Category: General Motors

Introduction

Merger and acquisition technique plays a significant role in increasing economic potential and gaining competitive advantages in the constantly changing environment of the global market. Furthermore, cross-border merger and acquisition activities are the main approaches to the international strategies of many organizations, which results in company participation in foreign direct investment. The purpose of this paper is to analyze two companies selected from one industry and evaluate their merger and acquisition strategy, the impact of five forces of competition, and corporate governance mechanisms based on the conducted research. For this assignment, General Motors and Elio Motors, which are two companies from the automotive industry, were selected.

Merger and Acquisition Strategy

Merging usually refers to the negotiation of two or more businesses to form a new corporation while acquisition involves two companies in the process of swallowing a small business by the bigger one. Therefore, mergers and acquisitions can be defined as the integration of companies with different business values into one organization. In economics, it is possible to distinguish horizontal and vertical mergers. Horizontal mergers include companies from one industry, while vertical ones include businesses from different areas.

General Motors Company became a big Delaware corporation in 2009. This company design manufactures and sells cars and automobile parts at the global level. It also provides financial services through General Motors Financial Company (“General Motors Company: Annual Report Under Section 13 or 15(D) of the Securities Exchange Act of 1934″, 2018). The history of the development of this corporation includes numerous acquisitions of automotive companies with recognizable brands such as Buick Motor Company, Cadillac, Pontiac, Elmore, and others. Despite the crisis in the automotive industry, the corporation managed to survive and continues to produce vehicles with advanced technologies.

It is a general opinion that the strategy applied by General Motors Company over the decades of its existence involves gradual expansion through acquiring new assets which might be useful for company success and gaining competitive advantage. Some researchers state that this strategy helps to “increase markups on average across U.S. manufacturing industries, but find little evidence for channels often mentioned as potential sources of productivity and efficiency gains” (Blonigen & Pierce, 2016, p. 5). Therefore, the company selected wise strategy and increased its profits by purchasing companies with famous brands, which made it possible to increase markups on other products produced by the company and expand the number of manufactured brands.

This strategy might have helped it to survive in the crisis in the automotive industry. It is also possible to say that General Motors is experienced in utilizing a competent approach to the acquisition process by developing integration plans, which allowed easily adapt the new assets to the overall company values and manufacturing strategies. At present, the company applies a customer-oriented approach and provides multiple services to its clients.

Elio Motors is a relatively small business that now plans to manufacture low-price three-wheeled vehicles that can be customized according to the clients’ requirements and are claimed to be comfortable and innovative by design (“Elio Motors: Corporate Presentation,” 2016). This company is not international and is present only in the U.S. market at present. It is a general opinion that their idea of a three-wheeled car to provide cheap variants for mobility to the population might be interesting not only to the customers but also to the bigger actors in the automotive industry.

Some companies might be interested in merging with Elio Motors. One of the most profitable candidates that might be interested in acquiring this company is Tesla company which produces electric cars. Two companies might combine approaches to design and innovations to manufacture the new type of electric car which is cheap and easy to control in the city and rural zones. Tesla might also provide additional investments to Elio motors to complete the mission they began and secure its success. Some researchers note that “it is very important that company share the future roadmap with the existing customer and promise to the customer they will continue providing service, personnel support and salespeople will continue to serve as they were doing earlier” (Kansal & Chandani, 2014, p. 214). Therefore, if Tesla merges with Elio Motors at this stage when they still need investment but have potential and a waiting list of clients, it will be beneficial to share the future strategy with clients and listen to their ideas to improve the product.

Impact of Five Forces of Competition

Porter’s five forces approach is utilized to analyze the business competition. These five forces include a threat to new actors in the industry, a threat of the companies that might become substitutes, the bargaining power of clients and suppliers, and rivals in the industry. It is stated that some companies in the same industry might have similar strategies but different performances (Pisano, 2017).

General Motors seems to face a challenge since such new entrants as Tesla appeared in the automotive industry. The electric car seems to be cheaper in-vehicle operation due to the high cost of petrol for an ordinary car. Although an electric car is a relatively new product in the global market, constantly developing technologies might make Tesla a powerful competitor. Although General Motors cannot be substituted by some other company due to a big number of assets and car brands at the international level, the bargaining power of clients and suppliers determines its business strategy both at the international and domestic levels.

The current international business-level and corporate-level strategies of the company include earning customers for life by providing various services related to car maintenance. This strategy is applied in all the subsidiaries of the corporation including international ones located in other regions and time-zones. It would be also advisable for a company to obtain cost advantage for electric cars in the global market because the vehicles produced by General Motors remain rather expensive and the customers might want to use cheaper variants, especially if electric cars become a mass production in the nearest future.

Elio Motors seems to have no rivals or competitors in the U.S. market at present. The idea of a three-wheeled cheap car seems to be innovative and attractive to potential customers. Customizing vehicles at stores might be beneficial for company promotion. If the company merges with Tesla, it might use electric facilities for customizing its vehicles by customer’s requirements as a part of the business strategy. The corporate-level strategy might include promoting three-wheeled vehicles at the international level. This idea might be interesting for the countries with developing economics as it provides a cheap variant of the vehicle that can be customized. The further implementation of the client-oriented approach might be also useful both for business-level and corporate-level strategies to provide the customers with the services they need and demand.

Corporate Governance Mechanisms

Corporate governance mechanisms are believed to secure the alignment of the interests of the CEOs and the shareholders. It includes internal monitoring applied by external monitoring by shareholders and the board of directors. It is a general opinion that the effectiveness of these mechanisms is arguable. An Independent audit might also be used as an additional mechanism of corporate control.

Elio Motors includes representatives of the transportation industry into the board of directors, which helps to follow their strategy in developing a new vision of a modern vehicle. Its governance mechanisms are not very extended and include internal audit and transparency in business decisions. The company needs investors and merging with some bigger company will be beneficial for it. After merging, it would be beneficial for the company to use equity principles as the main strategy for building governance mechanisms.

General Motors is a corporation that declares the principle of equity among all its subsidiaries. It utilizes the board of directors as a structure and independent internal audits in the frames of internal mechanisms. This mechanism is effective in monitoring various assets of the company and securing the distribution of governance and rights between the managers of different levels. The external mechanisms include regulatory guidelines presented by the stakeholders as the company has many subsidiaries in various countries of the world. These corporate governance mechanisms are used to monitor the actions, policies, and practices applied by the stakeholders.

It is a general opinion that most of the corporate conflicts begin with the conflict of interests between the stakeholders that might be represented by the board of directors and suppliers, and shareholders. The division of management and owners might lead to some serious problems in the corporation. Some researchers state that “The two primary mechanisms theorized to align top managers with shareholder interests are pay tournaments and managers’ equity holdings” (Misangyi & Acharya, 2014, p. 1684). This approach should be improved in General Motors’ company to avoid any conflict of interest in the future. Therefore, CEO equity ownership is regarded to be beneficial for building an effective management approach in the global corporation. Independence and alignment of the outside directors are believed to be important mechanisms for effective monitoring.

It is possible to say that General Motors is a responsible corporate citizen because they proportionally share the earnings of each asset, which is reflected in the principle of equity income. This corporation also makes timely investments in the assets that require such actions. They take into account the interests of their assets situated in various countries.

