Category: General Motors

Introduction

The purpose of this paper is to prepare a comprehensive strategic plan for new GM Company. However, this report will discuss the vision, mission, objectives of GM, Porters 5 Forces, the position of GM in the BCG matrix, the grand strategy matrix, generic strategies, and so on.

Background of the company

General Motors the worlds mega automotive manufacturer that was established in 1908 and it was seriously affected by the credit crush in September 2008. Under SOA¹ chapter 11, General Motors has been treated as bankrupt. To protect against the financial crisis, the US government extended its hands with bailout bills, and rescue package, and now owned 60% shares of GM. With the change of lion shares, the government criticized the business model of GM and urged to implement a comprehensive strategic plan for new shaped GM Company.

Vision

GMs vision is to be the market leader in the global automobile industry by providing superior quality products

Mission

• One of the main aims of GM is to regain lost market share;
• Its present mission is to introduce more fuel-efficient 24 new vehicles within 2012;
• Applying Divestiture strategy in order to emphasize more on core business;
• Restructuring the company via temporary Federal assistance;
• Extraordinary customer care, constant development, and diversified product line (Thomas, 2009).

Objectives

The ultimate goal of GM is to hold a market leader position by developing product range, increasing profits, eliminating major challenges, lessening operating expenses, applying strategic plans, and restructuring the entire organization.

Porters five forces model analysis

To evaluate the competitive environment of GM, this report will concentrate on Porters five forces model 

• Threats from new entrants: GM Corporation (2009, p.11) reported that GM and other automobile companies had faced intense competition in the global market for the financial crisis, unstable oil prices and reduction in the employment rate. Generally, it is difficult for a new company to capture the market of GM but there is a risk of competitive stress from newer domestic carmakers of China and India as these new companies are popular to middle-class target customers.
• Bargaining power of suppliers: According to the annual report 2009 of GM Corporation, the major suppliers are generally raw materials companies, which supply steel, aluminum, fuel, rubber, motor engine, resins, copper, lead, systems, components, and other parts of the car, etc. However, the power of these suppliers varies from area to area considering the availability of the suppliers, for example, GM clears the payment in the second month of the delivery.
• Bargaining power of buyers: Before the economic meltdown, purchasers were a relatively less influential factor in the car industry as most of the customers of GM concentrated on quality rather than price though it differed from one market area to area. However, the bargaining power of purchasers is escalating due to the current pressure of recession as many customers now consider the price of the cars.
• Threats of substitute products: GM also faced hard competition from some other alternative transportation besides direct competitors, for instance, the demand for public transports like buses, railways, and trams have increased because of recession;
• Rivalry among existing firms: GM has to compete with many direct and indirect competitors at both domestic and international stages, such as the main competitors of GM are Honda, Ford motors, Mitsubishi, Land Rover, Toyota, BMW, etc. However, all major companies of this industry had adversely affected by the recession, for instance, in 2009, GMs sales had lowered by 30% than 2008 and cut a huge number of jobs with limited payments (GM Corporation, 2009). The following table no 1 demonstrates the global market share of the players of the automotive industry 

Position of GM in BCG Matrix

The BCG matrix is a portfolio planning process to measure GMs market situation in terms of relative market growth rate as well as relative market share 

• Star: Due to high- growth and high- share, GM occupied this segment before the global financial crisis but it failed to hold its reputation;
• Cash cow: GM is not in this segment as this area point out the low growth with high-share business;
• Dog: Unfortunately, GM occupies this segment now as it demonstrates low- growth with a low share of its business and it requires large investment for further development. However, the US government owned 60% of its share, so it can assume that it will capture the position of Star very soon by properly utilizing its capital and investment funds;

• Question mark: the competitors of GM hold the position of Question mark in a global economic downturn as they experienced a favorable growth rate in a few countries of the world.

SWOT analysis of GM

The strength, weaknesses, opportunities, and threats would discuss to evaluate the position of GM in recession 

Strengths

• Large Market Share in the global car manufacturing industry;
• Brand awareness is the key factor to creating a positive image in customers minds;
• It has long experience to protect the company from any risks;
• It has strong global supply chain management and positioning strategy.

Weaknesses

• GMs market share in the US has dropped due to fluctuated economic and political situations;
• Fluctuated market share, poor organizational structure, and lower profit margin.

Opportunities

• It has the opportunity to develop its hybrid technology, new vehicle styles and models;
• It has innovative power to increase market share;

Threats

• Competitors and global financial crisis are the main problems for its operation.

Porters Generic Strategy

Cost Leadership: As the automobile market is too competitive, the new GM Corporation should supply the products at low prices in order to boost its profit margin and carry on its business as a market leader in such economic circumstances.

Focus: GM Corporation (2008, p.4) pointed out in its restructuring plan that GM would concentrate on new product development for further expansion besides its core business. However, it will develop the quality of its products in order to lessen the market risks and the following figure shows the action plan 

Differentiation strategy: From the beginning of its operation, General Motors considered very low levels of a diversification strategy, so it manufactured cars and related products with sharing the raw materials and earned more than 70% from single sectors. In this context, it should diversify its product range to come back as a market leader in this industry

Implementation

After discussing the overall condition, this report identifies the following prospective strategic- planning process of GM:

However, new GM Corporation should also implement the value-delivery process and 4 Ps of the marketing mix 

Recommendations

• GM should implement the cost-effective strategy in order to avoid further economic loss;
• It should strictly follow SOA to reduce internal conflict and litigation costs;
• It ought to combine the financial and creative communication plan;
• New GM Corporation should be more attentive to meet customer demands because the market is too competitive in terms of product, price, service, innovation, technology, loyalty, safety, price, fuel economy, style and so on;
• It should restructure dividend and pricing policies;
• It should target middle-class people and introduce products considering their earning level;
• Introduction of flexible production and utilization of modern technology;
• Besides customers, it should maintain a good relationship with overseas suppliers, making a connection or mutual co-ordination with foreign policymakers by using the latest technologies;
• It should formulate a better incentive plan in order to motivate its employees;
• In addition, it should increase the budget for R&D and provide special offers for loyal customers;
• It should more concentrate on Asian and Middle- East markets.

Conclusion

It would be difficult for GM to regain its glorious position in terms of more vehicle sales in the high level of competition but GM has some competitive advantages to recover its position. In addition, federal assistance and the recommendation of a new restructuring plan will help GM to save the company from the adverse impact of the financial crisis.

Reference List

GM Corporation. (2008) Restructuring Plan for Long-Term Viability.

GM Corporation. (2009) Form 10-K General Motors Corp  GM.

Thomas, C. (2009) General Motors Strategic Analysis.

Footnotes

1. Sarbanes Oxley Act.

Introduction

General Motors (GM) specializing in manufacturing automobiles has always been a symbol of American culture and a representation of the high level of competitiveness of the United States in the global economy. It was founded in 1908. Its plants located in more than 30 countries all over the globe use the newest and environmentally friendly technologies to make the most reliable cars that would win the customers for life.

Including a wide range of models and brands, General Motors, the company employing more that 250,000 workers, can satisfy the variety of needs and tastes from budgetary to the most exquisite, from mass production to individual designs. As the quantity of the vehicle manufacturers increased and the quality of their products, as well as the competitors performance, improved, GM decided not to miss the leading positions in the market and focused on boosting the productivity and competitiveness. The conglomerate decided to fall upon the operations management as the primary tool for achieving this strategic objective.

The paper will be divided into subsections each covering the major steps taken by General Motors with the aim of improving its operational performance such as planning and design of transformational processes, monitoring and controlling of the operations, process improvement with Six Sigma and lean principles, project and supply chain management, capacity, location, and scheduling planning. Furthermore, it will provide the SWOT analysis of General Motors and the overall conclusion regarding the effectiveness of the GM operational performance.

Finally, special attention will be paid to the recommendations for the companys further development. The motivation for shaping such list is the fact that there are still some areas of operations management that are underdeveloped or ignored and require changes and improvement.

Overview of GM Operations Management

Operations are central to both the company and its employees no matter what is their position (Meredith & Shafer, 2013). That said, it is effective and well-planned operations management that defines whether the organization would be productive and successful.

General Motors as the company that strives for winning customers for life and sees the maximum possible satisfaction of their need and desires as its strategic objective, acknowledges the significance of operations in achieving this aim. The companys operations management can be characterized by several specificities such as:

• introduction of the newest technologies that help both reduce the defects in the process of manufacturing and improve the operational performance;
• focus on the use of environmentally friendly technologies and making sure that the suppliers do the same;
• priority on the safety of the employees reached by the maximum automation of the production process and safe raw materials;
• thorough planning of capacities and location as the foundation for boosting productivity and improving performance;
• strict systems of controlling and monitoring the operations aimed at providing the best quality products.

Planning and Design of Transformation Processes

General Motors acknowledged that transformation processes are the key to improving performance. That is why the special focus is made on planning and designing them. Because GM uses assembly lines in manufacturing automobiles, the most significant bettering refers to modifying them. The company introduced the newest technologies, the so-called smart bolts, to its factory in Tonawanda, New York.

The step was taken in response to defects in the whole batch of engines that resulted in severe losses to the company because it was forced to call back the vehicles of that batch. The technology operates under the track-and-trace (Paula, 2013, par. 1) principle that means that the system gathers all the necessary data and minimizes the risk of defects or, at least, records the time and the number of the defective batch. GM plans to introduce smart bolts to all plants within the next five years.

Monitoring and Controlling Operations

Nowadays, GM exploits traditional balance sheets as the tool for controlling and monitoring operations with the primary focus on the financial performance and statistical data (General Motors Company, 2015). The decision is motivated by the fact that the company sees financial success and increase of revenues as the major indicator of well-being.

In addition to it, GM pays significant attention to meeting the demands and standards of green management. In particular, it requires its suppliers to be certified with ISO14000 (Bosso, 2010), a set of environmental standards, making sure that the materials used for its vehicles are safe for both workers and customers.

Process Improvement With Six Sigma Approach

Six Sigma approach is an effective tool for improving the overall operational performance. Comprising of five stages (define, measure, analyze, improve, control), it is only beneficial in case of strict control over the activities taken at every step. GM has used this approach to enhance safety concerns deriving from ignition switch issue that caused the customers vehicles crashes and even led to deaths. What GM has done is developed the safety improvement project based on the Six Sigma approach.

On the define phase, the specialists detected the problem that had to be solved and found that it was the lack of quality control of the ignitions. On the measure stage, GM collected the data to find out the primary reason for the problem, and saw it in the fact that the assembly lines work 24/7, but employees failed to control their performance constantly. The analyze phase helped realize that the primary way of solving the problem is launching the initiative that will let the workers contact the senior management as soon as they detect the problem with the automobile parts quality or potential dangers. The company called it Speak Up for Safety Program.

The improve was a step at which GM decided to build up a new quality assurance process that will control the performance of every stage of the final part assemblage. Finally, control phase implies developing ignition recall update website (GM safety initiative listed, 2014). The primary purpose is to make sure that the customers know how to act in the similar situation and have an opportunity to provide the company with the feedback.

The company announced that it would take further steps in improving the skills of its workers in using this approach to enhance the operational performance from engineering to covering all types of processes.

Process Improvement With Lean

There is a wide range or principles generally referred to as lean. The philosophy was designed by Toyota when the automobile manufacturer faced the acute lack of resources. The decision was to use the available resources to the maximum extent and eliminate any kind of waste, so that it will boost productivity and improve performance. The practice has proved to be effective. Nevertheless, General Motors positions itself as a non-lean company claiming that this method is only for needy organizations that do not possess resources similar to those GM (Carraciolo, 2014).

