General Motors - Strategic management plan

Thèmes abordés

Strategy general motors

Résumé du document

The development of the automotive industry is probably the biggest revolution of the twentieth century along with Internet and telecommunications. Motor cars were invented in 1769 but we had to wait until 1890 to hear about the word "automobile". Since then, many car companies were born; cars and automobiles became the first means of transport in the world and became a way of life. Automobiles, apart from being useful and indispensable as a medium of transport, are also known to be a very common passion. Be it racing, Formula 1, vintage car rallies, cars featuring cutting edge technology, cars are loved by millions of people. The car industry hasn't stopped growing in more than a century. In 2006, one could count almost 600 million cars over the world, almost 1 car for 11 human beings .

But the industry has been facing difficulties since around 2008. Several factors can be pinpointed such as the increase in oil prices, pricing pressures from raw material suppliers, purchasing behavior, etc. The global car market is evolving very fast. In some countries, the market has witnessed a slowdown while in other countries, emerging countries, the market is growing quickly. Logically, the fastest growing markets for car manufacturers are China, Brazil and India, countries in the midst of an exponential economic development. These have recorded the maximum growth during the past five years.

The United States is the world's largest market for light vehicles, cars and light trucks (SUVs and pickups). In 2008, a total of 13.24 million vehicles were sold in the US and we count more than 247 million cars in the US. The industry is dominated by the "Big Three" automobile manufacturers: General Motors, Ford and Daimler-Chrysler. But with the crisis in the industry, GM left lost its number one rank to Japanese manufacturer Toyota. All "big three" are currently facing difficulties but GM has suffered more damage by the crisis; the group is on the verge of bankruptcy.

Through this paper we will analyze the situation of General Motors via a SWOT and PESTL analysis. This analysis will help us understand and relate to the causes of the GM failure, and report the strategic management decisions made by Rick Wagoner to save the company. The last part of the paper isdedicated to the formulation and implementation of strategic management recommendations for GM.

Extraits

[...] Presentation of GMC GMC for General Motors Corporation, is ( was) the biggest car manufacturer in the US. Founded in 1908 by William Durant, in Flint, Michigan. The company GM was a holding of different carmakers: Cadillac, Buick and Oldsmobile. Later on the company melts with Chevrolet, but in 1915, Durant buy Louis Chevrolet's shares and re and entered the New York Stock Exchange. General Motors ended possessing brands like Saab, Opel, Hummer, Buick Cadillac, Chevrolet, Pontiac, Saturn, Vauxhall and more. [...]

[...] By the way, putting too much pressure on employees can lead to bad results, in France the Orange/France Telecom case about employees suicides is her to prove it. Since 2003 the costs of pension and health care benefits have dramatically risen to almost two billion dollars in 2006[12] [13]. In the same time, Japanese industry did not seemed to have the same problem because employees were paid considerably less. Thus, the decline of GM industry already began, and management was not efficient enough to handle the situation. [...]

[...] The group took several measures that were not efficient at the time, and GM dived into bankruptcy. Finally, according to The Guardian, filed for Chapter 11 protection against its creditors' demands at 8am local time after racking up losses of $81bn over four years, putting a veteran bankruptcy judge, Robert Gerber, in charge of the future of 235,000 employees worldwide.” But the new manager of GM have to learn from the former directors' mistakes, and implement strategic decision for the future: Reducing production costs Develop cleaner cars and more economic cars Satisfy the demand Build a new brand identity This will not be easy to fulfill and it will take time, as president Obama declared during a press conference in downtown Manhattan: want to be honest with you: building a leaner GM will come at a cost," he said. [...]

[...] Strategic Management recommendations a. Short term b. Mid term c. Long term Introduction The development of the automotive industry is probably the biggest revolution of the twentieth century along with Internet and telecommunications. Motors cars were invented in 1769[1] but we have to wait until 1890 to ear about the word “automobile”. Since then, many car companies were born; cars and automobiles became the first transportation mean in the world and became part of life. Automobiles, in spite of being useful and indispensable to move, are also known to be a very common passion. [...]

[...] Finally the company is placed under protection Chapter 11 of American bankruptcy law, and now the American government owns 60% of the company and started a restructuration plan for a The plan includes closing several plants over the world, firing people, closing dealerships and restructuring the management team and board of directors. III. Strategic Management recommendations a. Short term General Motors cars are numerous, as we saw. They are many different models of cars. Chassis, frame parts, platform, skeleton etc are proper to each model. Copying the Dacia business model, GM should standardize as much spares parts as they can for they entire range of vehicles. As a result, pieces can be reused in many different models. [...]