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General Motors’ Competitive Advantage
GM is primarily engaged in the design, development, manufacturing, and marketing of automotive products worldwide. We employ 266000 people around the world (not including employee at joint ventures) and manufacture vehicles in 33 countries. In 2007 GM sold 9.4 million vehicles in 149 countries. GM industry continues to experience significant change, increasing complexity, and intense global competition in both mature and emerging markets. The key to winning under these circumstances is to consistently provide cars and trucks that customers will choose over those of GM competitors based on superior design, quality, fuel economy, safety, technology, and value. To remain a global automotive leader, in more mature markets to ensure GM’s ongoing competitiveness and rapidly grow their presence in emerging markets around the world. In GM’s competitive business environment, we must continue to attract, retain, and motivate leaders who can successfully navigate the complexities of GM industry and deliver business result for the benefit of GM’s stockholders and other key stakeholders. Fair and competitive compensation programs are an important element in GM’s ability to do this.
About General Motors
GM is an American company. The company was founded on September 16 1908 in Michigan as a holding company. Core businesses of the GM are designs manufactures and distributes vehicles and vehicle parts and sells financial services. General Motors produces vehicles in 37 countries under eleven brands, including cheviots, Buick, GMC, Cadillac, Baojun, Holden, Isuzu, Jie fing, Opel, Vauxhall, and Wuling. There are 212000 employees in GM. GM does business in 157 countries. Mainly GM divided in to five businesses GM North America, GM International Operations, GM South America and GM financial.
Logo Creation and Development
Logo is a symbol or special icon maybe it’s explain what company does or types of these products maybe not. A great logo explains the company values, culture and people. A great logo is not the end but the beginning of a great brand identity. A company logo is a recognition tool for the public to link their products to the company. A logo if designed effectively can bring to people’s mind the unique selling proposition of an organization.
The market of excellence is the original name of the logo of the General Motors Corporation. First introduced in 1966, the logo originally included the phrase “Mark of Excellence” at the bottom, and as a decal, it was installed on the door jambs of General Motors’ vehicles. This logo also was stamped on the release buttons of seat belt buckles on GM vehicles from 1967 until the mid-1990s, as well as being stamped onto the ignition and door keys from the late 1960s up until the early 2000s. Originally turquoise, the color was changed to a royal blue in 1968. In 2005, it was announced that small silver emblems of the logo would be applied to the exterior of every 2006 GM vehicle. This was continued into 2007. A decision was made in August 2009 to stop using the GM ‘Mark of Excellence’ badge on GM vehicle. It was agreed that with GM’s post-bankruptcy focus on four core brands and less of a focus on the GM brand the relevance of the badge has diminished.
The Shell Gas
The shell gas station brand logo started out in 1900 as a literal inked clamshell drawing but has gradually become a smooth red and yellow stylized shell. The colors and shape are so distinct, shell doesn’t even write its name on the logo anymore.
Microsoft
In 1992 the Windows 3.1 logo was a literal window with four panes and a black frame that broke in to tails on one side like a meteor. It remained the same until windows XP was released in 2001. The windows XP logo was minimalizes down to just the four colored windowpanes floatation with no frame – distinctly windows but much simpler.
Volkswagen
The original VW logo from 1939 featured bumped teeth around the circle to make it look like a gear, with logo arms rotating around the circle. The arms and gear bumps were eliminated by the time WWII ended and in 2000, VW colored the logo blue and silver.
BMW
Everybody knows a BMW automobile when they see ones. BMW logo meant to symbolize the movement of an aircraft propeller, of white blades cutting through the blue skies. It was first created in 1923, but the logo has pretty much retained its original features other than a few minor modifications to its fonts and colors.
Analysis of Vision and Mission
Over the past 100 years, GM has been a leader in the global automotive industry. And the next 100 years will be no different. GM is committed to leading the industry in alternative fuel propulsion. GM’s vision is to be the world leader in transportation products and related services. ‘We will earn our customer’s enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people”.
