General motors Strategic Mangement
Upcoming SlideShare
Loading in...5
×
 

General motors Strategic Mangement

on

  • 14,882 views

Detailed report on analysis of strategies acquired by GM

Detailed report on analysis of strategies acquired by GM

Statistics

Views

Total Views
14,882
Views on SlideShare
14,879
Embed Views
3

Actions

Likes
6
Downloads
417
Comments
1

2 Embeds 3

https://www.facebook.com 2
https://www.linkedin.com 1

Accessibility

Categories

Upload Details

Uploaded via as Microsoft Word

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
  • How can I download?
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

General motors Strategic Mangement General motors Strategic Mangement Document Transcript

  • GM MotorsSTRATEGICMANAGEMENTGENERAL MOTORSSubmitted by: Mohammad ArifSubmitted to: Sir Shoaib 0
  • GM MotorsSTRATEGIC MANAGEMENT Submission Date 14th September`12 Term Paper ‘’General Motors’’ ASSIGNED BY Sir Shoaib SUBMITTED BY Mohammad Arif 1
  • GM Motors TABLE OF CONTENTS Pg. #COMPANY INFORMATION .............................................................................................. 2MISSION STATEMENT ...................................................................................................... 3VISION STATEMENT ......................................................................................................... 3BACKGROUND.................................................................................................................. 4ORGANIZATIONAL CHART .............................................................................................. 5KEY STRATEGIC DILEMMAS .......................................................................................... 6FACTORS AFFECTING THE AUTOMOTIVE INDUSTRY .............................................. 8DIVISION OF BRANDS OF GM ...................................................................................... 10FINANCIALS .................................................................................................................... 11COMPETITORS................................................................................................................ 14SWOT ANALYSIS .............................................................................................................. 16 STRENGTHS ........................................................................................................... 16 WEAKNESSES ........................................................................................................ 17 OPPORTUNITIES .................................................................................................. 18 THREATS ................................................................................................................ 19PORTER’S FIVE-FORCES ANALYSIS ............................................................................ 20CORE COMPETENCE ..................................................................................................... 23FINANCIAL RESULTS ..................................................................................................... 23SUGGESTED STRATEGIES ............................................................................................ 24EVALUATION: ................................................................................................................. 25 2
  • GM MotorsCOMPANY INFORMATION General Motors Company (GM) designs, forms and trades cars, trucksand automobile parts worldwide. The Company also delivers automotivefinancing facilities through General Motors Financial Company, Inc. (GMFinancial). It operates in four automotive segments: GM North America(GMNA), GM Europe (GME), GM International Operations (GMIO) and GMSouth America (GMSA). GMs total worldwide vehicle sales were nine millionduring the year ended December 31, 2011. The Companys GMNA segmentdevelops, manufactures and/or markets vehicles under the brands, such asBuick, Cadillac, Chevrolet and GMC for its customers in North America. GMfor its customers outside North America develops, manufactures and/or marketsvehicles under the brands, such as Buick Chevrolet, GMC, Opel, Cadillac,Daewoo, Holden and Vauxhall.MISSION STATEMENT General Motors is devoted to be a leader in providing transportationproducts and services of such quality that its customers will receive superiorvalue, its employees and business partners will share their success and theirshareholders will receive a sustained return on their investment.VISION STATEMENT Our Vision is to design, build, and sell the worlds best vehicles. 3
  • GM MotorsBACKGROUND General Motors Corporation (GM) is a multinational automobilemanufacturer created in 1908.its headquarter is in the United States. GM is theworlds largest automaker as measured according to the global industry sales.GM is the proud sales leader in the automotive industry for the last 77 years. As of 2008, General Motors employs about 266,000 people around theworld. It manufactures its cars and trucks in 35 different countries. The famousbrands under the umbrella of GM are Buick, Cadillac, Chevrolet, GM Daewoo,GMC, Holden, Hummer, Opel, Pontiac, Saab, Saturn, Vauxhall, and Wuling. In2008, General Motors was the ninth largest publicly traded company in theworld. In recent years the company has faced significant financial chaos,including a 38 billion dollar loss in 2007. From 1908 to 2005, it had grown expansively. But today its market sharehas gone down and together, with challenges posed by economic conditions, inthe