The given research dealt with the evaluation of two companies that belong to the automotive industry. One of the companies chosen for evaluation was General Motors which is considered to be a powerful global corporation presented at the international market. The other company was Elio Motors which is a representative of a domestic U.S. market but is regarded to have the potential to become a strong actor in the automotive industry due to its innovative ideas and car design. The evaluation of the companies included the analysis of merge and acquisition strategy, five forces of competition, and corporate governance mechanisms. It was revealed that General Motors needs some transformations in its cost policy to compete with the rivals who produce electric cars as they might be popular in the nearest future. It was also stated that Elio Company would obtain market competition and additional investments after merging with other successful companies like Tesla. The principles of corporate governance mechanisms were described for the companies.

References

Blonigen, B. A., & Pierce, J. R. (2016). Evidence for the effects of mergers on market power and efficiency: Finance and economics discussion series 2016-082. Washington, DC: Board of Governors of the Federal Reserve System.

Elio Motors: Corporate Presentation. (2016). Web.

General Motors company: Annual report pursuant to section 13 or 15(D) of the Securities Exchange Act of 1934. (2018). Web.

Kansal, S., & Chandani, A. (2014). Effective management of change during merger and acquisition. Procedia Economics and Finance, 11(1), 208-217.

Misangyi, V. F., & Acharya, A. G. (2014). Substitutes or complements? A configurational examination of corporate governance mechanisms. Academy of Management Journal, 57(6), 1681-1705.

Pisano, G. P. (2017). Toward a prescriptive theory of dynamic capabilities: Connecting strategic choice, learning, and competition. Industrial and Corporate Change, 26(5), 747-762.

Introduction

General Motors (GM) remains one of the most competitive automakers in the world today (General Motors, 2016). The company has numerous resources and financial assets that support its manufacturing processes. GM continues to deliver exemplary and luxurious vehicles to more customers across the globe. Despite such achievements, errors, and challenges have always been associated with GM’s business process. Such challenges are evidenced by the major concerns reported by most of the firm’s customers. For example, GM “recalled over 2.6 vehicles because they had faulty ignition switches in 2014” (General Motors, 2016, para. 3).

Such faults led to the death of around 124 people. Similarly, the giant automaker recalled over 4.3 million luxury vehicles in September 2016 (Nunez, 2016). Most of the affected vehicles had been manufactured between 2014 and 2016. Such automobiles had been observed to have software issues. Such “defects prevented airbags from deploying whenever there was a crash” (Nunez, 2016, para. 2). Since such defects had caused several deaths, GM decided to implement new measures in an attempt to improve the safety of its automobiles. The use of lean can play a critical role in dealing with the current issues affecting the company.

GM Recalls as an Internal Service Issue

Experts in the global automobile industry have acknowledged the presence of internal service issues at GM. This is the case because the occurrence of defects in such vehicles is a clear indication that several things are not being done efficiently. The company’s management team has not been committed to the best cultural and manufacturing practices. Two major recalls within a period of two years is a serious issue that should be analyzed carefully (Nunez, 2016). This is the case because such recalls might affect the performance and profitability of the company in the future. The corporation’s culture might have been ineffective thus creating new rooms for errors.

The term internal services “describes the managerial approaches embraced in order to ensure the activities within a large organization are executed in a professional manner” (Watson, 2012, p. 74). The case of GM indicates that some of its internal services are characterized by a wide range of problems. Consequently, the inefficiencies associated with such internal services must have led to the issues affecting the company (General Motors, 2016). The financial implications of such recalls cannot be underestimated. This fact explains why GM has continued to lose its profits. Nunez (2016) indicates that such issues might have long-term implications on the company’s business performance and discourage more customers from purchasing its automobiles.

The occurrence of these challenges at GM should be a wakeup call in order to implement new approaches that can make a significant difference. The ultimate goal of every organization is to maximize profits and ensure the diverse needs of the targeted customers are addressed in a timely manner. If GM continues to record similar problems, chances are high that it will lose its competitive edge and become less profitable. Many giant companies in the industry are focusing on the best initiatives to produce superior products. The vehicles should be able to satisfy the diverse needs of targeted customers (Kumar, Kumar, Haleem, & Gahlot, 2013). These recalls show conclusively that something is wrong in GM’s internal services. That being the case, a new approach to lean has the potential to support the firm’s business model.

Applying a Continuous Lean Improvement Application at GM

Giant corporations such as GM are usually characterized by a wide range of internal services. Such services should be carefully coordinated and monitored in order to add value and make the firm successful. Some of these services include procurement, supply chain, accounting, engineering, and marketing. These internal processes should be carefully monitored and managed if the company is to deliver quality products to the targeted customers (Kumar et al., 2013). The above recalls explaining why new strategies are needed to ensure GM’s final products do not have similar defects.

The principles of lean production can make a significant difference for this company. To begin with, the recalls should be carefully analyzed in order to understand the major gaps affecting the firm’s production process. The strategy will ensure the diverse needs of the targeted customers are clearly understood (General Motors, 2016). Consequently, the manufacturing processes embraced by GM will focus on new approaches that can add value to the consumers. The ultimate goal of the manufacturing process should be to support the needs of the targeted clients (Watson, 2012).

After identifying the major gaps responsible for the defects, the company “should focus on the value stream” (Featherston, 2014, p. 14). This phase of the lean process is useful because it identifies the major issues contributing to the defects. The phase is widely used by firms to monitor the sources of defects and wastes (Watson, 2012). Competent individuals at the corporation should use their skills to understand the sources of the defects. The wastes and malpractices associated with the manufacturing process will be identified during this second phase. The gathered data will be used to monitor the duties and responsibilities of different departments. The phase will ensure different processes and activities are improved accordingly.

The third phase of the lean process will be used to minimize or remove wastes. During this phase, the managers and leaders at the firm will identify specific areas that must be improved (Featherston, 2014). They will also align different internal services in order to support the production process. The concept of pull should be taken seriously in an attempt to implement new practices that have the potential to drive performance.

Since GM has recorded several problems within the past two years, it will be appropriate for the management to focus on the best practices that can support a new change. It is agreeable that the ineffectiveness of different workers and systems at the firm must have led to the above defects. This fact explains why a new organizational change will transform the existing culture. The approach will also present new processes that can address the challenges affecting the company. The managers should “work tirelessly to set a new industry standard for excellence, safety, and quality” (Watson, 2012, p. 3). By so doing, the employees will be empowered and guided to focus on the most desirable outcomes.

The third phase of the lean approach will ensure the concept of transparency is developed at the company. This means that reluctant and underperforming employees will be empowered accordingly. Different services such as accounting will be used to support the manufacturing process at the company (Featherston, 2014). All the internal services will be aligned in such a way that they minimize wastes and improve the level of performance.

The leaders should focus on the best approaches in an attempt to develop high-performance teams (Featherston, 2014). Such teams should be characterized by quality leadership. The right people should be hired to support various practices and ensure every vehicle supports the company’s business strategy. This long-term approach will ensure the workers support specific concepts such as quality and excellence. Individuals and professionals should be empowered to embrace the idea of accountability. The workforce should be guided and empowered to deliver positive results (Watson, 2012). This approach will play a positive role in dealing with the defects and wastes associated with GM’s manufacturing process.