GM is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment.
Market Growth and Market Share of General Motors
Global sales grew 3.6% to nearly 2.4 million vehicles as GM’s share of industry increased 0.2 point to 11.4%. A strong performance in North America spurred the result as sales climbed 8.2% to 761,616 vehicle and GM’s share increased 0.4 point to 17.1%. Growth was also strong in Asia, Africa and the Middle East where sales increased 6.9& to 992,234 vehicles, pushing GM’s share up 0.2 point to 9.6%. GM managed to expand its share in Europe by 0.1 point to 8.3% even as sales shrank 6.4% to 372,634 vehicles amid an industry-wide downturn in the recession-riddled bloc. Its South American operations were troubled, however, as sales fell 5.3% to 234474 vehicles and GM’s share shrank by 0.9 point to 17.2%.
General Motors recently announced second quarter earnings that topped market expectations. Besides improving in Europe, the automaker continued to perform strongly in the U.S. and China with sales higher by 8.4% and 11.5% respectively. China has become significant for GM and it now accounts for about 45% of the stock value according to our estimates. GM operates in China through 10 joint ventures although the SAIC-GM-Wuling JV accounts for almost half of the sales. SAIC-GM-Wuling Automobile is a joint venture between SAIC Motor, General Motors and Liuzhou Wuling Motors Co Ltd. General Motors Co sees growth of between 7% to 10% in China’s car market this year. In 2009 it grew 50%, 2010 it grew roughly 30%. General Motors said it had sold 240,244 vehicles in China during the month of September, up 15.3% from a year earlier. GM makes vehicles in China in partnership with SAIC Motor Corp and FAW Group. China’s overall vehicle market sizzled in 2010 with 18 million units sold. But it has now reverted to a more subdued growth pattern after the government ended tax incentives for small car sales and subsidies for van buyers in total areas.
Added Value of General Motors
In a business the difference between the sale price and the production cost of a product is the unit profit. In economic, the sum of the unit profit, the depreciation cost, and the labor cost, and the unit labor cost is the unit value added.
Quality is the value added given by the GM to the customers. Chevrolet has received more 2013 J.D. power initial quality awards than any other automotive brand. Chevrolet vehicles are giving GM’s consumers the quality they deserve. According to the 2013 J.D. power and Associates initial quality study, Chevrolet received five segment awards more than any other auto brand.
These results highlight Chevrolet’s commitment to quality. Customers want inventive designs, advanced features, exhilaration performance and great quality-without any sacrifices. At Chevrolet, quality is at the center of every decision that affects the development of every vehicle.
Strategy
General Motors Company (GM) has a generic strategy (Porter’s model) that ensures competitive advantage amid increasing competition in the global automotive industry. Michael Porter’s model indicates that competitive advantage is created through a generic strategy that the company effectively applies in relation to variables in the target market. In this case, General Motors’ generic competitive strategy emphasizes the benefits of economies of scale, which is one of the company’s strengths.
The firm also employs intensive growth strategies based on the business effects of such generic strategy. Each intensive strategy contributes to the growth of General Motors. However, these intensive growth strategies have different degrees of significance in the business. For example, General Motors benefits more from one intensive strategy compared to the other intensive strategies in terms of their effects on organizational growth and appropriateness to the target market for automobiles and related products.
The effectiveness of General Motors’ generic strategy has a direct link to the organization’s ability to address issues associated with competitive rivalry. Competition is a major external force that affects the company’s growth and development. The Porter’s Five Forces Analysis of General Motors Company shows the significance of competition in determining the performance of the automobile business. Thus, the generic competitive strategy must match the needs of the organization, while considering the external business environment. On the other hand, the effectiveness of General Motors’ intensive growth strategies influences how the business grows. The competitive advantage based on the generic strategy and the growth potential based on the intensive strategies contribute to the long-term success of General Motors.