The only experience of the comprehensive use of lean and all its principles including kaizen, 5S, theory of constraints, JIT, and kanban was in the case of New United Motor Manufacturing Inc. (NUMMI), a joint venture of Toyota and GM. The plant was operational in the period between 1986 and 2010, and it has proved that lean philosophy has many benefits and indeed leads to process improvement (Hozak, 2012) but with its closing, the company decided to forget about this experience.

As for today, the only lean principles applied to the GM operation are the Six Sigma approach and value stream mapping. As of the latter, it is used for analyzing process flows and as a visual tool for detecting and eliminating waste in every department. GMs value stream map consists of six primary elements: the customer and the customers requirements, major process steps, process metrics (basically, process time), supplier with material flows, information and physical flows, and overall performance (Thorsen, n.d.).

The whole process is a set of four steps: pre-study defining the scope of the value stream, drawing the current situation, defining the desirable future situation, and implementing the plan. So, value stream mapping in GM is drawing the difference between the state of the process as it is and how it should be (Thorsen, n.d.). The practice has proved to be effective because the company actively uses it.

Project Management

Project management in the case of GM has several dimensions  the projects themselves, planning them, and the control over their effectiveness. As of the projects, the organization strives for improving the operational performance by involving the newest technologies in the production process. That is why the primary type of projects used are R&D and IT projects financed throughout the life cycle as GM has enough resources for doing so.

What can be said about planning and control is that GM focuses on the productive system of project management. The company makes sure that its project managers are trained according to its global standards and are highly skilled. Moreover, special attention is paid the leadership features of the managers, so that they are able to coordinate the process and teach the employees if needed (Iamratanakul, 2013). However, the company has faced a challenge of quantity over quality because it focuses on the speed of finishing tasks, not on the essence of the progress (McKie, 2014). It means that planning and scheduling are successful, but the control tools are not always effective.

Supply Chain Management

General Motors is the company that focuses primarily on satisfying the customers and delivering the final good to them as soon as possible. That is why it made significant efforts to develop the supply chain that would simplify and speed up the whole process. The specificity of the firms supply chain is that the primary focus is made on compliance with the laws especially certifications and standards regarding the production of automobile parts it buys from suppliers. Moreover, it is seen as the contractual guarantee of providing the consumer with the best quality and safe product. In addition to that, GM is concerned about the human dignity, that is why special attention is paid to fair working conditions granted to all employees (General Motors, 2016).

GMs current supply chain is monitored by the global material and logistics controlling organizations that has managing and distributing the companies resources according to the companys needs all over the globe. There are several major elements of the firms supply chain. First, there are suppliers of raw materials and vehicle details that the company does not assemble by itself. Second, there are contributors to the company  the companies that together with GM work on supplying the goods to the consumer but are not suppliers (in fact, investors). Third, there is also logistics system comprising of thousands of dealers all over the globe. Finally, the web-enabled element that helps to reduce order wait times (Yu & Bauer, 2014).

Capacity, Scheduling, and Location Planning

Capacity planning, location planning, and scheduling are of extreme importance to General Motors because the company felt significant influence of every economic crisis and lost its positions in the automobile market for numerous times. That said, it pays a lot of attention to estimating potential demand and output as well as market fluctuations using the wide range of formal methods of forecasting. The company may not be successful in predicting economic collapses but, at least, it does its best to succeed.

Moreover, planning and scheduling are a part of the companys educational program (Song & Yao, 2002). The primary reason for teaching them is that GM wants to make sure that its employees have skills necessary to develop plans for the further development. As of the practical use of planning, the latest news from General Motors is that it plans to increase capacity in China by adding four new plants (Ramsey, 2013).

First of all, this step proves that capacity and location are interconnected. Second, it demonstrates that GM realizes that it is more beneficial to invest in building manufacturing close to the customer than transport the finished products. Speaking of scheduling, GM has positioned itself as the company that focuses on continuous improvement of operational performance, that is why it pays significant attention to developing and optimizing schedules of assembling and manufacturing its vehicles according to economic and even weather conditions. Moreover, General Motors launched the online schedule system, so that it is available to all its employees and management.

General Motors SWOT analysis

Critical assessment of the companys primary strengths, weaknesses, opportunities, and threads, also known as SWOT analysis, can become another effective tool for estimating and improving its operational performance. In the case of General Motors, it should be noted that they all derive from the GMs position in the automobile manufacture market and what is seen as the strength, on the other hand, is the source of weakness or threat.

The analysis begins with the strength (S). What is first and foremost is GMs rich experience and location of plants all over the globe. The company has manufactories close to the location of raw materials and in the countries with the most developed infrastructures or the cheapest workforce. These factors guarantee that it will remain afloat because there will always be found an opportunity to keep on manufacturing.

Moreover, it means that the company involves specialists with diverse backgrounds that increases the potential effectiveness of it decision-making and problem-solving mechanisms. Except for the fact that there are plants in most than 30 states, the official dealers of the company are represented in more than 120 countries from the poorest to the richest. It means that the next strength of GM is its global presence. The fourth strength is branding.

The fact the GM is the representation of the American quality cannot be ignored when defining the reasons for its popularity and consumer faithfulness. The next strength is the desire to win a customer for life that is a vision statement of the GM. It is about doing everything possible to satisfy the needs and desires of the customer to the maximum extent so that once an individual bought a care of wide range of models, he/she does not want to switch to another manufacturer. Finally, the company strives for the involvement of the newest technologies in the production and is quite successful in taking this step.

The next part of the analysis is weaknesses (W). The first one emerges from the last strength. Nowadays, the company uses old and out-of-date that often results in defects of the products and decrease in the level of customer satisfaction. The next weakness is failing to use the environmentally friendly technologies to the maximum extent that is unforgivable in the era of overall green consciousness. Next, nevertheless the companys operational performance is, for the most part, successful and effective, the financial performance is low. That is why what suffers is the quality of the final product, especially if compared to other leaders in the automobile manufacturing market.

The third constituent of the analysis is opportunities (O). What should be mentioned first of all is the growing presence in China and India. As the company announced the plan of increasing capacities in this region, it might help it win the billion market that would have more than positive impact on the overall performance. Next opportunity is the growing demand for hybrid vehicles. Because GM has hybrid cars in its model range, it can benefit the company. Finally, the light truck segment of the vehicle market is continually expanding. It is another area in which General Motors has the advantage because it produces light trucks.

The last part of the analysis is threats (T). The primary threat to GM is intense competition in the global market of vehicle manufacturers. Bearing in mind the number of weaknesses it has, this threat can significantly affect the performance of GM. Another threat is the growing environmental concern and the transition towards green production and green management. Finally, there is a threat of increases in the prices for fuel that will have the impact on both manufacturing and sales.

Bearing in mind what was mentioned about GM in the SWOT analysis, it can be said that the company has some significant weaknesses that can become opportunities for the further growth if critically estimated and correctly dealt with. Moreover, it has numerous strengths. That is why I believe it has good chances to become a leader in the automobile industry again.

Conclusion

This report has provided the overlook of steps taken by General Motors to improve its operational performance such as planning and design of transformational processes, monitoring and controlling of the operations, process improvement with Six Sigma and lean principles, project and supply chain management, capacity, location, and scheduling planning. In addition to it, it has presented SWOT analysis of the company for the evaluation of its role and perspective in the global automobile market.

The general conclusion about the GM operations management is that it is, for the most part, effective. The company pays significant attention to the operational performance and has proved that those approaches that were applied in a well-planned and thorough manner were productive and benefited the organization. Of course, there are some gaps, but they can easily be filled in case of following at least some of the recommendations listed below. The same steps can, by the way, improve SWOT analysis of the company eliminating its primary weaknesses or turning them into opportunities and making it more competitive and, as the end results, bringing restoring the leadership positions in the world automobile market.

Recommendations

The analysis of GM operational performance has shown that there are still gaps that should be filled. For example, the company might be interested in:

• Implementing innovations using Thin Film Pretreatment System instead of zinc phosphate to prepare automobiles for paint and apply paint without baking in an oven after every layer that will decrease the usage of natural gas. These steps will not only reduce the costs, energy, and water usage but also make the manufacturing process more environmentally friendly (Bradburn & Randall, n.d.).
• Designing a balanced scorecard considering such aspect of performance as customer, learning and growth, internal business processes, and financial. It should start with drawing up the strategy maps that will focus on the same aspects of performance as the balanced scoreboard. This step will help estimate the effectiveness of the companys operational performance.
• Obtaining the ISO 14000 certification because green management and environmental issues have become one of the companys challenges and it works hard to meet the ecological standards.
• Further improving feedback from customers. For example, one of the steps taken while using the Six Sigma approach was launching the Spanish version of the recall website (GM safety initiative listed, 2014). My recommendation is to translate it in some other languages because even though English and Spanish speaking people are the primary users of GM automobiles, the company should also think about the minorities who do not know these languages but still may face the similar problem. With the resources the conglomerate has, it is possible to bring this improvement to life.
• Recollecting its successful experience of using the whole set of lean principles and return to it. Even though the company positions itself as such having enough resource to ignore these approaches, the practice has demonstrated that there are still some problems the can be solved using this approach and the areas in which they are applied shows higher levels of operational performance.
• Improving its project management exploiting the Goldratts critical chain. Bearing in mind that it often forms teams of people coming from different countries and with different backgrounds, the possible safety buffer for the company is considering the option of having people with the same backgrounds or drawing up maximum deadlines because these people might be involved in different projects at different places. These steps could lead to minimizing the probability of activity time variability with path interdependencies and inflated activity time estimates.
• Including some newest technologies, e.g. the web-based system for sharing knowledge and experiences in the GM supply chain, as the company operates on the multinational scale.

References

Bosso, C. J. (2010). Governing uncertainty: Environmental regulation in the age of nanotechnology. Washington, DC: RFF Press.

Bradburn, J., & Randall, D. (n.d.). How to enable green projects and make them a part of the culture. Web.

Carraciolo, S. (2014). Q&A: General Motors Brazil. Web.

General Motors Company. (2015). Annual report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934. Web.

General Motors. (2016). Supply chain responsibility. 

GM safety initiative listed. (2014). Web.

Hozak, K. (2012). Lean and Six Sigma create valuable synergies for RFID adopters. Web.

Iamratanakul, S. (2013). Project management in Asian car companies. Proceedings of International Conference on Technology Innovation and Industrial Management, 29-31 May. Phuket, Thailand: TIIM.

McKie, N. (2014). Project management lessons learned from General Motors and Toyota. Web.

Meredith, J. R., & Shafer, S. M. (2013). Operations management for MBAs (5th ed.). Hoboken, NJ: John Wiley & Sons.

Paula, M. (2013). This bolt is the key to GMs high-tech assembly line. Web.

Ramsey, M. (2013). General Motors to expand China capacity. The Wall Street Journal. Web.

Song, J. S., & Yao, D. D. (2002). Supply chain structures: Coordination, information, and optimization. New York, NY: Springer US.

Thorsen, W. (n.d.). Value stream mapping & VM. Web.

Yu, Q., & Bauer, G. (2014). General Motors. Web.

Introduction

Business organizations need to implement superior measures to improve their operations and maximize profitability. The selected company that can benefit from a new strategy is General Motors (GM). In 2014, this organization had a scandal that exposed the major challenges that were affecting its business operations. This project presents the idea of just-in-time (JIT) to maximize efficiency at GM and make the corporation more profitable.

Selected Idea

The concept of JIT makes it possible for companies to minimize lead time, identify and reduce defects, and allow materials or parts to be delivered to the assembly line when required. In 20014, GM released 2.6 cars into the market that had faulty ignition switches (Rushe, 2015). This problem led to over 94 deaths in different parts of the world, thereby forcing the company to recall them (Rushe, 2015). This occurrence can become a new opportunity for GM to implement the concept of JIT. Such an approach requires computerized systems to manage inventory and ensure that different materials are delivered in a timely manner. Additionally, GM will have to give specific units or departments adequate time to analyze and test the targeted parts thoroughly before delivering them during assembly.

