Global sales of vehicles are expected to dip to only 70m units in 2021, down sharply from 80 million units in 2017. The auto industry’s most significant industry divisions include passenger cars and commercial vehicles. China is listed among the major markets, both in terms of revenue and demand. Car prices in China fell for the first time in 2018; the industry collapsed in February 2020 but bounced back soon after. The auto culture has developed across the whole world over the last century. Like every other commodity, the automobile not only shaped the world economy but also influenced how millions of citizens live (Hoskisson, Johnson, and Moesel ., 1994). The automobile sector alone in Europe accounts for over 12 million employees (including associated employment), more than 8 million in the U.S., and about 5 million in Japan.
However, the industry has often seen frequent changes with all its continuing strength. Today vehicles must have surprised Henry Ford, Ferdinand Porsche, and Kiichiro Toyoda with their push-by-wire or drive assistants. They will also be struck by the growing demands of the environment and the emergence of new players, especially in China.
In general, the global automotive industry is better shaped than it was five years earlier, particularly in the United States, where sales and profits recovered after the recent economic recession, and in China, where growth is still high. This progress is only going to continue. Worldwide revenue for car manufacturers was projected to increase by about 50 percent by 2020, safe for the resurgence of COVID-19 in 2020. The net profits are primarily due to emerging-market expansion and, to a lesser degree (Hoskisson, Johnson, and Moesel ., 1994), the U.S. In terms of profit development, Europe, Japan, and South Korea would be sluggish.
In the 1860s, the motor industry started with hundreds of factories pioneering the unbeatable automobile. The U.S. has been leading the world in overall automotive demand for several decades. In 1929, before the Great Depression, 32,028,500 cars were in production worldwide, and the United States automotive industry manufactured 90 percent. The United States had one vehicle every 4.87 people at the time. Since 1945, the United States generated around 75% of the world’s automotive manufacturing. In 1980, Japan overtook the U.S. and in 1994 again became the world leader. In 2006(Hoskisson, Johnson, and Moesel ., 1994), Japan finished narrowly in the USA and kept that place until 2009, when China finished top with 13.8 million units. China almost doubled the U.S. production of 10.3 million units with 19.3 million units generated in 2012, while Japan ranked third with 9.9 million units.
There are four significant obstacles for OEMs to tackle to achieve future profitability. The research done in 2020 indicate that these uncertainties will influence the market until at least 2025.
More platform sharing and more modular solutions will take place. Regulatory burdens will tighten around the same period (Hoskisson, Johnson, and Moesel ., 1994), and rates are expected to remain flat on developed markets.
OEMs need to change their manufacturing and supply base profiles, supply chains, and product profiles to changing geographic and industry trends of supply and demand, and the evolving Chinese after-sales market is offering new opportunities to expand.
Customers want greater accessibility, active protection, and ease of access and use automated sources to make purchasing choices more and more.
Manufacturers will bring the more excellent value of alternative powertrain technology and creative, active protection and infotainment solutions; Europe must redefine and adapt its ability to meet the demand; and China is emerging rivalry (Hoskisson, Johnson, and Moesel ., 1994). OEMs cannot easily switch to a conventional toolbox to catch potential development, take advantage of these threats, and mitigate their risks. They need to assess and change their strategic agendas, deploy suitable investments and tools and build new capabilities to achieve these strategic goals.
Concerning the 2007 economic crisis, the car manufacturing sector has benefited from the global downturn worldwide. Industry gains were much higher in 2012 (€ 54 billion) than in 2007 (€ 41 billion), the very last pre-crisis year, and potential growth forecasts were so much stronger. The researcher predicted a worldwide revenues rise to €79 billion by 2020 to an additional EUR 25 billion, which was, however, cut short by the 2020 COVID-19 pandemic. This was good news, but not all markets or all car models could prosper somewhat (Stevenson, Hojati, and Cao., 2014). Instead, some areas and segments are much stronger than others.
What makes modern antiquity more striking is how deeply the source of earnings has changed. In 2007, 30% of world profits were made by the BRICs and Row. In 2012, the shares grew to almost 60% (EUR 31 billion), with revenues in these countries increasing 65% and outstripping expansion in North America, South Korea, Europe, and Japan. About half this development originated in China.
Another very well-received research by analysts of IBIS World, which continuously monitors the impacts of the industry from current events, indicates that world car and automotive sales revenues fell by over 15.0% in 2020 owing to global disturbances in production, the distribution network, and customer spending.
