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GENERAL MOTORS GLOBAL STRATEGY

Student’s Name

Institutional affiliation
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Table of contents

Contents
INTRODUCTION..........................................................................................................................2

Objectives...................................................................................................................................2

Strengths.....................................................................................................................................3

Weaknesses.................................................................................................................................3

Internal environment evaluation.....................................................................................................3

VRIO Model...............................................................................................................................3

Valuable..................................................................................................................................4

Rarity......................................................................................................................................4

Imitating them is costly...........................................................................................................4

Capabilities and Competence..................................................................................................4

External environment evaluation....................................................................................................4

Porter’s five forces analysis........................................................................................................4

Bargaining power of suppliers................................................................................................5

Buyer bargaining power..........................................................................................................5

Threats of new entrants...........................................................................................................5

Threats of new substitutes.......................................................................................................6

Competition rivalry.................................................................................................................6

Global strategies.............................................................................................................................6

Diversification strategy...................................................................................................................9
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Advantages/Disadvantages of Strategic Alliances vs. Mergers and Acquisitions..........................10

Advantages...............................................................................................................................10

Disadvantages...........................................................................................................................10

Mergers and Acquisition...........................................................................................................10

De-internationalization strategy of GM........................................................................................11

Differences of TMT of GM compared to the TMT of competitors that have succeeded in the

Indian Market............................................................................................................................................12

Global strategy implementation....................................................................................................13

Recommendation for changes in the strategy of GM in the future................................................14

References....................................................................................................................................15
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INTRODUCTION

General Motors Company, an American multinational automaker, designs, produces,

sells, distributes automobiles and parts and provides financial services. Founded in Detroit on

September 16, 1908 (General Motors 2019). On September 16, 1908, in Flint, Michigan, William

C. Durant, owner of Buick, created General Motors Company as a holding company using an

escrow account set up by R S McLaughlin for 15 years of Buick Motors in 1907. In the early

20th century, less than 8,000 automobiles were in the US. Durant had become a dominant maker

of horse-drawn vehicles in Flint after buying the Carriage and Gear invention from the

McLaughlin dynasty in Canada (General Motors 2019).

Objectives

GM is strengthening its core business of exceptional cars, vans, and crossovers while

transforming personal mobility through cutting-edge innovations like connectivity,

electrification, self-driving, and car sharing to make transportation safer, better, and more

sustainable (General Motors 2019). General Motors, its subsidiaries, and its joint mission entities

market Cadillac, Chevrolet, Baojun, Buick, GMC, Holden, Jiefang, and Wuling vehicles and

motors, as well as OnStar, an international leader in automobile security and protection services,

Maven, its personal mobility brand, and Cruise, its self-reliant automobile ride-sharing company

(Chevrolet 2019). GM's 2018 sales were $147.049 billion, up 1% from 2017's $145.588 billion

(Macrotrends 2019).
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Strengths

Nairobi's Isuzu truck and bus factory dominates the market. Eastern Africa's largest

commercial vehicle producer has over 15 models. World's largest carmaker GM employs

325,000 people. Branding—GM has 30 years of local manufacture and service. Nairobi

assembles Isuzu vehicles and buses. Specific situations require models with up to 50% native

components. The US-based GM brand is well-known in Africa and abroad. Global Presence—

GM operates in Poland, Russia, and South Africa. Egypt, Ecuador, and Germany. Argentina,

Australia, Belgium, Spain, Sweden, Thailand, and Brazil. Vietnam's firm.

Weaknesses

One-shift Nairobi facility underutilized productive capacity. However, it has a three-shift

capacity and expected productivity of 2.300 units, 60% of the total capacity for a single shift, a

50% increase over the previous year's production. GM may fulfill a national job goal by

increasing production. Level of safety and quality of its products- According to its chief

executive, GM must constantly improve its goods' safety and quality to meet both strict

worldwide and GMC parent organization standards and to uphold a high standard of customer

service because quality and service sold products.