Finally, the suggested lean process should become a critical aspect of the company. The stages of lean should be repeated continuously in order to identify defects frequently. Constant improvements will be considered throughout the manufacturing process (Kumar et al., 2013). The final products will be sampled and tested in order to ensure they fulfill the requirements set by the company. Such vehicles will eventually satisfy the needs of more clients.

Conclusion

General Motors has been focusing on the best strategies in order to remain profitable. This fact explains why the company should embrace the use of the lean improvement framework. When the concepts of lean are implemented in a professional manner, it will be possible for GM to produce superior vehicles and eventually drive performance (Watson, 2012). This analysis shows clearly that lean is a continuous improvement tool that has the potential to reduce wastes and promote performance. In conclusion, GM should use the lean concept in order to deal with the above issues.

References

Featherston, S. (2014). Study of reasons for the adoption of lean production in the automobile industry. Proceedings IGLC, 1(1), 11-21.

General Motors. (2016). Web.

Kumar, N., Kumar, S., Haleem, A., & Gahlot, P. (2013). Implementing lean manufacturing system: ISM approach. Journal of Industrial Engineering and Management, 6(4), 996-1012.

Nunez, M. (2016). General Motors recalls 4.3 million vehicles over a software bug.GIZMODO. Web.

Watson, G. (2012). Strategic benchmarking reloaded with Six Sigma. New York, NY: Wiley.

Report Purpose

Transportation options are an important part of people’s everyday lives. Though often taken for granted, the specified industry and the companies operating in it contribute extensively to the improvement of the quality of life. Therefore, a scrutiny of the current challenges and opportunities that can be pursued in the target industry by the firms that work in it is required.

The goal of the report is to provide a review of the automotive industry and shed light on the changes that have occurred it over the past few years. The threats that organizations producing vehicles face nowadays, as well as the chances that they have to improve the quality of the products and enhance the safety of their customers, will be analyzed. Thus, a better understanding of the further course of the industry’s development will become a possibility.

Particularly, the General Motors Company will be considered in the report. Its recent successes and the issues that it has been facing will be explored. By outlining the future pathways for GM’s development, one will be able to forecast the overall evolution of the automotive industry.

Industry Overview

The automotive industry includes the organizations that produce, develop, or sell vehicles (“Global Automotive Executive Survey”). Because of the importance of transportation, especially as a part of the supply chain management process, the industry has been gaining increasingly high significance over the past few decades (Parkin et al.). Since the 1990s, the number of cars sold annually has risen from 39.2 to 78.59 million units (“Number of Cars”).

The automotive industry has undergone significant changes with the recent introduction of innovative information technologies. The IT advances allowed souring the development of the automotive industry to a considerable extent (Parkin et al.). The emergence of hybrid cars as the means of addressing environmental concerns should be viewed as one of the dramatic changes in the automotive industry development that have taken place so far (Eady).

However, despite positive sales and comparatively good performance, the recent S&P 500 (14.8) and the Dow Jones Index (10.1) point to the fact that the automotive industry has been experiencing certain difficulties in advancing in the global market (Parkin et al.). The specified problem can be attributed to the fact that the recent innovations in the automotive manufacturing industry are focused primarily on altering the traditional contours and features of vehicles as opposed to introducing cost-efficient solutions to the product (Parkin et al.).

Company Overview

General Motors (GM) has been known for manufacturing and selling cars for quite a while. The organization was founded in 1908 by William C. Durant (Colby 708). Its current headquarters are in Detroit, MI (Colby 708). Initially, GM was built as a holding company; however, with the increasingly large significance of cars in transportation, GM was redesigned to produce and sell vehicles (Parkin et al.).

With the rise in the popularity and influence of the environmental movement, GM started producing green cars along with diesel ones. Particularly, the firm currently offers hybrid and all-electric cars as a part of its production (“Automotive Industry ETFs in Focus”). Its sales have grown by 9.20 in 2017, and the organization is expecting further progress (“General Motors Co (GM.N)”).

The increasingly high competition levels in the global market can be deemed as the key challenge for GM at present. Tesla as the leading company in manufacturing and selling electric vehicles is a serious rival for GM (Eady). Therefore, a comprehensive marketing framework must be designed for GM to maintain its presence in the global market.

Works Cited

“Automotive Industry ETFs in Focus.”Yahoo! Finance, 2017. Web.

Colby, Laura. Road to Power: How GM’s Mary Barra Shattered the Glass Ceiling. John Wiley & Sons, 2015.

Eady, Trent. “GM’s Chevy Bolt Is Not Serious Competition For Tesla’s Model 3.”Seeking Alpha, 2017. Web.

”General Motors Co (GM.N).”Reuters.com, 2017. Web.

“Global Automotive Executive Survey.”KMPG.com, 2017. Web.

“Number of Cars Sold Worldwide from 1990 to 2017 (in Million Units).”Statista.com, 2017. Web.

Parkin, Rich, et al. “2017 Automotive Trends.” Strategy and PWC, 2017. Web.

General Motors is one of the world’s automotive giants. The company has a long history of successes and failures as any other company of such scale. The beginning of the new millennium became one of the dark moments in the history of GM. A difficult economic situation in the United States at the end of the 2000s led to the severe decline in vehicle sales, and GM started to lose its market share to its direct rivals such as Toyota, for example. Three decades of domination on the U.S. market ended in 2009 with the process of entering protection from bankruptcy. By this moment, the company’s market share slipped from 44% to about 20%. Going through the bankruptcy, GM sold several brands and developed the new strategy for the company’s renewal. China became the strategic choice of GM.

The changes were needed, and GM decided to find promising markets abroad. In 1997, the company established a joint venture with SAIC, Shanghai Automotive Industry Corp. owned by the state. The market of China was very small back then (only about 400,000 car sales in the previous year), but the potential was enormous. The decision to establish a joint venture was dictated by the need of the company for connections in China that SAIC had and the Chinese regulations in this sphere, according to which a foreign company could not operate in the country as a standalone enterprise.

GM’s initial investment in the joint venture was $1.6 billion. From the world’s key automobile market players who entered the Chinese market also, only Volkswagen invested a similar capital. By 2007, the joint venture included such brands as Cadillac, Wuling, and Chevrolet to be sold to the Chinese customers. The Pan-Asian Technical Automotive center was created as well to provide two companies with the opportunity to design vehicles and the appropriate components for other markets in Asia as well, along with the Chinese market. About 8 million vehicles (light trucks and various brands of cars) were sold on the Chinese market in 2007. The market of China appeared to be the second in the world as referring to the volume of sales after the United Sates’ market.

The key to success was the stake made by the joint venture on the design and production of the vehicles for the needs of the Chinese customers only. Thus, a light minivan under the Wuling brand was created. “Sunshine” had only a 0.8-liter motor, allowing it to have the speed about 60 mph only and price near $3,700. It was a huge success for both companies. In 2010, the Chinese market became the largest in the world with about 18 million vehicles sold. GM and SAIC became the substantial part of this success.

The strategic choice was correct if to evaluate the success of the company on the Chinese automotive market. GM’s joint venture with SAIC and its decision to produce vehicles exclusively for the Chinese market are the two most advantageous contributors to the company’s success after the bankruptcy. The company had invested extensively in the joint venture, and this decision was justified, considering the size of the market in China and car per 1,000 people ratio. Thus, in America, there were more than 760 cars per 1,000 people, while China had about 40 cars per 1,000 people. The volume of the market is still tremendously large, so GM’s focus on it is a very wise strategic decision. It should be noted that in 2010, the company sold more cars in China than in the United States (2.35 million vehicles versus 2.22 million vehicles respectively), which only supports the correctness of the company’s course of development.

