Proposal on

“The benefits of General Motor's (American Car Company) partnership with Shanghai Automotive in China”

CHAPTER 1: INTRODUCTION

Outline of the Study

This study is based on the analyzing the strategic alliance of General Motors and Shanghai Automotive. The first chapter of introduction will deals with analyzing the gist of the strategic alliance amidst the two companies. The second chapter deals with the advantages seeked by the two companies in forming a strategic alliance. The third chapter is concerned with the methodology utilized. The fourth will be concerned with findings and discussion and the fifth entailing the implications and recommendations.

Background of the research

With the growing needs of individual and the degree of competitiveness that is increasing on a regular basis and the urge to be at the right place at the right time has enhanced the importance of the car industry. This has also induced an intense competition amidst the automotive industries. Companies want to capture as much of the target market as they possibly can to ensure higher revenues and hence long term sustainability. In order to attain the target market companies are expanding across borders. Expansion brings about higher timely demands which needs to catered to. Since the needs of the customers are dynamic companies need to keep a tab on it. All factors cumulatively stimulate companies to form a strategic alliance.

With sufficient profit making, the company will have the ability to be competitive and further expand its business offshore. To become an international business, studying the trend, culture and customer's needs and wants are significant to ensure the right target audience chosen and selected. Therefore, a foreign company selects partnership with local companies, who are very familiar and understand perfectly well on their target audiences demands. An international partnership is a joint venture between two or more organization doing common task to share risk and benefit. The activities may be differ up to agreement, can be work together on a set of activities for different concern or attend a common concern. Major automotive companies gain competitive advantage by increasing sales and driving down cost, which makes them concentrate production in China, the fourth largest country in the world following Russia, Canada and USA and the world's second largest economy next to USA because of its large population and cheap labour cost. China easily earns the competitive advantage in terms of cost.With low wage levels and easily trainable industrial work forces in China, main automotive companies are likely to shift all their major manufacturers from the existing home location to china.

General Motor (GM),the biggest car company in America challenged in Chinese market as the General Motor's second largest market after United State with first dealership in 1929 on Buick(luxury car). For fist coming to china GM set up major operation as 50-50 partnership with Shanghai Automotive Industry Corp (SAIC) .

Aims & Objectives

The objectives of this research is to explore the advantages of the alliance amidst the two companies along with the potential enstored in terms of the opportunities it ...