GROUP 18

GENERAL MOTORS

UNIT 1: Company Background

General Motors (GM) is a multinational corporation founded in 1908 in Detroit,
Michigan, United States. The company was established by William C. Durant and is
one of the largest automobile manufacturers in the world. GM's growth path has been
marked by significant expansion and diversification. In the 1920s, the company
acquired several brands, including Chevrolet, Buick, Cadillac, and Oldsmobile,
solidifying its position as a dominant player in the U.S. market. During the mid-20th
century, GM expanded its global footprint, establishing manufacturing and sales
operations in Europe, Asia, and South America. General Motors has been at the
forefront of automotive technology, introducing advancements such as the automatic
transmission, the V8 engine, and the electric starter.

During World War II, General Motors shifted its production to support the war effort,
manufacturing military vehicles and aircraft. After the war, the company resumed its
focus on automobiles and continued to expand, both domestically and internationally.
In recent years, General Motors has made significant efforts to transition to electric
and autonomous vehicles, with plans to offer a range of electric vehicles across its
brands by 2030. The company has also invested in ride-sharing services and other
mobility solutions, positioning itself for the future of transportation.
Today, GM's product range includes a diverse portfolio of passenger vehicles,
commercial trucks, and alternative-fuel vehicles, such as electric and hybrid models
with a strong presence in key markets like China, the United States, and Canada.

Market Coverage: GM expanded from a domestic US automaker to a global presence,

operating in over 30 countries.
Employees: As of 2023, GM employed approximately 163,000 people worldwide
Product Range: From initially producing only Buick automobiles, GM now offers a
diverse lineup across multiple brands including Chevrolet, Cadillac, GMC, and Buick.

The table and graph below illustrates the growth of General Motors between 2020 to
2023, number of employees, total assets, and sales volume.
Year Number Of Employees Total Assets Sales Volumes

(in millions)

2020 155000 235,200 122,485

2021 157000 244,700 127,004

2022 167000 264,037 156,735

2023 163000 273,064 171,842

UNIT 2: An Assessment Of Global Business Strategy

Key Industry Characteristics of General Motors (GM)

Market Size and Growth Rate

Automotive Industry Market Size: As of 2023, the global automotive industry is
valued at approximately $2.9 trillion. The market is expected to grow at a CAGR
(Compound Annual Growth Rate) of around 4% from 2023 to 2028.
GM's Market Share: General Motors is one of the largest automakers in the world,
with a significant presence in North America, China, and other regions. In 2022, GM
sold around 5.9 million vehicles globally, capturing a notable market share.

Key Players
Major Competitors: Key competitors of GM include Toyota, Volkswagen Group,
Ford, Honda, Hyundai-Kia, and Stellantis. These companies, along with GM,
dominate the global automotive market.
Industry Leaders: Toyota and Volkswagen are often the leaders in terms of global
vehicle sales, with GM consistently ranking among the top manufacturers.

Market Structure
Oligopoly: The automotive industry is characterized by an oligopolistic market
structure. A few large firms dominate the market, leading to significant competition in
terms of innovation, pricing, and market share. These firms often have the capability
to influence market trends and standards.

Globalization Drivers and Factors Influencing GM's Globalization

Economic Drivers
i.Global Demand: Increasing demand for vehicles in emerging markets, such as
China and India, has driven GM to expand its operations globally. China, in
particular, has become GM's largest market.
Ii.Cost Reduction: GM has leveraged globalization to reduce manufacturing and
operational costs by establishing production facilities in countries with lower labor
costs.

Technological Drivers
i.Innovation and R&D: GM has invested heavily in research and development,
particularly in electric vehicles (EVs) and autonomous driving technologies. This has
allowed GM to stay competitive and meet global market demands.
Ii.Global Supply Chain: Advanced logistics and supply chain management have
enabled GM to efficiently manage production and distribution across different
regions.

Political Drivers
i.Regulations and Policies: GM has had to navigate varying automotive regulations
and policies in different countries. Compliance with environmental regulations, safety
standards, and trade policies has influenced GM's globalization strategy.
Ii.Government Incentives: Many governments provide incentives for automakers to
set up manufacturing plants and invest in local economies. These incentives have
been a significant factor in GM's decision to expand internationally.