Description of Organization

The process of strategic planning is crucial for any organization because it allows it to respond to external challenges and develop. According to Johnston and Bate (2013), the notion is defined as an act of setting goals and ensuring those are achieved. While there are many components to strategic planning, the crucial one is to ensure that stakeholders are satisfied with the outcomes. The primary step of the process is identifying directional statements that lead the establishment’s operations.

Those objectives provide insight into goals the company strives to achieve and its approaches to business. General Motors (GM) is among the biggest and most well-known companies in the US, thus researching the approaches it takes to its strategic planning can be valuable. This paper aims to examine GM, its mission, vision, and value statements in regards to the strategy of the firm.

Background Information

The headquarters of GM is located in Detroit, Michigan; however, there are many branches across the US. The overall number of employees exceeds 180,000 on five continents across the world (“About GM,” n.d.). GM has existed for over a hundred years; thus, it has a long history and experience in the car production business. The company’s primary focus of operational activity is in the automobile industry. Therefore, the main products are various cars that GM sells both in the US and overseas. The customers of GM are varied, depending on the specific vehicle, as the firm offers a wide range of choices in regards to pricing options. The services that GM offers are aimed at repairing cars.

The company has identified the primary objectives that guide its actions. Firstly, its vision is “zero crashes, zero emissions and zero congestion” (“About GM,” n.d., para 1). The statement implicates that GM strives to ensure that its cars are safe through improving the current measures and approaches applied to vehicles. Additionally, it is evident that the business cares about the community as it aims at developing products that do not contaminate the environment. The congestion goal may indicate an innovative approach that GM takes in regards to human transportation by changing it towards an easier-to-use model. By modifying the envisionment, one can say that GM is focused on minimizing the adverse impact its products have on the surroundings.

The mission statement of an organization is essential as it reflects the culture within it. GM states that its goals are in “creating an environment where everyone feels welcomed and valued for who they are” (“About GM,” n.d., para. 3). Thus, the business wants to lead its employees in friendly and accepting surroundings, to promote the worth of individuals. The claim reflects the guidelines that GM uses regarding the managerial approach. By modifying the mission statement of GM, one can state that the firm emphasizes both the internal and external culture of the relationships between people and the company’s products and strives to improve it.

Therefore, the statements provide an understanding of the goals the business aims to achieve. According to Dibrell, Craig, and Neubaum (2013), positive outcomes are created by an ability to leverage resources and create a competitive advantage. Additionally, the authors emphasize the importance of innovation and flexibility in strategic planning. The two are indirectly reflected in the vision of GM as zero harm to the environment can be achieved by developing new technological solutions. The examined statements by GM can present a strategy which the company executes to ensure such an advantage.

The Importance of Mission, Vision, and Values

Proper strategic planning should include a variety of components that influence a business. Johnston and Bate (2013) state that the three statements are among the internal sources of information that provide insight into operations. The vision should reflect the primary objective and a success indicator to measure the effectiveness of the efforts. Values are the critical factors that GM focuses on in its daily activities.

The firm states they strive to “addressing societal and environmental challenges while transforming the future of mobility” (“GM’s vision drives value for the company,” 2018, para.1). The aim is reflected in the statements and offers an understanding of the goal to both employees and customers. The three are a part of GM’s organizational culture because they reflect its vision regarding business and industry.

Therefore, the three statements aid a company in reaching its strategic goals by providing it with a clear purpose and success measure, as well as by defining the internal culture of the firm. The components of the strategic management process that should be analyzed in light of the new strategy are the mission, vision, and values. In addition, the current approach and measures utilized to identify successful outcomes and current organizational structure can be helpful in creating a new development plan.

Outcomes of the New Strategy

Due to the fact that the new strategy would influence the culture of the establishment directly by modifying the essential statements and providing new goals, the company’s leadership should consider the importance of these components. According to Arayesh, Golmohammadi, Nekooeezadeh, and Mansouri (2017), “organizational culture is a factor that can result in the development of strategic thinking in organizations” (p. 261). Therefore, the two factors are connected and depend on one another. In addition, the two help identify possible challenges presented by the external environment and affect them through proper planning.

Having a proper culture can determine the success or failure of businesses’ endeavors. As a mission, vision, and value statement, it is part of the internal environment that defines the ways in which an organization operates. Additionally, “culture forms the foundation of strategies and affects the elements of the communication process and strategic relationships” (Arayesh et al., 2017, p. 261).

Thus, the stakeholders would be affected by a change in a company’s strategy as well. The primary stakeholders in the case of GM are the employees and its customers. In case GM chooses a different direction for strategic development, the person would have to adjust their daily activities and adhere to new objectives. Arayesh et al. (2017) state that the notion creates a specific identity among staff members. The consumers would receive a different product or service from GM with such alterations. Therefore, the culture of a firm should consider the primary stakeholders and their interests.

Conclusion

Overall, GN was chosen for this research, as it is a large company with many divisions across the world. Examining its operations and components of strategic planning is valuable in understanding the goals that the firm wants to achieve. The vision of GM indicates that current activities are aimed at reducing environmental harm and possible adverse outcomes of vehicle usage. The vision reflects GM’s striving to create an excellent organizational culture GM. The statements depict a corporate culture that exists in the GM.

References

About GM. (n.d.). Web.

Arayesh, M. B., Golmohammadi, E., Nekooeezadeh, M., & Mansouri, A. (2017). The effects of organizational culture on the development of strategic thinking at the organizational level. International Journal of Organizational Leadership, 6(2), 261-275.

Dibrell, C., Craig, J. B., & Neubaum, D. O. (2014). Linking the formal strategic planning process, planning flexibility, and innovativeness to firm performance. Journal of Business Research, 67(9), 2000-2007. Web.

GM’s vision drives value for the company, communities and future mobility. (2018). Web.

Johnston, R. E., & Bate, J. D. (2013). The power of strategy innovation: A new way of linking creativity and strategic planning to discover great business opportunities. New York, NY: AMA.

Introduction

There are challenges that face companies in today’s competitive business world. The most pressing of these is staying relevant, being on top of the game and coming up with products that will keep the consumer coming back for more.

This is especially true for companies working in the sectors of motor vehicles and computer technology. There is a constant call for faster cars that are more environmentally friendly, have lower fuel consumption, greater aesthetic appeal and at the same time, are affordable. For the creators of computer technology, the situation is much the same as consumers are interested in much more compact machines that can perform a greater multitude of different tasks in a shorter time and look sleeker.

General Motors (GM) and International Business Machines (IBM) are both companies that have been around since the turn of the last century. GM was founded in 1908 by Charles Durant as an automaker. It is headquartered in Detroit, Michigan in the United States of America. IBM was founded by Herman Holleith as the Tabulating Machine Company. It has its headquarters in Armonk, New York. Between them GM and IBM employ over half a million people worldwide.

Main body

From the very beginning, IBM has embraced diversity not only in employing workers but also in how they market their products. Ron Glover, IBM’s president of global workforce diversity, says that having Global Workforce Diversity is a cornerstone for the company that puts it in its own league. He says that taking the global approach gives IBM a chance to reap of the best talent that can be found worldwide.