Internal environment evaluation

VRIO Model

The resources available to an organization can be split into two distinct groups: tangible

assets and intangible resources. The physical entities such as land, structures, machinery, assets,

inventory, and money are all examples of tangible resources in the Gm Renminbi. Other

examples include inventory.

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Valuable

Chinese renminbi (RMB) values the resource. Money, employees, marketing, and operations

management knowledge are the organization's most valuable resources, according to David W.

Conklin and Danielle Cadieux's case study.

Rarity

The "Gm Renminbi" should consider if its most valuable assets are scarce or pricey. Rivals and

newcomers can easily access them and enter the market if expected. They are rare if they are not.

Imitating them is costly.

Most sectors face growing disruption risks. GM in China states that the Gm Renminbi's main

feature is uncopiable. GM Renminbi's products can be copied or copied by competitors,

undermining the industrial structure.

Capabilities and competence

It measures how well the company has exploited scarce, valuable, and hard-to-replicate market

resources. GM Renminbi product exploitation level analysis has two approaches. The execution

team and company strategy often determine exploitation. Thus, exploitation is a good indicator

of human resource quality. When a corporation builds strategic resources, its capabilities usually

grow.

External environment evaluation

Porter’s five forces analysis

Porter's five forces model helps assess how these forces present in every industry affect a

business's competitiveness and profitability.

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Bargaining power of suppliers

Their modest size inhibits supplier bargaining, forward integration, vehicle manufacturer

purchasing power, etc. Single-source raw materials limit General Motors’ product development.

GM's global suppliers and capital to buy components and raw materials limit their bargaining

leverage. Most variables give GM bargaining power over its suppliers. Large automakers can

backward integrate by making critical parts and suppliers. GM manufactures electric car battery

cells to reduce Tesla's dependence and generate money. Tesla out-negotiates smaller suppliers.

Automakers negotiate poorly.

Buyer bargaining power

Consumer power and demographic patterns give auto buyers negotiating strength.

Consumers drive automakers. GM is making driving safer, easier, and greener. Consumer-

friendly government policies have boosted competition, replacements, and information,

enhancing customer bargaining power. Automakers lose clients to fierce competition despite

hefty switching costs. Luxury, sports, and family cars cost. Brand value, technology, promotion,

product quality, and high switching costs give purchasers negotiating power.

Threats of new entrants

Current brands form coalitions to expand dominance, while newcomers face high entry

barriers. Newcomers to the auto industry face regulatory hurdles and high costs. Permits,

licenses, and other legal requirements restrict access. Due to more considerable industry risks,

established automakers like General Motors don't have to worry about newcomers taking market

share. Trust and value take time and money for new brands. New brands like GM struggle to

build brand loyalty.

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Threats of new substitutes

Public transportation and rival automakers are alternatives. Uber and Lyft offer to carpool.

Brand equity, consumer loyalty, and driving independence diminish replacement product risk. It

offers products for various price points and transportation needs. It’s a vast selection, and

technological advancements have enhanced product demand. Consumer loyalty and consumption

have moderated other threats.

Competition rivalry

Apart from many participants, the growth of the public transport system and a greater

emphasis on technology advancements have exacerbated competition between automotive

brands. General Motors has expanded marketing, customer service, and technology spending to

compete. GM has over twelve global competitors. Ford, Toyota, FCA, and VW are strong,

market-shared competitors. Competition forces General Motors to prioritize research and

innovation.

Global strategies

According to Johnson et al. (2008), several strategies exist. The corporate-level plan

concerns every aspect of an organization and how value will be contributed to the company’s

various segments (business units). This may involve concerns regarding the geographic

coverage, the variety of products and services offered by the business units, and the method

through which resources are to be distributed across the many components of the firm.

According to the research conducted by Wechsler et al. (1986) on Ohio state agencies, there are

four unique public sector strategies: the developmental strategy, the transformational strategy, the

protective strategy, and the political strategy.

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Public sector organizations still becoming fully functional typically use a developmental

plan to improve their status, capacity, and resources to establish a future. A dedication to

fundamental change, whether internal or external, is a precondition for implementing

transformational tactics. An organization with a transformational strategy almost always has a

policy or political orientation. This is because transformational strategies include a high amount

of external control. In India General Motors implemented a localization strategy in India. The

process of adjusting the goods and services of a business or marketing techniques to fulfill local

consumers’ requirements is known as localization.