Cultural Drivers
i.Brand Adaptation: GM has adapted its branding and marketing strategies to suit
different cultural contexts. Understanding local consumer preferences has been crucial
for GM's success in various markets.
Ii.Product Localization: GM often tailors its vehicle offerings to meet the specific
needs and preferences of consumers in different regions. This includes designing cars
that cater to local tastes and requirements.
Historical Context of GM's Globalization
Early Expansion: GM's globalization efforts began in the early 20th century with the
establishment of operations in Canada and later in Europe and Latin America.
Post-War Growth: After World War II, GM expanded rapidly, establishing a strong
presence in Europe and Asia.
Modern Era: In the 21st century, GM has focused on emerging markets, particularly
China, which has become a critical part of its global strategy. The company has also
emphasized innovation in electric and autonomous vehicles to maintain its
competitive edge.

General Motors (GM) has employed a mix of Ghemawat's AAA global strategy
framework:
i. Adaptation: General Motors has customized its products and services
to cater to local market preferences. For instance, the company has
tailored its products to align with the tastes and preferences of different
regions. In areas with extreme weather conditions, GM modifies its
vehicles to ensure optimal performance. For example, in the Middle
East, GM offers enhanced air conditioning systems and engine cooling
mechanisms to withstand high temperatures. Additionally, GM has
adjusted its marketing and branding strategies to suit local cultural
contexts worldwide.
ii. Aggregation: General Motors (GM) employs an aggregation strategy
to achieve economies of scale and leverage global efficiencies.
Aggregation focuses on creating standardized products and processes
to serve multiple markets, thus reducing costs and enhancing
efficiency. For example, GM develops global vehicle platforms that
can be used across multiple markets. By using common platforms, GM
reduces development costs and achieves economies of scale. The
Chevrolet Cruze, for instance, is built on a platform that is used for
several models sold in different regions. Additionally, GM has
established centralized R&D centers that serve multiple regions. These
centers focus on developing technologies and innovations that can be
applied globally, such as electric vehicle technology and autonomous
driving systems.
iii. Arbitrage: This basically involves taking advantage of these
differences to optimize production, reduce costs, and maximize profits.
General Motors (GM) establishes manufacturing plants in countries
with lower labor costs to decrease production expenses. For instance,
GM operates significant manufacturing facilities in Mexico, China, and
other countries where labor costs are lower than in the United States or
Europe. Additionally, GM outsources certain non-core activities, such
as parts manufacturing, to third-party suppliers in low-cost regions.
This approach allows GM to concentrate on core competencies while
taking advantage of cost savings. GM also sources raw materials and
components from regions where they are more cost-effective. By
utilizing global supply chains, GM can acquire materials at lower
prices, ultimately reducing overall production costs.
 The Bartlett and Ghoshal framework helps assess a company’s stage of
internationalization and its corresponding global strategy based on two
dimensions: global integration and local responsiveness.
i. International Strategy: This approach mainly focuses on testing
waters such as exporting products to foreign markets with minimal
local adaptation. Early in its expansion, General Motors focused on
exporting vehicles designed primarily for the U.S. market to other
countries, with limited adaptation to local needs.
ii. Multinational Strategy: This is when firms set up subsidiaries in
foreign markets to better meet the needs and preferences of their target
markets emphasizing local responsiveness. GM set up manufacturing
and assembly plants in various countries, creating more localized
operations. For instance, GM's establishment of Opel in Europe and
Holden in Australia exemplifies this stage, where local units were
given more autonomy to adapt to regional preferences and conditions.
iii. Global Strategy: This is when companies standardize their market
products and processes seeking to maximize efficiency and integration
across global operations. GM leverages global platforms and
standardized components to reduce costs and enhance efficiency.
Vehicles like the Chevrolet Cruze are built on a global platform and
sold in multiple markets with minimal modifications, reflecting a high
degree of global integration.
iv. Transnational: Firms aim to achieve both global efficiency and local
responsiveness, integrating global operations while adapting to local
markets where necessary. GM's current strategy is more of
transnational characteristics. The company balances global integration
through standardized platforms and components with local
responsiveness by adapting products to meet specific market needs.
For example, in China, GM adapts vehicle designs to cater to local
preferences for rear seat comfort, while still maintaining global
production efficiencies. GM's strategic objectives align with the
transnational approach, emphasizing cost efficiency, market
adaptation, innovation.