Glover adds that by being committed to global diversity, IBM can adequately respond to the disparate needs of the emerging global markets. The main aim of global diversity, he says, is to get the best of what their employees have to give while simultaneously providing them with a global understanding of IBM.

According to Glover, IBM’s interpretation of the term global is not limited to the traditional aspects of race, genetics, sexual orientation and religion, but is more far reaching to include globalization so that it embraces the strategy applied by the company.

Glover recognizes the importance of maintaining this diversity since IBM is established in more than 75 countries worldwide, and the fact that for over a quarter of a century, more than half of IBM’s revenue has come from outside of the United States of America.

IBM strongly advocates and has advocated for equal employment opportunities since it was founded. After the First World War, it was the only company that employed war veterans who had gained disabilities while in action. In IBM, there is no bias shown whether it is in training, hiring, awarding promotions or termination of employments. The social and recreational events that are not discriminated upon because of national origin, gender, religion, sexual orientation, age or any other grounds. It is designated the role of managers to make sure that the working environment is unencumbered with hostilities rising out of discrimination or harassment.

IBM works in programs that create a platform for equal opportunities for women, minorities and people with disabilities by conducting outreach along with putting into place human resource programs that guarantee impartiality in compensation.

A marketing strategy that is working exceedingly is its well thought out advertising. IBM pushes for diversity to an almost ‘maniacal’ degree, so says Lisa Baird, vice president, Worldwide Integrated Marketing Communications. Baird reflects that IBM is focusing its attention on newer sections of the market such medium size businesses ad constituency groups. The best way to get their attention, she says, is by representing them in advertisements. This means putting up advertisements that they can identify with. She emphasizes that advertising gives people a chance to learn, creates interest in their products, solutions and their message on leadership.

However, IBM goes beyond advertising by actually taking an interest minority groups and sponsors and participates in their events. IBM sponsors La Familia Technology Week over the Hispanic Heritage Month as well as Black Technology Awareness Week during the African American Awareness Week.

There is a follow up to advertisement, that of actually reaching the constituency groups. The strategy applied by IBM is that of first identifying businesses that they need to make with, then deciding on the most efficient approach to use which can be marketing on to the individual or by using one or more of their ‘go-to-market’ strategies.

Another tactic is to find their way into a business community by using professional associations and organizations where these groups engender an interest in IBM. This induces an interest in what products IBM has to offer while simultaneously helping to discover new business partners.

The researchers at IBM have a goal, and their goal in their own words is ‘pervasive computing accessibility’. Former IBM worldwide business director , Accessibility, IBM Research puts it more succinctly; access to information to everyone. In 2000, IBM launched six Worldwide Accessibility Centers that were in line with this vision. The centers were to ensure that all the products of IBM were made accessible to people all round the globe, no matter their ability or disability (IBM, 2008).

According to Samuelson (2005), a handicap for GM is its slowness to adapt to change. Right from its management methods, working with managers who in GM’s heyday believed in the misconceived(at least in today’s business world)notion that they could foresee and control change. However, managers of newer companies recognize the fact that any tragedy can strike unexpectedly and they have to brace themselves for this.

This has been to GM’s great loss because they did not forecast the consumer’s need for smaller cars in the 1970s nor the competition wrought by Japanese motors. Their most recent headache is the demand for fuel-efficient vehicles. Their reflex reaction to change was too slow, hence they were overtaken by it.

Working with a global reach has worked for IBM, while it has been a pitfall for GM. General Motors has been unable to achieve the harmonization of parts that is mandatory for a large company divided into smaller segments distributed worldwide. In the 1980s, there was the occurrence of ‘rebadging’ within GM, a term used to refer to the act of stealing a successful idea from one division by another. This created competition within the company, a situation that would have been avoided if there were better cohesion between the divisions.

To counter this, in a bid for unification, GM decided that their different brands would carry their motto ‘mark pf excellence’. The worry now is that the move may have come a little too late and would not save the ship.

Another thing that has been GM’s undoing, according to Samuelson, is its belief in its own invincibility. The company became complacent in its security as a power in the motor industry. They did not heed the rise in cost, especially for labor and this would later come to haunt the company.

One outstanding feature of both GM and IBM is the attitude they take towards their employees. In 2004, GM was named among the top ‘100 Best Companies for Working Mothers’ by the magazine ‘Working Mothers’. GM worked hand in hand with the United Auto Workers in 1985, in an endeavor to improve the overall quality for life for those in its employ (Samuelson, 2005).

IBM also strives to create a good working environment for their employees by remaining resolute at there being complete fairness at the workplace. They feel strongly against discrimination of any kind and have policies that protect their employees from these. Since 2003, they have periodically conducted an online intranet based assessment using ‘jam’ technology on how the company can be improved. This way, they take account of employees’ opinions when developing the company’s values and policies (IBM, 2008).

Both GM and IBM over the years have adapted to mechanization in their factories. Instead of using human labor, the number of workers in factories have been continuously downsized over the years as machines are developed which can perform tasks much faster ad with greater efficiency. Another reason that has led to mechanization is that it is cost saving since one machine might be able to do the work of twenty men.

The major difference between GM and IBM’s management is their adaptation to change. IBM builds on policies that have been grounded in the company since it was founded, and uses them to embrace the future. IBM believes in diversity, hence, it works it marketing strategies around this, finding a way to incorporate changing global market trends into their routine. GM, on the other hand, has shown a tendency over the years of being too slow at embracing change (Samuelson, 2005).

A major difference between how IBM and GM are run is the cohesiveness of their international units. IBM is IBM, no matter what part of the world you may be. This is because they emphasize on the fact that IBM subdivisions are ‘branches of the same vine’. This aspect off having subdivisions has however worked against GM because its individual brands are rarely associated with the mother body. This muddles attempts at comprehensive marketing.

In conclusion, it can be said that Darwin’s theory, ‘survival for the fittest’ does not imply to the evolution of living things only but can be used to refer to today’s business arena. Companies have to stay ahead of time, be one step into the future, keeping alive the spark of innovativeness and creativity alive. It is not enough to be great, turn an annual profit stay liquid. Companies today cannot be content with the balance sheet because as soon as it is printed, it is a thing of the future and the company has to focus on looking ahead. That is the element that determines their fate, like that of International Business Machines and General Motors.

References

IBM (2008): Advertising Then and Now. Web.

Samuelson Robert J. (2005). Ghosts That Still Haunt GM. Washington D.C. Washington Post. 2008. Web.

IKEA expansion in India: infrastructure bottlenecks

In operation management, the bottleneck is the process or the particular phase that has the lowest capacity. It can be defined as a part of the process that impedes the successful implementation of the whole project. In other words, bottlenecks are the weakest links. The influence of bottleneck cannot be always foreseen. When one part is not working correctly, the whole process can be significantly hindered.

The article under consideration entitled “IKEA may have to overcome infrastructure bottlenecks” was published on the website The Hindu Business Line in 2012. The author of the article is Bindu Menon. The author provides readers with information concerning the potential bottlenecks for the expansion of IKEA in the Indian market. Menon writes that IKEA is more likely to face difficulties with price policies, product variety, real estate, and infrastructure (Menon par. 1).