While a significant portion expected an excellent turnaround by 2021, the steel price worldwide is yet to stabilize, putting pressure on manufacturers to regulate their fixed costs. Consequently, IBIS World predicts the earnings from the sector to maintain the decrease until 2026 (Stevenson, Hojati, and Cao., 2014). In addition, the manufacturers in countries that did not have access to critical supplies during the COVID-19 pandemic operators witched to assist in the manufacture of protective masks for healthcare professionals, ventilators, and other personal protective equipment manufacturers of medical equipment deeply cutting their potential since 2020.
It is evident at the beginning of the second automotive century that the competitive sphere of the automotive sector has changed considerably over 100 years. The standard division into art, mass, and lean manufacturers are now debatable. Businesses across the geographic and volume continuum have incorporated a portfolio of innovation concepts drawn from the group and lean manufacturing paradigms. Likewise, the latest surge of consolidation suggests that geographical comparisons can no longer be rendered without considering the complexity of the diverse ownership system and the abundance of multinational partnerships (Stevenson, Hojati, and Cao., 2014). It has been suggested that tactics can no longer be addressed following the classification of ‘craft, mass and lean,’ and mergers have eliminated the supposed geographical limits of competitiveness. Instead, the paper examines the dynamics of the competitive sphere in a double-helix model, which argues that competition has shifted since the golden days of the Ford original mass production from pure cost leadership to match based on the variation and selection of Sloan’s strategy, due to the differentiation of leadership in design, innovation of alternative propulsion is identified as a potential mechanism for restarting industry’s trade patterns, which is why the fuel cell will prove to be ‘the second-century model T.’
General Motors is an American international company, also known as G.M. It manages the production, manufacture, and sale of vehicles, automobiles, and car parts. It has activities worldwide. William C. Durant established the Business on September 16, 1908. General Motors headquarters is located in Detroit, MI. Following bankruptcies (Stevenson, Hojati, and Cao., 2014), General Motors Company LLC (the New G.M.) was restructured by the General Motors Corporation in 2009. The new firm bought the brand and the majority of the old properties of G.M.
A joint venture with local Chinese automotive firms has made it possible for G.M. to bypass most obstacles to international markets’ entrance and boost its success in China. The corporation has been able to enter local brands and has opened the door for its brands. Few competitors of General Motors have done too far in China.
Thus, the solid presence of the group in the U.S. gives G.M. an extra competitive advantage over its rivals.
The industry alone in 2015 was able to slash its energy spending per vehicle manufactured by 5.6%. There was no end to G.M.’s environmental and management initiatives. The corporation has converted its corporate headquarters and 122 additional waste disposal facilities and dedicated itself to clean energies 100% by 2050. It is also the first car manufacturer in the world to sign the “Carbon Declaration” to help resolve climate change. Other strengths include;
General Motors is an automaker headquartered in the USA that relies on its home market to produce the bulk of its revenues as most of its rivals. However, in comparison to its major competitors, G.M.’s domestic sales share was the largest. Ford only earns 55.5% from the U.S., although Toyota only receives 41.9% from Japan.
2. Brand recognition 3. Dependence on trucks and SUVs for growth in revenue
The vast brand inventory raises the primary brand dilution of the group. It also adds that General Motors does not market any commodity with its brand. Their brand name recognizes rivals such as Toyota, Mercedes-Benz, BMW, Honda, Ford, Hyundai, Volkswagen, Nissan, Porsche, Kia, Land Rover, Mini, and Tesla.
1. Low fuel prices increase demand for pick-up and SUVs
Fuel rates are now the weakest in a decade. This led to buyers buying large fuel-efficient cars such as SUVs and pick-up trucks.
2. The updated model launches time and frequency
The pace and duration of the new product launch greatly affect the market position of carmakers. The latest versions have historically seen significant updates every 4 to 5 years with only small changes.
