STRATEGIC MANAGEMENT AND LEADERSHIP

Strategic Management and Leadership

Strategic Management and Leadership

TASK A

Question 1

Executive Summary

General Motors (GM) is not only a leading employer among automobile companies of the transitory world, but, it is also one of the modern industries of the world. (Barabba 2004, 4-16) Nowadays, GM is enjoying its leading edge. Ups and downs have always remained a part of GM's history. There was little cause for celebration in 2008, the year that General Motors marked its 100th anniversary. After a slow but steady decline over the previous three decades, GM was finally facing the end of the road, at least in its current form. The company which had at one point dominated the world's automobile industry had seen its domestic market share halve from 45% in 1980 to just 22%. The industry operates through two businesses, automotive and financial services. The automotive business is referred to as GM Automotive or GMA, which includes four automotive reportable segments consisting of GM North America (GMNA), GM Europe (GME), GM Latin America/Africa/Mid-East (GMLAAM) and GM Asia Pacific (GMAP). The financial services business operates through a single reportable segment, FIO.

Company Information

From the very first day of its existence (1908) (Charny 2001, 124-131), GM is leading internationally due to its unique products (Barabba 2004, 6-13). GM has remained a global tag in advanaced technological products since 1931 (Tittemore 2004, 25-99) For years, GM's business strategy was damaged by several deep, underlying flaws. In its core market of North America, the group was structured to produce big, fuel-hungry power cars and trucks, but first gas prices and then credit worries prompted consumers to move decisively towards cheaper automotive options. There were also numerous competing brands, many of which offered multiple versions of the same vehicle. For example, no less than four separate group-owned marques offered mass-market midsize sedans (The Chevrolet Malibu, Buick LaCrosse, Pontiac G6 and Saturn Aura). Rival Toyota offered just one, the Camry, and in 2007 it alone outsold GM's four cars combined. For 2008, GM reported combined vehicle sales of 8.35m cars and trucks, down by 11% on the previous year. That decline was greater than that of arch-rival Toyota, which finally secured the position as the #1 vehicle manufacturer worldwide with sales of just under 9.0m.

External and Internal Analysis

Pestle Analysis

Economic

As sales began to fall from 2005 onwards, the company attempted to win back customers with more exciting models that were less expensive to run, as well as heavy discounting and clearer differentiation between its multiple competing brands (Barabba 2004, 6-13).

Political

On the basis of political situations, GM's management strategy is very powerful.

Technology

GM and Energy Conversion Devices established GM Ovonic, a joint venture to develop, manufacture and commercialize Ovonic nickel metal hydride batteries for electric vehicles in 1994. (Barabba 2004, 12-23). In 2000, GM entered into electronic business (e-business) partnerships with Sony, NetZero and America Online. In the same year, GM and Fiat entered a strategic alliance, with GM holding 20% equity in Fiat and the two companies creating several joint ...