In the case under analysis, IKEA is ready to present its products to the Indian market. The target audience of the company is a middle-income stratum of residents. Although IKEA is popular worldwide and is ready to invest substantial financial resources to the development, the mentioned bottlenecks can impede the process. Thus, the problem with real estate and infrastructure refers to the fact that land is extremely expensive in the country.

IKEA will have to find ways to create an efficient infrastructure and remain its system of competitive prices. Besides, self-service is a distinctive feature of IKEA’s markets. However, it can be rather a challenge to educate potential consumers of the company’s “do-it-yourself” system. IKEA should pay particular attention to the problem of infrastructure and evaluate its competitive advantage in comparison to other Indian furniture retailers.

Capacity planning of General Motors in China

The notion of capacity is essential for operation management. Capacity can be defined as the maximum limit of products or services that can be offered or manufactured by the company within a particular time limit. Capacity planning is the process that aims at the identification of the product availability that is necessary to meet the demands of the consumers. When the production capacity and consumers’ needs are not equal, the discrepancy occurs, and it results in inefficiency.

The article that exemplifies the issue of capacity planning is entitled “GM to Put $12 Billion into China, Hike Capacity 65%” was published on the website Automotive News in 2014. Hans Greimel is the author of the article who dwells on the plan of General Motors to invest in the China market to meet the increasing demand. The demand refers to the luxury and crossover cars in China. General Motors plans to invest $12 billion by 2017. The primary goal of the company is to increase the capacity to 65% by 2020 (Greimel par. 1).

The article under consideration is an example of capacity planning that aims at not only meeting customers’ needs but expanding demand as well. Thus, General Motors should meet the increasing demand for luxury and crossover cars. Besides, the company plans to introduce more models of automobiles in the market and enhance output in such away. The primary principle of General Motors is that capacity is crucial for staying competitive. Although the pace of enhancement is slow, it brings substantial results. That is why the company’s capacity planning is mostly concerned with the intensive increase in market share.

Works Cited

Greimel, Hans. GM to Put $12 Billion into China, Hike Capacity 65%. 2014. Web.

Menon, Bindu. IKEA may have to overcome infrastructure bottlenecks. 2012. Web.

Background

The share price for the General Motors (GM), which is America’s biggest carmaker, had gone a lot below the standard $10 that had been maintained by the corporation for a long time now; the reorganizing of the mammoth corporation making a lot more than an approximate $6 Billion. When the same event had taken place earlier and the GM Corporation’s share price had gone down, the Cadillac Eldorado then moved onto. The last time GM’s share price had been this stumpy, it was then the Cadillac Eldorado then gotten to creating accessories along with this the Volkswagen’s Beetle had come out as a very crazy looking car being driven on all the roads within the United States of America.

Ford has deserted all expectations of recurring to profit, as assured, in 2009 and materializes to be revitalizing itself for a loss during 2008 even larger than the previous year’s $2.7 billion. On June 26th Chrysler was directed to refute rumors that it was planning to file for insolvency, after portraying down a $2 billion credit line from its landlord, Cerberus Capital Management, a private-equity corporation and Daimler.

At the launch of the year together Ford and GM were looking forward to the credit calamity to thump the sales during the first half; however, they were still carefully positive that they would rapidly harvest the loot of their exclusive and aching orbits. With Chrysler, they had only protected a big wrap up of dispensation from the car workers’ union that went a long way to finishing the expenditure gap with the transplants the bend over, non-union factories functioned in North America by their Asian and European contenders.

Several reports were then produced by J.D. Power as well as Harbor which helped in discovering the fact that the state of Detroit had been also very cleverly snuggling onto the Japanese level of performance as well as additionally, the GM’s most recent Chevrolet Malibu, was announced as the North American Car of the Year as it is within January, by the experts of the industry it was being looked upon as being one of the pioneers within the domestic product over the past few years. This automobile also then presented the Toyotas and Honda’s with an increased competition scenario, which sent these corporations running after their profits in such an aggressive market of middle-sized car showrooms.

However, the carmakers have been trapped by the terrible housing marketplace and, overall, by the towering expenditure of fuel. Detroit is even now trapped with the model ranges heavily unfair towards the large, dehydrated sport-utility vehicles (SUVs) and surprise trucks that collected in the profits when the petrol charged half of nowadays price.

The Big Three were definite that America’s love affair with the cars would not go everywhere, do something, gas scoffing trucks would never finish so much so that together Ford and Chrysler raised their faith of growth on the fresh report of their bestselling pickups, the F-150 and Dodge Ram likewise. Chrysler even revealed the new report of the Ram with livestock drive through the streets of Detroit within January. If there is an unexpected hitch within the price of oil, Japanese also South Korean brands will make large gains within market share together this day and next. Their North American factories are a lot more elastic than Detroit’s are and there is aptitude to strike back home. Even though GM and Ford make some fuel capable cars, like the Chevrolet Cobalt plus the Ford Focus, dealers protest that the supply is partial and that clientele tend to decide on Japanese or South Korean brands when trading.

GM, Ford and Chrysler are each responding to the disaster in diverse ways, however with similar aims, to lessen the speed at which they are flaming cash, and to hasten the onset of more fuel resourceful models; Ford is slicing its remunerated personnel, postponing the instigation of the new F-150 by two months as dealers cannot shift the extrovert model, and translating an F-series plant inside Mexico to put up the reasonably tiny fresh Fiesta, which Europeans will obtain this summer–more than a year before American consumers.

The second modification is that it appears to be ever more doubtful that the customers will ultimately wave off the elevated price of fuel and go back to their old trading habits, which implies that Detroit’s old business model is now outdated. It was Jim Farley, who had been Ford’s international marketing manager who actually explained in detail about the aggressive market behavior and also was quoted as implying the pathway as a complete cut-off point. The difficulty is that the smaller, more competitive cars that they now wish for and which will come on pouring out within a year or two, are far less money-making for both producer and merchant. Additionally, it had been Mr. Denny Fitzpatrick, who was automobile a GM showroom owner in the State of California, who ended up evaluating the fact that he had been making a lot more money than promoting and selling ten Chevy Tahoes, this was then an SUV which had been produced by the GM corporation, than advertising for an approximate 50 Honda Cars which had been then compact cars.

GM and Ford can at least take a little reassurance from their well administered foreign operations, which are profiting from the rising demand within China, Russia and Brazil. But Chrysler nothing it can use as a pillow. Poorer, it is setting up to put back merely half its convoy during the four years after the 2009 model year (compared with Honda’s 72% replacement and Nissan’s 80%). John Murphy of Merrill Lynch has faith that an energetic decision by the new landlords to diminish the product range in proceed of a break-up or else sale. It may not be lengthy earlier than the Big Three become the Not-So-Big Two.

Following a near death experience during the early ’90s in the midst of one of GM’s Worst monetary crises and years of unevenness in the gold series, disco ’70s – the ‘Vette in its half-century year situate places on a sound ground (Economist Newspaper, 2008).

The Corvette has always been a big reflection enhancer for GM. However it also has become a concrete supplier of technology to the organizations more conventional vehicles. Corvette engineers, for instance, developed the chassis manufacturing technique and V8 engine design that are used within GM’s full-size sport value vehicles and pickups – extremely observed that the trucks that produce most of the company’s profits (Dallas, 2003).

