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