Localization is a component of globalization. In 1996, General Motors constructed an

assembly factory in Halol, Gujarat, and ten years later, in 2008, the company established a

manufacturing unit in Talegaon, Maharashtra. The corporation localized its products and services

by introducing models specifically built for the market in India, such as the Chevrolet Beat,

Tavera, and Spark. This was done to cater to the specific needs and preferences of Indian

consumers. The business also adapted its marketing methods to the local environment by

developing advertising campaigns congruent with the norms, values, and customs of the Indian

culture.

GM was successful in establishing a significant presence in the market in India and

gaining the confidence of Indian customers thanks to the implementation of a localization plan.

For China, General Motors implemented a partnership strategy. A global approach known as a

joint venture entails forming a partnership with a local business to reach a market in another

country. In 1997, General Motors partnered with the Shanghai Automobile Industry Corporation

(often known as SAIC) to produce and market automobiles in the Chinese market.
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Shanghai General Motors Corporation (SGM), a joint venture between General Motors

and Shanghai Automotive Industry Corporation, has emerged as one of the most successful

automakers in China, holding a market share of approximately 10%. Through its partnership with

SAIC, General Motors overcame China’s regulatory and social obstacles by capitalizing on its

partner's local expertise, knowledge, and connections. By utilizing this technique, GM could

avoid some dangers of joining a foreign market. Some of these risks include unfamiliarity with

local laws and rivalry with established local firms.

Localization was GM's approach in India, whereas joint ventures were their mode of

operation in China. Using these global methods, General Motors was able to penetrate and create

an essential presence in both of the most important worldwide vehicle markets, which was a

significant accomplishment for the company. GM could tailor its goods and services to meet the

specific requirements of Indian customers by employing the localization strategy. At the same

time, the partnership plan enabled the company to capitalize on its partners' local understanding

and experience to overcome cultural and regulatory barriers in China.

In China, state-owned firms control about half of the economy, people from the Chinese

community abroad control a large number of the international businesses which operate there,

and private ownership comes in last since it is nearly complicated for business owners to gain

access to money. India is a reflection of China in every way. Despite their significance, public

corporations in the United States do not have quite the same prominent position as their

counterparts in China. In contrast to China, India is apprehensive of investment from outside its

borders, even if it comes from citizens of the diaspora in India. However, the nation has given

rise to many private-sector enterprises, a few of which are competitive globally. In China, it is
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difficult to conceive a prosperous company that has not had some relationship with the state; in

India, on the other hand, most businesses have thrived despite the presence of the state.

Multinational corporations have to adapt the way they do business in each country if they

want to be successful. They could need to modify their operations to fill gaps in a country's

market for goods, its contribution to markets, or both. However, businesses must ensure that their

fundamental value propositions are preserved regardless of any changes made to their

operational structures. If they make too significant changes, these companies will lose the

benefits of worldwide scale and worldwide recognition they already enjoy. Multinational

companies can be forced to adapt to fill vacancies in a country’s product or input markets.

However, businesses must ensure that their fundamental value propositions are preserved

regardless of any changes made to their operational structures.

Diversification strategy

Another rigorous growth strategy that supports General Motors' expansion is the

diversification of its business. There is a slim chance that the corporation will pursue this action.

The development of new markets is facilitated by diversification in businesses. For instance,

General Motors might drive the expansion of its firm by acquiring a company that provides

automobile rental services in a local market. This aggressive growth strategy may provide new

corporate capabilities for the distinction in the generic competitive strategy. The expansion of

General Motors through purchasing companies operating in industries other than the automotive

sector is a strategic objective connected to this intensive approach.

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Advantages/Disadvantages of Strategic Alliances vs. Mergers and Acquisitions

Advantages

Strategic alliances give businesses access to markets, technologies, cash, and people.