Strategic Objectives

i. Cost Efficiency: By leveraging global platforms and standardized

components, GM aims to reduce production costs and improve overall
efficiency. This is evident in their use of shared components and global supply
chain management.
ii. Market Adaptation: GM focuses on adapting its products and operations to
meet the specific needs and preferences of local markets. This includes
modifying vehicle designs, marketing strategies, and even operational
processes to ensure relevance in different regions.
iii. Innovation and Technological Leadership: GM invests in centralized R&D
to drive innovation and develop cutting-edge technologies that can be
deployed globally. This includes advancements in electric vehicle technology
and autonomous driving systems.

1. ORGANIZATIONAL STRUCTURE OF GM
The organizational structure of General Motors comprises several key levels. These
include the CEO, executive team, board of directors, and various departments and
divisions.
i.CEO: The Chief Executive Officer (CEO) holds the highest position in the
company. They are responsible for making major corporate decisions, managing
overall operations and resources, and acting as the primary point of communication
between the board of directors and corporate operations.
ii. Executive Team: Led by the CEO, the executive team oversees the company's day-
to-day operations and makes strategic decisions. It typically includes senior
executives such as the Chief Financial Officer (CFO), Chief Operating Officer
(COO), Chief Information Officer (CIO), and other department heads.
iii. Board of Directors: The board of directors oversees the management and
operations of the company, makes major corporate decisions, and ensures the
company operates in the best interests of its shareholders. The board comprises both
executive and non-executive directors, with the CEO typically serving as an ex-officio
member.
General Motors is structured into various departments and divisions, each with
specific responsibilities within the company, including Global Product Development,
North America, International, Finance, Marketing and Sales, Purchasing and Supply
Chain, Human Resources, and Legal. The alignment between the organizational
structure and the company’s strategy can be assessed by how well the structure
supports the company’s goals. General Motors focuses on designing, manufacturing,
and selling vehicles and vehicle parts, with an emphasis on innovation, quality, and
customer satisfaction. The organizational structure appears well-aligned with this
strategy, with departments and divisions focused on product development,
manufacturing, marketing, and sales. The executive team and board of directors offer
leadership and strategic guidance, while the various departments and divisions
collaborate to ensure efficient and effective company operations.
It's crucial to understand that a company's organizational structure isn't fixed and may
require adjustments over time to align with the company's evolving strategy and
operations. As General Motors adapts to the changing automotive industry, it may
need to modify its organizational structure to stay competitive and achieve its long-
term objectives.

i. Organizational Design: General Motors employs a divisional organizational design,

characterized by high decentralization and autonomy among its various divisions or
business units. This design enables swift decision-making and flexibility to respond to
market changes and customer demands, making it well-suited for a company
operating in a dynamic and competitive industry like automotive.

ii. Management Hierarchy: General Motors' management hierarchy is headed by the

CEO, with an executive team overseeing daily operations and providing strategic
guidance. The CEO is responsible for major corporate decisions and acts as the main
liaison between the board of directors and corporate operations. The executive team
usually includes senior executives such as the Chief Financial Officer (CFO), Chief
Operating Officer (COO), Chief Information Officer (CIO), and other department
heads, ensuring efficient communication and decision-making throughout the
organization.

iii. Decision-Making Processes: General Motors follows a decentralized decision-

making process, granting departments and divisions a significant degree of autonomy
in operational decisions. However, strategic decisions are made by the executive team
and the board of directors, striking a balance between agility and long-term vision.
This approach facilitates quick responses to market changes and customer demands
while ensuring alignment of the company's strategic goals with its operations.

iv. Alignment of Structure with Strategic Goals: General Motors' organizational

structure is well-aligned with the company's strategic goals of designing,
manufacturing, and selling vehicles and vehicle parts. The divisional organizational
design, management hierarchy, and decision-making processes collectively support
the company's focus on innovation, quality, and customer satisfaction. Various
departments and divisions handle specific functions and operations, while the
executive team and board of directors provide leadership and strategic guidance for
the efficient and effective operation of the company.

v. Effectiveness of Current Structure: The current organizational structure of General