form of increasing healthcare costs and fuel costs and cut throat competitionGM is facing a tough time in maintaining its profits. GM is deriving its 100%profits from financing cars and not from the sales of vehicles. Internal factors that account for this decline are the failure of thecompany to adapt to the changes in the environment such as the consumerpreferences and technology, lack of differentiation applied to products and lackof effective cost leadership strategies to efficiently manage costs. General Motors is one of Americas biggest corporations. It would seemto be very successful, but it is having problems today. A lot of large companiesare having troubles today along with small companies. The recession is one ofthe reasons, but there are other reasons too. General Motors has a long history,and during that time it has changed its management and its management styleseveral times. The way the company is administered has something to do withthe troubles it is having today. It is having so many troubles that it is closing 4
  • GM Motorsplants and firing people by the thousands. No one is sure if these measures willmake enough difference to save the company.ORGANIZATIONAL CHART 5
  • GM MotorsKEY STRATEGIC DILEMMAS• GMs Bankruptcy General Motors is the biggest of the three, Ford Chrysler and GM motorsthe ponderous American auto makers who have traditionally dominated theNorth American market. GMs bankruptcy has given greater impetus to this downsizing, callingfor closing another 14 factories and 2,400 dealerships, eliminating 29,000 jobs,and canceling nearly $80 billion in debt. But GMs survival cannot be assured bycost cuts and capital infusion forever. GM hopes that a few new hit products willraise profits, and is refocusing on crossover-utility vehicles (CUVs) and sedans.Product reviews have been positive so far. Still, it will be challenging for GMsnew models to capture attention when all of these three automotive industriesare using the same strategy and introducing their own new lineups.• Automation Production In the early 1980s another foreign competitor, the Japanese, explodedonto the U.S. auto market, offering reliable, small, competitively priced cars.The Japanese approach, which emphasized such unusual practices as just-in-time inventory, quality management, painstaking attention to productionprocesses, extensive employee training and involvement, and close cooperationwith suppliers, generated productivity rates far in excess of anything Detroitcould muster and posed a real threat to the established order in automobiles. Todeal with the growing global assault and reestablish its domestic leadership, GMunleashed a radical business plan to automate and modernize its factories as wellas its car models. It was not a subtle strategy—the centerpiece of the plan was tosubstitute high-tech robotics for inefficient labor, relying on GMs huge financialresources to make it all work. 6
  • GM Motors• GMs Spending For Nothing Though confidence remained high, productivity paybacks from GMsfactory automation spending seemed slower-than-expected right from the start.Costs were rising at an alarming rate while market share and operating incomewere starting to decline, a combination that might trigger warning bells in someorganizations. Internal GM reports indicated that by 1985 the Japanese costadvantage had not changed after four years of intensive spending on automation.The company that was founded on the principle of cost savings and was once theprototype for efficiency had by 1986 become the auto industrys high costproducer. The average number of autos produced by each GM employee stoodat 11.7, while the same metric at Ford was 16.1 and as high as 57.7 at Toyota.GM also earned 38% less than Ford and 26% less than Toyota on each vehiclethey made.• Automating GM (False Assumption) The strategy to automate General Motors in the 1980s under RogerSmith was predicated on a false assumption—that replacing people withmachines could turn back the Japanese attack and bring GM back to dominancein the global auto industry. Rather than adopt the lean manufacturing techniquesthat still define the Toyota production system today, a virtual obsession withrobotics took over. In some ways this was no different than the companies todaythat jump on the latest fad without really understanding the underlying processesand inter-relationships that make the whole thing work. That was certainly thecase with GM and automation in the 1980s. By not understanding how peopleand machines could be effectively integrated, GM missed the essence ofToyotas low-cost production success. Former Ford President Phil Benton put itthis way: "Automation would not make the list of major problems facing theauto industry in the 1980s." Consistency of manufacture must come beforeautomation. Toyota is not as automated as Nissan, for example, but they aremore successful. "Everything goes back to management. What you need to do isengineer the product to the skills of your work force." 7
