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2. GM must differentiate its products for customers to get a sense of value-added

3. Must appeal to needs and trends of local markets instead of using a global Corporate Level Strategy & Organizational Structure<br /> <br />- Multi Divisional Structure<br />Centralization of key processes <br />- Regions represent autonomous Strategic Business units<br /> <br />- Brands are a subdivision of the SBU’s with minimum control over processes<br />- Minimal links to identical brands in different regions<br />Problems with Current Structure<br />1)Structure focuses on cost reductions<br />2)Direct conflict with the intended integrated differentiation/cost leadership strategy<br />3)Brand level management is almost inexistent at the SBU level which results in lack of differentiation<br />4)Regional SBUs do not have enough control over their regions.**<br />General motor’s strategic board<br />Why did general motors did not succeed?<br />If General Motors Corp. (GM ) were any other company, its problems would have sorted themselves out a long time ago. Logic says that when your cash holdings exceed your entire valuation in the stock market, some Wall Street shark is going to swoop in, snap up the good parts, and toss the rest. Companies with bloated factories and workforces got religion the hard way 20 years ago, in the days of quot;
Neutron Jackquot;
Welch. And with today's more active boards, CEOs who consistently lose ground to the competition usually don't need Donald Trump to tell them they're fired.<br />Worst of all, GM reached a watershed in its four-decade decline in market share. After losing two percentage points of share over the past year to log in at 25.6%, GM has reached the point at which it actually consumes more cash than it brings in making cars, for the first time since the early '90s. GM, once the world's premier auto maker, is now cash-flow-negative. That's a game changer. Without growth, GM's strategy of simply trying to keep its factories humming and squeaking by until its legacy costs start to diminish is no longer tenable. If market share continues to slip, its losses will rapidly balloon.Normally a company in such straits contracts until it reaches equilibrium. But for GM, shrinkage is not much of an option. Because of its union agreements, the auto maker can't close plants or lay off workers without paying a stiff penalty, no matter how far its sales or profits fall. It must run plants at 80% capacity, minimum, whether they make money or not. Even if it halts its assembly lines, GM must pay laid-off workers and foot their extraordinarily generous health-care and pension costs. Unless GM scores major givebacks from the union, those costs are fixed, at least until the next round of contract talks in two years.<br />Gm’s global strategy<br />In Britain, you can buy a Vauxhall, a Chevrolet, a Saab, a Cadillac or a Hummer. On the Continent, you can trade in the Vauxhall for an Opel. In China, perhaps you’d prefer a Buick, in Dubai a GMC. How about a Holden? Well, you’ll have to travel to Australia or New Zealand. But they are all General Motors brands.<br />As Ford Motor streamlines its global business around its flagship brand, moving to divest itself of nameplates like Aston Martin, Jaguar and Land Rover, General Motors is sticking to a different international marketing strategy. Rather than focus on one brand, it wants consumers to be able to choose from a fleet of them.<br /> “How do you cover an area so diverse with a proposition that’s valid across the entire region?” he said. “You can’t do that with one brand. You have to have a portfolio.”<br />The increase in international sales helped G.M. retain its position as the world’s largest automaker last year, narrowly fending off a challenge from Toyota. Though January was a surprisingly good month for G.M. in North America, like other American automakers it has been struggling for years in the domestic market. But in the European region, G.M.’s sales rose 9 percent, to 2.2 million vehicles, last year. In Asia, sales were up 15 percent, to nearly 1.5 million cars.<br />GMC’s annual sales in the region have risen sixfold since 1999, to more than 30,000 vehicles. G.M. is aiming the Yukon at well-to-do consumers in the Middle East.<br />In the less affluent countries of Eastern Europe, the Chevrolet brand has shown strong growth. G.M. sold more than 450,000 Chevrolets in the region last year, only a few years after the brand was introduced there.<br />At a time when some American marketers are playing down their origins abroad, General Motors has been promoting Chevrolet in Europe with a bit of American.<br />SWOT Analysis<br />Strengths<br />1. Large Market Share<br />Although GM's market share in the US has dropped it is still very much competitive at 26 percent.They also have an increasing share in the Chinese market. With the right decisions there is noreason for GM to not become the automotive leader it once was.<br />2. Global Experience<br />As explained above even with GM's recent decline they still have the market share and theexperience to bounce back. They have been a worldwide company for nearly a century now andhave established themselves as the global leader for most of them. If you recall I mentioned abovethat a current opportunity for GM is to expand globally and as we can see they already have theexperience to do so. It is just a matter of the correct planning and proper implementation of thoseplans that will decided whether or not GM's goals are achieved.