Strategic Analysis

An Overview and Analysis of General Motors

General Motors is a public company currently trading as GM in the New York Stock Exchange. The company was founded in Flint, Michigan, United States on September 16, 1908 and is operating as a multinational company with a worldwide presence. GM has a total of 396 facilities located in several countries in six continents. GM produces, sells and distributes automotive components including complete automobile, automotive parts and Commercial vehicles (Andrew, 2005). The company has an online presence with at www.gm.com that highlights its services and general business to the public (General Motors, 2014).

General Motors organizational strategy begins from its corporate governance and business culture. The company is headed by Dan Amman as its president, Mary Bara as it’s CEO and Tim Solo the Board Chairman (General Motors, 2014). These three significant leaders with assistance of eight vice presidents assume functional organizational theory. This theory dictates specific tasks each vice president leader should manage in their specific duties to the company.

Apart from leadership, the company has a significant presence worldwide. Its presence in approximately 396 countries with production factories represents GM’s presence of motor services across the globe. Another significant organizational strategy is that the company through its research and development section employs constant innovation for safety and durable automotive products. Innovation is key to making automobiles that are environmentally friendly in terms of economic usage such as fueling as well as reduced carbon emission (General Motors, 2014). Vehicle purchase financing is also a unique organizational strategy. GM strategically finances vehicle assets for its customers to tap on customers who want quality vehicles but do not have ready cash. Vehicle asset financing has been described as both a sales tool and a subsidiary business for GM. Although heavy commercial vehicles that are part of GM’s products still consume significant amounts of fuel, the lower motor vehicles for this company standout in design for both usage and being environmentally friendly.

GM’s business model takes into account production and servicing of motor vehicles. The servicing part might be specific because the company only services its customer’s vehicles and not vehicles from other manufacturers. Therefore, the main money making strategy for this company is completing a vehicle manufacturing process and selling it directly to customers. GM’s business model does not use retailers on its supply chain (Womack, Jones, and Roos, 2007). Although, wholesalers are used, the company prefers to sell its vehicles and services directly from its manufacturing warehouses to its chain stores located around the globe. Most of GM’s revenue comes from manufacturing, production and sale of its line of motor vehicles and motor vehicle parts.

The company does well in financing its customers own new vehicles as subsidiary services as well as a service that will earn it revenue. In the U.S. automotive industry, General Motors is ranked first beating out Ford and Chrysler. These three companies are the major U.S. automotive market manufacturing companies (Bayou, and Korvin, 2008). The automotive industry is competitive and sometimes it becomes hard to define, which company has a comparative advantage. The number of hybrid vehicles such as Buick, Cadillac, Chevrolet, GMC and all electrics such as Tesla among the future breeds is an example of what factors define the size and scope of the automotive market in the U.S. as well as defining a market comparative advantage.

References

Andrew, I.C. (2005). Learning through Alliances: General Motors and NUMMI. California Management Review. 47 (4): 114-136.

Bayou, M.E. and Korvin, A. (2008). Measuring the leanness of manufacturing systems – A case study of Ford Motor Company and General Motors. Journal of Engineering and Technology Management. 25 (4): 287-304.

Womack, J.P., Jones, D.T. and Roos, D. (2007). The machine that changed the world. New York. Free Press.

General Motors (2014). About GM Corporate Officers. Retrieved from http://www.gm.com/company/aboutGM/GM_Corporate_Officers.html