth in the gross profit from 2005 to 2011. This
provides as an analysis as to how GM has done in 2005 in jobs cut as well as a reflection as to how their
setbacks have impacted their gross profit. This data also supports the buyback of Delphi in 2009. The
gross profit had increased dramatically in 2009 to 2011. Because they want back to vertical integration
around this time, they have definitely increased profitability.
Outsourcing
In further analysis of the table provided in the previous section, there really would not be much
of a need to outsource any of their operations. As stated earlier, they had tried to stray away from
doing any vertical integration, especially with their auto parts subsidiary, Delphi, only to buy the
company back in 2009. The reason why GM had bought back the company had to do with their financial
troubles, and thought that if they did buy back Delphi, that they would start doing much better, and as
shown in the table above, doing so really did help them out. If they were to outsource even this
particular area of the automobile industry, there is some concern that they would be forced to reduce
their workforce again, cut back on operations, and possibly sell the operations.
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Corporate-Level Strategy: Diversification
Restructuring strategy
As stated earlier in this report, GM had to change their ways. The reason that GM needed to
pursue a restructuring strategy is because they went bankrupt. GM was facing 100 years of
accumulated obligations which it had no way of paying back. The government stepped in and wiped
these debts clean and GM had to turn the company’s management over to a team of Detroit outsiders
who view the business with fresh eyes. GM’s former management was to blame for them being in this
position and the government realized they needed new people in charge to turn the company around.
Worker moral was low in the company and a company with employees who are not happy is not
producing their full potential. GM needs to ask the employee what they want and need from the
company and manage a way to give it to them (TAYLOR III, 2011).
Exited Industry
GM had certain vehicles models that were not selling and causing problems for the company.
GM referred to these models as burdens and decided it was in their best interest to stop them from
being produced. The three most notable models that GM stopped producing were Pontiac, Saturn, and
the gas guzzling hummer. In return it could have more focus on their best-selling models (Brown, 2011).
Strategy to exit
In 2008, GM’s problem was not manufacturing or labor. Its biggest problem was legacy costs.
The decision to stop the manufacturing of these models that are not big sellers any more may lead to
bigger and better opportunities for GM. If they can take these manufacturing lines and redesign them
to make their better selling models it will be an asset to their company. This move will offer a more time
and effort to the better selling models GM has to offer. If a product is not selling, it should be given a
chance to be redesigned and sold again. If at this time it fails the losses should be cut because it is
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appearing that the product will never make money. This is a management decision and if the
management cannot make the decision to cut the sunk costs they should be replaced (Brown, 2011).
Opinion on exiting
In my opinion it was a smart move for GM to cut some of the models that were more of a
burden to them than an asset. It opened to the door for them to enhance their other models to make
them more desirable by consumers. In my opinion it was smart to cut the ties with them fast because if
people know they are going to stop making that model, they will be less likely to buy one for fear of
future needs like getting parts for them.
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Corporate Performance, Governance, & Business Ethics
Stakeholder Groups
When it comes to groups and individuals that have some sort of stake in how successful General
Motors is over the years, one must take into account that there are many stakeholders that want to see
this company succeed and do well with their many vehicles as well as their business models. One of the
major stakeholder groups that nearly every company has, are their customers. The customers are the
ones that are mostly affected by the company, and this is through their products. Customers need to
know that the vehicles they will be purchasing from this particular automaker are safe, economical, and
eco-friendly. When GM puts out any commercial advertising their new vehicle, they are advertising
these three things.
Other groups of stakeholders who are affected by decisions made by GM include parts suppliers,
dealers, debt-holders, shareholders, workers and retirees (Clark, 2009). These stakeholders do business
and work with GM on a regular basis, and they place a claim on GM so that they can do ethical and
positive business with GM. Because GM produces many vehicles, the part suppliers, dealers, and all the
other stakeholders have a responsibility so that proper business practice is done, and so GM can
continue doing business with them.
