Strategic planning for General motors
EXECUTIVE SUMMARY
Objectives
The following are the objectives for the strategic planning of General Motors Company:
To have a better and successful business segment in the world auto market within a period of 5 years, to ensure that there is a high level of awareness of the presence of this particular company in the auto market by using? effective planning strategies, to put in place a wide range of marketing strategies available in the auto market including e-commerce strategies to ensure that there is overall growth of the company in the market, to acquire about 40 percent of the market segment within period of 5 years.
Mission and vision
GM is one of the respected auto companies in the world.
It has a variety of products that ensure that the company is fairing well in the market. The company?s head quarters is located in Tokyo Japan and looks forward to establishing an outlet in every country of the world.
Purpose of the study
The purpose of this research is:
To determine the prosperity of the GM in the auto market
To determine the planning strategies used by the GM company
To determine the strengths and weaknesses of the GM
Company analyses
(i) ? Strengths
General Motors is among the market leaders in the auto market.? For more than three decades, the company has established a market portfolio that has positioned it well in the auto manufacturing industry.? Currently the company has a market share of more than 10 percent of the auto market.
The company has a world wide operation.
This gives the company a chance to transfer products which have been successful in one market to the other emerging market. The company is able to conduct extensive researches on developing their range of autos and new technology. (Laura, 2008)
GM has good human resource policies which have ensured the growth of the company in a recent 2006 survey GM was ranked the 3rd overall greatest place to work. The company has been improving its ranking in the recent past for the last 10 years. All over the world it employs more than 3,000,000 employees operating in the company and its branches world wide.
One of the most important factors in the overall growth of the company has been heavy investment in technology. Through innovation the company has placed new models in the market which ensures reduced cost of production. Investment in the new technology has ensured the growth of the company in the market.
The company has a strong management team with a strong centralized management structure. This ensures that there is standardization of operations procedures in all its departments. The company also has put in place effective corporate management structures which ensure timely disclosure of information on the performance of the company. This is important for the overall financial management of the company.
(ii) Weakness
The company has not been able to standardize its operation in all the departments.? For example while the Toyota, Ford and Nissan motor companies have strong market share in the world market and other emerging market, its market share in the established market has been declining. Its European and African market share is strong enough to guarantee its market leadership. (Brandi, 2007)
Product analyses
The planning strategy is looking on how the GM products are fairing in the world auto market. The existence of the company in the market is based on an extensive research that was carried out in the European market which shows that there is still large untapped market potential in the auto industry in Europe and other parts of the world.
The GM Company specializes in Designing and making of automobiles, trucks, locomotives, and related parts such as chassis, interiors, drivetrains, and electronics. (Brandi, 2007)
SWOT analyses
GM is among the market leader in the auto industry.? The following is the SWOT analysis for the company:
Strengths
a) The GM Company has an already large established business in the auto market.? Since 1960s, the company has established itself among as a leader in the auto market. It has operated in market since 1950s. In line with its vision, the company has been striving to be the world leader in the auto industry. Through innovation and strategic planning, the company has acquired about 10% of the world auto market. The company has a good market reputation with strong brands like automobiles, electronics and locomotives ?(Laura, 2008)
b) The target market is also quite large. The auto market has been recording growth in the recent past and there are future prospects of growth. Therefore the target market is slowly expanding.
Weakness
a) The target market is quiet large and there are fears the demand for the GM products may outdo the capacity of the GM to satisfy the demands of the market. It is still not clearly established the rate of growth of the product in the market but there are expectation that the product will record a high growth rate. This means that the company will need to increase its production capacity in order to match the rate of growth of the market.
Opportunities
a) The company is trading its products in a growing market. This is a unique opportunity for the company.? A stagnant market becomes difficult to introduce new products because there are already other companies which are likely to bring in competition.
b) The company can use a wide range of marketing strategies which will lead to the overall growth of its product in the market. There are many advertising strategies for the company in the world market.
Threats
a) There are threats of entry of other products in the market.? In this case there are threats of existing companies in the market which will increase the level of competition in the market. There are other auto companies which are likely to introduce the same products in the market once there is success of the initial product like Hyudai, Tata and other brands. (Brandi, 2007)
Internal and external analyses
In the internal environment of the company, the company has several structures that help the company to have a smooth running of its businesses. The leadership structure is one of the cornerstones of the company?s success; the good leadership in the company has been a result of the company?s success. The company has also involved itself in the use of technology that has on the other hand has propelled the company to greater heights as a result of high quality and more products produced by the company.
