Better Close Fast

When trying to acquire another company or trying to divest an unit of you company always try and close quick. You never know what can happen and the entire deal may fall though. Similarly to GM's deal to sell Hummer to a Chinese company. The deal dragged on for months until it was dead. This eventually led to GM shutting down the Hummer brand for good.http://money.cnn.com/2010/02/24/news/companies/hummer_chinese/

Risk of IB

Did you know that GM supplied both the Allies and the Nazis in World War 2? Command of Opel, a subsidiary of GM, was taken by the Nazis during the war. GM was not able to produce Opels or refuse to supply the Germans. This is a major risk of international business. You never know when the country you are investing in will ultimately become an enemy of your home country. When GM purchased Opel in 1923, it was right after WW1. At that point Germany was devastated and disarmed, they were no risk of every being an enemy of the United States.

http://boards.straightdope.com/sdmb/archive/index.php/t-345330.html

GM and PSA

GM and PSA, Citroen have agreed to a strategic alliance to make a small car platform for the European and South American markets. This alliance like many will not work due to lack of trust between the two companies. GM will not want to give to many of its secrets away to PSA and visa versa. This alliance instead will produce sub par vehicles that would not normally be produced by either company.

GM moving towards a flatter structure

GM has announced that they are moving to a flatter structure. In an attempt to create a more nimble organization, while also putting more decisions and ownership on its employees. This decision will save GM millions of dollars in the long run by cutting middle management jobs out from the middle of the hierarchal structure.

http://gmauthority.com/blog/2010/03/gm-announces-major-organizational-changes-to-gm-north-america-with-org-chart/

General Motors Fridge?

 Did you know that GM once made refrigerators?  Neither did I. I bet you ask yourself why? Think about this both cars and appliances have to be assembled in large plants. GM could us the downtime in their automotive plants as tome to build their other ventures. In addition, they could use the knowledge of refrigeration to benefit their core competency of auto manufacturing. At that time the “average” automobile did not have air conditioning. With their refrigerator’s manufacturing, GM may be  able to use economies of scale to lower the price of parts that could be used for both cars and refrigerators.

GM's anti vertical integration

Vertical integration is supposed to give the parent company more control as well as lower cost of the element that they are integrating. However, after GM’s bankruptcy they are doing the opposite. GM is closing corporate owned dealerships as well as selling the parts supplier Delphi. These moves are to save GM money over the next few years. Instead of divesting though GM should have “broke” the union. By breaking the union, GM could have cut cost as well as become more nimble to human resource issues. 

GM and Toyota Strategic Alliance

GM and Toyota have been in a joint venture in California for nearly 30 years. This partnership helped GM benchmark a company that strived on their quality and JIT production, while also helping Toyota to learn from the number one automotive manufacture in the world. (http://www.kellyallan.com/gm_toyota.html)

Further GM Expansion into China

GM has decided to make a decision based on risk. They had already decided to build two plants in China but has now decided that more expansion could be highly rewarding in the world's number one fastest growing automotive country (http://www.bloomberg.com/news/2013-01-14/gm-may-expand-in-china-beyond-plans-for-two-new-factories.html.)

Although, a move into China seems like a can't miss. GM could run into trouble with the Communist government if the government decided to take over non-Chinese owed business. GM could also not fully understand consumer needs in China. 

The continued expansion into China will help GM hedge loses in other parts of the world. Therefore, the continued expansion is worth the "risk."

Cadillac Diversification

Ever hear the phrase; “Nothing rides like a Cadillac,” or “when you arrive in a Cadillac, you know you have arrived?’  These sayings are synonymous with Cadillacs of yesteryear.   Cadillac was once the most luxurious car on the block and highly demanded by the elite of America.

As Cadillac has moved into the 90’s, 2000’s, and beyond other car companies have targeted that luxury that only Cadillac once could display. However, the mantra still fits “Nothing rides like a Cadillac/” This diversification from other manufacturers cannot be competed against.   

I have recently gone through the frustrating task of purchasing a new car for my wife. After days of looking at vehicles from every brand you could thing of I said to my wife; “Let’s go drive a Cadillac.” Her response “That is something my grandmother would drive.” But to her surprise when she reached the dealership Cadillac’s STS and CTS were right up her alley. Once she drove the cars all she could say was “WOW.” She was sold, these vehicles ride better than nothing else and their styling was top notch as well. When we drive up to the valet at a hotel or other establishment in this car you still get the feeling that “We have arrived!”

Economies of Scale GM

Gm is the second largest suto maker in the world and on the heels of Toyota to become the largest once again. GM has now turned to worldwide design teams to design cars for their different divisions all around the world. By doing this GM is able to save oney on parts. They are able to use economy of scales to place large orders with their suppliers to lessen the average cost per part for the vehicles.

By ordering so many parts GM, also lowers suppliers bargining power. Suppliers are more likely to accept terms that GM demands to ensure they continue to stay in business. By lessening cost GM would be able to either increase profit margin or lower the cost to the costumer, which would increase sells.

http://www.thecarconnection.com/tips-article/1010253_gm-design-goes-worldwide

First Mover Disadvantage GM

In the late 1990's, GM produced the GM EV1. It was a fully electric vehicle that was far ahead of its time. In an age of big gas guzzling SUV's, the EV1 sold very well. The owners of the cars had embraced a "cult following" of the car. GM decided to pull the car from the market due to better selling SUV's. Companies like Honda and Toyota picked up on what GM had done to produce the Prius and Insight. When GM tried to return to the electric car market with the Volt, they were years behind their competitors.

Bargaining Power of Suppliers of GM

GM is the largest automotive company in the world. That being said they control their suppliers. Because if any of their suppliers try and push GM to change terms of their agreement or if the supplier's employees went on strike, GM could and would find another supplier to provide their parts. Therefore suppliers have little to no bargaining power in the automotive industry.

Competitive Advantage of General Motors

General Motors is the second largest automobile manufacturing company in the world. They have divisions throughout the world that share designs and parts with each other. By sharing parts and designs throughout the world, GM is able to gain a competitive advantage over their competitors by saving on design teams. They also use economy of scales to lower their cost on their parts.