  • GM Motors• GM Board of Directors While there was internal opposition, particularly among people whounderstood that productivity is not just based on labor costs but on the entireproduction system, the board of directors appears to have had little problem withthe strategy. Indeed, given the deteriorating state of GM labor relations andproductivity at the beginning of the 1980s, turning to the automation solutionmay well have been considered reasonable. It didnt take long, however, forproblems to develop. Plant efficiency was down in many factories, productivityimprovements relative to the Japanese did not materialize, and traditionalmetrics like stock price and market share reflected these problems. Further,when a company spends some $45 billion on automated factories, it does notwrite a single check for that amount and wait for delivery. Expenditures of thismagnitude involve thousands of checks written to vendors over a long timeperiod, with an opportunity to assess progress along the way. For example, in1983 GM spent $6 billion for new technology and automation, increasing to $9billion in 1984 and $10 billion in 1985. Even by 1985, when internal studieswere indicating little change in the productivity gap between GM and Toyota,GM was still poised to spend more. Nevertheless, throughout this time the boardof directors continued to approve Roger Smiths plans and expenditures.FACTORS AFFECTING THE AUTOMOTIVE INDUSTRY1. Political Laws and government regulations have affected this industry since the1960s. Almost all of the regulations come from consumers increasing concernsfor the environment and the concern for safer automobiles.2. Economic The automobile industry has a huge impact on every country’s economy.According to various studies this industry is the major user of computer chips,textiles, aluminum, copper, steel, iron, lead, plastics, vinyl, and rubber. The 8
  • GM Motorsstudy also showed that for every autoworker there are seven other jobs createdin other industries. These industries include anything from the aluminums tolead to vinyl.3. Sociocultural Today’s society judges people on the type of car you drive. Society doesnot like to admit to this but it is very true. Manufactures know this happens andtargets their markets by these thoughts. Anyone who drives a nice vehicle isthought to be wealthy. No one wants to be seen driving an unattractive piece ofjunk because of what other people will think of him or her. Consumers also justfeel better when they are driving a nice or new car, if makes them feel betterabout themselves.4. Technology The internet has affected just about every industry in the world and hasalso had a huge impact on the automobile industry. A study was conducted byJ.D. Power and Associates in 2002 and involved more 27,000 new vehiclebuyers. The study showed that 60% of the buyers referred to the internet beforemaking their purchases and out of that 60%, 88% went to the auto websitesbefore going and taking a test drive. Business-to-business marketplaces havegiven the industry many opportunities because of the internet, such as moreefficiency and lower cost.5. Demographics For many years now, the baby boomers generation has been the maintarget market for just about every product. As their generation is getting ready toretire and spend less money, the automakers are looking at the youngergenerations. Right now, the focus is starting to turn towards the baby boomerschildren (Generation X) who are in their mid-20 and 30’s. According toAnalysts, five years from now Gen X will account for at least 30% of vehiclesales. 9
  • GM Motors6. Global General Motors, Ford Motor Company, Daimler Chrysler, BMW,Volkswagen, Volvo, Toyota, Mazda, and Nissan Motor Company come togetherto create a new trade association created the Alliance of AutomobileManufacturers. The organization was to replace the American AutomobileManufacturers Association that only consisted of American manufacturers, thegoals of the associations were to work together on public policy matters ofcommon interest to provide credible industry information and data, and seekconsistent global regulatory standardsDIVISION OF BRANDS OF GM GMs cars are sold under a number of different brands and marque. Asgrouped by primary region of distribution: North America: Buick, Cadillac, Chevrolet, GMC Europe: Corvette (as standalone brand), Opel, Vauxhall Asia/Pacific: Buick, Daewoo, Holden, Wuling (joint venture) 10
  • GM MotorsFINANCIALSIncome Statement 11
  • GM MotorsBalance Sheet 12
  • GM MotorsCash FlowFundamentals 13
  • GM MotorsCOMPETITORS The major competitors of General Motors are domestic companies likeDamiler Chrysler & Ford Motor and foreign companies like Toyota Motor &Honda Motor.Damiler Chrysler As the number two auto manufacturer in total revenues DaimlerChryslerhas positioned itself as an industry leader, with this come many strengths. TheDaimlerChrysler umbrella covers many well-known brands such as Dodge,Chrysler, Mercedes Benz, and Jeep. This means DaimlerChrysler has strongbrands that are recognizable in almost every part of the world.Ford Motor Company Ford Motor Company is a global company with two core businesses:Automotive and Financial Services. The Automotive business consists of thedesign, development, and manufacture, sale and service of cars, trucks andservice parts. Ford has been focusing on cutting costs to increase margins more 14
  • GM Motorsthan its competitors. It has used reverse engineering in the development of theirproducts. Thus Ford has been an innovator in the auto industry.Honda Motor Company Honda motor company is not your average Japanese car manufacturer.Originally known for motorcycles, Honda has managed to elude the dominatekeiretsu system in Japan and become one of the dominant automobilemanufactures in the world. There is much strength to Honda. Honda has areputation for producing high quality products from cars to motorcycles. Hondahas won many awards for initial quality and customer satisfaction. Theirautomobiles are reliable and generally fuel efficient. Their research has affordedthem competitiveness in innovative products.Toyota Motor Corporation The Toyota Motor Corporation was incorporated in 1937 and has manystrengths being one of the industry leaders in the automotive industry. Toyotahas three major brands underneath the company umbrella; Toyota, Lexus, andScion. By having these three distinct brands, it lets the company reach manysectors of the globe in a choice of vehicle for customers. Toyota has traditionallyalso been the leader in Total Quality Management or TQM. By using the Kaizentheory of continuous improvement, Japan caught up the U.S. auto makers duringthe 1980s. 15