The case of Toyota explains how the implementation of the suggested method supports the manufacturing and delivery of quality cars that meet the demands of more customers. This corporation minimizes errors and ensures that all materials meet the required standards and are delivered in a timely manner. For GM, the proposal should be introduced in every part of the manufacturing process to streamline operations and reduce the lead time (Shepherd & Vardiman, 2016). GM can hire competent professionals to monitor and test all parts before they are fitted. The intended change will need to be completed in 12 months to improve operations.

Motivated Conclusions and Proposals

GM is a leading company that designs, manufactures, and markets classic vehicles that meet the demands of more customers. The established business model is effective and resonates with the demands of more stakeholders. However, some gaps might emerge in different phases of production. The consideration of an effective JIT approach will support the rate and speed at which different materials are acquired and delivered in the assembly line (Calderone, 2017). The consideration of such a strategy means that the established system will analyze and test all parts thoroughly to ensure that they match with the intended cars. The installed robotic system should also be able to handle them efficiently (Shepherd & Vardiman, 2016). The leaders and engineers need to be involved to solve emerging obstacles while streamlining the process to maximize productivity.

The success of this model will depend on the actions and initiatives of all key partners. The management at GM needs to offer the relevant skill sets, guide suppliers to maintain the required standards and testing procedures, and consider a power change strategy. The consideration of emerging challenges would be essential before implementing the JIT process successfully (Calderone, 2017). When introduced effectively, GM will find it easier to improve the process of assembly, minimize defects, and meet the demands of future customers. The concepts of continuous monitoring and improvement are proposed to ensure that positive results are recorded.

Implementation Plan and Outcomes

GM would require several tools and techniques to ensure that positive results are recorded. The consideration of such attributes will address the existing challenges and take the organization to the next level. The major ones are outlined below.

• Just in Time (JIT) technique
• Kurt Lewins change model
• Improved robotic systems
• Human resources

All these tools and techniques will make a difference at GM and eventually ensure that all vehicles meet the outlined quality standards. The implementation of this new project means that Kurt Lewins change model will come first. The HR department will also have to be involved to streamline operations and support the intended process (Rushe, 2015). The JIT technique needs to become a company-wide project whereby all partners, employees, and customers will offer their views and guide the implementation team to make the relevant adjustments. When this new project or initiative is implemented, the companys production model will change significantly and improve profitability.

The consideration of a powerful implementation plan is necessary to make it possible for all departments and stakeholders to remain supportive and eventually improve the overall GMs performance. Kurt Lewins theory offers the best plan for introducing and making the proposed change a reality (Calderone, 2017). A detailed breakdown of the model or structure is presented above (see Figure 1). The contributions of all leaders and followers will make it possible for GM to address the current gaps and become more productive.

In terms of implementation, the team members need to complete the entire process within a year. The first three months will be essential for sensitizing all key stakeholders and focusing on areas that can benefit from the JIT model (see Figure 2). During the next six months, the JIT technique will become part of GMs manufacturing process. The participants will present their ideas and skills to support the process. The last three months will be essential for the freezing stage to improve operations continuously (Calderone, 2017). The use of key performance indicators (KPIs) will be critical to identify positive gains and challenges that the organization needs to resolve. Some of the key issues to consider will include the rate at which defects and errors are recorded, car recalls, and customers complaints (Shepherd & Vardiman, 2016). When desirable results are recorded, the company will generalize the model and make the introduced actions part of its business model.

From the above analysis, it is evident that Lewins change approach will remain essential during this implementation process. The existing resources and manufacturing procedures will support this new approach or the second phase of change implementation. The main issue that GM needs to address in the current system is the speed and rate at which parts are acquired and tested from different suppliers (Rushe, 2015). There is no potential for pushback with this case or proposal. Suppliers need to receive additional guidelines for improving productivity and analysis of their parts and materials. The success of this effort will empower more team members and improve customers experiences. The current technologies and robotic systems will support the intended JIT methods. This aspect makes them available and costs justifiable (Shepherd & Vardiman, 2016). Finally, a reward system to entice more suppliers will become part of the new process and allow the refreeze phase to take effect. These attributes will continue to dictate the nature of operations and how the new JIT process will continue to improve overall organizational performance.

Conclusion

The above discussion has described a powerful model that the leaders at GM need to consider to ensure that the challenges it has recorded in the past do not reoccur. The JIT approach stands out as a powerful strategy for identifying potential sources of defects and avoiding them accordingly. The presented structure can address some of the identified obstacles, maximize the involvement of all key stakeholders, and eventually support the delivery of high-quality vehicles to the targeted customers. Such attributes will make GM a leading competitor in the global automobile industry.

References

Calderone, L. (2017). The benefits of just-in-time inventory. Manufacturing Tomorrow.

Rushe, D. (2015). General Motors protected from faulty ignition-switch lawsuits, judge rules. The Guardian.

Shepherd, I. J., & Vardiman, P. (2016). The General Motors ignition switch incident viewed through a proposed economic impact severity index. Journal of Management Policy and Practice, 17(1), 36-59.

Background

Not all companies have succeeded at restructuring their operations due to globalization, and General Motors (GM) is one of them. There are significant internal failures that mark its downfall, including safety standards issues, manufacturing flaws in its cars parts, and the inappropriate initial response to the accusations on these topics (Spector and Lesser, 2021). At the same time, the external pressure in the market negated the firms competitive advantage. GM has failed to enter many regional markets, such as India and South America, in which it was overshadowed by Asian car manufacturers (Homer, 2020). These factors define the GMs competitiveness, as shown in Table 1.

Table 1: General Motors SWOT Analysis

While GM had a period of success, it was negated after crises. As a result of the companys failure to adapt to the new environment, Japans Toyota has claimed the first place among carmakers even in the U.S. market (BBC News, 2022). There is the need for GM to reestablish its name on the automobile market. This paper will examine an appropriate change strategy and its specifics for General Motors.

Proposed Change Strategies

The first strategy is to excel at the technological environment through acquiring crucial information on new technologies. The primary target of this change is to present a solution that can help the firm to compete with Tesla and other top electric vehicle (EV) manufacturers. GM already tried this method with unfavorable results, and the current state of the superconductor industry does not provide a viable opportunity to enter the race for the most energy-efficient electric motor (Morris, 2019). The firm needs to take a different approach due to the risks related to entering this technological race.

There is a possibility for GM to cut its costs via restructuring, including laying off employees and changing the factories specifics to better fit the current market. Such a drastic change may result in a window of opportunity for GM, in which the firm has to follow the EV trend to the best of its abilities. Another key approach is to adapt to the regional markets with products that are specifically customized for them (Lauer, 2021). However, the firm will not be able to introduce new models and expect a long-term impact, as the shift toward EVs will overtake regional markets. GM can also try to re-establish its reputation as a trusted car manufacturer through new values and mission. The firm has a corporate culture that does not make delivering bad news easy (Brooks, 2022). By focusing on this change alone, GM might not reach the new markets that have issues with the companys products other than trust.

Costs and Resistances

There are barriers that can play a detrimental role in GMs change process. Refitting factories to produce EVs is a costly process that might not be well-supported by local workers, whose expertise in manufacturing gas-powered vehicles is already vast. To reduce this resistance and its costs, the firm must provide a hierarchical restructure in management to adapt all leading personnel to its new paradigm that will make the transition as smooth as possible. Eliminating dissonant information that causes workers to revolt against a proposed shift can be done through company-funded retraining opportunities and promotions of sustainability as a primary shared value in GM (Lauer, 2021). Employees may need to be convinced that this approach is the best through incentives to try EVs for themselves.

Communicating Change

The risks involved in the proposed transition are significant, yet GM must take a realistic approach when establishing a new paradigm. All leaders, their followers, and customers must be knowledgeable on the events occurring within the firm that might affect its future. These interactions are critical for any firm, as they outline how successful it is in delivering new products and highlighting its values that are important to both customers and stakeholders. First of all, there must be a shift toward openness and honesty in all GMs communications. Moreover, the companys ethical code must be up to the modern standards and outline how all sides benefit from the companys course on sustainability (Brooks, 2022). Managers must translate this change through all hierarchical levels and lead by example.

Cultural Changes

The failure of GM can only be reconciled with a drastic change in its management and business strategy. An organizational culture is a success factor that represents a firms ability to promote its values and work on its mission as a team (Lauer, 2021). The current state of GMs organizational culture indicates that there might be gaps in communication after implementing the proposed change. The company has to adapt to EVs and seek new ways to appeal to the car market through promoting sustainability goals above other organizational values. The current organizational culture of GM shows that the company is not sufficiently open in its communications, both internal and external (Brooks, 2022). To fix this problem, the firm must enforce transparency policies that will highlight its willingness to change to customers and stakeholders.

Reference List

BBC News (2022) General Motors 90-year reign as top US car seller ends.

Brooks, C. (2022) 6 lessons in corporate ethics from the GM recall, business.com.

Homer, D. (2020) GM failed to expand into 1 of the biggest emerging auto markets, MotorBiscuit. Web.

Lauer, T. (2021) Change management fundamentals and success factors. Berlin, Germany: Springer.

MacDuffie, J.P. (2018) Why General Motors shifted gears in its manufacturing strategy, Knowledge@Wharton.

Morris, R. (2019) Why did Tesla succeed where GM failed? Timing, Medium.

Spector, M. and Lesser, B. (2021) Special report: Suit over deadly crash renews spotlight on GM safety practices, Reuters.

Forms of Transformation Processes used by Companies and Their Relation to the Facility Layout

Selecting the most appropriate transformation process and facility layout is one of the keys towards achieving success in the companys performance. In general, there are many forms of transformation processes, and each has particular facility layout. What is more, there are also hybrid combinations of them so the organization can choose the one that best fits its needs and potential.

Speaking of the basic forms of transformation systems, there are five of them including job shop, continuous process, cellular production, flow shop, and project (Meredith & Shafer, 2013). Job shops are industries that offer a wide range of products and services. They can achieve diversity in possible outputs using departments functionally specializing in one or other good. The specialty of this transformation system is that the departments comprise of identical equipment or involve people with nearly the same set of skills, and the process is carried out on a non-stop basis. It also has a peculiar layout that is based on a historically stable output so that it is rarely changed.

The second type of transformation system is continuous process. Such industries use a set of materials and equipment and a sequence of processes to produce a final output. Facility layout of this transformation system is usually a set of needed equipment such as assembly lines, tanks, pipes, etc., and low-skilled employees whose primary responsibility is monitoring a continuous working flow of the machines.

Next type of transformation process is cellular production, and its difference from the job shop is that it produces families of outputs. That means that, unlike job shop, they focus on making up groups of products requiring similar skills for their manufacturing and do not concentrate on one unique good. Its facility layout is somewhat similar to that of the continuous process with the difference that employees are trained to control the process of manufacturing of different groups of goods, and the scales of production are larger.

Flow shops are the systems making up standardized goods by automated mass production and assembly lines. Facility layout is the combination of automated and human work. That means that conveyors are used whenever possible, but people in most cases put the details on it and monitor the whole process of assembling.

Finally, projects are transformation processes focusing on reaching a unique output. That means that the organization exploits skills and equipment necessary for carrying out a specific project, and changes them once there is the new one, so the system is not fixed in the outcome. What is more, layout changes every time another task is defined, so there is no single layout except for the high level of coordination between the people working on the project.

