Abstract: In this business case study, I will examine the remarkable success of General Motors, a multinational conglomerate holding company based in the United States, which was founded in 1908. General Motors has been led by the CEO Mary Barra since January 2014. The first lesson you can learn from General Motors is that a CEO should have a long-term vision and commitment to the company. All Fortune 500 companies that have been studied so far had one thing in common the long-term commitment of the CEO. CEO of young start-ups start talking about their exit plan from the first year which shows the lack of commitment. By analyzing General Motors, you will be able to grow your startup or small business globally.
1. Introduction
General Motors Company (GM) is a renowned American multinational corporation headquartered in Detroit, Michigan. It is one of the world's largest and most prominent automobile manufacturers. GM has played a pivotal role in shaping the global automotive industry.
Learning: All great companies that we have studied so far are multinational companies. You should focus on building your small business into a global business. The first step to taking a small business global is to build a system and structure at the right place.
Does your business have a structure in the right place?
2. History
GM's history is deeply intertwined with the growth and evolution of the automotive industry. It was founded by William C. Durant in 1908, who brought together several car companies, including Buick, Oldsmobile, Cadillac, and Chevrolet, under the GM umbrella. Over the years, GM expanded its reach globally and became a dominant force in the industry. However, the company faced significant challenges during the Great Depression in 1929 and World War II. Due to innovation and management, GM was able to rebound post-war.
Learning: Research Development and Innovation should be the key driving factor of every company. If you have extra time then read the history of Nike to understand the importance of R&D.
Who runs the R&D department in your company? What makes this person eligible to run the department?
3. Business Segments
GM operates through various business segments, including:
a. GM North America: North America provides a major segment of designing, manufacturing, and selling of vehicles primarily in the United States, Canada, and Mexico.
b. GM International: GM operates outside North America and provides services in all major continents in Asia, Europe, and South America.
c. GM Financial: Provides financing and insurance solutions to support GM vehicle sales.
4. Business Segmentation
GM produces a wide range of vehicles, from compact cars to trucks and SUVs. Furthermore, it has been transitioning toward electric and autonomous vehicles to stay competitive in the rapidly evolving automotive landscape. The new norm in the industry is the transition to electric vehicles.
5. Key Achievements and Milestones
a. Innovation in Electric Vehicles: GM's Chevrolet Volt was one of the first mass-market plug-in electric vehicle segments. It shows the commitment of GM towards sustainable transportation and the environment.
b. Global Reach: No business can have one standard across all the regions it operates. GM has a global presence around the world as it knows the purchasing power of the local market. GM’s partnerships with companies like SAIC Motor in China demonstrate its focus on local markets.
c. Safety Leadership: GM has been a pioneer in vehicle safety innovations with a complete focus on customer safety.
Learning: Customer satisfaction and safety should always come first. Tata organization is a shining example of customer satisfaction.
Do you focus on customer satisfaction or returns?
6. Challenges and Management Principles
GM's management principles for addressing challenges encompass:
a. Cost Management: Implementing lean manufacturing and cost-saving measures to improve profitability.
b. Restructuring: Streamlining operations and divesting non-core assets to focus on core business areas.
c. Innovation: Embracing technological advancements to remain competitive in an evolving industry.
Question: Is it a good sign that a company recalls its vehicles? What do you think?
7. Marketing and Branding Strategy
GM has focused on brand differentiation, with Cadillac representing luxury, Chevrolet for affordability, and GMC for trucks and SUVs. In recent years, GM actively promoted its electric vehicle lineup, which showcases its commitment to sustainability and innovation.
Learning: The best branding strategy is to show transparency.
8. SWOT Analysis
Strengths:
Strong commitment to safety and sustainability.
Established global presence and brand recognition.
Robust portfolio of electric and autonomous vehicles.
Weaknesses:
Complex organizational structure.
Legacy issues, including pension obligations.
Historically, vulnerability to economic downturns.
Opportunities:
Increasing focus on sustainability.
