Caso De Estudio Gm

Globales Management und Strategie
Lva.-Nr. 247.304 Mag.a Alma Šehić

Case Study

Camilo Fernandez ......................... 0856569 .........................................SKZ: 180

INTRODUCTION
In the past years General Motors (GM) have been facing and struggling with some difficulties concerning its corporate strategy, and decisions made by its leading executives, although thiscompany has the tools and means to be in a very different position than the one the company is today. Over the years GM have accumulated several kinds of obligations with its employees and other kind of obligations due to the strategic focus this company has had, and now these obligations are becoming an inconvenience for the correct functioning of the company, its profitability, the company competitivelevel and its position in the market of its industry. In this case study I will analyze and discuss what went wrong and what could be the possible solutions and decisions GM has to make in order to recover the position it has and to create a possible guideline that this particular company should follow in order to survive its competitors and today´s market environment.

GM BACKROUND
Thefounding of General Motors on September 16, 1908, drew little Attention, because car companies were opening in large numbers due to the resent technologies that were present at that time. There was no guarantee of a place in the market or assurance of any profit. Of the nearly 1,000 companies that tried to build and sell motor vehicles prior to 1927, less than 200 continued in business long enough toeven offer a commercially suitable vehicle. Most of the companies that comprised the General Motors Company were weak, and their operations were uncoordinated. Many were in debt. It was not until the 1920s, when a new concept of management was forged and a new concept of product emerged, that GM really began to prosper. General Motors sales for its first full fiscal year ending September 31,

21909, totaled 25,000 cars and trucks, 19 percent of total U.S. sales. Net sales totaled $29,030,000 and its payroll at the peak of the manufacturing season numbered more than 14,000 mostly in Michigan. In 1995, GM sold 8.3 million cars and trucks worldwide with net income of $6.9 billion and worldwide employment averaging 714,000 workers. General Motors has 284 operations in 35 states and 158cities in the United States. In addition GM of Canada operates 21 locations, GM de Mexico operates 5 locations, and GM has assembly, manufacturing, distribution or warehousing operations in 49 other countries, including equity interests in associated companies. General Motors has operations in 41 countries outside North America and accounts for about 17 percent of the vehicles sold in the world'scompetitive markets. GM operations outside North American accounts for over one-third of the corporation's vehicle sales. GM products (of all types) are sold in 170 countries around the world. In recent years GM had already outsourced most of its components to lower cost suppliers, retaining only the production of engines and transmissions, and this outsourcing project was yielding high returnsespecially in vehicle manufacturing in China.

GM INDUSTRY
The automotive industry in the United States was characterized by the dominance of three major companies, also known as the big three (Ford, Chrysler and GM), furthermore the automotive industry structure meant that each of these three companies quickly copied each other´s decisions in regard to model and price changes, and this trendthreatened sustained profitability. In addition the competition between the big three was turning fiercer due to the increase in the

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market share of foreign companies. In the graphics below it can be seen who is this industry evolving in regard to the market share in the USA.

This is how the market share of the automotive industry changed from 1990 to 2004, and here it can be seen the...