It doesn’t matter in what stakeholder group one belongs to, they need to know how business is
doing periodically. One thing that GM does to keep communication going is publishing their annual
report. The report starts out with a letter to the stakeholders, which addresses what has gone on for
that particular year. In 2010, GM’s CEO prepared a letter that addressed “The new GM.” In this letter,
he writes,
“We truly are building a new GM, from the inside out. Our vision is clear: to design,
build and sell the world’s best vehicles, and we have a new business model to bring that
vision to life. We have a lower cost structure, a stronger balance sheet and a
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dramatically lower risk profile. We have a new leadership team—a strong mix of
executive talent from outside the industry and automotive veterans—and a passionate,
rejuvenated workforce (General Motors, 2010).
This particular quote from the 2010 Annual Report shows that GM is now more than ever
serious to have vehicles that meet the needs of their stakeholders, especially the customer need from
GM. Not only does this show the growth of their product line, but this also shows the particular people
that make up the company. Through this restructuring that GM is doing, they have workers that are
enjoying their work and enjoying being at work. When employees enjoy working for their company and
enjoy the work they do, it helps increase worker morale, which is needed at GM.
Performance of the CEO
Since 2010, Daniel Akerson has been CEO of General Motors. Akerson is not just the CEO; he is
also the Chairman of the Board. He has been the chairman since July 2011. Since Akerson has been at
GM for two years, his performance has been viewed by shareholders, employees, customers, and
suppliers. These different perspectives, especially with the employees, can give insight in how to ensure
better worker morale.
Stockholder Perspective
In 2011, Dan Akerson held a meeting with stockholders that reflected his positive outlook on
General Motors. Mary Conway reported that the company is “well positioned for the future with more
fuel efficient cars on the way.” In a video posted with this article, Akerson also stated that “the new GM
is more agile,” and that the company will be more profitable as they move forward with new vehicles
(Conway, 2011). So far, stockholders are in agreement with Akerson, and are content with the sales of
how things are going. Quite recently, the US Treasury froze several company’s CEO’s salaries, and
Akerson was part of that freeze. His salary ended up being frozen at $9 million. The reason for this
salary freeze was because GM received help from the government, but did not repay their public debt.
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This may end up great for stakeholders, because, “pay freeze gives these executives much more
incentive to return the government's money as soon as possible (Gutone, 2012).” This freeze will give
stakeholders an even better perspective, knowing that the freeze will do well in paying off the debt.
Employee Perspective
As mentioned earlier, executive pay at GM has been frozen for now, and with the salary freeze,
employees are definitely happy with the freeze. Not only are they happy with the fact that Akerson’s
pay has been frozen for now, but salaried workers are really enjoying the fact that they will be receiving
five more vacation days than normal (Krisher, 2012). There are about 26,000 salaried employees that
are employed by GM.
Since Akerson made the decision to spend more than $500 billion on employee bonuses and
profit-sharing based on the performance of the company in 2011, employees are connecting their
performance to their compensation. A compensation specialist for World at Work notes that GM needs
to reward employees because of the labor market becoming more competitive than it was before, and
this especially affects those at GM who work in skilled jobs, such as computer experts and engineers.
These white collar employees really are deserving of the rewards. Because of this choice that Akerson
has made in early 2012, employees are definitely becoming more content with their work lives and with
their perceptions of how Akerson is performing for the company.
Customer Perspective
Just as employees and the stockholders are content with how Akerson is dealing with business
inside of the walls of General Motors, so are their customers. On January 25, Akerson gave a testimony
in Congress in regards to the safety of the Chevrolet Volt. Akerson stated that “93 percent of Volt
owners report the highest customer satisfaction with their car.” These Volt owners are showing their
satisfaction not only towards these particular vehicles, but they are also showing their satisfaction with
how Akerson is handling business (General Motors, 2012). Later on in this testimony, Akerson mentions
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that customers are placed in high priority, and this reflects how the customers are feeling in regards to
Akerson’s performance. Akerson also reported that a customer once said that, “if they couldn’t cut him
out of the vehicle in two or three weeks, he had a bigger problem to worry about.” This particular
customer was saying that he trusts the performance of General Motors as well as Akerson himself.
Akerson also made sure that during this trouble with the former version of the Volt vehicles that the
company called each Volt customer and “offered them a loaner car until the issue was settled. And if
that wasn’t enough, we offered to buy the car back.” This shows just how much Akerson cares for his
customers, and in turn, shows the customer that Akerson is doing well in company performance.