  • GM MotorsSWOT ANALYSISSTRENGTHS1. Large Market Share Although GMs market share in the US has dropped it is still very muchcompetitive at 26 percent. They also have an increasing share in the Chinesemarket. With the right decisions there is no reason for GM to not become theautomotive leader it once was.2. Global Experience As explained above even with GMs recent decline they still have themarket share and the experience to bounce back. They have been a worldwidecompany for nearly a century now and have established themselves as the globalleader for most of them. If you recall I mentioned above that a currentopportunity for GM is to expand globally and as we can see they already havethe experience to do so. It is just a matter of the correct planning and properimplementation of those plans that will decided whether or not GMs goals areachieved.3. Variety of Brand Names GM as I mentioned has been the automotive leader for the majority ofthe last century. A large reason for that is the wide variety of quality brandnames that appeal to all target markets. The current GM brands include:Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Hummer, Saab, Daewoo,Opel, and Holden.4. GMAC Customer Financing Program Since its establishment in 1919 it has proven to be GMs most reliablesource of revenue. 16
  • GM Motors5. OnStar Satellite Technology Developed in 1996 OnStar currently has over 3 million subscribers andis standard on all GM vehicles. This technology allows the vehicles to betracked in the event of an emergency or theft. It also allows the driver and orpassengers the ability to communicate with OnStar personnel at the click of abutton.WEAKNESSES1. Behind on Alternative Energy Movement This is GMs biggest weakness. The alternative energy/hybrid trend hasbegun to take place in the automotive industry and GM has been one step behindthe competition in terms of alternative energy vehicles. This has led to manyproblems including loss of market share and a decrease in company profit. Inorder for any automotive company to be successful from this point forward theymust be Hybrid friendly and fuel efficient.2. Poor Organizational Structure GMs organizational structure seems to be too vertically integrated. Thiscauses a lack of communication between employees from top to bottom and mayhave played a part in GM falling behind on the alternative energy movement.3. Stagnant Profitability Looking at GMs profit we see that they are certainly struggling withrespect to the size of their company. Their profit margin was about 1.5% and theROE has dramatically decreased over the recent years dropping to 10% in 2004.This is a situation that shareholders will not be pleased with. 17
  • GM Motors4. Overly Dependent on US market GM has become too dependent on the US market and must takeadvantage of the opportunity to expand globally. The competition is becomingtoo strong to focus on just one country.5. Overly Dependent on General Motors Acceptance Corporation (GMAC)Financing GM has become too dependent on its financing program. Granted it is agreat strength for GM, however they once again cannot rely solely on financingin order to turn profit, especially if they want to compete with Honda andToyota who are rapidly growing.6. Poor Credit Status GMs financial status has like everything else has been graduallydecreasing. Their current ratio is just barely above 1 and their asset test is evenlower. Although, I dont see them getting denied based on their credit at thispoint, the seriousness of the matter is certainly apparent.OPPORTUNITIES1. Alternative Energy Movement It is obvious that GM was behind its competition with regards to theresearch and development of hybrid vehicles. However hybrid technology is stillvery much new giving GM the opportunity to once again become the automotiveindustrys leader in innovation and technology.2. Continuing to Expand Globally. Recently GM saw an increase in the Chinese automotive market, whichproves their needs to be more emphasis put on foreign markets. If GM caninfiltrate these markets and successfully grow along with their continuing focuson the US market they will be headed in a positive direction. 18
  • GM Motors3. Low Interest Rates With the right marketing strategy the low interest rates have the potentialto generate an immediate increase in sales.4. Develop New Vehicle Styles and Models This is an opportunity that will never be satisfied, meaning that GMshould always be attempting to develop the automotive worlds most popularvehicles, and as we know, what is in today will be out tomorrow.THREATS1. Rising Fuel Prices With GM being a large producer in both trucks and SUVs, sales havedrastically decreased due to the lack of fuel efficiency. The rise in fuel priceshas played a significant role in creating the opportunity for development of bothhybrid and more fuel efficient vehicles. As you will find with most threats, anequal opportunity will usually emerge as is the case here with GMs opportunitymentioned above.2. Growth of Competitors GM no longer has the luxury of being the known leader in theautomotive industry and faces the reality that they are in serious trouble. As Imentioned earlier Toyota took the first step in the direction of hybrid technologyand has since drastically grown and become the questionable automotivefrontrunner to start the 21st century.3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable.GM is responsible for providing generous pension benefits to its employees, 19