Expansion into emerging markets.
Growing demand for electric vehicles.
Threats:
Economic uncertainties affecting consumer spending.
Intense competition from both traditional and new entrants.
Regulatory changes impacting emissions and safety standards.
9. Stock Market Performance and Return
It's really hard to predict the outcome or direction of the stock market in the automobile industry. Historical Context: HumVee was very popular even among Hollywood celebrities and big brands. Still, it took a short time to run out of fashion. GM's stock performance has exhibited fluctuations over the years, reflecting industry dynamics and economic conditions. The company's stock has been influenced by factors like production volumes, sales figures, and shifts in consumer demand.
Learning: If you wish to invest in the automobile sector, then invest based on company performance, management, and past track record instead of ongoing trends.
10. Opportunities and Challenges
Opportunities:
Electric Vehicle Growth: GM can capitalize on the growing demand for electric vehicles as consumers seek eco-friendly transportation options.
Autonomous Driving: GM has the opportunity to be a leader in self-driving vehicles but the competition is very high and needs the box strategy.
Challenges:
Competition: The automotive industry is highly competitive, with both traditional automakers and tech companies entering the electric and autonomous vehicle space.
Regulatory Changes: GM's operations and product development can be impacted by evolving regulations and safety standards of emission.
11. Lessons for Other Businesses
a. Adaptability: GM's ability to adapt to changing market conditions and consumer preferences is a crucial lesson for businesses in every industry.
b. Innovation: Staying at the forefront of technological advancements is vital for long-term success.
c. Global Expansion: Strategic global expansion can provide access to new markets and revenue streams.
12. Role of Management
GM's management has played a critical role in the company's journey, from overcoming monetary constraints during the financial crisis to driving innovation in electric and autonomous vehicles. Leadership has focused on cost control, strategic partnerships, and fostering a culture of innovation.
13. Major Innovation
GM's major innovation lies in its commitment to electric and autonomous vehicles. Initiatives like the Chevrolet Bolt and investments in self-driving technology highlight GM's determination to shape the future of mobility while addressing environmental concerns.
In conclusion, General Motors Company's rich history, adaptability, innovation, and commitment to sustainability make it a compelling case study for businesses navigating the challenges and opportunities of the modern automotive industry. GM's journey underscores the importance of strategic management, innovation, and global presence in achieving long-term success.
Bibliography & References
Part1. Books
1. Johnson, C. (1994). The Making of 'The Great American Automobile: General Motors and the Automobile Industry. University of Pennsylvania Press.
2. Davis, M. W. R. (2009). Engineered for Success: A Comprehensive Look at the Evolution of General Motors Operations. Society of Automotive Engineers.
3. Sloan, A. P. (1990). My Years with General Motors. Doubleday.
4. Wright, J. P. (2003). On a Clear Day You Can See General Motors: John Z. DeLorean's Look Inside the Automotive Giant. New Comiskey House.
Part2. Research & Discussion Papers
1. Hart, K.M., Capps, H.R., Cangemi, J.P. and Caillouet, L.M., 1986. Exploring organizational trust and its multiple dimensions: A case study of General Motors. Organization Development Journal.
2. Grewe, T.M., Conlon, B.M. and Holmes, A.G., 2007. Defining the general motors 2-mode hybrid transmission (No. 2007-01-0273). SAE Technical Paper.
3. Bayou, M.E. and De 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), pp.287-304.
4. Alden, J.M., Burns, L.D., Costy, T., Hutton, R.D., Jackson, C.A., Kim, D.S., Kohls, K.A., Owen, J.H., Turnquist, M.A. and Veen, D.J.V., 2006. General Motors increases its production throughput. Interfaces, 36(1), pp.6-25.
5. Barabba, V., Huber, C., Cooke, F., Pudar, N., Smith, J. and Paich, M., 2002. A multimethod approach for creating new business models: The General Motors OnStar project. Interfaces, 32(1), pp.20-34.
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