Supplier Perspective
Around 2009 when GM was going through their bankruptcy, one of the main groups of people
that were very much affected by the bankruptcy was the suppliers. In part of the preparation for their
bankruptcy, General Motors had to idle their factories, especially American Axle & Manufacturing
Holdings Inc. and Shiloh Industries, Inc (Ortolani, 2009). During this time, the supplier’s sales were
shrinking because of the bankruptcy. However, this does not mean that GM would not be paying
outstanding bills; in fact, they were allowed to do so by a bankruptcy judge before they could officially
file for Chapter 11 bankruptcy. CEO Dan Akerson made sure all of this was taken care of, which
encouraged the suppliers to continue business with each other.
Later on in 2012, Akerson held a Best Global Suppliers event at the Detroit Institute of the Arts.
At this event, there are a few awards that are handed out to suppliers, and one of the awards is known
as the Supplier of the Year. This is awarded to the supplier that shows strong “partnership, dedication
and commitment to consistently perform above expectations played an important role in GM’s success
in 2011,” according to Bob Socia. These awards are showing GM that suppliers are doing their part in
performing above expectations so that they can continue supplying the products that GM is needing,
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and it also shows that Akerson cares for the productivity of his suppliers and will continue to reinforce
that behavior.
Evaluation of the Perspectives
Overall, this shows that Akerson is doing his best to show GM that he wants the people that
work for GM to do well, and that he is committed to assisting the stakeholders, employees, and
suppliers to do the best work they can do so that GM can continue to thrive in the automobile industry.
When it comes to the customers, Akerson shows concern for what the customers need in their vehicles,
and continues to look for new, innovative ways to make their vehicles economically and environmentally
friendly. With each perspective that each group has given, it is evident that Akerson is effective as the
CEO of General Motors.
Governance
When it comes to aligning interests of top managers with those of stockholders, companies tend
to use governance mechanisms to ensure that they are doing a good job with aligning these interests.
According to the textbook, Strategic Management: An Integrated Approach, there are four main types
of mechanisms: the board of directors, stock-based compensation, financial statements, and the
takeover constraint (Hill & Jones, Strategic Management: An Integrated Approach, 2010). These four
mechanisms need to be taken account in order to ensure that GM is doing well in aligning with top
managers and stockholders.
Board of Directors
In April of 2009, the Obama administration saw fit to help reshape how the Board of Directors
are doing in their business practices. This was done in light of the fact that some of the people who
were representing GM in the Board of Directors needed to be removed. They were not doing well at
this time because of the stress of having to go through the Chapter 11 bankruptcy. During this time, it
was important for the stakeholders and the Board of Directors to be properly aligned so that everyone
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came into agreement so they could stay out of the courts, due to the debts they had and were doing
their best to pay off. Since then, the Board of Directors and GM have stayed on the same page with
doing good work.
Stock-Based Compensation
As mentioned previously, executive pay has been frozen this year, and it is benefitting the
company so that they can pay off their debts in a timely manner. As a result of this freeze, the salaried
employees are enjoying their five extra days of vacation. Stockholders are also affected by this freeze in
that they are assured that debts will be paid off, and are in agreement with the decision to use this time
of the freeze to pay off those debts. With the freeze, the public debt that GM owes will be paid back in
two years, considering all things end up going well for the company (Gutone, 2012).
Financial Statements
On February 16, 2012, General Motors released their financial statement from 2011. According
to their article on their website,
“General Motors Co. (NYSE: GM) today announced 2011 calendar-year net income
attributable to common stockholders of $7.6 billion, or $4.58 per fully diluted share,
up from $4.7 billion, or $2.89 per fully diluted share, in 2010. Revenue increased 11
percent to $150.3 billion, compared with $135.6 billion in 2010. Full-year earnings
before interest and tax (EBIT) adjusted was $8.3 billion, compared with $7.0 billion
in 2010 (GM Reports 2011 Net Income of $7.6 Billion, 2012).”
This financial information shows that General Motors is good with working with their stockholders and
that their interests are looking great when aligning with what top managers want to see with the
governance mechanisms.