  • GM Motorswhich at the time seemed like a great idea,however they are now experiencingproblems as more and more people begin to collect.4. Increased Health Care Costs GM, like many large companies with quality employee health carebenefits, is experiencing a large financial hit that only gets worse as timecontinues.5. Rising Supply Costs, i.e. Steel Once again this threat affects the entire automotive industry and forceseach company to cut manufacturing and production costs as much as possible,without taking away from the quality of the product.PORTER’S FIVE-FORCES ANALYSIS The competitive structure of an industry is another important componentof identifying factors that are a threat to diminish profitability. One of the mostefficient ways to assess competitive issues is to consider Michael Porters five-force analysis. Porter has highlighted five such factors:(1) Rivalry between existing competitors,(2) Threat of entry by new competitors,(3) Price pressure from substitute or complementary products,(4) Bargaining power of buyers, and(5) Bargaining power of suppliers.1. Rivalry between existing competitors With the rise of foreign competitors like Toyota, Honda and Nissan inthe 1970s and 80s, rivalry in the American auto industry has become muchmore intense. Firms compete on both prices and non-price dimensions. Theprice competition erodes profits by drawing down price-cost margins while non- 20
  • GM Motorsprice competition (e.g., new car rebates and interest free loans) drives up fixedcost (new product development) and marginal cost (adding product features).One of the other reasons there is such high rivalry is that there is a lack ofdifferentiation opportunities. All the companies make cars, trucks or SUVs. Thecompetitors are compared to one another constantly. In recent years there hasbeen significant market share variation, another indication of rivalry and its verystrong threat to profits.2. Threat of entry by new competitors The presence of new firms in an industry may force prices down and putpressure on profits. There are, however, barriers to entry that tend to protectestablished firms. One would expect the production of automobiles to requiresignificant economies of scale, an important barrier to entry. The new entrantwould have to achieve substantial market share to reach minimum efficientscale, and if it does not, it may be at a significant cost disadvantage. While theevidence suggests that economies of scale in the auto industry are substantial,there are also indications that large size may not be as important as commonlyassumed. Nevertheless, entry would represent a large capital investment to anynew firm and the body of research still indicates that economies of scalerepresent a substantial barrier to entry. Consequently, entry is currently a weakthreat to profitability.3. Price pressure from substitute or complementary products While five-forces do not directly consider demand, it does consider twofactors that influences demand ― substitutes and complements. Although newcars generally are slightly price elastic, suggesting few real substitutes (e.g., busand rapid transit), the demand for a particular model is highly sensitive to pricebecause of the availability of close substitutes for a given model. A change inthe price of a complementary product (e.g., gasoline, batteries, and tires) couldhave a significant impact on the demand for automobiles. The rising price ofgas, an important complementary product, is likely to affect some firms more 21
  • GM Motorsthan others depending upon the vehicle composition. Recent rising fuel pricesare likely to have a greater impact on the big three (GM, Ford Motor andDaimler-Chrysler) whose most profitable models are energy inefficient pick-uptrucks and sports utility vehicles. On balance, the overall impact on "industry"profitability from substitutes and complements is weak to moderate.4. Bargaining Power of Buyers Buyer power refers to the ability of individual customers to negotiateprices that extract profit from the seller. Individual consumers have someinfluence over price within a given dealership, but little power overmanufacturers. Customers can easily, and with little cost, switch to other autodealers. Furthermore, customers now have access to market information (pricesand costs) from the Internet that enhances their negotiating power. But whenyou have many individual customers, each representing a small proportion oftotal sales, they will have little bargaining power with manufacturers andtherefore pose a weak threat to industry profit.5. Bargaining Power of Suppliers Auto manufacturers require inputs-labor, parts, raw materials andservices. The cost of these inputs can have a significant effect on profitability.Whether the strength of suppliers is weak, moderate or strong depends on howmuch bargaining power they can exert. The auto manufacturers have largesupplier networks that appear to exert little bargaining power. Nevertheless, theUnited Auto Workers (UAW), the only supplier of labor, has historically exerteda great deal of leverage over the benefits and wages provided by the big three.Because of this historical dominance by the UAW and the uncertain results oftheir current negotiations with the big three, one has to characterize supplierpower, at least in this segment of the American market, as a strong threat toprofits. 22