An automobile for each and every purse with purpose is the means in which he portrayed his radical market segment plan to the GM board during 1924. (chinadigitaltimes.com).Even as Henry Ford was still building Model Ts and obstinately considering that as with a horse, you only preferred a new car when the old one had been used this has been the fundamental commercial vision that still underpins the complete industry these days. Along With the formation of the elements of Art and Colour Division, being headed by Mr. Harley Earl, throughout the period of January, 1928, to lend a hand in rousing the corporations strategy to face the then aggressive face of the marketplace. Additionally, the GM Corporation had also come up with the present-day automotive design studio. What’s more it was also for the period of the overdue 1950’s, that the GM conglomerate curved into one of the entire worlds most noteworthy as well as the wealthiest vehicle manufacturer, that moreover with a very low down boundary. Boasting and finishing completely the perception car namely the Harley Earl’s Buick , which was brought in during the 1930’s , it was going to carry this distinctive structure to implausible heights with the introduction of the Firebird III. This was an extremely on the trot titanium bodied, and turbine powered machinery that accredited the sheltered locking, journey control in addition to the anti-lock power-assisted brake, additional benefit of a joystick that not allowed course-plotting, speeding up and decelerating , all along with the jet-fighter styling indication, envisaging being at Toyota at the jiffy, taking into consideration the fact that , the GM corporation had created the electric self starter moreover the automatic programme; the two advancements that lend a hand made means of transport even more obtainable to all. They had conceded out more or less all of this examination following the simplest technologies for illustration the ones like the airbag, along with the catalytic converter (Gmfactsandfiction.com).

It has made the most thorough packed in car ever sold by a conventional American automaker, the Corvair, which attributed a rear-mounted, air-cooled flat-six engine and entirely Independent deferment at a time when its competitors had power trains and suspensions that had altered only a bit during the past 30 years. It fashioned the primary modern, clean-sheet electric car, the much misinterpret EV1. This is a corporation that right there, right then, makes a Corvette first-class enough to terrify a Ferrari, plus a Cadillac speedy enough to strike a BMW M5. This is a business that is all set to join its balls on the wedge with the paradigm shifting Chevy Volt, to stake long term on Buick within China, and permit a gang of Australians help re create the Camaro. For all that’s gone erroneous, there are symbols mainly, happily, the produce. The GM is aware what it now desires to do to make it right. There is a long way to go, with a lot of solid yards to create one it. however if there are consumers who love cars, watching the GM company establish its second century, its prospect possibly as doubtful as it was during the 1908, is going to be completely mesmerizing ( Angus Mackenzie , 2008).

Works Cited

1. The Economist, Business: That shrinking feeling; America’s carmakers, London: 2008. Vol. 388, Iss. 8587, Available at: Pro quest Journal
2. Angus MacKenzie. General Motors: The world’s most fascinating automaker. 2008.
3. Terry Box. ‘Fantastic Plastic’ Corvette Is Still a Hot Car at 50. 2003. China Digital times, 2008.

Main Ideas of the Article

The article focuses on outlining the recent events on the automotive market of China. It is stated that the sales of cars by the American automaker, Ford Motor, in China dropped significantly, according to a press release from Ford. The rate of decline slowed down compared to 2018, while China was recognized as the largest automobile market globally. At the same time, Ford and General Motors ‘sales in China are falling for the third year in a row, having more than doubled in 2019 from the peak level recorded in 2016. The article also discusses the subsidies, arguing that the tax incentives of the government allowed maintaining car prices. Furthermore, Chinese customer desires are reviewed in the context of the mentioned decline and future perspectives. It is assumed that General Motors and Ford paid little attention to the fact that they value innovation and some new features.

Important Facts That the Author Uses to Support the Main Ideas

The recession on the Chinese car market turned out to be especially painful for American automakers: along with local companies, the sales of Ford and General Motors were most seriously affected. At the same time, German and Japanese manufacturers increased their share in the given market. To support the key ideas, the author refers to the numerical data and presents convincing numbers. For example, it is noted that 570,000 vehicles were sold by Ford in 2019, which is a half of the profit that was obtained in 2016 (Xu Elegant, 2020). More to the point, the author cites the credible references, such as the Wall Street Journal, which shows this article is trustworthy.

It should also be stressed that the opinion of an equity analyst working for Morningstar agency, Ivan Su, adds more value to the article and makes information more comprehensive. As for the customer preferences, the position of the author is clearly described by means of the comparison with Honda Motor and Toyota Motors, both of which reported a 9% growth in sales in 2019. In spite of the current decline that is experienced by General Motors and Ford, there is a more pleasant future since the Chinese market presents the place for growth. In general, the key underlying reason for such positive predictions is related to the under-penetrated nature of this market.

Holes in the Main Ideas and Supporting Arguments

The critical review of the given article reveals that the author lacks an objective presentation of the decline in the Chinese automobile market. Namely, one may suggest that the opinion of the only expert cannot provide a full picture. It would be better if the author also mentioned other peoples’ attitudes towards the target event. Another hole is associated with the supporting arguments that seem to be one-sided and lacking any positive data with regard to Ford or General Motors. Nevertheless, the key arguments provided by the author seem to be strong enough to take them into account while examining the automotive market of China.

Point/Counterargument

The article under discussion claims that the failure to focus on customer needs and expectations is the key factor that led to their decreased revenues. However, some automakers are still betting on the Chinese market, emphasizing its size and growth potential. This applies, first of all, to manufacturers of electric vehicles, which receive support from the Chinese authorities. It is important that Ford sales began to decline earlier than the general fall in the Chinese market – in 2017. According to Yale Zhang, the analyst at Shanghai Automotive Foresight consulting company, quoted by The Wall Street Journal, the main problem for the American company is its outdated lineup (Kubota, 2020). It seems to be rather important to point out that in the past two to three years, they have not launched new products fast enough, and traditional models have not been updated for years.

Related Management Theories

Although none of the management theories are identified in the article with regard to the target event, it is evident that some of them are present. A communication theory implies sharing information between two or more stakeholders: in this case, the companies and customers. The facts that customers play an important role for any company and are its most significant stakeholders cannot be overestimated. However, when the crisis begins, a question arises for the companies, the answer to which is not always clear. Should the crisis be reported, and should customers be consulted to improve the situation? (Certo, & Certo, 2016). These questions give rise to more specific ones, for example: what will we win (or lose) if we do not tell clients about the crisis; how they will react when we tell them about it. Ford and General Motors failed to interact effectively with their customers to learn about their needs, which resulted in a sales decline.

The impact of the environment on organizations requires proper management from a company. An understanding of the importance of assessing the external environment when managing the enterprise is critical as the external environment of the organization is the source of many problems of managers. It can be described as the whole set of factors affecting the organization’s activities, namely: consumers, suppliers, financial organizations, competitors, labor resources, and the state of society. Peter Drucker, a specialist in the field of management, believed that the only true goal of any business is to create a customer (Certo, & Certo, 2016). Meeting the needs of the buyers is useful since the number of consumers determines the necessary production resources, a range of goods and services along with their quality.