Relationship of the Facility Layout to the Transformation Process in Supporting Operations and Organizational Strategy

Choosing a particular organizational strategy that will lead to achieving the desired level of outputs is one of the most important steps in selecting transformation system. Facility layout plays one of the most significant roles in this process as the appropriate choice will help maximize the productivity and effectiveness of the operations and minimize the costs of the manufacturing process as well as reduce various risks that may emerge during production such as health or safety hazards and achieve other goals as facilitating system of staff interactions and guaranteeing that product or service is exhibited to the customer.

It should be said that in choosing the layout of operations and organizational strategy, customer instead of processes should be the point of attention. That means that if the organization wants to be successful, the emphasis should be made on the customers needs and desire so that it is possible to produce a good or provide a service that he is willing to buy. What is more, senior management should constantly monitor and redesign transformation system and facility layout so they meet the requirements of the market and regulations and the changes in demand, as well as new trends in products and services (Meredith & Shafer, 2013).

Transformation Process Tools Used by General Motors Corporation

General Motors (GM) specializes in manufacturing automobiles. The process of production is for the most part automated with the heavy use of assembly lines. So, the most evident of changing transformation process with the aim of increasing efficiency and effectiveness and reduce the costs and risks is to modernize the assembly lines. The company already implemented these modifications in 2013 when General Motors upgraded its factory in Tonawanda, New York.

The key modernization consisted in replacing old bolts located inside the production lines that assemble engines with the so-called smart bolts, new technology that collects data about every single manufacturing process that am engine undergoes. The primary goal of this track-and-trace (Paula, 2013, par. 1) system is to prevent the probability and minimize the consequences of making mistakes during the process of production whether it be taking wrong parts, problems with the work of machines or human factor.

The way these smart bolts work is extremely simple  they are attached to heads of the cylinders of the production lines where they monitor the process of assembling engines and transmit all the collected data about the operations to the factorys master server where highly professional workers decode them to make sure that there are no problems with the work of the automated machines. Because they are located at different points all across the conveyor, it became possible to control the whole manufacturing process and make sure that it is carried out to perfection on every single stage of assembling an engine.

Using this technology not only increases the level of productivity and the quality of work but also minimizes the risk of providing the customers with the engines that were not assembled correctly (Swedberg, 2014). Even is there is a batch of bad automobile parts the company can easily trace it by the information provided by the bolts and retract it to fix the problem accurate up to every engine. General Motors plans to modernize the rest of its factories using this technology within next four to five years.

Influence of Product and Process Life Cycles on the General Motors Transformational Process: Past and Future Scenarios

Product and process life cycles also have a significant impact on choosing a form of transformation system with its facility layout. That means that as the needs for particular products or services change, e.g. customers want more goods or services of better quality than before, transformation system should be altered so that it meets the new requirements (Meredith & Shafer, 2013).

General Motors has always been a symbol of American culture and a representation of the high level of competitiveness of the United States. However, as many automobile conglomerates started the transition towards the principles of lean production, GM was also forced to redesign its transformational system and manufacturing strategy so that the company could reclaim its competitive position (Briody, Trotter, & Meerwarth, 2010).

Because transformational processes should change in response to shifts in the environment and demand of the customers, General Motors had to alter its system in reaction to the rise of Toyota. It took very long for the American company to develop the new manufacturing process because of the differences in mentality and cultural background of Americans and Japanese. Nevertheless, GM managed to implement a new facility layout. For example, the company signed relational contracts with the suppliers of the raw material that improved the relationships between the both and thus quality of the final product because GM received better input materials (Helper & Henderson, 2014). What is more, it practiced lean management principles to increase the level of employees productivity and worked at modernizing factories.

Together with that, there is still work to do. For example, because General Motors is a company depending on chemicals, it will have to respond to new requirements of the market initiated by the green movement. Here, GM will also have to implement innovations using Thin Film Pretreatment System instead of zinc phosphate to prepare automobiles for paint. It will not only reduce the costs, energy, and water usage but also make the manufacturing process more environment-friendly (Bradburn & Randall, n.d.). What is more, the company might want to apply paint without baking in an oven after every layer that will decrease the usage of natural gas.

References

Bradburn, J., & Randall, D. (n.d.). How to enable green projects and make them a part of the culture. Web.

Briody, E. K., Trotter, R. T., & Meerwarth, T. L. (2010). Transforming culture: Creating and sustaining a better manufacturing organization. London, UK: Palgrave Macmillan.

Helper, S., & Henderson, R. (2014). Management practices, relational contracts and the decline of General Motors.

Meredith, J. R., & Shafer, S. M. (2013). Operations management for MBAs (5th ed.). Hoboken, NJ: John Wiley & Sons.

Paula, M. (2013). This bolt is the key to GMs high-tech assembly line.

Swedberg, C. (2014). General Motors factory installs smart bolts in engine blocks, cylinder heads. Web.

Introduction

General Motors (GM) is a symbol of the American automotive industry and culture. It is known for an exceptional quality of manufactured automobiles as well as a high level of competitiveness and significant impact on both national and global vehicle markets. GM was founded in 1908. Since then, it has expanded operations to more than 30 countries around the globe. Nowadays, it employs more than 250,000 workers. What made the company such a successful and influential manufacturer is the focus on innovating its processes and operations and the stress on reducing the negative impact on the natural environment. As a result, there are no objectives that GM could not reach and customer needs it could not satisfy. Therefore, its experience can be used as a guideline for both competitors and new companies regardless of the industry and region of operation.

Specificities of General Motors Operations Management

Operations are at the heart of any companys performance and success. In this way, the only strategy to become productive is to develop effective operations management. In the case of General Motors, there are several main characteristics that make its operations management remarkable and efficient. First and foremost, GM senior management recognizes the criticality of constant improvement of operations. As a result, the stress is laid on the continuous introduction of the newest technologies and the deployment of the so-called green technologies in achieving operational performance objectives. In addition, special attention is paid to cooperating with suppliers that share the same philosophy. Another peculiarity of GM operations management is the focus on employees safety reached by high levels of processes automation. Finally, the company is known for strict planning, controlling, and monitoring systems, which make the conducted operations defect-free and efficient.

GM Transformation Processes

The key to General Motors success is the stress on transformation processes as the foundation of performance improvements. This objective is commonly achieved by introducing innovations and modifying processes based on the newest technologies. The most outstanding example of such transformations is the implementation of smart bolts at one of its factories in the USA. The technology is special because it helps to detect slightest detects during all stages of manufacturing automobiles (Paula, 2013). The so-called track-and-trace technology collects all information regarding defects so that all of them can be easily removed in case of necessity.

Six Sigma and Lean Management as the Foundation of Process Improvement

Six Sigma is a generally acknowledged tool for operational performance improvement. It is based on five interrelated stages. In the case of GM, the method is deployed to eliminate defects of manufactured automobiles. The whole process of applying the technique is as follows:

1. Define: detect the problem (ignition defects);
2. Measure: collect data necessary for determining the main cause of the problem (failing to control the work of assembly lines);
3. Analyze: identify ways to eliminate the defect (introducing Speak Up for Safety initiative);
4. Improve: transform currently deployed processes (implementation of quality control measures);
5. Control: constant updates on the defect (launching website aimed at collecting customer feedback related to ignition defects).

Initially, the lean philosophy was designed by Toyota. However, it has become popular and widely used by companies that operate in different industries and regions. The foundation of the approach is the use and allocation of currently available resources more effectively, which helps to operate successfully in the case of lacking them. In the history of GM, there was only one experience of using lean techniques  NUMMI plant (Hozak, 2012). It was a joint venture with Toyota. As for ignoring lean management, senior management explains its position by having enough resources (Carraciolo, 2014). From this perspective, there is no need for developing strategies for re-allocating them.

Project Management Strategies

In General Motors, project management is a combination of three dimensions: projects themselves, planning, and controlling initiatives. The first dimension is associated with the constant improvement of processes, thus making projects more innovative. In this way, preference is given to IT and R&D projects. Speaking of planning and controlling initiatives, they are based on training efforts, leadership, meeting internal and global standards of operations, and attention to cooperation with high-skilled employees (Iamratanakul, 2013).

GM Supply Chain Management

In General Motors, the main focus is made on satisfying needs of customers. In most cases, these needs are associated with receiving the final good of an exceptional quality as soon as possible. In order to meet such customer requirements, GM paid special attention to developing effective supply chain management in order to speed up all necessary processes. Nowadays, the stress is laid on compliance with global standards of safe automobile manufacturing (General Motors, 2016). As for the supply chain itself, it involves the following elements: raw materials suppliers, contributors (investors), logistics system (dealers), and web-enabled systems (Yu & Bauer, 2014). See Figure 1 below for details.

Capacity, Scheduling, And Location Planning at General Motors

Planning is another core factor leading to the success of General Motors. It can be explained by the fact that the company is significantly affected by the developments in the global economic environment  both positive and negative. The foundation of planning is the estimation of potential output and demand as well as major market fluctuations. Based on them, all planning activities are conducted. Therefore, capacity and location planning is connected to the forecasted changes in demand. As for scheduling, it is associated with internal planning and allocation of human resources. The main specificity is the development of online schedules available to all employees.

General Motors SWOT analysis

SWOT analysis  the estimation of strength (S), weaknesses (W), threats (T), and opportunities (O)  is an effective tool for assessing and improving any companys operational performance. Speaking of GM, it is special because all of its peculiarities derive from the position in the global automobile market, which makes the company both powerful and vulnerable. Detailed SWOT analysis can be found in Table 1 below.

Conclusion

Nowadays, General Motors operations management is efficient. It is associated with the fact that the company pays specific attention to the improvement of operational performance. Therefore, all techniques that were deployed were effective and benefited GM. Still, it is critical to note that their effectiveness is based on thorough and detailed planning. All in all, regardless of some deficiencies and weaknesses, the company is powerful, and it can become even more influential in case of transforming its threats into opportunities. This step would make General Motors more competitive and help to restore leading positions in the global automotive market.

Recommendations

Regardless of being an influential company, there are still some gaps to fill. It can be achieved by following some recommendations:

• Further focus on innovations. For instance, replace zinc phosphate with thin film pretreatment system when applying paint to decrease the volume of natural gas in vehicle manufacturing and to make the process more environmentally friendly;
• Work on designing a balanced scorecard, which is ignored. It should incorporate such constituents as learning and growth, customers, financial performance, and internal business processes. It is necessary for analyzing the companys effectiveness, thus finding ways to improve performance;
• Lay stress on ISO 14000 certifications due to the increasing popularity of green management;
• Continue collecting feedback from customers in order to improve customer satisfaction and obtain data regarding the most critical defects of the manufactured automobiles (for instance, make websites multilingual);
• Introduce lean management principles, recollecting the successful experience of NUMMI plant.
• Apply Goldratts critical chain to improving project management: lay the major stress on creating multicultural teams.
• Introduce web-based systems for sharing information and knowledge.

References

Carraciolo, S. (2014). Q&A: General Motors Brazil. Web.

General Motors. (2016). Supply chain responsibility. Web.

Hozak, K. (2012). Lean and Six Sigma create valuable synergies for RFID adopters. Web.

Iamratanakul, S. (2013). Project management in Asian car companies. Web.

Paula, M. (2013). This bolt is the key to GMs high-tech assembly line. Web.

Yu, Q., & Bauer, G. (2014). General Motors. Web.

General Motors has been pushing the limits of transportation and technology for over 100 years. Today, they are in the midst of a transportation revolution. And they have the ambition, the talent and the technology to realize the safer, better and more sustainable world they want. As an open, inclusive company, they also creating an environment where everyone feels welcomed and valued for who they are. One team, where all ideas are considered and heard, where everyone can contribute to their fullest potential, with a culture based in respect, integrity, accountability and equality. Their team brings wide-ranging perspectives and experiences to solving the complex transportation challenges of today and tomorrow.

