General Motors Case Essay
General Motors Case General Motors had a faulty management strategy causing the firm to go into bankruptcy - General Motors Case Essay introduction. One of the key components that led to failure was neglecting to collaborate between global divisions. As a multinational corporation, General Motors operated did not have sufficient collaboration between divisions, making it difficult to achieve economies of scale. One of General Motors existing strategies has been to cut the ranks of management and thus simplify the communication and operation channels and bring in new executives to fill top management positions; llowing a new perspective to enter the organization. The existing strategy is also based on performance criteria. General Motors is now focusing on market share, revenue, operating profit, cash flow, product quality, and customer satisfaction. Rather than having numerous brands that competing on a large number of markets, General Motors has cut four of it’s brands to focus on fewer key customer markets. General Motors has to be on high alert as market trends are continuing the drift toward small, compact, “green”, and fuel--efficient vehicles. Another key strategy is to etain Opel and concentrate on the small car industry that has been a market trend. Toyota has been in the lead with its Prius leading the way to greater fuel efficiency.
The market is likely to continue to seek high fuel efficiency, especially with the prices of gasoline steadily increasing. GM has to consider that sales of high gas mileage cars may be linked to the spikes in gas prices. However, the market may not continue strongly shifting this direction since the resent news that Australia discovers a twenty trillion oil reserve; now making then a leading exporter. To dentify the position of the company, we can do a SWOT analysis.
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Strengths include a large company with many recourses, new management, skilled workers, ability to develop new products. Weaknesses are the weak brand image that resulted when the company filed bankruptcy. GM may also have a difficult time proving its credit worthiness to potential lenders and inventors. Opportunities include the growing interest in compact cars and growing European and world markets. Threats include all other car companies that compete with their brands and are fighting for the market. Potential ntrants include European known brands that are entering United Stats markets and other car companies introducing new concepts that could compete with GM.
Substitutes are Toyota and Honda for more of the middle and lower middle class that compete with GM and BMW and Audi who are in the same luxury market as Cadillac. Bargaining power of customers is moderate. While they do have other options, GM parts, insurance, and upkeep are usually lower than foreign brands. GM is a hug corporation with large economies of scale of the threat of suppliers rising prices are low.
Especially ince GM may be a very large part of the supplier’s business. I would recommend that General Motors continues innovating compact cars and emphasizing fuel efficacy. Regarding it’s luxury car the Cadillac, GM needs to continue to compete with other luxury brands. The Cadillac CTS--V is a key example of producing a product that is a fast, sleek, luxury sedan. The Chevy Cruse has been a great step in the “green” car segment with a estimated 42 mpg. GM has been stepping in the right direction and should continue to improve it products based on quality and cost efficiency.