Motors seems effective in supporting the company's strategic goals and operations.
The divisional organizational design allows agility and flexibility in responding to
market changes and customer demands, with the management hierarchy and decision-
making processes ensuring efficient communication and decision-making throughout
the organization. However, as the automotive industry evolves, General Motors may
need to adjust its organizational structure to stay competitive and achieve its long-
term goals.
UNIT 3

General Motors had total assets of USD 235,200m, 244,700m, 264,037m, and
273,064m in 2020, 2021, 2022, and 2023, respectively. As of March 31, 2024, the
quarterly financial report showed total assets of $276,591m, with current assets of
$106,470m and non-current assets of $170,121m. The non-current assets included net
property of $51,423m and net goodwill and intangible assets of $4,823m.
General Motors' primary financial resources come from selling cars to customers and
dealers, with total sales and revenue of $43,014m as of March 31, 2014. In addition to
sales revenue, the company offered about 1.1 billion shares of common stock to the
public. In 2023, General Motors had an estimated market share of nearly 17% in the
United States, making it the leading automotive manufacturer. The company owns
well-known car brands such as Buick, Chevrolet, and Cadillac, which contribute to its
strong reputation in the automobile industry.
Furthermore, General Motors holds copyrights on all materials on its website,
including text, images, graphics, animations, and videos. The company's logos,
emblems, slogans, and vehicle model names are trademarks. General Motors is
committed to creating an inclusive, innovative, and forward-thinking work
environment that values diverse perspectives and ideas. Diversity, equity, and
inclusivity are core elements of the company's corporate culture.
General Motors has developed significant technological expertise in gearing
technology, particularly in the application of planetary gear sets. The company has a
large patent portfolio in this area, allowing it to maintain a core competence in this
technology over time. Additionally, General Motors has shown the ability to diversify
its technological expertise and learn new competencies to enter new markets. This
indicates that the company can leverage its existing technological knowledge and
apply it to different applications and market segments. However, there are concerns
that competency-based approaches may reduce practical "know-how" to more
theoretical "know-that" knowledge, potentially undermining the original intent of
focusing on applied skills and expertise. While General Motors excels in core
technological capabilities such as gearing, it's also important for the company to
prioritize non-core specialists to ensure its workforce has a broad range of capabilities
beyond just its core engineering and manufacturing expertise. Furthermore, it's
essential to integrate collective knowledge and expertise across the organization or
industry to improve decision-making and product quality. This suggests that General
Motors has the potential to leverage the combined knowledge of its workforce and
partners to enhance its global business strategy and operations.

General Motors has established itself as a key player in the automotive industry
through its innovation, diverse brand portfolio, and global presence. However, like all
multinational corporations (MNCs), GM faces stiff competition from other leading
automotive companies. This writeup will compare GM's core competencies with those
of its key competitors, highlighting unique strengths, areas where GM outperforms its
rivals, and areas where GM could improve.

Unique Strengths

Diverse Brand Portfolio General Motors boasts a diverse brand portfolio, including
Chevrolet, Cadillac, GMC, and Buick. This diversity allows GM to cater to a wide
range of market segments, from affordable vehicles to luxury cars. Competitors like
Ford and Toyota also have diverse offerings, but GM's ability to maintain strong
brand identities across various market segments is noteworthy.

Strong Presence in the North American Market GM has a significant market share
in North America, particularly in the United States. The company's long-standing
presence and deep-rooted connections with American consumers give it an edge over
international competitors like Toyota and Volkswagen. GM's focus on trucks and
SUVs, which are highly popular in the US, further strengthens its position in this
market.
Advanced Research and Development (R&D) General Motors invests heavily in
research and development, particularly in electric and autonomous vehicle
technology. The company's commitment to innovation is exemplified by its electric
vehicle (EV) lineup, including the Chevrolet Bolt and the upcoming Cadillac Lyriq.
While competitors like Tesla are leaders in the EV market, GM's extensive R&D
efforts position it as a formidable competitor in the race towards sustainable
transportation.

Areas Where GM Outperforms Competitors

Integration of Advanced Technology General Motors has made significant strides in

integrating advanced technology into its vehicles. The company's Super Cruise
system, a hands-free driver assistance technology, is a prime example. While Tesla's
Autopilot is often seen as the benchmark, GM's Super Cruise has received praise for
its safety features and ease of use. This technological prowess helps GM stay
competitive in the rapidly evolving automotive landscape.

