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General Motors

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Alexis Buchoz

on 17 April 2011

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Transcript of General Motors

Strategic Control System Cont..

Constantly creating new cars
Gaining and getting rid of brands
Inventing new operating processes
Trying to model their processes off the very successful foreign process
Responsiveness to customers
Struggle to respond to customers wants/needs,
Lead to its downfall
Working to improve to get back on top History

1908: Founded by William C. Durant
1917-19: GM shifts truck production to war effort
1920: Alfred P. Sloan became CEO
1925: Ford sales plummetted and GM excelled
1925-75: GM dominated the market
1937: Violent sit downs - UAW
1942: Plants turned to war effort
1970's: Foreign efficiency is recognized
1979: Employment peaks to >600,00
1980: Roger Smith appointed CEO
1982: Low manufacturing experiment
1990: Robert Stemple stepped in as CEO
1996: Joint venture with Japenese
2000: New plant in Lansing
2001: Rick Waggoner appointed CEO Current Issues

Employees paid to high
Decline in sales
Regain reputation
competitors History

2007: Experience largest annual loss
2008: Rising gas prices effect sales
2008: Money requested from congress
2009: Major layoffs began
2009: More money requested
March 2009: Wagoner is let go; major cuts to take place
May 2009: UAW agrees to job cuts
June 2009: Files for Chapter 11 bankrupcy Vision

"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 customers’ enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people."

"G.M. 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."
2011 1950 1920-30 1910 1960 1970 1990 Organizational Structure

Daniel F. Akerson - Chairman and CEO
Stephen J. Gersky - Vice Chairman, Corporate Strategy, Business Development, Global Product Planning,
and Global Purchasing and Supply Chain
Thomas G. Freeman - Vice Chairman and Global Chief Technology Officer
Jaime Ardila - GM Vice President and President, South America
Timothy E. Lee - GM Vice President and President, International Operations
David N. Reilly - GM Vice President and President, Europe
Mark L. Reuss - GM Vice President and President, North America
Daniel Ammann - GM Senior Vice President and Chief Financial Officer
Mary T. Barra - GM Senior Vice President, Global Product Development Organizational Structure Cont..

Michael P. Millikin - GM Senior Vice President and General Counsel
Selim Bingol- GM Vice President, Global Communications
Nicholas S. Cyprus - GM Vice President and Chief Accounting Officer and Controller
Joel Ewanick - GM Vice President and Global Chief Marketing Officer
Robert E. Ferguson - GM Vice President, Government Relations
Terry Kline - GM Vice President, Information Technology and Chief Information Officer
Anne T. Larin - Corporate Secretary
Victoria McInnis - Chief Tax Officer
Chester N. Watson - General Auditor Organizational Structure Cont..

Functional structure at corporate level
Decentralized divisions
Grouped according to its purpose
Departments have own President and VP
Strategic Control System

Has been a struggle for GM
Not efficient cars or operating processes
Restructuring after bankruptcy
Builds quality cars
Tries to find the best prices for consumers Corporate Culture

Environment awareness
Diversified - I am GM Campaign
Advocates of health safety and education
Community technology and innovation

Lead in advanced technologies and quality in creating the world’s best vehicles
Give employees more responsibility and authority and then hold them accountable
Create positive, lasting relations with customers, dealers, communities, union partners and suppliers to drive our operating success External Business
Environment Analysis

• Competitor Analysis
• Porter’s Five Forces Model
• Macro-Environment Factors
• Strategic Groups
• External Threats and Opportunities Competitor Analysis

Ford Motor Co.
Founded in 1903 in Dearborn, MI
Manufactures and distributes automobiles across six continents
Estimate of 164,000 employees and 70 plants worldwide
Brands include Ford and Lincoln
2010 Gross Profit 24.5 billion and 128.95 billion in revenues
Toyota Motors
Established in 1950 in Japan
Continues to be one of the top-selling brands in America
Brands include Toyota, Lexus, & Scion
Employs 317,734 employees
2010 Gross Profit 24.26 billion and 236.8 billion in revenues
Chrysler Group LLC
Founded in 1925 in Auburn Hills, MI
Manufactures and distributes automobiles
Brands include Dodge, Jeep, Chrysler, Ram, and an alliance with the Fiat Family
41.95 billion in revenues in 2010
Smallest of the big 3
Worldwide company to this Porter's Five Forces Model Bargaining Power of Suppliers- Low Threat

Numerous small and medium size and various (fragmented) automobile component manufacturers
They are very dependents with automobile manufacturers, like GM
These suppliers cannot integrate forward due to entry barriers
Any automobile manufacturers, like GM can integrate backward without much problems. Bargaining Power of Buyers- Medium to Low Threat

High switching costs for customers (dealers and end customers)
Buyers cannot enter the market
Buyers cannot buy cars from more than one company at once
Buyers do not purchase in large quantities
Many different suppliers for customers to choose from Risk of Entry by Potential Competitors

Economies of scale achieved by GM with suppliers
Brand Loyalty with current customers
Market served well with current competitors
High customer switching costs Rivalry among Established Companies- High Threat

Small number of large well-established competitors
Demand for quality products
High exit barriers Threat of Substitutes- Low Threat
Other forms of transportation
Busses, trains, walking, bicycle, etc. Summary of Porter’s Five Forces Model

Threat of Potential Entrants- Low Threat
Bargaining Power of Suppliers- Low Threat
Bargaining Power of Buyers- Medium to Low Threat
Rivalry among Established Companies- High Threat
Threat of Substitutes- Low Threat Macro-Economic Factors

1. Dependent on the Economy
Gas prices dependent on car sales
If the economy is down, car sales will decrease
2. Social forces and values
Move towards “Green energy”
Electric cars, etc.
3. Technological Forces
Need to keep technology up to date
Higher MPG in cars Strategic Groups External Opportunities

Growth potential in other areas of the world- India and China- market for purchasing cars in both countries around 15%
Rising demand for Hybrid vehicles- GM has six hybrid models and investing more in the technology
Technology- new ways to build cars more efficiently and effectively with better technology
Global alliances with suppliers
Ability to create economies of scale External Threats

Global recession
Weakness is Global Automobile Industry
Intense competition
Global Oil crisis
Taxes & Government regulations
Suppliers can go to other manufacturers to make up for GM’s aggressiveness economy Internal Assessment

Internal Strengths
Internal Weaknesses Internal Strengths

Brand Recognition
Worldwide presence
Streamlined structures
Innovation promotion
IT system Internal Weaknesses

Diminishing dealer network
Insufficient Liquidity
Inadequate performance among some business segments
Low debt ratings
Employee morale
High labor costs Recommendations

Continue to expand social responsibility and corporate culture
Environmental focus - Green/hybrid cars
Use bankruptcy to their advantage - Renegotiate contracts
Lead industry with R&D and continue to improve efficiency
Hire valuable employees and retain them by empowering and challenging them
Continuously improve your the orgraniational structure

Functional Level Strategy

Marketing and Sales:
Local distribution Channel
Top Mamangers coordinate actions from headquarters
Each channel has separate marketing to increase sales

Human Resources:
-Family First program
-Great Retiree Benefits Business Level Strategy

Trade off between cost and differentiation
Implications of unionized labor forces and costs

High range in price between models Corporate and Global Level Strategy

Multi divisional structure
Centralization of key processes
Brands are subdivisions
Minimal links to brands in opposing subdivisions GM employs 209,000 people in every major region of the world and does business in more than 120 countries.
Produce cars and trucks in 21 countriies.
Largest markets is in China, followed by United States, Brazil, the United Kingdon, Germany, Canada and Russia. Questions?
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