General Motors Company’s Generic Strategy (Porter’s Model)
General Motors’ generic competitive strategy is cost leadership. Based on Porter’s model, this generic strategy creates competitive advantage based on the attractiveness of low costs and corresponding low prices of products. For example, General Motors’ automobiles are offered at prices that are lower than premium or luxury automobiles like Mercedes-Benz. The relatively lower prices attract customers, leading to GM’s competitive advantage. A strategic objective based on this generic strategy is to enhance manufacturing process efficiencies through automation and continuous improvement to support General Motors’ competitive advantage.
The differentiation generic strategy has a supporting role for General Motors’ competitive advantage. However, cost-leadership remains the company’s main generic competitive strategy. In differentiation, the strategic objective is to make products attractive on the basis of features, brand image, quality, and related variables. For example, the differentiation generic competitive strategy is applied through General Motors’ research and development efforts toward producing energy-efficient automobiles. The features of these products should also differentiate them from the competition, to ensure the company’s competitive advantage. This generic strategy supports the technological advancement and value emphases in General Motors’ mission statement and vision statement, respectively.
General Motors Company’s Intensive Strategies (Intensive Growth Strategies)
- Market Penetration (Primary). General Motors uses market penetration as its primary intensive growth strategy. This intensive strategy contributes to the company’s growth by increasing sales in current markets. For example, General Motors expands its market reach by increasing the number of its dealerships. In this way, the distribution of GM automobiles increases, improving customers’ access to these products. General Motors’ cost-leadership generic strategy creates competitive advantage that facilitates the successful implementation of market penetration. Based on this intensive growth strategy, a strategic objective is to continue expanding the company’s distribution network to support business growth and development.
- Product Development (Secondary). Product development serves as a secondary intensive growth strategy in the case of General Motors Company. This intensive strategy ensures growth through new product sales. For example, every new product or product line translates to a potential increase in GM’s revenues. This intensive growth strategy supports the differentiation generic competitive strategy by focusing on uniqueness in the design and features of new products. Thus, General Motors’ strategic objective based on product development is to achieve a high rate of innovation in new product development.
- Market Development (Supporting). General Motors employs market development as a supporting intensive strategy for growth. In this intensive strategy, the company grows by entering new markets or market segments. For example, General Motors’ growth as a global automotive business has been significantly based on new market entry, such as when the company adds a country to its areas of operations and sales. However, considering the firm’s current worldwide operations, this intensive growth strategy now only serves a supporting role in business growth. Based on market development, a strategic objective is to enter new markets in Africa or develop novel products to enter new market segments for General Motors’ growth. The differentiation generic strategy can contribute competitive advantage needed to maximize the benefit of implementing the market development intensive growth strategy.
- Diversification (Supporting). Diversification is another intensive strategy that has a supporting role in General Motors’ growth. The company has a low probability of using this strategy. Diversification supports business growth through new business. For example, General Motors could acquire a car rental services company in a domestic market to fuel business growth. This intensive growth strategy can contribute new business capabilities to support the differentiation generic competitive strategy. A strategic objective linked to this intensive strategy is to grow General Motors through new acquisitions of businesses outside the automotive industry.
References
- Anderson, A.H., Barker, D., 1996, Effective Enterprise and Change Management, Oxford: Blackwell Publishers Ltd.
- Flint, J., (2005), “Saving General Motors”, Forbes, November.
- General motors web page (2006), www.GM.com (March, 2007).
- General Motors 2006 financial report. www. GM.com. (March, 2007).
- Henderson., Clark, K. B., (1990), “Architectural Innovation: The reconfiguration of existing product technologies and the failure of established firms”, Administrative Science Quarterly.
- Isidore, Ch. (2006), http://money.cnn.com/ New York U.S. (March, 2007).
- Kiyosaki, R., (2006), “What ails GM and America”, http://finance.yahoo.com/columnist/article/richricher/4353 (March, 2007).
- Levin, D. (2007), http://www.bloombergnews.com/New York U.S. (March, 2007);
- Loomis, C., (2006), “The tragedy of General Motors”, Fortune, USA.
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