Manufacturing Efficiency GM's manufacturing processes are highly efficient, thanks

to its extensive experience and continuous improvement initiatives. The company has
implemented lean manufacturing techniques and advanced robotics to streamline
production. This efficiency enables GM to produce high-quality vehicles at
competitive costs, giving it an advantage over companies with less optimized
manufacturing processes.

Global Supply Chain Management General Motors has a well-established global

supply chain that supports its operations across various regions. The company's ability
to source materials and components efficiently and manage logistics effectively is
crucial for maintaining production schedules and meeting market demands. This
competency is particularly important in an industry where supply chain disruptions
can have significant impacts on business performance.

Areas for Improvement

Electric Vehicle Market Penetration While GM has made notable progress in the
electric vehicle market, it still lags behind leaders like Tesla and even traditional
competitors like Volkswagen, which have aggressively expanded their EV offerings.
To strengthen its position, GM needs to accelerate the rollout of its electric models
and invest in charging infrastructure to support EV adoption.

Sustainability and Environmental Initiatives Environmental concerns are

becoming increasingly important to consumers and regulators alike. While GM has
set ambitious sustainability goals, such as achieving carbon neutrality by 2040, it
needs to demonstrate more tangible progress in reducing its carbon footprint and
adopting sustainable practices across its operations. Competitors like Toyota, with its
hybrid technology leadership, and Ford, with its focus on green manufacturing, are
making notable strides in this area.

Customer Experience and Digital Transformation Enhancing the customer

experience through digital transformation is another area where GM could improve.
Companies like Tesla have set new standards for direct-to-consumer sales models and
seamless digital experiences. GM needs to leverage digital technologies to enhance
customer engagement, streamline the buying process, and provide superior after-sales
service to remain competitive.

UNIT 3

We recommend that GM should continue developing its current strengths while also
actively pursuing new assets, capabilities, and skills in important areas such as electric
vehicles, sustainability, and digital transformation. This balanced approach will help
GM to maintain and improve its competitive edge in the rapidly changing automotive
industry. By speeding up its electric vehicle strategy, strengthening sustainability
efforts, and improving digital transformation and customer experience, GM can
establish a long-term competitive advantage.

Enhance Electric Vehicle (EV) Strategy:

1. Accelerate EV Rollout: Increase investment in EV research and development to

expedite the development and release of new electric models. This includes expanding
the range of electric vehicles across all brands to cater to different market segments.

2. Infrastructure Investment: Collaborate with governments and private entities to

develop a comprehensive charging infrastructure. This will help alleviate range
anxiety and encourage EV adoption.

3. Battery Technology: Invest in advanced battery technologies to improve the

efficiency, range, and cost-effectiveness of EVs. Consider partnerships or acquisitions
of companies with leading battery technologies.

Strengthen Sustainability Initiatives:

1. Carbon Neutrality Goals: Develop clear and achievable short-term and long-term
sustainability goals, with regular progress updates to stakeholders.

2. Green Manufacturing: Implement more environmentally friendly manufacturing

processes. This includes using renewable energy sources and reducing waste in
production.
3. Circular Economy: Promote the recycling and reuse of materials, particularly in
battery production and end-of-life vehicle management.

Digital Transformation and Customer Experience:

1. Enhance Online Sales Platforms: Develop a seamless digital buying experience,

similar to Tesla’s direct-to-consumer model. This includes online configuration,
purchasing, and home delivery options.

2. Connected Services: Invest in connected car technologies that offer enhanced

features like real-time diagnostics, remote control, and over-the-air updates.

3. Customer Engagement: Use data analytics to personalize customer interactions and

improve after-sales service. Implement customer feedback loops to continuously
improve products and services.

Global Strategy Adjustment:

1. Market Adaptation: Continue to adapt vehicles and marketing strategies to meet

local market preferences, especially in emerging markets like China and India.2.
Strategic Alliances: Form strategic alliances and joint ventures to share technology,
reduce costs, and enhance market penetration, particularly in regions where GM has a
smaller footprint.

3. Flexibility and Agility: Maintain a flexible and agile organizational structure that
can quickly respond to market changes and technological advancements.