Strategic Management, General Motors, environmental factors, key factors, competitive environment, biggest car company, internal factors, performance, value chain deficiencies, Wagoner
What are the general environmental factors that have an impact on General Motors?
General Motors (GM) has known very hard times since 2000, as much as car industry. That is why GM had to reduce hourly workers, which means that 35,000 jobs were eliminated. Moreover, GM decreased health care costs to extract more cost savings. To face the crisis, Wagoner also cut the common stock of General Motors dividend in half and reduced executive salaries. So, car industry crisis has an impact on GM. In addition, GM market share has continued to drop until twenty five percent for the first time since the company was created. Currently, cars and trucks from GM do not appeal to buyers. The market is very hard and car industry is in crisis. The auto industry is being hit by a weak US and global economy, rising gas prices, social and political environmental concerns and issues. In order to overcome these potential treat, GM should consider mass producing, alternative energies such as electric and hybrid technology
[...] Thus, the decline of GM industry already began, and management was not quickly enough to deal with this situation. Finally, GM agreed to pay employees for years after a furlough and fired them. So, if GM would have close plants and accept a smaller piece of the market instead of firing employees and paying annuities to them, the strategic move would be more efficient Are the steps Wagoner has taken sufficient to turn GM around? According to the Exhibit 8 which represents 10-year stock price history of car companies, the situation of General Motors is not good at all. [...]
[...] A preparation for dealing with a crisis is possible by training and educating managers and leaders. But Wagoner did not seem to did that when he was elected as CEO. Moreover, the bad image of the brand is stuck to General Motors and it is very hard to go through it. So, all those aspects lead to affect GM's performance What steps has Wagoner taken to address critical value chain deficiencies? On the first point of view, we can say that GM dramatically reduced and reported its losses in 2006. [...]
[...] This way, like Japanese cars, GM can cut its development costs by almost half. General Motors also wants to compete Japanese market. That is why GM's engineers have been working on the development on new cars which use new energies such as hydrogen and ethanol What internal factors are affecting GM's performance? The type of management of G. Richard Wagoner has not helped to solve General Motor crisis. Also, the former CEOs from Frederic Donner to Roger Smith did not help to create a strong and efficient leadership. [...]
[...] Richard Wagoner tries very hard to turn around the company from the crisis, even if it is a difficult mission. Nevertheless, GM has a vision and it is strength to try to respect it. The vision is to be the world leader in transportation products and related services. GM wants to earn customers' enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people. Moreover, Wagoner has been working to General Motors since a long time; he was COO before being CEO. So he was aware of the type of top management in GE. [...]
[...] As we saw before, the external environment is very bad, American people is an exhausted market for car companies like GM or Ford. They need original and cheap cars. But that is not what GM does. Then, Wagoner decided to restructure some GM units through the world. For example, all the Europeans units had to collaborate with each other, in term of marketing, designing and manufacturing cars. They used to be much more independent. The main aim was to reduce the firm's overall cost structure over the next years. [...]
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