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Major Strategic Decision
In November of 2011, “General Motors and their local joint venture partner UzAvtosanoat
opened a new state-of-the-art engine plant in Tashkent, 400 kilometers from the automakers’ vehicle
manufacturing facility in Asaka.” This decision to do so represents this to be for GM a “most significant
powertrain investment in Central Asia.” This energy plant is energy-efficient, which helps GM because
they are always looking for new and innovative ways to continue with successful business while still
keeping their value of being environmentally friendly towards the country they are opening the engine
plant. In terms of being environmentally friendly, the company has employed “advanced
environmental-protection processes throughout the facility, including the most modern wastewater
treatment technology in Uzbekistan with the purest discharge of any facility of its kind within GM.”
Because GM made sure that they are sticking to their values with innovation and being environmentally
friendly, ethical boundaries have not been crossed. With this particular facility, they are employing 1200
employees at the facility, so now GM needs to make sure that employee morale at this particular facility
is going well (GM Opens Engine Plant in Uzbekistan, 2011). Considering that GM Uzbekistan employs
approximately 6,600 employees, this is something to ensure that the corporate culture and values are
being treated well and that employees are handling the transition to a new facility.
GM STRATEGIC PLAN
Implementing Strategy – Competing in a Single Industry
Size of Business and Levels of Hierarchy
General Motors ranked 20th on CNN’s annual ranking of the world’s largest companies with
202,000 employees (CNN, 2011). GM’s previous rank was 38, but has since moved up in the list. After
they went bankrupt, GM started new and hired more employees and is now stronger than ever. GM
used to have a tall hierarchy with many different levels and managers, which was before they went
bankrupt. Because of this tall structure, they experienced communication problems and other problems
that lead to conflict. Now that they have since started over, they have flattened out the structure and
also have a centralized decision making approach, which has caused them to be much more successful
(General Motors, 2012).
Authority and Responsibility
The newly appointed interim chairman Ed Whitacre, decided to use his new power and make a
complete change in the management at GM. Whitacre said, “I want to give people more responsibility
and authority deeper in the organization and then hold them accountable,” Whitacre said. “We’ve
realigned our leadership duties and responsibilities to help us meet our mission to design, build and sell
the world’s best vehicles” (Luft, 2009, p. 1). By doing this, he gave more power to fewer people, for
example, he made Susan Docherty responsible for sales, support, and marketing (Luft, 2009). The result
of these changes, if GM is failing in any of those areas, blame can be given to one person making it much
easier to take care of the problem and find someone new if necessary. GM shouldn’t change anything in
how they are giving authority and responsibility; it makes a lot of sense to give more power to fewer
people because it is much simpler to resolve if there are problems. Rather than laying off countless
employees, they will now only have to get rid of a few.
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Organizational Chart –Divisional Structure According to a glossary on the Essentials of Contemporary Management webpage, a divisional
structure is “an organizational structure composed of separate business units within which are the
functions that work together to produce a specific product for a specific customer (Jones & George,
2009). The following figure shows the organizational structure of General Motors, the left column is
composed of the board of directors for GM, the middle column shows the different departments that
make up GM; and the right column shows the different sub-divisions and where they report to. Each
sub-division reports to a different department in their structure, and all departments report back to
Daniel Akerson, the CEO.
GM STRATEGIC PLAN
Why Did GM Choose A Divisional Structure?
GM chose the divisional structure because it is the most effective way. A divisional structure
groups an organization’s activities by division to achieve its goals in the most effective way. Divisional
structure also helps a company to better produce and transfer its goods and services to customers.
Integration When GM started over after being bankrupt, they used integration to help make their hierarchy
and organizational chart more compact. Instead of having a lot of employees with a bunch of different
responsibilities, GM decided to integrate those responsibilities to make it so there were fewer people,
but those people have more responsibilities. This made it easier to solve problems because there were
fewer people to blame for problems.