Examples of Bias or Faulty Reasoning

Faulty reasoning refers to logical mistakes that are made based on a lack of awareness, the limited evidence, or other factors. Many of them are intrusive and common that they have their own names. To understand logical errors, it is necessary to determine which rules they violate. One of the most common faulty reasoning examples is the desire to draw conclusions based on a rather small number of facts. In case of Ford and General Motors, the companies proceeded from erroneous judgments, and, therefore, their actions were also mistaken. If heir decision-making could be more informed and adjusted to the new trends that are dictated by the environment, it would be much easier to avoid the failure. One may note the case of Tesla, a car that was developed in consistence with the great enthusiasm of people to innovations and ecologic consumption. The sales of Tesla are enormous, and it is expected that the revenues would increase in future years.

References

Certo, S. C., & Certo, S. T. (2016). Modern management: Concepts and skills (14th ed.). New Jersey: Pearson Education.

Kubota, Y. (2020). Ford signals more China trouble on the road ahead.The Wall Street Journal. Web.

Xu Elegant, N. (2020). Ford and GM take a hit in China as German carmakers thrive.Fortune. Web.

Introduction

General Motors is one of the biggest multinational corporations in the world. It is the second-largest car manufacturer after Toyota based on the 2008 sales units. The company was founded in the year 1908 and deals with cars and trucks in 34 countries. The headquarters are in Detroit but it has different branches in countries all over the world. General Motors brands include, Opel, Saab, Pontiac, Saturn, Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, HUMMER, Wuling and Vauxhall. The main markets for General Motors are China, the United States, Brazil, The United Kingdom, Germany, Canada and Russia. (General Motors Corporation, 2009)

Mission and Vision and Objectives

The current vision of General Motors is to be the world leader in transportation products and related services. The company aims to keep the customers’ interest by continually improving its products. The core values of General Motors are Customer Enthusiasm, Teamwork, Innovation, Continuous Improvement, Integrity and Individual respect. (Crsglobe) The employees of the company ensure that they adhere to these values in their day-to-day performance. General Motors intends to use threats such as rising fuel prices, environmental changes and global warming as opportunities. (General Motors Corporation, 2009)

The changes in consumer habits of the market mean that the company has to change as well. General Motors wants to change the previous perception of the company in the market as a dull and of poor quality manufacturer. It intends to do this by portraying an image of quality and environmental friendliness. The values of the customer and the environmental needs will have to be considered. The customers will be listened to directly so as to give them exactly what they want. The firm intends to persuade the stakeholders of General Motors to remain in the company by giving them financial incentives and providing them with pride to be in the company. (Scribd, 2008)

The new proposed vision of General Motors is to become a world industry leader not just a follower. It will also focus on regaining the lost market share so as to become the leader in sales and market share. (Scribd, 2008)

The marketing strategy that general motors use is very different from that of other automakers. It sells its products under different brand names. Therefore the marketing mix is very complex.

Countries of manufacture and sale

General Motors is very active in Africa. The key markets are Kenya, Egypt, South Africa and Nigeria. General Motors makes use of strong partnerships and joint ventures. These ventures assemble old motor vehicles and they complement those that are imported. The main joint ventures in Africa are GM East Africa in Kenya, GM Egypt, GM Nigeria and Industries Macaniques Maghrebines in Tunisia. The acquisition of Delta Motors Corporation included General Motors South Africa in its company portfolio. (General Motors Corporation, 2009)

In North America, General Motors operates in Canada, Mexico and the United States. In South America, General Motors has large manufacturing plants in Argentina, Brazil and Chile. It also operates in Colombia, Ecuador, Peru, Uruguay and Venezuela. In this part of the world, the main brand that is sold is Chevrolet. In the Middle East, General Motors has a strong market base in Saudi Arabia, United Arab Emirates. The sales and marketing in these regions are aimed at Kuwait, Lebanon, Oman, Qatar, Syria, Jordan and Yemen. There is a lot of business for General Motors in the Asia-pacific region. This includes China, Indonesia, Japan, Korea, Thailand, Singapore and India among others. (General Motors Corporation, 2009)

Production Facilities

Production facilities of a company can either be centralized or decentralized. A decentralized production facility is whereby the company produces all the products it sells in the different parts of the world in a single country. This means that the production plants are in one country. A decentralized production is where the company has production plants in different parts of the world. General motors adopt decentralization of its production facilities. There are many production plants of General Motors in different parts of the world. Some of the General Motors factories are in Spain, South Australia, Michigan, Italy, Sweden, Russia, South Africa, Mexico, and Brazil among others. (General Motors Corporation, 2009)

Product Standardization

Product Standardization refers to the situation where the company sells the same product in different parts of the world. Some companies sell products with different characteristics. Such attributes like product quality, durability and packaging may be different depending on the part of the world they are being sold to. The market offering of General Motors is the same throughout the world. The vehicle that is sold in Europe is the same one that is sold in Africa.

Organizational structure

General Motors affairs are overseen by a board of directors. It is charged with the responsibility of selecting officers in the company and directing the operations. Below the directors are the strategy board which is responsible for the subsidiaries of General Motors. The strategy boards are comprised of the North American Strategy board, Europe Strategy board, Asia-Pacific Strategy board. There is also the Latin America, Africa and Middle East Strategy Board. The international business is run by the Public Policy Center Global Coordination Team. Sections that fall under this team are Government Relations, Trade and Economics, Corporate Relations and Philanthropy, and environment, energy and sustainability. (General Motors Corporation, 2009)

International Strategy

The two types of international strategy are decentralization and centralization. A centralized multinational company has all the product development, marketing and promotions controlled through one location. The products and services are then disseminated through the local or regional divisions. In a decentralized company, decision-making is done by different people or groups in different locations. Therefore it is possible to make decisions without necessarily consulting the parent company. General Motors seems to be a centralized organization. The parent company in the United States directly controls the subsidiaries in other countries. Therefore they make decisions on the marketing strategies, employee policies and sales targets. For example, the parent company recently ordered the temporary closure of certain manufacturing plants. (Lowe & Doodle, 2007)

Work teams

The organization of company’s employees in order to mean the objectives of the company is very important. There are two ways of organizing staff. This is using teams to perform a task or using individuals to attain the target. The types of teams are work teams, management teams, parallel teams, management teams and project teams. General Motors uses work teams in its operations.

The strategies that General Motors adopts will make the difference between its survival and its collapse. The current global financial crisis has made it necessary for management to make strategic decisions so as to prevent the company from sinking. Some of the strategies that General Motors intends to carry out are Market Development, Market Penetration, Restructuring and Retrenchment. (Scribd)

The company has restructured to be able to accommodate the current crisis. The restructuring includes job cuts and phasing out the Oldsmobile brand. This restructuring plan is very good as it will solve some of the temporary problems. In the long run, the company will benefit from its quality manufacturing and core values. Based on the strategies that General Motors follows in the company it is going to succeed in the international market. The objectives it has set can be attained by continuous application of effective policies. (CNNMONEY)

The company could consider centralization of its management and decision-making so that the decisions made are reflective of the needs in the different parts of the world. This will improve their competitive position.

References

Lowe, R & Doodle, I. (2007). International Marketing Strategy: Analysis, Development and Implementation. London: Cengage Learning EMEA.

General Motors Corporation, 2009. Corporate information. Web.

CNNMONEY. (2000)End of the road for Olds. Web.

Scribd. (2008) General Motors’ Strategic Analysis. Web.

Crsglobe. 2009. General Motors Corp. Web.