At General Motors, innovation is their north star. As the first automotive company to mass-produce an affordable electric car, and the first to develop an electric starter and air bags, GM has always pushed the limits of engineering. GM is the only company with a fully integrated solution to produce self-driving vehicles at scale. They have committed to launch at least 20 new all-electric vehicles by 2023. 2.6 billion EV miles have been driven by drivers of five GM electrified models, including the Chevrolet Bolt EV.

The future depends on responsible stewardship of the earth, and they continually seek creative and innovative solutions for the environment. Their policies and technologies promote a cleaner planet from supply chain to manufacturing to the vehicles we put on the road. Across 14 recent new-vehicle launches, they have trimmed an average of 357 pounds per vehicle, saving 35 million gallons of gasoline and avoiding 312,000 metric tons of CO2 emissions per year. Today, their vehicle manufacturing process has the lowest environmental footprint in their history, thanks to steady progress toward achieving our 2020 operational commitments to reduce energy, carbon, water and waste intensity. They transformed how the world moved through the last century. And they’re determined to do it again as they redefine mobility to serve their customers and shareholders and solve societal challenges. Since GM has enrolled into U.S. Environmental Protection Agency (EPA) ENERGY STAR energy-reduction challenge in 2010, the company has already avoided over $237 million in energy costs and reduced 1.8 million metric tons of carbon emissions in 73 of its U.S. facilities. The company was able to cut its energy spending per vehicle produced by 5.6% in 2015 alone. GM’s environmental and sustainability policies didn’t stop there. The company has converted its global headquarters and an additional 122 facilities landfill-free and has committed to 100% renewable energy by 2050. It is also the only automaker in the world, which has signed ‘Climate Declaration’ to help solve climate change.

With new technical innovations, the possibility of new models within the automotive industry are endless. With the evolution of technology, the possibility to manufacture a product portfolio that includes more product variety which satisfies the different needs of consumers is extremely high. Another important strength of General Motors is its innovation, as the group is a forerunner in introducing products in the market and is far ahead of its competitors. Making great strides in the technological aspect of manufacturing doesn’t only allow General Motors to craft products in the benefits of its consumers but its product has set in motion a movement in which redefined the abilities of technology and its benefits to society.

General Motors should increase its capital expenditures to increase competitiveness and that is their goal. By reinvesting a higher amount of capitol back into the business GM will be able to increase their market share and stock value. By creating new models and adding in more advanced technology and fuel economy than competitors GM will be able to take customers from other brands and create new customers for life. The segments of the business that get the most capitol should be research and development. Understanding what the customer wants should be at the very core of this company. General Motors should increase their growth by acquiring other companies. As it stands General Motors over the last few years has been putting several small suppliers out of business. These suppliers have issues fulfilling orders for General Motor and often get charged for any downtime that results from a part shortage they cause. If General Motors were to take over their existing infrastructure and use their capitol to build all of their parts in house, they would avoid having a labor lost in wasting time and could quickly identify any supply related issues that needed to be resolved. GM should lower its debt in an effort to increase earnings and return on capital. General Motors has accrued more than enough debt after the collapse of 2008. Buying back shares should be at the forefront of the company’s goals. By taking back control of the company the capitol, the company gains can be allocated toward reinvestments in the company in order to get future returns. Some would argue GM got here mostly because the sales-killing recession came just as it was about to turn around. “This has nothing to do with the management of the company over the years”, – says David Cole, chairman of the Center for Automotive Research. “When you take sales down to Depression-era levels in a high-fixed-cost industry like this, it’s a killer” (Carty, 2016). GM should increase market spending. I would increase this marketing by a small amount but in the proper channels such as in the social media markets. General Motors should definitely make online marketing and international marketing increase more than print ads. Few people read print ads in today’s society. Newspapers are slowly fading away and hard copy books are becoming a thing of the past. Marketing online give GM the ability to not only showcase a few products like a print ad but to also give customers all of the information about all of their vehicles, old, new and, future concepts.

In concluding, General Motors will continue to see an increase in market share and profitability if they consider these recommendations. GM will be able to expand their business while cutting cost of labor expenses. By increasing research and development spending GM will see an increase in customer satisfaction and loyalty and will gain new customers, also increasing their market share. If General Motors does not begin to look at their company with a fresh set of eyes every year, then they may be well on their way back to the way things were in 2008.

Introduction

1.1 Introduction to Report

The following report is a strategic analysis of the American Company named called General Motor Company. This report contains the strategic analysis company’s profit and risk factors determining internal and external factors. This report is a research of the company’s overall information and the strategy to overcome their challenges and sustain in the market. There are three parts in this report, in the first part, it contains Introduction to strategy, Introduction to General Motors and a variety of Information about the company. In the second part of the report, it contains the analysis of General Motors through strategic position, strategic choices, strategic action macro-environmental factors, Porters Five forces analysis and Strategic Capabilities. In the last part, it contains SWOT analysis of the Company.

1.2 Introduction to strategic management

Strategic management is the study of a business and its environment. Alfred Chandler graduated from Harvard Business School defined strategy as the logical flow of the company which influence by the company’s goals and objectives. Chandler emphasizes that most of the companies try to make their business strategy by focusing on their goals and objectives. He also mentioned that many companies implement their business plans and strategic direction heavily referred through their set of company’s goals and objectives. Michael Porter was also graduated from Harvard, Porter focuses on deliberate choices, difference, and competition (Johnson et al. 2011).

The long-term direction of an organization depends upon the market and consumer the company serves along with delivering unique and extra services than of competitors. Mission, Vision, Objectives, Advantage and Scope are the marketing strategy statement which helps in leading companies towards the height of success. The mission statement helps in achieving the short terms goal for an organization. The vision statement tells what a company wants to achieve in long term similarly, the objectives tells the purpose of company’s establishment and wants to achievement in company period. Likewise, the scope determines the future of established company in the market and the advantage illustrates the differentiation in providing products and services to customers than of competitors. For this reason every companies needs to analyze their Competitors, Strength, Weakness, Opportunities and threats (Johnson et al. 2011).

The Corporate level strategy plays a huge role in making very important decisions like expanding their business into various geographic areas along with providing diverse goods and services in the market. Business level strategy is about competing within the same business level in terms of providing unique products and services than competitors. Operational level strategy determines utilizing the resources within the organization resources to meet the success for the business level and corporate level strategy (Johnson et al. 2011).

The exploring strategy model helps in understanding the organization into major 3 segments. Strategic position of an organization is concerned with the environment, capability, purpose and culture of an individual organization. Usually in Strategic position strength, weakness, purpose and environment opportunities and threats of an organization are concerned and to identify the impact PESTEL analysis is conducted (Johnson et al. 2011).

A strategic choice provides the option for strategy in terms of direction, where the company wants to move in the future and the method, by which strategy might be followed. Under strategic choices basic things like how business unit have to compete? Whom to include in a portfolio? Where the organization should compete internationally is concerned (Johnson et al. 2011).

Strategy in action is about implementing the strategy that has been formed. The fundamental questions that are usually asked in strategy in action are which strategy are suitable, acceptable, and feasible? How the organization should manage the necessary changes? Who should do what in different stages? Organized strategy must be in structure and systematic and both the top level managers and lower level employee must follow up the strategic plan, and it must be communicate within the organization (Johnson et al. 2011).

1.3 Introduction to company

General Motors Company is American automobile manufacturing Multinational Corporation that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services Headquartered in Detroit, Michigan established on September 16, 1908 (General Motors 2019). General Motors Company was formed with an escrow account set up by R S McLaughlin for 15 years of Buick Motors in 1907 on September 16, 1908, in Flint, Michigan, as a holding company controlled by William C. Durant, owner of Buick. At the beginning of the 20th century, there were fewer than 8,000 automobiles in the US, and Durant had become a leading manufacturer of horse-drawn vehicles in Flint helped by his purchase of the Carriage Gear patent from the McLaughlin family in Canada (General Motors 2019). Mary Barra is Chairman and Chief Executive Officer of General Motors Company. General Motors made a sale of $147049.0M where Over 180,000 people are employed and Serving 6 continents (General Motors 2019).

GM is centered on strengthening core commercial enterprise of exceptional car, vans and crossovers, while also working to lead the transformation of non-public mobility through advanced technologies like connectivity, electrification, self sustaining riding and automobile sharing and also dedicated to turning in safer, better and greater sustainable approaches for humans to get around (General motors 2019). General Motors, its subsidiaries and its joint mission entities promotes vehicle and motors under Cadillac, Chevrolet, Baojun, Buick, GMC, Holden, Jiefang and Wulingbrands including other companies like OnStar, a global leader in vehicle safety and security services, Maven, its personal mobility brand, and Cruise, its self reliant automobile ride-sharing company (Chervolet 2019). General Motors annual revenue for 2018 was $147.049 billion, which was increased by 1% from $145.588 billion annual revenue of 2017 (Macrotrends 2019).

2. Strategic evaluation

2.1 Environment Analysis of General Motors

As per the macro-environment analysis of General Motors, they suffered politically and economically because the reductions come as the largest U.S. automaker undergoes a massive restructuring announced with the aid of CEO Mary Barra in November 2018. GM is halting manufacturing at five plants in North America and cutting 14,000 jobs as it realigns its group of workers and plants to produce more electric powered vehicles (Clifford and ferris 2019). Among the factories GM plans to close one in Lordstown, Ohio, where Chevrolet Cruze gets manufactured and getting closed because of poor sales of the model it manufactures (Olorunnipa and Sink 2018). Ohio is a imperative political battleground in presidential elections. In 2016, Lordstown, Ohio, helped deliver the presidency to Donald J. Trump, having a bet that he would fulfill his promise to retailer its auto industry (Tavernise 2019).

Being multinational automotive company General Motors enterprise delivered proper outcomes on the returned of greater pricing for the fiscal year and beats consensus expectations and suggested a revenue of $147 billion are making investments of 10 billion reais ($2.65 billion) in two of its Brazilian plants positioned in the country of brazil, Sao Paulo The two plants are placed in Sao Caetano do Sul and Sao Jose dos Campos and appoint 15,000 people, jobs that will be maintained as phase of the investment plan (Reuters 2019). GM are negotiating “feasibility conditions” to make investments 10 billion reais ($2.73 billion) in Brazil from 2020 to 2024, that new investments would depend on returning to profit and focuses on competitiveness that the enterprise is experiencing in order to make a sustainable future viable for our groups and the suited return to shareholders (Reuters 2019).

In the technology and innovation field, GM in china improving research and improvement of new materials, battery testing, concept auto design and the localization of international technologies. Advanced Technical Center will focus extra on new electricity vehicles, smart linked motors and advanced materials in an effort to meet Chinese customers. The technical core has developed a third-generation metal with more desirable strength, which helps an automobile minimize its weight with the aid of 20 % and a high-performance solid aluminum alloy, which has extensively accelerated ductility and tensile strength which is 40 % lighter than conventional aluminum alloy and A far off laser-welding technology was once also developed by way of the technical center which has accelerated the welding efficiency by using three to 4 instances and cut carbon dioxide emissions by using 50 percent (China daily 2019). Because of those circumstances and market segment General Motors sells 70% more cars in China than in the US (Business Insider 2017).

In order to maintain environment, General Motors has been creating technologies that have changed our world. General Motors creates and sales an electric vehicle to the world with Zero Crashes, Congestion and zero emission of co2 gas, and advancing its lineup of current vehicles while simultaneously investing in electrification, autonomy and offerings like Maven which means it can reduce the global warming and reduce in the pollution (General Motors 2019). GM aspires to decrease its carbon footprint by 77% of which is represented by using its international automobile fleet to zero, and toward that intention plans to introduce 20 new zero-emissions cars to world markets by using 2023(Forbes 2019). The impact that trash has on waterways, marine life, animals and humans on local, regional and world ranges as phase of the 2018 launch of the Keep Belle Isle Beautiful anti-littering campaign GM Partnering with 37 different volunteer groups, employees joined the Belle Isle Spring Clean-Up to remove 1,276 pounds of litter (General Motors 2019).