Figure 12.1 - (The Official Board, 2012)
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Control Systems
The purpose of a control system is to provide managers with (1) a set of incentives to motivate
employees to work toward increasing efficiency, quality, innovation, and responsiveness to customers
and (2) specific feedback on how well an organization and its members are performing and building
competitive advantage so that managers can continuously take action to strengthen a company’s
business model (Hill and Jones 380). Since GM is still recovering from their bankruptcy, they are using
methods of motivation employees that do not require money. A study involving 300 participants was
done to see how companies can motivate employees without money (Krenek, 2011). The study
concluded that the two most important factors to motivating employees came down to respect and
company pride. So with these results, GM has made sure that they keep respecting their employees to
the highest degree. Respect makes people happy, and when people are happy, they will work harder. It
is also very important for an employee to be proud to work for their company. After all this, GM has
made sure to keep their employees proud by making sure that they respect their employees, and by
making moral decisions in everything they do to avoid conflict (Krenek, 2011).
Top Management’s Role
Top management’s role in a company is very important. The decisions that top management
make will affect the entire company, so their decisions are very important. The values of GM’s new top
management are greatly improved than before. The new top management believes in treating
customers the way they should be treated, with respect. Before GM went bankrupt, the old
management did not do a very good job with its customers which caused them to lose a lot of
customers and eventually file for bankruptcy, but now GM is back on the right track with its customers
and they are making a strong come back to being the top automotive manufacturer in the U.S.
GM STRATEGIC PLAN
Distinctive Competencies
The source of General Motors competitive advantage comes from all four of its qualities:
efficiency, quality, innovativeness, and responsiveness to customers. GM has always been known for
their efficiency, quality, and their innovativeness, but it hasn’t been until the past couple years that GM
has been good to their customers. When GM went through their bankruptcy, a big part of it was
because they did not treat their customers the way they should have. Now that GM is back on their feet
and is now a strong company again, they can thank their new management for making sure that they
treat their customers respectfully and help them to the fullest of their abilities.
GM’s Matrix Structure
General Motors has a matrix structure because they have separated all of their managers and
projects into separate divisions. Matrix structures promote innovation and speeds up product level
development which means that they can stay ahead of the game by coming out with new products
faster than their competitors.
GM’s Culture
General Motors culture is simple, design, build, and sell the world’s best vehicles. GM values
simplicity, agility, and they believe in action (The Official Board, 2012). In order to achieve their goals,
GM has remained committed to the following formula for success:
Move faster and take risks to achieve sustained success, not just short-term results
Lead in advanced technologies and quality in creating the world’s best vehicles
Give employees more responsibility and authority and then hold them accountable
Create positive, lasting relations with customers, dealers, communities, union partners and
suppliers to drive our operating success (The Official Board, 2012)
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Top management influences the company’s culture because they are the ones who came up
with this formula. Without top management guiding the company in the right direction, they would not
be nearly as successful as they are now.
Coordinating and Motivating
I think that GM’s top management is doing very well with coordinating and motivating their
employees. It really shows how important management is to a company when you look at the story of
GM and what they have been through in the past few years. With its old management, their beliefs and
actions caused the company to go completely bankrupt. Now that new management has taken over, GM
has fully recovered and even started to go beyond what it used to be. The only thing that GM should
have changed from the past has already been changed. The old GM was terrible to their customers,
causing them to lose a large number of them. After filing for bankruptcy, GM realized they needed to
completely start over. They completely overhauled their top management and by doing so added new
beliefs, policies, and new motivations for employees. These new managers have kept employees very
happy and proud to be an employee of General Motors. They have found the key to success inside and
outside of the workplace, respect. By respecting their employees and their customers, GM has become
more successful than ever. When customers and employees are happy, they are more loyal and harder
working. All of these things lead to success, and success means money.
GM STRATEGIC PLAN
Implementing Strategies in Competition Across Industries and
Countries
Multidivisional Structure
GM does have a multidivisional structure. It has used this ever since 1921 when its first CEO,
Alfred Sloan, implemented a multidivisional structure. This was a good decision by one of GM’s CEO’s,
something that has been lacking in recent years. Sloan noted that GM “needs to find a principle for
coordination without losing the advantages of decentralization.” (Hill & Jones, 2008, P.425)
GM’s current CEO needs to think more like this if he plans to be successful. In the past years
before GM went bankrupt there was confusion within the company walls. They were lacking a chain of
command structure in management that would help give order to the company.