<br />3. Variety of Brand Names<br />GM as I mentioned has been the automotive leader for the majority of the last century. A largereason for that is the wide variety of quality brand names that appeal to all target markets. Thecurrent GM brands include: Chevrolet, GMC, Cadillac, Buick, Pontiac, Saturn, Hummer, Saab,Daewoo, Opel, and Holden.<br />Weaknesses <br />1. Behind on Alternative Energy Movement This is GM's biggest weakness. The alternative energy/hybrid trend has begun to take place in the automotive industry and GM has been one step behind the competition in terms of alternative energy vehicles. This has led to many problems including loss of market share and a decrease in company profit. In order for any automotive company to be successful from this point forward they must be Hybrid friendly and fuel efficient. <br />2. Poor Organizational Structure As we can see in exhibit 1 of the case GM's organizational structure seems to be too vertically integrated. This causes a lack of communication between employees from top to bottom and may have played a part in GM falling behind on the alternative energy movement. <br />3. Stagnant Profitability Looking at GM's profit we see that they are certainly struggling with respect to the size of their company. Their profit margin was about 1.5% and the ROE has dramatically decreased over the recent years dropping to 10% in 2004. This is a situation that shareholders will not be pleased with. <br />4. Overly Dependent on US market GM has become too dependent on the US market and must take advantage of the opportunity to expand globally.competition is becoming too strong to focus on just one country.<br />Oppurtunities<br />1)alternative energy movement- It is obvious that GM was behind its competition with regards to the research and development of hybrid vehicles. However hybrid technology is still very much new giving GM the opportunity to once again become the automotive industry's leader in innovation and technology. <br />2. Continuing to Expand Globally. Recently GM saw an increase in the Chinese automotive market, which proves their needs to be more emphasis put on foreign markets. If GM can infiltrate these markets and successfully grow along with their continuing focus on the US market they will be headed in a positive direction.<br /> 3. Low Interest Rates With the right marketing strategy the low interest rates have the potential to generate an immediate increase in sales.<br /> 4. Develop New Vehicle Styles and Models This is an opportunity that will never be satisfied, meaning that GM should always be attempting to develop the automotive world's most popular vehicles, and as we know, what is in today will be out tomorrow.<br />Threats-<br /> 1. Rising Fuel Prices With GM being a large producer in both trucks and SUV's, sales have drastically decreased due to the lack of fuel efficiency. The rise in fuel prices has played a significant role in creating the opportunity for development of both hybrid and more fuel efficient vehicles. As you will find with most threats, an equal opportunity will usually emerge as is the case here with GM's opportunity mentioned above. <br />2. Growth of Competitors GM no longer has the luxury of being the known leader in the automotive industry and faces the reality that they are in serious trouble. As I mentioned earlier Toyota took the first step in the direction of hybrid technology and has since drastically grown and become the questionable automotive frontrunner to start the 21st century. <br />3. Pension Payouts. Part of this threat is their own doing and the other is simply unavoidable. GM is responsible for providing generous pension benefits to its employees, which at the time seemed like a great idea, however they are now experiencing problems as more and more people begin to collect.<br />Efforts to maintain its standard<br />Becoming efficient is GM's key goal right now, both in bringing back its own financial security and at the same time convincing the auto industry task force to provide crucial loans.To achieve this goal, GM will be trying to preserve its global product strategy that helps it reduce costs for model development by creating cars for global markets rather than specific regions. This task may become more difficult over the next few months, especially considering the state of GM's Opel subsidiary based in Germany and its own financial troubles.<br />But problems may crop up where GM is requesting financial help from third-parties in exchange for equity stakes in their brands - as is the case with the German government and Opel. If the German government were to claim control of Opel with a majority shareholding of stocks, it remains uncertain who would be in charge of running the company, especially in regards to GM's global development plans. The same could occur for its Holden and HYPERLINK quot;