2.2 Porter’s five forces framework

Porter’s five forces framework helps in determining and identifying the attractiveness of an industry in major five factors which consist of threat of entry, threat of substitute, bargaining power of customers, bargaining power of supplier and competitive rivalry (Johnson et al 2011).

Analyzing the power of buyer of General Motors, there is a high power of consumers because the same categories of vehicles with similar prices are also provided by its competitors in which switching from one brand to another has become easier. The other competitors such as Volkswagen, Toyota, Daimler AG, ford, Honda, etc.are producing the vehicles on the same categories of SUV’s crossover, sport utility vehicles and ,a pick-up truck so Corvette (sport utility vehicles) sales in the U.S. have steadily declined each year for the reason that more than doubling with the introduction of the current-generation auto in 2014. Through the first six months of this year, Corvette sales have been down 5%. That places GM on pace to promote less than 20,000 units for a second-consecutive year and marks five-straight years of declining sales (CNBC 2019).

General Motors has a highly competitive rivalry with its competitors. General Motors made a sale of $147049.0M while Toyota Motor Corporation made a sale of $271165.07M, Volkswagen $266742.29M and Ford Motors Company of $160338.0M respectively thus, evaluating the result there is a big manufacturer chasing Toyota in term of revenues and sales soon, there is an intense competition (Statista 2019).

2.3 Strategic Capabilities of General Motors

As per the resources and capability analysis of General Motors, the company has assets of $75,293,000M and the human resources have reached 173,000. It has been used to maintain the quality and standard of the products the factories have been using fully automated equipment for production but the production line-up fully integrated AV manufacturing process is the best way to build safe and reliably performing self-driving vehicles is run by the staff. It helps to lessen the workload and higher efficiency in work (General Motors 2019).

General Motors capabilities depend upon the company strategy which is focusing on workforce improvement, using employee’s capabilities in its full potential and enhancing the competitive advantage. Research and Development is the main capability of the company. The company has a lot of the best expertise; good distribution channel of having in 190 396 facilities on six continents, a large amount of capital, have been contributing to the success of the organization (General Motors). The company produces different vehicle segment from low range up to luxury brands. The company has been doing great at innovation in designing, manufacturing, and sales that give a valuable product in term of cost and quality and to hold the strong foot on global market (General Motors 2019).

SWOT analysis

One of the strengths of General Motors is to constantly improving on the products in term of quality maintenance, efficiency, and flexibility. Research and development team is the biggest strength of Toyota because it gives value to the customer and tries to adapt to the changing technology. Besides that, it is producing safer vehicles, more environmentally friendly cars, and the automatic car has proved to be their main strength (BBC 2018). Besides, The Company has a huge amount of employees having 173,000 working on a daily basis and the strong brand image of the company has been created a long time back. The company strength also lies in the creativity of the employees as they are developing advanced technology (General Motor 2018).

General Motors Co is recalling 1.205 million pickup trucks and recreation utility vehicles worldwide due to issues with a temporary loss of power steering, switches shut unexpectedly, and cutting power to brakes. The recall covers sure 2015 Chevrolet, GMC and Cadillac pickup trucks and SUVs, and consists of about 1.02 million automobiles in the United States. The automaker has acquired reviews of 30 crashes and two injuries however no deaths linked to the recall. In 2017, GM had recalled here almost 800,000 pickup vehicles international because of the equal problem. General Motors might have drawback sometimes by the defective equipment, high-cost price, and conflict between both parties. Due to the strongholds of other auto mobile companies the company has been failing to sell its electric vehicles in a growing market (CNN 2019).

With the rapidly growing market of electric hybrid vehicles, General Motors has a chance to grab opportunities as the company holds a good brand image by selling the highest number of electric vehicles and gain the trust of people with its innovation and reliability and leans toward electrification and intelligent connectivity, the automaker said there are higher requirements for auto materials (Dandan 2019). Michelin and General Motors presented a new generation of airless wheel technology makes the Uptis Prototype eliminate flats and blowouts. This means Uptis offers significant potential for reducing the use of raw materials and waste, contributing to GM for a world with zero crashes, zero emissions and zero congestion (General Motors 2019).

The Company presently runs two manufacturing facilities in the country. India is anticipated to surpass Japan as the third largest auto market in the subsequent decade. General Motors has introduced that it plans to give up selling Chevrolet company automobiles in India at the give up of 2017. India has an extremely low vehicle penetration rate, with solely 32 vehicles per 1,000 human beings as of 2015. This potential that there is substantial room for the auto market to grow and, car sales could double from 3 million final year by 2025. However, there are costs to capture this growth that General Motors isn’t inclined to take on and possibly difficult to hold the market (Forbes 2017).

Company Profile

General Motors (GM) is an American multinational company that designs, manufactures, markets, and distributes vehicles and vehicle parts, and sells financial services to the public. Their mission is, “to earn customers for life by building brands that inspire passion and loyalty through not only breakthrough technologies but also by serving and improving the communities in which we live and work around the world” (Kissinger 2017). Their mission statement is very possible to achieve whereas their vision statement is more widespread. According to General Motors, their vision statement is, “to create a future of zero crashes, zero emissions, and zero congestion and we have committed ourselves to lead the way toward this future” (GM, 2019). With the use of General Motors’ knowledgeable team members and their understanding of the business, they offer products to dealers that meet their needs. General Motors Company provides all-around auto finance options to assist Chevrolet, Buick, GMC and Cadillac dealers to increase sales such as Prime Auto Loans, Non-Prime Auto Loans, and Commercial Vehicle Lending to name a few. There is also a Training & Development Program, Dealer Training, available for employees of the dealerships to develop their comprehension and victoriously offer the appropriate leasing or non-prime auto solutions for their customers. Existing competitors of General Motors include any car company but the most prominent ones include Toyota, Honda, and Ford. Their strategy includes Porter’s model that gives them a competitive advantage over all other car manufacturers. General Motors generates its competitive advantage through a low-cost strategy, and cost leadership is the main strategy used (Kissinger 2017). Corporate leaders within General Motors include Chairman and Chief Executive Officer Mary T. Barra and Senior Vice President & President and Chief Executive Officer Daniel E. Berce. They strive to make the best decisions for the company that helps their workers as well as their public customers.

Identifying the issue

General Motors plans to make its largest downsize since its bankruptcy in June of 2009 in New York which made General Motors the largest industrial bankruptcy in history. As of November 2018, there were plans of cutting 14,800 jobs in the United States and Canada along with ending production in several North American factories (Colias 2018). The “callous” decision was made by General Motors Chief Executive Mary Barra who says that she wants to act now in order to prepare for unforeseen changes in the United States car market. General Motors Company is not the only one to take effect from the changes in the automobile industry, but the automobile sales are declining in general. These changes are happening in the car market because of electric cars, no need for a vehicle due to uber, and fines against companies that don’t cut carbon monoxide emissions (Ewing 2019). She stated that ‘This is what we’re doing to transform the company. The industry is changing very rapidly” (Colias 2018). She justifies her decision by stating that acting now while the United States economy is strong and the company is in good health will help General Motors sustain their profits. In response to backlash from Trump, a Detroit auto-maker of GM claimed to have spent well around $6.6 billion on their United States plants over the course of 4 years and that this investment has ultimately created and preserved 17,600 jobs (Colias 2018). The cuts would affect the more educated portion of GM’s workforce such as the engineers, designers, and others within GM’s product-development operations (Colias 2018). GM is having to cut back on some models such as the ”Cruze compact car, the Volt and large sedans like the Impala, Buick LaCrosse and Cadillac CT6” (Colias 2018). GM’s Lordstown factory was working around the clock and even with all this production, GM hit this factory with layoffs to decrease some of GM’s expenses. Tommy Wolikow one of the employees laid off had been working for GM for nearly a decade and expressed that he hoped he could get his job back because his father retired with GM after working with the company for 46 years and he is so proud of this (Colias 2018). With U.S. vehicle sales on a strong run, surpassing $17 million GM still had to make these cuts, which should shed light on how much debt GM got themselves into (Colias 2018). The CEO Ms. Barra said, “the company wants to be more efficient in its core business of engineering and building cars while plowing more money into potential game-changing innovations” (Colias 2018). Giving some of the GM employees a boost that the company was not necessarily in a bad place but trying to reallocate their resources more efficiently. This could be so GM is ready to compete with any new technology that pops up for electric cars within the next couple of years. GM may be trying to get a head start in R&D for the future of their company (Colias 2018). This can be seen by GM spending around $1 billion a year on the autonomous-vehicle development program (Colias 2018). GM also hired 1,000 employees in San Francisco to work on the driverless-car they are working on (Colias 2018). Even though they are changing towards this type of vehicle, it comes with severe risks and consequences. Michael Wayland of Automotive News states, “Business cases for electrified and autonomous vehicles remain unproven, and nearly a decade after GM’s federally backed bankruptcy, the company again is becoming a political football” (Wayland 2018). Since they had to lay off so many people, GM reported receiving calls from dozens of large corporations expressing their interest in hiring the workers that were laid off (LaReau 2019). Because of this, they are outplacement services to help those affected gain a job. Gm is losing very good, well-educated employees just because they want an increase in a new and very specific technology, and this will hurt them in the long run. They must continue to plan their decisions in a strategic manner unless they want to end up where they were back in 2009.

Analysis and recommendation

The decision from General Motors CEO, Mary Barra, to change the production line has not only affected the company financially, but also their employees, lawmakers, and consumers. As of November 15, 2019, strikes at General Motors have decreased industrial production by 0.8% in October. Factories in the United States were using about 74.7% of their capacity in October; it has been down 4.1% since October of 2018 (Wiseman 2019). “Nearly 50,000 members of the United Auto Workers had walked off the job across the United States on Sept. 16, the first time a union had declared a nationwide strike against one of the Detroit automakers since 2007, and workers outside the General Motors factory in Flint, Michigan, seemed poised for a fight” (Kirkland 2019). They wanted what was right for not only the company but for themselves and their future.

In response to this issue, I would urge top-level management of General Motors to acknowledge their Corporate Social Responsibility, engaging in the empowerment of existing employees that are on strike due to alluded closings. It is important that they know and understand that the reason for their potential departure is not due to their inability or incapability to do their jobs; but, is due to the new products, markets and new production techniques that would ultimately make their current jobs obsolete within this particular organization. A notable con may be that workers will not be satisfied with just words of consolation. Some actions may need to be taken for them to feel a genuine sense of care from General Motors. In fact, it may be most beneficial for the greater good with the implementation of a Training & Development course that would teach the new techniques to existing workers. The con is that on average, an employer may spend anywhere between $900-$1,200 per employee on training & development (Freifield 2018). However, the investment in the Training & Development program should lead to a decrease in the need for external recruitment since they would be hiring from a pool of applicants within the firm, should the building stay up and running. However, if the end result is indeed the closing of the plant, the skills developed in the courses implemented should definitely position the workers well for new job opportunities outside of General Motors Company.

General Motors Company may increase the satisfaction of the company by having another program set up for the workers they are letting go. The program could be concluded of being able to write recommendation letters and a source to help the employees they are laying off to have another job. This action could lead consumers to believe the company cares for its own workers and even interest people to work for General Motors Company. If potential candidates realize that General Motors will lay off their workers in mass numbers it could easily reject the candidate from putting an application. This could also potentially set ease to the employees that are or could potentially be terminated because they do not have others putting in applications to add to their mass numbers being laid off. They do not want more employees entering their workforce at this exact moment to try and save their own jobs.