  • GM Motors The following table summarizes the results of a five-force analysis of theautomobile industry.CORE COMPETENCE The core competence of General Motors is innovation. This is thedriving force behind its $190above turnover. General Motors has been utilizinginnovation in service ad technology to secure itself a dominant position in theautomobile industry, since 1908. In 1911, it conceptualized, engineered andcommercialized the self-starter engine for the first time. Then in 1926, itsproduct Cadillac was the pioneer in devising a nationwide service strategy. In1996 General Motors introduced OnStar satellite technology which allowsequipped vehicles to be tracked in case of an emergency or theft and allows thepassengers to communicate with OnStar personnel. Other new car conceptsinclude mini cars such as Chevy Aveo. However in the case of hybrid vehicles,General Motors was unable to keep up to the pace of the market demand.FINANCIAL RESULTS Based on the GM’s consolidate net sales and revenue, it shown thatGeneral Motor Corporation revenue has been falling to $ 192.6 billion in 2007from 193.5 billion in 2004. GM incurred a consolidated net loss in 2007 of $10.6 billion, compared to net income of $ 2.8 billion in 2004.In the last 1990s,GM had regained market share up $ 80 a share. In 2000, the interest went up bythe Federal Reserve to quell the stock market and a severe stock market decline 23
  • GM Motorsfollowing the September 11, 2001 attacks. Due to this factor, it affected apension and benefit crisis at General motors and many other Americancompanies. The current stock market price of General Motors are fallingbetween $28- $29 per share. It has been falling down gradually in the past sixyears. General Motors North America market share in 2007 fell to 25.5%compared to 26.7 in 2004.Decreased in market share also due to sales declinesin segment where GM has high volume such as large sport utilities, mid-sizedutilities, and mid-sized cars. The unfavorable results of GM’s consolidate netloss in 2007 were driven primarily by losses at GMNA due largely tounfavorable volume and product mix.SUGGESTED STRATEGIES Below is a list of possible strategies General Motors could use to redirectprofits and be able to maintain survival for the future.1. Market Development2. Market Penetration3. Product Development4. Restructuring5. Retrenchment6. Liquidation Implementations Suggested policies for General Motors would initiate with improvementin their product then market growth, liquidation, and restructuring. Reasons forproduct improvement being at the top of priorities is that GM has to create atype of Hybrid vehicle that will allow it to keep up with the pace of thecompetitive environment, but must be a product that stands out from the crowdat the same time. Prime example of their idea for a Hybrid SUV, it fits the GMprofile with maintaining the SUV portion, but allows the firm to stay with trendpatterns.GM must also re-evaluate the market they are trying to approach, 24
  • GM Motorsbecause for so long they have continued with a tradition outlook forautomobiles, but now that times are changing their original target market is notlooking for what they once were. General Motors needs to take a step back andtake look at how they want to position themselves and towards what marketsince what they have been doing is no longer in favor for the company. Anexample of what GM could possibly do is producing a futuristic vehicle, whichhas been heard in rumors from Toyota about their next plan of action. If GeneralMotors could provide a "futuristic" vehicle before Toyota has the chance to hitthe market with theirs GM would be a step ahead of the competition. Economicfailure is important to GM because their possessions are a lot higher thanreturns, and if GM may possibly try to convert their assets into cash then therewould be more readily available funds and then GM would not have to dependsome much on their U.S. sales, which only include 2/3 of that market and theirfinancing tactic wouldnt be as much of a risk. Liquidation would clearly helpout the financial parts of the organization. Last but not least is restructuring,which General Motors most desperately needs to review possibilities. Thecompany has taken a large hit in recent years and needs to find a way back to thetop. This is only going to be achieved if something drastic is changed.Restructuring the product development pace would be a start as well as cuttingback on employees because the company is growing in size but not in profit,which causes a red flag for GM. The company needs to be re-evaluated in manyways, but GM has been strong for many years that it is very possible for thecompany to come above these issues.EVALUATION: The major thing for General Motors is to improve a Hybrid vehicle thatwill keep the position in the competition for the company as well as to bedistinguished. Generating a Hybrid SUV is a brilliant idea and if GM can pullthat off by the end of 2012 the future could look very bright for them. Thecompany has a huge background proving that they can maintain being number 25
  • GM Motorsone, its just a matter of product development being maintained and refocusingproducts to the correct target markets. 26