Integration Mechanisms
When Sloan introduced his multidivisional structure to GM he placed each of GM’s different car
brands in a self-contained division so it possessed its own functions. The functions included sales,
production, engineering, and finance. He also set in place a transfer-pricing system based on the cost of
making a product plus some agreed-on rate of return. It still uses these strategies today, but beings
times have changed and the company could use other changes it may be better to implement different
integration mechanisms. (Hill & Jones, 2008)
Corporate-Level Strategy
In 1998, GM decided to change its corporate level strategy. They thought that the competitive
forces at that time were forcing many companies, including themselves, to innovation. In 1998 GM
began to focus on business innovation as a corporate strategy. GM did not do enough research and
homework on this change in strategy before they implemented it. GM’s CEO at the time told Larry
Burns, Vice President at the time that they should focus on putting more effort into business innovation
and growth rather than continuous improvement. This strategy ultimately failed and was just one of the
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reasons that led to GM’s bankruptcy and left them searching for yet another change in strategies.
(Hemerling, 2007).
International Strategy
In 2002, GM bought up parts of a bankrupt Daewoo Motor and people around the world were
laughing at them. But GM knew that this was part of their international strategy to get their name in
more countries around the world. GM gave Daewoo ambitions, as a base for exports throughout Asia,
especially the booming Chinese market. Today Daewoo’s factories have doubled their capacity
utilization. Vehicles made at their factories are being exported to GM-related companies in 120
countries in Asia, Europe and North America. GM’s quest for a global synergies got off to a rocky start.
But now, GM is putting the pieces together, tapping the engineering, manufacturing and distribution
resources of its global partners. GM’s strategy to sell the cars in only the countries that they sell well in
could save billions of dollars. Over the past thirty years GM has been investing in other motor
companies in order to create a joint venture with them. In recent years is seems this is starting to pay
off as it takes time to tweak the plans and get everything running smoothly. In the future management
at GM should look for more opportunities like this to keep keeping the ventures going. If people no
longer like the package the current ventures offer together GM will be stuck with only their current
partners and people may want something new. (Muller, J., & Meredith, R., 2004)
With all of these joint ventures and other manufacturing plants opening in other countries,
current employees at GM may wonder how secure their careers are. People do not want to put their
best effort forward if they feel they are not being treated with equal respect from their employer. GM
needs to be up front and honest with its employees to ensure they are on the minds of the managers
and that the managers care about the employees.
GM STRATEGIC PLAN
Altering the company’s structure
In the recent years since GM has went bankrupt they have had a good start in strengthening the
company. They have made plans to cut the models that have been lacking in sales because in all reality
they were costing them money. At times it seems there can be confusion or too many people in the
company trying to make decisions. GM should think about minimizing their chain of command in order
to save money and not lose control over the hierarchy.
Particular entry mode
GM does not really have a particular entry mode that it uses to implement its strategy. When
they see an opportunity, they research it and weigh the benefits against the risks. This is an area that
could be better managed in the company. When GM opens a new facility in a new country they do
however do certain things right in the way they enter their market. They give the customer what they
want in that area. If a vehicle is not selling good in that part of the world, that plant won’t make it. If
they did make vehicles in one country then shipped them to another they would have to take into
consideration the added cost of shipping. GM needs to be more responsive in what their employees
want or need from the company. The first step in this would be to ask the employees what they want
from the company and not just wait for them to have a bad attitude and create low worker moral.
(Muller, J., & Meredith, R., 2004)
Use IT to coordinate
GM has been focusing on its IT technology primarily since the 1984 when it formed an IT service
company named EDS. GM believed their IT innovation would have to start with the right employees so
they hired over 1000 employees to work in the IT department. GM uses IT in the making of their cars as
well as on their cars. Production is the one of the most significant area in the value chain that GM has
increased their IT level in recent years. They have used IT to shrink its workforce and boost productivity
with the use of things like robots to do welding in the manufacturing line. A customer service is also a
| 74 P a g e
major area that GM has used IT to improve their company. GM engineers are equipped with the most
state of the art equipment in order to increase fuel efficiency, increase safety, and reduce costs. These
have all been used well but there was one big problem, timing. GM was in the last of the running to be
equipped with most of these IT capabilities. (Brown, 2011)
Multibusiness
GM was once a power house when people talked about multibusinesses but this is not the case
anymore. They do have a good structure having each of its car brands in a self-contained division so it
possesses its own functions-sales, production, engineering, and finance. Each division is treated as a
profit center and evaluated on its return on investment. What this means is that GM should have been
able to see their bankruptcy coming. If they would have taken earlier modes of action they may have
been able to avoid bankruptcy. GM needed better management to overlook their structure so they
could maintain the level of excellence they once had. They facts were in front of them and no one took
action, which shows poor leadership (Hill & Jones, 2008).