The conclusion for General Motors to end production in six of their cars is because they are trying to keep their customer base coming back. They came to realize that the models that they were going to end were Buick, Chevrolet, and Cadillac brands. North American customers wanted different types of styles of cars that were not popular anymore (Valdes-Dapena, 2018). Data are shown only the Cadillac XTS had sales that went up 15.9% and the models like Buick LaCrosse, Cadillac CT6, Chevrolet Cruze, Chevrolet Impala, and Chevrolet Volt were down 10.6%-26.5% (Valdes-Dapena, 2018).

Instead of closing five of their North American facilities and having many employees laid off, they should have the employees move with the changes within the company. This will allow General Motors to see within its company if they have any technicians for environmentally friendly cars that they are going to be producing in the future.

Another demand from consumers are environment friendly actions. In reference to Jackson Ewings findings, the change of the type of cars is also coming from an environmental standpoint. This being that pollution is rising and causing harm to planet earth. Research has shown that cars are at the top of the list for having an impact on global warming by releasing carbon dioxide. Although General Motors is considering what the customers want, they should consider the effect they are having on the people they have employed within the company.

General Motors should also consider the idea that the demand for cars has shrunk due to the companies that are floating around that provide rides and food delivery (Wayfast, Lift, Uber/Uber Eats). These companies are creating jobs and also decreasing the needs of other people to have their own cars. Maybe General Motors company could decide to find a way to partner with the companies that are creating a lesser need for vehicles. Ideas that if the company influences their employees to buy a car from general motors said employees could receive benefits such as free oil changes, free car inspections, discount on car being bought, and things of that nature. It could cost a lot of money, but may drive the demand for wanting a new car and it being from general motors. The employee will have to have a car to be employed at the said employer so the partnership could drive a high demand from its own employers.

Relationship to Course

General Motors has faced many issues within the last decade, and most of the major ones deal with key management concepts. Our issue focuses on the closing of several General Motors plants to focus on improving technology and driverless cars. As we learned in chapter one, they are trying to get a head start on competitive advantage in this side of the automobile industry (pg. 18-22). A competitive advantage in this specific area will help them be rare, valuable, inimitable, and non-substitutable. Innovation is the introduction of new goods and services, and they are trying to adapt to new technology before their competitors do. This directly related to the CEO, Mary Barra’s, business strategy. As we learned in chapter five a business strategy is the major actions by which an organization competes in a particular market or industry (pg 107). The business strategy helps achieve a competitive advantage because they think into the future about what will be the most effective and efficient in making the most profits in the long run. While trying to beat their competitors in this market comes at a large cost, it also costs thousands of loyal employees their jobs. GM laid off almost everyone in those five plants. In chapter eight we learned about employees being let go, whether it was fired or terminated (pg 187-188). For the most part, they temporarily laid off these employees until they can get their new and technologically advanced plants up and running. The problem is that this leaves these people without a job at the moment. And as stated above, many large corporations want these employees because they already have a hand in this kind of business. As we also learned about in chapter eight, outplacement is the process of helping dismissed people regain employment, and GM is trying to do just that (pg 188). Laying off thousands of people has its impacts on GM, and it is also helping its competitors by giving them their old employees for the time remaining. This decision to lay off thousands and close factories comes at a very large risk which we discussed in class during chapter five. Risk is defined as the state that exists when the probability of success is less than one hundred percent and losses may occur (pg 111). They are taking a very large risk by implementing this decision and it may backfire and prove to be worthless. The top-level managers discussed this issue for a long time before putting it into place, but there is a risk involved in any major decision. If a large loss does occur, then the blame will be taken out on those higher-level officials of the company. We discussed how they have a major role in decision making in chapter one of our textbook (pg 8). These top-level managers typically include the Chief Executive Office, Chief Financial Officer, president, and vice president. The decisions that these few people make influence the entire company as a whole, and they usually do not consult with any lower or middle-level officials before implementing these plans. They always hope for the best, but sometimes it ends up in a loss instead of a gain. Hopefully, the company will be able to turn around and be back in the market place like this event never occurred and they will not incur any major losses in years to follow. The decisions made by this company factor in many other topics discussed in our management textbook, but these few are the most prominently seen in our day to day lives.

Conclusion

In conclusion, General Motors made some very tough management decisions when implementing their plans to close several plants and lay off thousands. When making big decisions for a well-known company it is important for them to have indicating factors of what will put them near the top of demand. General Motors’s decision could cause them a high success rate in the long run if their driverless car technology takes off, but a large risk is involved in whether or not that will happen. Taking such a steep step could potentially harm their position in the market. However, Mary Barra, Chief Executive Officer, made some decisions that were risky and tough but does hope this will expand General Motors as a company. This being that they create a differentiated market for their consumers to choose from compared to their tough competitors. Even though thousands of people lost their jobs, they hope to turn the company around and regain success in just a few years. Time will tell whether or not this decision will make them millions or cause them to go into another major loss as they incurred back in 2009 with their large bankruptcy. Families across the globe hope that General Motors will get back on its own two feet as soon as possible and produce the best cars possible.

References

1. About GM. (n.d.). Retrieved November 7AD, from https://www.gm.com/our-company/about-gm.html.
2. Bateman, T., Snell, S., & Konopaske, R. (2020). Management. New York: McGraw-Hill Education.
3. Bomey, N. (2018, November 26). GM poised to close plants in Michigan, Ohio, Maryland, will cut 15% of salaried workers. Retrieved from https://www.usatoday.com/story/money/cars/2018/11/26/gm-general-motors-plant-closures-job-cuts/2113275002/.
4. Colias, M. (2018). GM’s Plan to Cut Jobs and Plants Draws Fire from Trump, Others. Retrieved from https://www.evernote.com/shard/s672/sh/7f4a3156-333a-4ab1-b7da-c952a4966727/066320710f6c82b6eb6090efcd09b98b.
5. Corporate Officers. (n.d.). Retrieved November 7, 2019, from https://www.gm.com/our-company/leadership/corporate-officers.html.
6. Ewing, Jack. (2019, June 6). The Car Industry is Under Siege. Retrieved from : https://www.nytimes.com/2019/06/06/business/auto-industry-fiat-renault.html.
7. Freifield, L. (2018). 2018 Training Industry Report. Retrieved from https://trainingmag.com/trgmag-article/2018-training-industry-report.
8. GM Financial. (n.d.). GM FINANCIAL DRIVES MORE SALES TO YOUR DEALERSHIP.
9. Retrieved from https://dealers.gmfinancial.com/product-offerings.aspx.
10. Kissinger, D. (2017) General Motors’ Generic Strategy & Intensive Growth Strategies. Retrieved from http://panmore.com/general-motors-generic-strategy-intensive-growth-strategies.
11. Kissinger, D. (2017). General Motors’ Vision Statement and Mission Statement. Retrieved from http://panmore.com/general-motors-vision-statement-mission-statement-analysis.
12. LaReau, J. (2019). GM Confirms white-collar job cuts to happen over next two weeks. Retrieved from https://www.usatoday.com/story/money/cars/2019/02/04/general-motors-gm-start-layoffs-2019-workers/2765989002/.
13. Valdes-Dapena, P. (2018, November 27) GM will no longer make these 6 cars. Retrieved fromhttps://www.cnn.com/2018/11/26/business/gm-cars-dropping-production/index.html
14. Wayland, M. (2018). Unlike 2008, GM cutting jobs, plants proactively. Retrieved from https://www.autonews.com/article/20181203/OEM/181209962/unlike-2008-gm-cutting-jobs-plants-proactivelybusiness/gm-strike-pushes-industrial-production-down-08percent-last-month/2019/11/15/32031b2c-07b3-11ea-ae28-7d1898012861_story.html.
15. Wiseman | AP, P. (2019, November 15). GM strike pushes industrial production down 0.8% last month. Retrieved from https://www.washingtonpost.com/.

Introduction

General Motors is America’s largest car supplier and one of the world’s largest automotive companies. It designs, manufactures, markets, and distributes automotive and truck components, providing financial services with regional headquarters in Detroit’s Renaissance Centre. William C. Durant founded the company in 1908. General Motors is ranked number 10 in the Fortune 500 list of the biggest U.S. companies by total revenue in 2018. It produces vehicles in 37 countries. Chevrolet, Buick, GMC and Cadillac are its main car models. It is divided into three divisions: GM North America (GMNA), GM International Operations (GMIO) and GM Financial.

1 Old Vision Statement

“To create a future of zero crashes, zero emissions, and zero congestion, and we have committed ourselves to lead the way toward this future.” https://www.gm.com/our-company/about-gm.html

General Motors’ core values include “innovation, responsibility, teamwork, and continuous improvement.”

2 Revised Vision Statement

“to create an automotive (3) future of zero crashes, zero emissions, and zero congestion,(2) and we have committed ourselves to lead the way toward this future of global automotive customers (1) through innovation, responsibility, teamwork, and continuous improvement(4) .”

1. Customers
2. Customer needs
3. Product or services
4. Business values

3 Mission Statement

“to earn customers for life by building automotive brands(2) that inspire passion and loyalty(6,7,8) through not only breakthrough technologies(4) but also by serving and improving(5) the communities(1,9) in which we live and work around the world. (3)”

1. Customers
2. Product or services
3. Markets
4. Technology
5. Survival, growth, and profitability
6. Philosophy
7. Self-Concept
8. Public image
9. Employees

Primary Implications from EFEM (Opportunities)

The EFEM for GMs presents major opportunities for the company in the near future. Small vehicles segment has a higher potential in emerging global markets. The technically knowledgeable young generation, pressure towards emission-free mobility and ongoing adaption of autonomous vehicles, open new business avenues for growth. Increased connectivity and accessibility, AI, ML and investing in multiple technologies are consistent with GMs strategies.

Primary Implications from EFEM (Threats)

The General Motors EFEM also reveals major threats that it will face in the near future. A possible increase in import taxes would result in a drastic reduction in profits. Reducing electric vehicle manufacturing costs and adapting customers is already challenging. The predicted economic slowdown, US relations with other nations, and fuel price fluctuations are unfavorable to the industry.

4 The Competitive

Toyota

Toyota is a Japanese multinational manufacturer of automobiles. In 2017, Toyota is the largest manufacturer of vehicles and its corporate structure has more than 350,000 employees worldwide. As of 2018, Toyota was the world’s sixth largest revenue-based company. Toyota was the first car manufacturer in the world to produce more than 10 million vehicles per year. Toyota was Japan’s largest listed company by market capitalization as of July 2014.

Toyota is the world’s market leader in hybrid electric vehicle sales, and one of the largest companies to promote hybrid vehicle mass-market adoption around the globe. Toyota is also a leader in fuel-cell hydrogen vehicles. The 10 million milestones achieved in January 2017 were the cumulative global sales of Toyota and Lexus hybrid passenger car models. Its Prius family is the top-selling hybrid nameplate in the world with more than 6 million units sold worldwide in 2017.https://global.toyota/en/company/vision-and-philosophy/

4.1.1 Ford Motor Company

A global leader in the automotive industry headquartered in Dearborn, Mich., Ford Motor Company produces and distributes vehicles across six continents. Ford has manufactured operations globally, including in the United States, Canada, Mexico, China, India, the United Kingdom, Germany, Turkey, Brazil, Australia, Argentina, and South Africa. Ford also has an agreement of cooperation with the Russian automaker GAZ. It was founded and incorporated in 1903 by Henry Ford. The company’s car brands include Ford and Lincoln, with nearly 177,000 employees and 65 plants worldwide. The Ford Motor Credit Company provides financial services.

https://corporate.ford.com/company.html?gnav=footer-aboutford

4.2 Competitive Profile Matrix (CPM)

Primary Implications from CPM

According to Competitive Profile Matrix, General Motors ranked as the lowest among its two main rivals Ford and Toyota. The company’s low-ranking stems from falling behind in 6 out of 12 critical success factors and they are; Product Quality, Global Footprint Expansion, Financial Position, R&D, Automation/Technology and Top Management. However, company even ranks evenly with its competitors in areas such as Price Competitiveness, Hybrid/Fuel Efficient/Electric, Customer Loyalty, Reputation and Loyalty of Customers. Further, General Motors still dominates its two rivals over US Market Share.