3. Autonomous vehicle demand
1. Intensified competition
2. The U.S. dollar currency instability
For General Motors Company and it is remote or macro-environment, the following external policy factors are relevant:
1. Rail- transport promotion by government and other options (threat)
2. Aggressive tax measures on vehicles of combustion sort (threat)
3. Big Business markets Political Stability (opportunity)
In the case of General Motors, the following external economic factors are essential for the car industry:
1. The high pace of development in emerging economies (opportunity)
2. Significant Business Economic Stability (opportunity)
3. Increased rivalry in emerging economies (threat)
|Sociocultural Factors Influencing GM’s
In this external study, General Motors greatly influences the following external sociocultural factors:
1. Increased electric car demand (opportunity)
2. Increased market for automobiles (opportunity)
3. Increased demand for car-sharing and hailing programs (threat)
In this external review of General Motors Business, the following external technical considerations are notable:
1. Increased deployment of automotive technologies (opportunity)
2. Rising car fuel efficiency (opportunity)
3. Increased electric car production (opportunity)
General Motors must respond in this respect to the following external ecological considerations in the automotive sector:
1. Changes in climate (opportunity)
2. Growing concerns regarding the effect of vehicle emissions on air quality (opportunity)
3. Sustainability of the industry (opportunity)
|Environmental factor analysis
General Motors must answer the following external ecological considerations in the automobile sector in this regard:
1. Climate change Changes (opportunity)
2. Increased worry about the air quality impact of car pollution (opportunity)
3. Increased market sustainability concern (opportunity)
In order to support global business expansion, the General Motors Company (G.M.) must tackle the problems identified in this PESTEL/PESTLE analysis. The Analysis tool PESTEL/PESTLE offers details on the most important external influences impacting the remote or macro-environment of the organization. In the case of General Motors, this external review shows a range of prospects and risks in the care sector.
Ford Motors is now one of the major names in the automotive market, with a significant global footprint and a broad selection of customers worldwide. Toyota is a Japanese car maker with an international manufacturing and distribution network and a major automotive company. In certain corners of the globe (Stevenson, Hojati, and Cao., 2014), the firm has high name awareness and revenues worldwide. It is a brand that focuses heavily on creativity and is a leader in General Motors. Volkswagen is now one of the top automotive manufacturers in the world with the biggest market share. V.W. has a diverse product range including automobiles, SUVs, trucks, and industrial vehicles from economical to premium and luxurious across different price segments. Nissan, FIAT, Renault, Hyundai, Honda, and even other rivals.
General Marketing Motors Mix
The product plan and combination of marketing strategy for General Motors can be explained as follows: General Motors is one of the major car manufacturers to supply a broad range of cars and brands. By offering the newest discounts and accessories, the organization permits its customers to customize their cars. G.M. sells a wide variety of brands under its brand name worldwide. It lets companies target consumers from various markets. General Motors has 12 brands, including GMC, HSV, Opel, Chevrolet, Buick, Cadillac, Holden, Ravon, Jie Fang. G.M. reaches middle-class shoppers for its Chevrolet lineup, and G.M. provides Cadillac cars for rich customers. G.M. constructs the commodity with good quality, advanced technologies, innovative designs, and cost-effectiveness. The business General Motors focuses on designing high-end engineering cars. Opel is a G.M. market division, and Opel sells goods of German construction. Buick offers modern, fuel-efficient, and technologically integrated luxury sedans.
The marketing mix for G.M. is focused primarily on consistency, quality of the vehicle, geography, and competitive pricing. Vehicle prices vary based on the model and features chosen. G.M. sells cars to various sectors of the car industry around the globe. The offers to medium-sized buyers and the offered spectrum to premium vehicles are competitive. The competitive approach of General Motors helps develop its reputation. General Motors’ value pricing tends to draw buyers in Asia. For example, Chevrolet uses medium-sized prices for their goods, whereas Buick has premium cars sold at a higher price level. G.M. also provides its customer’s banking resources.
Porter (1980, p.36) maintains that “a low overall cost situation also needs a large relative stake in the industry or other benefits such as preferential access to raw materials” (italics added). But how can one first acquire a strong market share? The response is that market shareholders make this difference by a differentiation strategy—higher quality—rather than cost leadership. According to Porter, GM was an active cost leadership policy follower (Porter 1980, p.43) mentions General Motors (G.M.) is an effective cost leadership management specialist. But the popularity of G.M. in the past poses a significant issue. How was GM a cheap leader? Is it attributed to the pursuit of cost management policy, or was it possible to reach G.M. largely due to the strong share of the industry due to differentiation?
General Motors place-review represents a large and committed population on six continents in 23 time zones. G.M. shipped about 9.8 million vehicles worldwide in 2015. General Motors has a strong network of 20,000 car dealers in 125 countries (Haugh, Mourougane, and Chatal., 2010), with a strong global presence. G.M. sells its vehicles directly or via its dealer network. Processing is carried out in 37 countries worldwide.