GM STRATEGIC PLAN
Conclusion & Recommendations
As stated previously, the main reason for this particular proposal is to assist General Motors in
the improvement of their low worker morale. Using many methods to reach this conclusion, it is
evident that General Motors is indeed quite aware of the low worker morale; now they need to
implement ideas such as restructuring of their management-employee relationships, offering training
that has sensitivity training as the main focus for both management and the employees, and
implementing other methods for employees to talk to top executives, so that they can make proper
decisions about what to do when a particular situation arises. It is important for employees to feel a
part of the team and also to feel comfortable in their working environment, and by offering the training
and the modes of communication with top management, employees will be able to feel encouraged to
step up in their work as well as have the pride necessary to input quality and efficient work. As stated
previously, GM has many competitive advantages over other automobile companies, and by focusing on
placing the employee with the same importance as top management, General Motors will be even more
competitive than ever before.
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GM STRATEGIC PLAN
Appendix
2010 Annual Report, 59, 77 acquisitions, 53 airbag, 9 Akerson, 11, 25, 27, 59, 60, 61, 62, 77 Alfred Sloan, 71 American Axle & Manufacturing Holdings Inc,
61 annual percentage state GDP in automotive
manufacturing, 18 auto manufacturing, 19 automatic transmission, 45, 48 automobile industry, 11, 12, 13, 22, 24, 27, 37,
45, 47, 48, 55, 62 automotive design, 8 automotive industry, 8, 9, 11, 18, 19, 21, 23, 25,
46 bankrupt, 11, 23, 30, 36, 37, 40, 42, 43, 56, 65,
67, 68, 70, 71, 72, 73 bankruptcy, 10, 18, 23, 25, 33, 35, 36, 37, 41,
42, 43, 61, 62, 68, 69, 70, 72, 74, 77 bargaining power of buyers, 17 bargaining power of suppliers, 17 Best Global Suppliers, 61 Bo Anderson, 51 board of directors, 62, 66 brand recognition, 12 Buick, 8, 9, 10, 12, 23, 29, 31, 35, 39, 52 Buick Roadmaster, 9 build, 10, 11, 21, 23, 42, 43, 58, 65, 69 Cadillac, 8, 9, 10, 23, 35, 39, 46, 47 catalytic converter, 9 CEO, 1, 5, 11, 23, 25, 35, 58, 59, 61, 62, 66, 71 Chairman of the Board, 59 Chevrolet, 9, 10, 12, 14, 23, 29, 33, 35, 36, 39,
47, 52, 60, 77 Chevrolet BelAir, 9 Chevrolet Corvetter, 9 Chevrolet Volt, 14 Chevy Volt, 9 closeness of substitutes, 17 Colorado, 50 competitive advantage, 27, 28, 31, 33, 68, 69 consolidation, 24 control system, 68 copyrights and trademarks, 49 corporate level strategy, 71
customer support, 23, 25, 33 customer support system, 23 customers, 10, 12, 14, 21, 23, 25, 28, 30, 31, 33,
36, 37, 39, 40, 41, 42, 43, 45, 46, 47, 49, 58, 59, 60, 62, 67, 68, 69, 70
Cyriac Thomas, 12 Daewoo Motor, 72 Daniel Akerson, 11, 59, 66 dealership, 19 Delphi factories, 54 demand, 8, 14, 50, 51 design, 8, 10, 23, 30, 32, 36, 58, 65, 69, 78 Detroit Institute of the Arts, 61 divisional structure, 66, 67 dominant technologies, 45, 47, 48 dominant technology, 45, 48 early adopters, 46, 47 Ed Whitacre, 65 employee reviews, 13 employees, 10, 15, 16, 19, 20, 21, 23, 24, 28, 29,