Income Statement Overview

Compared to 2017, General Motors significantly improved its net income in 2018. This was primarily due to the elimination of discontinued operation loss (European Business) and lower taxation due to favorable tax law changes.

In 2018, however, operating profit (EBIT) decreased dramatically by 26% due to inefficiencies in the cost of the goods sold and increased operating costs. Other than that, there is a 14% increase in interest expenses.

4.3 Balance Sheet

General Motors increased its asset investment by 7 percent in 2018 compared to 2017. Its asset investments have increased primarily in long-term assets and cash and equivalents. On the other hand, by lower inventory levels, lower debt credit to debtors, and increased current liabilities, the company has deteriorated its working capital position. An increase in assets was primarily financed by increasing liabilities, hence the company’s exposure to debt financing increased by 9 percent in long-term debt and other current liabilities.

5 Historical Ratios

GM’s financial performance (ROA percent and ROE percent) increased in 2018. For 2018, however, both the GP margin and the margin of operating profit are adverse.

The company’s overall gearing rate has decreased as per the book values. However, the company’s debt servicing capacity has decreased significantly (22 to 14 times) due to higher interest commitments and deteriorated operating profit margin from 8% to 6%.

The position of working capital in 2018 was weak. Current insufficient assets shown by lower current ratio. In contrast, spending in property was not justified by producing enough revenue. (FA Change and TA Change)

6 Internal Factor Evaluation Matrix (IFE Matrix, IFEM)

Primary Implications from IFEM (Strengths)

General Motors ‘ main strength is its market share leadership. In addition, the main advantages for the organization are strengths such as presence in China, strong R&D and electrification strategies. Other than that, the company’s strengths are also addressed by global renewable energy initiatives, higher profit margins, comprehensive financial products, United Autoworkers, dealer network and fulfilment of financial goals.

Primary Implications from IFEM (Weaknesses)

General Motors ‘ high concentration in North America and China is a major weakness. In addition, the complexities of implementing autonomous vehicle strategy, poor marketing strategies, increased regulations and international threats, fragmented markets, increased labor costs, loss of supply chain, unsuitable customer mix and declining sales position have also undermined the competitive position of the business on the market.

7 Strategy Analysis

7.1 Strengths-Weaknesses-Opportunities-Threats Matrix (SWOT)

This matrix shows possible strategies for the company. The condition was a comprehensive analysis of internal and external factors and their influence on the company.

7.2 Boston Consulting Group Matrix (BCG)

General Motors is the US automotive industry’s market leader. Therefore, General Motors divisions; GMNA, GMI, and GM Financial are competing for BCG matrix comparison purposes with General Motors itself.

Cash cow: GMI with a high market share in low-growth markets. The goal should therefore be to produce further revenue without compromising the company’s long-term sustainability.

Stars: The market leadership position of both GMNA and GM Financial needs continued investment to maintain. Compared to other two divisions, they have higher ROI. The strategy should therefore be to finance subprime customers by investing more in GM Finance. This also increases the likelihood of GM Finance to become a cash cow for the organisation.

7.3 Internal-External Matrix (IE)

7.3.1 Internal-External Matrix by divisions

All GMNA and GMI are for all IFE and EFF with similar weighted scores. For these divisions, therefore, the prescription is to expand and develop. For these divisions, intensive (market penetration, market development, and product development) or integrative strategies (backward integration, forward integration, and horizontal integration) may be most suitable.

Nonetheless, for both EFE and High score for IFE, GM Financial has an average weighted ranking. Therefore, holding and maintaining the strategy should be. It is possible to consider market penetration and product development as possible solutions.

7.4 Strategic Position and Action Evaluation Matrix (SPACE)

Through ‘Aggressive Posture,’ all three General Motors divisions show that the company can make full use of internal resources to take advantage of opportunities for international market share. Because the company has high financial resources, high position in the market, has a competitive advantage and is part of an attractive sector, working under relatively stable environmental conditions.

As described in Michael Porter’s overall cost leadership generic strategy, this opens the way for cost leadership strategy. Cost Management is the approach aimed at making processes more effective and reducing costs wherever possible. It can come from productivity scale or range, overhead management, careful customer choice, automation, and standardization. The goal of cost leadership is to be at the market’s lowest cost. This will allow the company to survive a price war and reach the highest margins in the absence of a price war.

7.5 Grand Strategy Matrix (GRAND)

This matrix has two dimensions: competitive position and market growth. It is a useful tool for a company to develop alternative strategies. All four General Motors models (Crossovers, SUVs, Vehicles, and Trucks) fall into Quadrant 1 according to our study.

General Motors therefore has a relatively strong strategic position, focusing on established competitive advantage and taking advantage of it as long as it allows it. Through implementing strategies for product development, business development, market penetration, the organization should concentrate on existing markets. The organization has already embarked on similar diversification strategy to minimize the risk of limited lines of goods. The organization can still retain its emphasis and follow a vertical, backward and forward set of strategies to reduce the possible challenges that may occur in the future market place.

7.6 Quantitative Strategic Planning Matrix (QSPM)

The Quantitative Strategic Planning Matrix compares two different strategies that can be the best option for General Motors to pursue in the future. The first strategy involves General Motors improving its current products in the existing markets. The second strategy for the company focuses on entering into new markets with existing products. Both strategies are assigned a rating against each strength, weakness, opportunity, and the threat of the company on a scale of 1 (not attractive) to 4 (highly attractive). If the factors do not apply for the strategies, they are rated with 0. However, if one strategy was rated the other one needs a rating also.

General Motors should diversify with existing products into new markets instead of focusing on the markets of the US and China. The company should therefore invest outside of the US and China in new distribution channels and manufacturing facilities.

7.7 Strategy conclusion

General Motors has been analysed through different matrixes to understand and determine the most suitable strategy for its future success. Accordingly, BCG, IE, SPACE, Grand Strategy and QSPM matrix have been applied for our study.

As per BCG matrix, GMI considered as a “Cash Cow” and GMNA identified as a “Star” that is going to be a “Cash Cow”. Therefore, it is important to use strategies relevant to a “Cash Cow” for both divisions. That generates more sales without affecting stability of the business.

Further, IE matrix prescribes to grow and build all divisions as they have average scores. Strategies recommended were market penetration, market development, product development, and integrative strategies. Grand Strategy matrix also prescribes similar results as all products fall into “Quadrant 1”.

Moreover, SPACE matrix identifies General Motors’ ability to use its strength to capitalize on external opportunities.

Finally, QSPM matrix recommends a market development strategy instead of market penetration as a suitable strategy for growth.

8 Recommendations

Recommendations Overview

The recommendations for improvements were derived from the SWOT and QSPM, which contains the weighted factors to support the importance of the recommendation.

It is recommended to use strong R&D skills to develop products with multiple technologies, AI and IoT capabilities and enhance the company’s Electrification strategy. Further, same strategy can be strengthened through global presence to cater the global emission-free requirements. Further, without being cost-effective in electric vehicles it is impractical to gain sustainable market growth in future. Therefore, it is encouraging to invest in mass production whenever possible.

On the other hand, it is important for the company to diversify into other markets (excluding US and China) to minimize the risks associated with concentration. Further, there is a possible hike in import tariffs. As a prevention measure, flexibility of international manufacturing facilities will be improved and investments made in local facilities for import substitution of components that are imported currently.

Furthermore, emerge into new markets will not be possible unless the company partners with new distribution channels and networks. Developing strong branding among youth would be beneficial in the short-run as well as in long run.

9 Organizational Structure

General Motors Company has a regional divisional organizational structure. Characteristics of General Motors’ organizational structure:

1. Regional Segments (primary structural characteristic)
2. Business-Type Divisions
3. Corporate Functional Groups

Corporate Functional Groups. General Motors Company’s corporate structure has corporate functional groups as a secondary feature. The company uses these groups as a means to integrate all business operations.

1. Office of the CEO
2. North America
3. GM Financial
4. Global Manufacturing
5. Global Communications
6. Cadillac
7. South America
8. Legal and Public Policy
9. GM International
10. Tax and Audit Services
11. Information Technology
12. Europe
13. Global Human Resources
14. Global Product Development, Purchasing and Supply Chain
15. Finance and Treasury
16. Accounting Services
17. GM China

9.1 Improved organizational structure

The organizational structure of General Motors provides limited support for international brand consistency. This leads to a lack of focus on regional markets, resulting in reduced branding and marketing consistency on the global automotive market.

It is therefore important to develop a suitable marketing campaign which will establish consistency in the branding of General Motors. This recommendation may improve the strength of the company’s brand. For example, General Motors can build stronger brands that attract target customers around the world through a cohesive and effective marketing campaign.

10 Perceptual Map

The Perceptual Map focuses on four major vehicle categories and a comparison of their price (y-axis) and performance (x-axis). All products are in the high priced high-performance segment. From this, it should be very important for General Motors positioned close to each other are seen as similar to the relevant dimensions by the consumer.

11 EPS/EBIT Analysis

EPS/EBIT Analysis overview Viewing

General Motors ‘ EPS / EBIT Analysis can obtain the necessary capital from either stock or debt for the list of recommendations since the EPS for the two financing options has no difference under their EBIT ranges. In the future, the financing option for General Motors will be 60 to 40 debt versus stock financing, with more debt than stock to ensure that ownership is somewhat diluted and that interest on debt financing benefits from a tax shield.

Company Valuation overview

The Company Valuation section presents the value of General Motors with Ford included under the four methods of corporate valuation which are the net worth method, the net income method, the method of price-earnings ratio, and the method of outstanding shares with the average method included. General Motors is extremely strong in revenue with $14 billion relative to its biggest rival Ford. It is vital that the company undertakes to maintain and enhance its value in the future. Compared to its top competitor Ford, General Motors is extremely strong in its value by over $14 billion. Moving forward, it is vital that the company commits to maintaining and enhancing its value.

Projected Income Statement Overview

With regard to the projected statement of income, General Motors will be in a good financial position with the implementation of the list of recommendations over the next three years. Operating profit is projected to grow by more than $4 billion over the next three years as a result of high revenue growth of $11 billion from marketing, brand improvement to increase sales and cost efficiency. This is better than in 2017 through 2018, where revenue grew by just over $3 billion and operating profit fell by over $3 billion.

Projected Balance Sheet overview

Two key changes in the anticipated balance sheet are the $20 billion increase in cash and equivalents and the $20 billion retained earnings account over the next three years. Also, with General Motors pursuing a 40 percent equity to 60 percent debt ratio, $12 billion increase in liabilities and $20 billion in common stock over the next three years.

Projected Financial Statements Overview

Compared to historical ratios, General Motors will have better liquidation over the next 3 years from the high growth of the current and quick ratios. Also, equity will grow more compared to debt as seen from the drop of the Debt-to-Assets and Debt-to-Equity Ratio caused by the major increase in the retained earnings account. Most importantly, company has been able to improve Gross profit, Operating profit and more consistency with high Return on Assets and Return on Equity. The company will experience some drops in a few of the ratio metrics such as Total assets turnover, fixed assets turnover, Times Interest Earned from 2019 to 2021. All in all, the metrics reveal that General Motors can successfully expand its operations and improve its global presence, brands, products, and systems.