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Daewoo subsidiaries. <br />GENERAL MOTORS AND ITS PATH TO INTERNATIONALISATION <br />Introduction Internationalisation concerns the process through which a firm increases its reliance on foreign markets and countries as a means of growth and financial performance improvement. The main components of a firm's degree of internationalisation consist of the number of countries in which the firm has foreign business operations and the number of diverse social cultures of the countries in which the firm operates and the geographic diversity of the foreign market.<br />Thus, the degree of internationalisation reflects the various differences across the countries and markets in which the firm undertakes foreign operations. General Motors Corporation (GM) is the world's largest automaker employing over 325,000 people in 32 countries. In 2006 it sold over 9 million cars and trucks globally in 5 continents with a global market share of 13.5 %. Internal and external triggers of Internationalisation The economic world has shifted from being a cluster of national economies to a global and more interdependent marketplace, based on line import, export and distribution of products, services and information around the world. <br />GM have been involved in a range of global ventures aimed at extending the carmakers market penetration and also increase its market share as well as sales. GM used exports, acquisitions, joint ventures and strategic alliances to enter foreign markets based on business considerations, that is, consistent with strategic fit.Global sourcing is mainly done to reduce production costs, and it has been often adopted in parallel with concentrated purchasing and platform unification among strategically allied companies and regional divisions worldwide. <br />The GM strategically allied with Fiat in 2000 by acquiring 20 percent of Fiat's equity to establish a joint procurement venture of 50 percent capital each for concentrated purchasing of about $32 billion per annum .This alliance have the capacity to strengthen their bargaining power as well as reducing the supplier management cost.<br /> A key issue in internationalization is the need to adapt to cultural characteristics.Consumer attitudes toward foreign goods and services, and their perceptions of country of origin and of foreign business are important factors when assessing the potential of markets. The number of younger, higher-income consumers with increasing demand for goods and services living in the emerging markets continues to grow, these markets become increasingly attractive and the need to assess the receptiveness of these consumers to foreign brands and business becomes important .<br />* Benefits of Internationalisation to General Motors By internationalising, a firm is able to increase the range of distinctive resources that are likely to come across and can potentially use for value creation. GM expanded its capabilities in manufacturing through technological competences. This was achieved by forming subsidiaries, alliances and joint ventures with other automobile companies in different parts of the world (See appendix2). Automobile companies pursuing a global strategy often look to global ventures to help them with new product development, branding, procurement, marketing, account management, pricing and market intelligence. According to the company has been involved in a range of global ventures throughout its history, each of which has aimed at extending the carmakers market penetration. Partnering enables GM to rapidly expand its technical fields and bring that knowledge to bear on corporate problems. Through the various stages of internationalisation, GM was able to expand distribution and provide access to materials. Additionally, the company developed and improved its operations, facilities and processes. <br />It also provided access to new technology, new knowledge and new capabilities. Furthermore, internationalisation of GM provided them with capabilities that allow them to improve their product offerings . <br />Capabilities of this type tend to relate to functions like research and development, production, sales, and distributing was able to gain operational efficiencies through concentrating their activities to a limited number of favourable locations to supply multiple markets to gain economies of scale leading to profitabilitabitility.<br /> Multinational companies (MNCs): multidomestic, international, global and transnational structures. GM as a successful MNC has developed an effective system of transferring its human resource management capability as well as technical knowledge across its overseas operations. argues that this transferability can also form a kind of special competitive capability for an MNC that may be difficult for competitors to imitate. cultural considerations which they should be aware of in managing in different countries. Transferability of human resource management is influenced not only by factors at national and company levels but also by the knowledge and innovation characteristics of the HRM practice transferred. <br />The automobile manufacturers such as GM have regional headquarters location for systems hence adopting the multinational company functionality provides these firms with the ability to manage their global supply chains while still localizing their products and operations to a specific geographical area <br />Another reason that GM has adopted this strategy of configuration is their size and scope. Their size suggests that a single installation in a centralized location would present problems and increase the costs of global communication.. General motors have taken advantage of its competences in the automobile industry to form alliances and partnerships to penetrate into foreign markets. Through these practices GM have also developed competences in the transferring of technology and human resource capacity into competitive advantage.<br />