GM has well laid policies that enable workers leaders? interrelation and this helps the company to have smooth running and motivated workers. ?The use of IT has on the other hand helped the company to have a good consumer producer relation and also communication in the company.
In the external environment, the company more major threats that are likely to arise besides the currently existing, there are threats of entrance of new companies in the market that are likely to add competition on the currently existing. In this regard, there likelihood that customers are going to increase their bargaining powers as there is variety of products in the market to choose from. This will walk hand in hand with the increase of substitute products in the market thus posing a problem to the pricing of the product. As there would be high demand of low materials, there is likelihood that suppliers would increase the prices of their supplies thus increasing the cost of production that will in turn reducing the company?s revenues. This will all be added to the existing competition among the rivalry companies in the market.
Major competitors
There are three major competitors in the auto industry that GM is competing with. GM is a market leader in the industry.? The other competitors are also well established and there fore the level of competition is very high
?
?
GM
TOYOTA
FORD
?
NISSAN
Core Strength
Wide established operation and good reputation
Wide established market with reputation of low live vehicles
Expensive vehicles with low life span
Reputation of low life span vehicles
Secondary Strength
Wide distribution network
Links with big? retail markets globally
Local distribution network
Not well established distribution net work especially in US
Biggest Weakness
Weak distribution system
Weak market appeal
High priced product and lack of spare parts
Low quality products
Core Competency Comparison (David, 2004)
Strategic planning worksheet
There are different goals of the company based on the missions and visions they have set for the welfare of the business. In the following worksheet, four goals have been analyzed to ensure consumer satisfaction as follows:
To make the company the world best auto company
To manufacture quality products
To have the largest market share in the auto market
To produce affordable products
The company should also be aware of the existing business environment. The competition in the industry and the probability of new competitors that are likely to venture in the market. The biggest concern for the company is to retain the current and attract other new customers. Consumer satisfaction is more needed at this time to enable the company retain its market share.
In doing this, the company should come up with strategies that will increase the consumers? trust in the company?s products to beat up the current obstacles. These strategies may include, arranging for the financing of their products that will enable the customers pay in installments. On the other hand, they should arrange for the shipments of their products on behalf of the customers abroad and discount the local customer,? this will enable the company enjoy all the market privileges.
?
?
?
?
?
CSF
Actual
Required
Assumptions
Obstacles
Strategies
Overhead rates
39%
33%
The company has been able to achieve its desired goals? as the actual goals surpasses the desired goals
The company fails to have a strong marketing strategies
The company has bureaucratic strategies that help in achieving the desired goals
Through output
55/hr
75/hr
The suppliers are able to adhere to the current trends
Maximum speed of 70/hr
They use more machines to improve production
Sales per employee
120,000
145,000
More employees are required to fill in the gap
More time in training employees and leaders work load will be increased leading to inefficiency
Motivating workers to have more production.
Increasing the number of employees to compensate for the deficit
?
?
?
?
?
?
?
To make the company the world best auto company
In the regard of the above goal, the company seeks to develop consumer satisfaction strategies based on this. The company will ensure all manufactured products reach the consumer and would give the expected service. It would also ensure that the products are user friendly that will satisfy the consumers? needs. It company will also ensure that the products are available at affordable prices and maintenance cost is also down.
The company would use psychographic and demographic strategies to fulfill this.
Discussion
The GM Company has a considerable market share in the auto manufacturing industry. It has high potential of growth by far if the planned strategies are implemented and are put in to great consideration. The company has strong reputation in the consumers that the products produced by the GM are of high quality and affordable.
The competition in the market would only be won by the company with customers? satisfaction strategies that will boost the company?s sale therefore increasing their profits. GM is facing stiff competition from other competitors who are well established in the market and have low priced vehicles like Toyota and Nissan.
Reference:
Brandi, C.2007, Leaders of tomorrow, Retrieved from www.gm.com/corporate on 14th Oct 2008
David, L. 2004: Strategic marketing in a new market. Harvard Business Review
Laura, H. (2008): General motors. New York Times, June 2007
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