General Motor (GM)

Introduction

General motor (GM) is the largest as well as the most diversified automobile manufacture in the whole world. Currently, the company operates over 387 facilities which sums up to 400m square feet of space in at least 37 states. It has about 650,000 workers who assist in producing over 8m vehicles and various component sets for selling in multiple states (Reiner et al, 2014).  The core business activity of this firm is marketing of vehicles. Within its structure, there is the world facilities group (WFG) which is a multibillion dollar service enterprise responsible for providing various manufacturing facilities for all the manufactures of vehicles which are marketed by GM.

Regardless of the above consideration, the company has diverse distinct competencies in the motor industry. For instance, the company is eying the manufacturing of hybrid automotives. This is to say that its main objective or core competency is the designing and manufacturing of high-voltage battery. This electrification technique will comprise of pure battery electric automobiles, hybrid of various types, plug-in hybrids as well as other fuel cell automobiles (Reiner et al, 2014). This will continue to be the breakthroughs for the company’s technology.

Nevertheless, GM has a wider core competency in manufacturing of SUVs and Trucks. With the application of modern technology, the competitive advantage for the company whilst manufacturing the SUVs and trucks comes from the manner in which the vehicles are efficient to use unlike that from other firms. For example, these vehicles have an efficient towing capacity, handling, and fuel economical. Equally, the SUVs have more horsepower hence increasing its speed. This then remains to be the code for the continuous demand for their high margin vehicles.

Nonetheless, it can be illustrated that the strategies that the company used in the past have greatly contributed to its present distinct competencies. For instance, the strategic positioning through partnership as well as merging with other firms is the most critical determinant of its present and future current financial performance (Holstein, 2009). Partnership as well as consolidation enables each marquee to be focusing on its major competencies while excluding cost redundancies. By availability and taste, the auto markets are still inefficiently regionalized. Presently this makes the GM Company to continue to be not only both larger but also better positioned unlike its major rivals.  On the other hand, in case this company continues to be executing its existing strategies competently, then it means that it will be highly favored to hardly outdo its rival Ford and Daimler-Chrysler (Neil, 2010).

Other than that, it is recognized that the strategies that are pursued by GM are giving it the opportunity of building on its distinctive competencies. As a way of taking advantage of such opportunities, as well as establishing further the GM as the leading manufacturer of automobile in the world, its initial strategies has resulted into more advantageous ones. For example, so as to continue matching the aggressive price cutting of Ford Company, in the long run it will win that market share battle since it is relatively stringer in terms of cash flows, profitability, and liquidity (Holstein, 2009).

It will also move aggressively to the republic of China through opening some joint venture. This will basically be Daewoo plant which will be domestically manufacturing a wide range of Daewoo automobiles. It will thus become the dominant car builder in China. Moreover, it should be noted that the opportunity associated with this is that Daewoo China will remain to be a money pit for the coming three years. The long term benefits that will come from taking quick action on this front are hard to overstate. This is to imply that, for this company, opportunities of this scale are exceptionally rare in a mature automobile production industry (Fernandez & Shengjun, 2007).

The last strategy will arise to foster the companies distinctive competencies is the need for merging with Toyota. The reason for this is because, usually, the economies of scale remain to be effectively infinite in the automobile industry.  Thus issues that deal with failure of merging are prone from the management but not the industry fundamentals. The core competencies of Toyota will end up matching the shortcomings of GM. Similarly, its weakness will ultimately fit the strengths of GM. Therefore, the potential cost synergies from this strategy will remain to be spectacular hence enabling its management authority to build newer competencies (Neil, 2010).

Despite the above added advantage which will arise from enjoying its economies of scale, there are a number of factor which keeps on limiting GM distinctive competencies in the automobile industry. For example, the alternative energy movement is the GMs biggest weakness. This is because, the alternative energy or hybrid trend has already commenced in other automotive industries, but the GM is still one step behind this competition in terms of the manufacturing of alternative energy automobiles (Dunne, 2011). This has resulted to numerous problems such as loss of market share as well as decline in its profit margins. This then means that in case it desires to be successful from this point forward, the management must ensure that the company is both hybrid friendly and fuel efficient too.

Other limiting factors include perennial difficulty in engineering and designing successful automotive products, average production line efficiency, and absence of globally desirable luxury exhibition area.

 

 

 

Reference

Reiner E, Jargosch & Joseph J, (2014). General Motors Company (GM) Patent Landscape Analysis – January 1, 1994 to December 31, 2013. IPGenix LLC Press

Holstein, W. J. (2009). Why GM matters: Inside the race to transform an American icon. New York: Walker.

Neil B, (2010). Factors Affecting the Decisions of General Motors and Chrysler to Reduce Their Dealership Networks. DIANE Publishing

Fernandez, J. A., & Shengjun, L. (2007). China CEO: A case guide for business leaders in China. Singapore: Wiley.

Dunne, M. J. (2011). American wheels, Chinese roads: The story of General Motors in China. Singapore: John Wiley & Sons (Asia.