Businesses can grow faster and more efficiently by collaborating. Alliances reduce production

costs and accelerate technology development. Strategic alliances speed product introduction and

legal and trade restrictions. In this age of rapid technological advancement and worldwide

marketplaces, alliances are usually the fastest, most effective way to achieve growth goals.

Organizations must guarantee that the alliance's goals match their own to share their expertise.

Strategic alliances can open many doors and boost business. Additionally, it can provide capital

during economic downturns.

Disadvantages

Strategic alliances pose challenges. The biggest drawback is that a partner that handles all

its company operations internally must suddenly rely on an additional partner. Strategic alliances

have rewards and risks. If both parties are not financially equal, strategic alliances involve

dangers. Operational control and proprietary technology confidentiality are among these threats.

Alliances might conflict with business cultures or reduce independence. The partners may also

miss out on future business prospects with strategic partner competitors.

Mergers and Acquisition

Getting good employees, business intelligence, and industry understanding. A business

with solid management and process processes will help buyers enhance themselves. Your chosen

business should have processes that complement yours and can scale up. Funding new projects
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using valued assets. Better manufacturing or shipping infrastructure is cheaper to buy than build.

Target low-profit, high-capacity companies. Increasing market share and client base.

Diversifying your business's products, services, and future. Target businesses may sell items or

services through your distribution channels. Sharing marketing budgets, buying power, and costs

reduces costs. Competing less. Buying new IPs, goods, or services may be cheap than producing

them. Accelerate organic growth or the business plan. Similar companies can share resources to

cut expenses, eliminate duplication, and boost income.

De-internationalization strategy of GM

General Motors (GM) and Ford had extensive expertise in international markets by the

latter part of the second half of the 1990s when globalization was being discussed against a

backdrop of deregulated markets. Given their sales, production, and resources, the world's largest

and second-largest automobile manufacturers are also the most internationalized (Hounshell,

1984). After starting their businesses in the early 1900s, these two motor industry pioneers

traveled abroad (Bardou et al., 1977).

Before Alfred P. Sloan reformed GM, Henry Ford extended the sector to the British

market, eventually expanding to other European countries and other countries (Wilkins and Hill,

1964). He began manufacturing domestically and exporting mass production systems (Laux,

1992). GM was founded by a multinational corporation (Tolliday, 1998). Because of its

inception, it has always differed from Ford's monolithic structure, but Sloan's organizational

leadership helped it attain corporate consistency (Chandler, 1962).

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Differences of TMT of GM compared to the TMT of competitors that have succeeded in the

Indian Market

A company's Top Management Team (TMT) is one of the most critical factors in

determining whether it will succeed in a new market. There are some significant distinctions

between the TMTs of GM (General Motors) and rivals that have been successful in the Indian

market. These distinctions have been a significant factor in the success of these companies.

Knowledge and expertise of the Indian market: The level of expertise each company possesses is

one of the most critical factors differentiating GM from its thriving competitors in India. Maruti

Suzuki, Hyundai, and Honda are just a few companies that have been doing business in India for

many years and have developed a profound comprehension of the market's behavior, customer

tastes, and regulatory environment. I am running a few minutes late; my previous meeting is

over.

General Motors did not enter India until the middle of the '90s, so the company had to

learn about and develop its expertise in the Indian market from scratch. Concentration on the

local market: Successful rivals in the Indian marketplace have been able to adapt their goods and

services to the demands of the regional market because they have concentrated their efforts on

the local market. Maruti Suzuki, for instance, has manufactured automobiles like the Alto, the

Swift, and the Baleno that are tailored to the requirements of the Indian market. Similarly,

Hyundai has adapted its marketing methods to the local market in India by developing

advertising campaigns that the country’s consumers will receive.

General Motors (GM) has not been as effective in locating its goods and services, which

could have been a factor in the company's lack of accomplishments in the market in India.
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Successful rivals in the Indian market have also created mutually beneficial relationships with

local firms. These alliances have enabled these competitors to navigate the problematic

regulatory framework while building a solid distribution network. Because these organizations

have formed these alliances, they have acquired a competitive advantage by capitalizing on their

partners' local expertise, knowledge, and connections. Conversely, General Motors has not

established such strategic alliances in India, which might have hindered the company's ability to

create a robust distribution network and successfully negotiate the complex regulatory

environment.