As a detailed marketing and advertisement model, General Motors’ promotional approach in a marketing blend can be demonstrated to increase global brand recognition. G.M. supports its goods through social media channels, T.V. advertisements, celebrities, and print media. General Motors hits target buyers through the promotion of their cars at automotive fairs. At car fairs, Business provides test drivers to get customers curious about their latest model. In publications written in G.M. journals, experts and journalists deliver verdicts. Magazines by General Motors also print auto-related news and reviews. Through building fuel-efficient cars, G.M. focuses on creating novel environmental solutions. Health and human services were supported by the G.M. Foundation. The organization still promotes schooling as part of its corporate citizenship. The General Motors advertisement blend concludes.
The G.M. competitive model
Sloan, GM’s CEO, was the pioneer of “a car for all purposes.” In 1921, G.M.’s vehicle was classified into five price divisions – from Chevrolet, Pontiac, Oldsmobile, Buick, and Cadillac. In order to differentiate G.M. products from their rivals, it placed each car line in its price segment at the top of the price range. The wide reach of G.M. in servicing many sectors in the car industry offered a benefit that this approach might lead to a low-cost advantage. The most innovative trend in the American automotive industry was the success of closed-body vehicles at the time.
At that point, Ford followed a classic low-price T-Model cost leadership approach. He firmly believed in selling the standard commodity at the lowest price, with a singular emphasis on improving production performance. He said the consumer should have a black vehicle in any color. The sudden increase in demand for closed-body cars prevented Ford from sustaining its management of the market share (Khan, and Hashim,.2014). This is because Ford “froze his model T policy,” which was basically an open-car design; it was ill-equipped with a lightweight frame to make the heavier locker car. However, Ford hesitantly adhered to his conviction that a modern automobile would satisfy the requirement for basic transport. However, this requirement was largely fulfilled by the used car industry after 1923. As buyers purchased more modern vehicles, they sold their old cars, and hence the used car became the main competitor of Ford’s Model T. Following the aforementioned developments, Model T revenues decreased rapidly. As a result, Henry Ford suspended his River Rouge retrofitting plant for about a year. He did not rebound from this disaster, though, and eventually lost the market share to Chevrolet for good.
In seeking product differentiation in recent times for an Electric Vehicles Development, G.M. has reclaimed its space in the electric car race; G.M. is dedicated to an all-electric future and is investing heavily in various innovations providing rising stages of vehicle electrification. This involves the newly upgraded Chevrolet Bolt EV that has around 259 miles of travel for the 2020 model year.
Other than the Chevrolet Bold E.V., G.M. has also revealed in its 4Q 2019 annual study an all-new battery-electric platform that will be released on a forthcoming Cadillac E.V. model. Moreover, G.M. has announced the introduction of GMC Hummer EV in May 2020, an upcoming battery-electric truck, which will be installed at the Boston Production, which is currently being re-build into a thoroughly electric vehicle plant.
A General Motors Porter’s competitive advantage review recognizes a strong market share through cost leadership. However, owing to G.M.’s market segmentation, distinction, and wider reach in the 1920s, it was a pioneer in the American automotive industry. Porter believes that cost management and distinction provide a way to sustainable competitiveness, which is equally feasible. Nevertheless, a policy of differentiation centered on superior efficiency over competitiveness is more successful than a strategy for cost leadership. This would lead a company to become a market leader and, therefore, even a cheap leader (Khan, and Hashim,.2014). Analysis suggests that differentiation and cost control can occur together. Porter maintains, however, that any generic approach demands a particular culture and ideology. General Motors should focus on reconstruction of their competitive advantage to a generic model that combines both cost leadership and differential strategy that shall position it a notch higher while still staying profitable.
The business world is moving very quickly, and new technology is transforming from old methods to new ones, new customer tastes, and new market trends as well as new strategies to control organizations and motivate employees as customers are the emperor of the market and much of the company spends thousands of billions on research to achieve sustainable change. The factors that necessitated chance can be classified into;
In external forces, the G.M., which was greatly affected by the Japanese company Toyota, was the emergence of the competitors in that era, and North America continues to be the largest marketplace for G.M., where in recent years the company sold around 2.9 million, and the nearest competitor is Toyota and Chinese companies.