30, 31, 32, 34, 35, 36, 38, 41, 42, 43, 49, 50, 51, 56, 59, 60, 62, 63, 64, 65, 67, 68, 69, 70, 72, 73, 75, 79
energy efficient vehicles, 14 environment, 14, 20, 21, 28, 31, 38, 39, 42, 45,
75 EPA Energy Star Certification, 28, 76 Ewanick, 50 executive pay, 60, 63 factories, 12, 53, 61, 72 financial statements, 62 five forces, 17 fuel cells, 20, 82 General Motors, 8, 9, 10, 11, 12, 13, 20, 21, 23,
24, 26, 27, 28, 30, 31, 32, 33, 36, 41, 42, 43, 45, 46, 47, 48, 53, 58, 59, 60, 61, 62, 63, 64, 65, 66, 69, 70, 75, 76, 77, 78, 79, 80, 81, 82
Glass Door, 16, 20, 78 Glidepath, 30 globalization era, 9 GMC, 10, 12, 23, 29 goal, 11, 28 governance mechanisms, 62, 63 Great Depression, 53 Healthcare costs, 15
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independent front wheel suspension unibody construction, 9
innovation, 14, 22, 23, 31, 33, 35, 36, 40, 48, 64, 68, 69, 71, 73, 76
intellectual property, 48, 49 Intellectual property, 48 intensity of rivalry, 17 Joel Ewanick, 50 Lansing Company, 29 Larry Burns, 71 late majority, 47 LEED Gold standard, 29 legacy costs, 56 low work morale, 15 maintenance, 19 manufacturers, 8, 14, 41, 50 market segmentation, 39 marketing innovation, 8 matrix structure, 69 merger, 53 mergers, 53 mission statement, 10 multidivisional structure, 71 new GM company, 10 NUMMI, 9, 34 Obama administration, 62 Oldsmobile, 8, 39, 45, 80 one-piece steel roof, 9 OnStar, 21, 29 OnStar Technology, 21 opportunities, 11, 13, 56, 72 partners, 10, 42, 69, 72 percentage of automotive employment
manufacturing in automotive parts manufacturing, 18
Pontiac, 8, 12, 39, 56 poor leadership, 15, 74 Power and Associates Initial Quality Study, 35 product level development, 69 product line diversification line, 22 production, 8, 22, 27, 29, 35, 54, 71, 74 rebirth stage, 42
recycling, 19 reducing emissions, 9 repair, 19 risk of entry, 17 Roger Smith, 34 SAE International, 45, 81 salary freeze, 59, 60 sales, 9, 10, 11, 15, 19, 23, 35, 36, 39, 41, 52, 53,
59, 61, 65, 71, 73, 74, 79 Saturn, 9, 12, 56 S-Curves, 48 sensitivity training, 15, 16, 75 shakeout stage, 42, 45 Shanghai Automobile Industry Corporation, 33 shareholders, 23, 42, 54, 58, 59, 77 Shiloh Industries, Inc, 61 Sloan, 71 StabiliTrak, 30 stakeholders, 42, 58, 59, 60, 62 standards, 19, 45, 47, 81 stock-based compensation, 62 strengths, 12, 13 Supplier of the Year, 61 suppliers, 51, 58, 59, 61, 62, 69 Susan Docherty, 65 SWOT analysis, 11, 13, 14, 15, 17, 20 takeover constraint, 62 The Heritage Center, 53, 81 threat of competitors, 14 Toyota, 9, 31, 32, 34, 35, 36, 50, 82 U.S. Environmental Protection Agency, 29 U.S. Small Business Administration, 19 U.S. Treasury, 10, 23 UzAvtosanoat, 64 vehicle manufacturers, 8, 39 vertical integration, 27, 54, 55, 80 vision statement, 10 weaknesses, 11, 13 William “Billy” Durant, 8 worker morale, 12, 15, 20, 21, 27, 28, 32, 50,
54, 59, 75 worker’s morale, 13