Global strategy implementation.

Putting a company's chosen strategy into action, or strategic implementation, focuses on

making the selected plan a reality within the organization. Change is an inevitable part of putting

a strategy into action, and how well that change is managed can substantially impact how well

that strategy is implemented. Alexander (1985). Formulating a plan and carrying out that strategy

are two aspects of the same process. Depending on how the company is structured, the group of

individuals responsible for implementing the plan will likely be very different from those

responsible for developing the strategy.

Likely, most individuals in the company who are essential to the successful

implementation of the strategy had very little input into the formulation of either the business

strategy or the corporate plan. Therefore, they may not know the large quantity of data and effort

that goes into the formulation process. Better organizational performance often results from

including middle managers in developing and implementing a strategy. This is one reason why

this is typically the case. Johnson and Scholes (2002). [Johnson and Scholes]. The managers of
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sections and functional areas collaborated with their peers as managers of different divisions and

operational areas to design programs, budgets, and processes to implement the strategy.

Recommendation for changes in the strategy of GM in the future

The recommendations and action plan are based on the idea that "the method of strategic

management depends upon the notion that organizations ought to constantly track both internal

and external developments and patterns so that changes can be created when required in the first

instance and that the overall reasons and justification to make changes should be the main focus

which guides any strategic commitment, hence the scope of modifications as to be brought by

General Motors (GM)." Every strategic change requires risk-taking and fresh experiences. No

organization can predict whether competence will be an advantage or a weakness (Mintzberg,

1998, p. 34). General Motors (GM) has few strategic skills, yet change is necessary.

Thus, this research shows how a Relationship Marketing Approach can affect change.

Rebranding General Motors as a Learning Organization with improved employee involvement.

Reducing financial deficits by adopting Total Product System (TPS) and shortening cash

conversion cycles/stock conversion periods. First, relationship marketing (RM) puts customers at

the center of operational logic, not marketing (Christopher et al., 2002, p. 21). In addition, the

organization's learning approach to change reconfigures the production procedure's macro and

local layers to focus on end-user satisfaction.

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References

Alexander, L. (1985). Successfully implementing strategic decisions. Long Range Planning, 18

(3), 91-97.

Bardou, J.P., Chanaron, J.J., Fridenson, P. and Laux, J.M., 2016. La révolution automobile. Albin

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Carrillo, J. and Hualde, A., 1996. Maquiladoras de tercera generación. El caso de Delphi-General

Motors. Espacios, 17(3), pp.747-757.

Chandler Jr, A.D., 1969. Strategy and structure: Chapters in the history of the American

industrial enterprise (Vol. 120). MIT Press.

Christopher, M., Payne, A. and Ballantyne, D. (2002), Relationship Marketing: Creating Staker

Value, Oxford, Butterworth Heinemann

Dosi, G. and Teece, D.J., 1998. Organizational competencies and the boundaries of the firm (pp.

281-302). Springer Berlin Heidelberg.

Hounshell, D., 1984. From the American system to mass production, 1800-1932: The

development of manufacturing technology in the United States (No. 4). JHU Press.

Johnson, G, and Scholes, K. (2008). Exploring Corporate Strategy. (8th ed.). London: Prentice

Hall

Mintzberg, H., Lampel, J., Quinn, B. J. and Ghoshal, S. (1999). The strategy process: Concepts,

cases, contexts (6th ed.). Pearson.

Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New

York: The Free Press.

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Thompson and Martin (2005). Strategic management: (5th ed). UK: Thomson Learning.

Tolliday, S., 1995. Transferring Fordism: The First Phase of the Overseas Diffusion and

Adaptation of Ford Methods 1911–1939. Communication à la 3ème rencontre du

GERPISA, Paris.

Wilkins, M. and Hill, F.E., 2011. American business abroad: Ford on six continents. Cambridge

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