Another strength for the transition to G.M. was the high salary costs for workers since the organization paid $74 per hour relative to Toyota $44 per hour, as G.M. was a compromise with the union. And the G.M. has been forced to operate the plant with a minimum capacity of 80 percent whether or not it is needed; these items play an important role in the company’s failure.
The principles and behaviors of employees and stakeholders contribute to effective organizational change implementation. Thus, thorough consideration of the changing mechanism of staff and stakeholders contributes to the performance of the organization (Khan, and Hashim,.2014), whereas the reverse effects contribute to detrimental results, such as active, passive, or violent opposition to transition.
Organizations have to acknowledge their key position and their responses to change, affected by a variety of factors, including their attitudes, cognitions, communications, and involvement in decision making, in order to effectively adopt change initiatives. Organizations that can successfully handle dynamic transitions and adaptations can not only succeed but prosper (Cahill, 2011). From the perspective of change management, drivers that affect the resistance of an employee to change need to be examined. In addition, this study highlights the psychological and emotional effects on stakeholders who can help managers to learn about their own company and execute a change plan that takes into account stakeholder effect.
The market areas which require changes included the organizational structure and culture. Structural adjustments, cost assessment changes, workflow improvements, and cultural shifts are the necessary changes.
During GM’s management of transition (Anon., 2021), the organization took measures to change. These are the latest changes the company has made.
The first move taken by G.M. is cost reduction; the organization has reduced the costs on some brands, for example, the Saturn and Hammer, to retain the profit margin, keeping some business costs. The corporation is now reducing the salaries of workers, which was a big concern for the company. In the last year, the organization has reached the cost reduction goal of up to 15 billion.
The general engine has altered the business culture; the G.M. scrapped the automobile product board and the automotive plan for up to 8 managers, who were in charge of reporting directly to the CEO. The primary goal of such a move is to speed up the decision-making phase every day. The G.M. has since updated the culture to increase the productivity and accountability of workers.
The G.M. encountered a range of challenges during the change management period.
The culture strategy is focused on the top-down model (Anon., 2021), which completely overlooked the participation of the workers when contrasted with other firms; others indicated that the firm did not adopt a top-level approach of employees feeling satisfied. Instead of showing workers what they are doing.
As cost reduction is an important part of reform management, the labor union deal posed a major challenge since the organization has agreed not to lower staff wages and retain capability levels.
As we have addressed, the G.M. has previously already updated, but these updates are mostly recent changes that the organization introduced in 2009 (Anon., 2021). The consequences of the modifications are as low as possible.
The effect of cost reduction G.M. seems to have been decreased from 98 to 2009, from 226000 to 101000 employees, and the Business is now concentrated on selling and not on more cuts. It also decides to limit the factory’s manpower from 6ooo to 4ooo. This would definitely save the business costs.
The general engine has seen positive results from cultural transition, and the staff was now mindful of duty and transparency, and the organization encouraged workers to improve efficiency.
As we debated earlier, the general engine has implemented two key change management techniques (Anon., 2021), the one lately being the change management expense control approach and the other the cultural change management strategy. The corporation has implemented two other tactics, but the last.
Haugh, D., Mourougane, A. and Chatal, O., 2010. The automobile industry in and beyond the crisis. https://www.oecd-ilibrary.org/economics/the-automobile-industry-in-and-beyond-the-crisis_5kmmp8wg6cmq-en
Hoskisson, R.E., Johnson, R.A. and Moesel, D.D., 1994. Corporate divestiture intensity in restructuring firms: Effects of governance, strategy, and performance. Academy of Management Journal, 37(5), pp.1207-1251. https://journals.aom.org/doi/abs/10.5465/256671
Stevenson, W.J., Hojati, M. and Cao, J., 2014. Operations management (p. 182). McGraw-Hill Education. https://www.academia.edu/download/52435140/stevenson12e_preface.pdf
Khan, M.A., and Hashim, M., 2014. Organizational Change: Case Study of General Motors. In ASEE Zone 1 Conference, University of Bridgeport, Bridgeport, CT, USA. https://www.academia.edu/download/55250000/Article_9.pdf
Anon., 2021. General Motors Co.; Annual Sustainability Report. [Online]
Available at: https://www.prnewswire.com/news-releases/general-motors-releases-annual-sustainability-report-setting-baseline-for-accelerated-goals-301281241.html
[Accessed May 20, 2021].
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