Business-Level and Corporate-Level Strategies - Case Study Example

Introduction: The General Motors is an American company which has existed for more than 100 years. This company has produced more than 450 million vehicles, all over the world. It also has operations in almost all the nations of the world, managing to capture a large percentage of the automotive market share in these countries. In as much as this company enjoys a growth in its revenues and sales, in markets outside the United States, America still remains the largest single market for the automotive products of the company. It is important to denote that the automotive industry is one of the leading employers in the United States, employing 1 out of every 10 Americans. General Motors on the other hand is a very important automotive company in United States, and it is amongst the largest buyers of steel, copper, iron, aluminum, plastics, and computer chips that belong to the United States (Calabrese, 2012). The United States Auto companies are not making good sales in their foreign and domestic market in the current year. Their sales and profitability have seen a decline by more than 30%. Due to these changes in their performances, there is a need of making a shift in the manner in which the auto companies of America conduct their business. This paper discusses the business level, and corporate level strategies of General Motors (Calabrese, 2012). It also identifies the best business level, and corporate level strategies that are suited for the long term success of General motors. This paper also identifies the significant competitor of General Motors, comparing their strategies, and making a conclusion on which company is better placed to succeed. Business Level Strategy of General Motors: The business level strategy of General Motors is based on the following three main areas, Brand Re-Structuring Fuel Efficiency Cost Cutting Measures Over the last years, General Motors has been focusing on restructuring its brand name, and this is while focusing on its key markets of Europe, Asia and America. The company seeks to improve on the manufacture and production of automotive products such as the Cadillac, Chevrolet, and Buick (Schmuck, 2013). This is because these products are performing well in the market. Take for instance Chevrolet and Cadillac, two cars that have managed to make an improvement in their sales, despite the global economic meltdown, and the American recession. The company also seeks to reduce its production of automotive vehicles such as the Hammer, Saturn, and Saab. This is because the company is finding it difficult to market these products in their international and domestic market. On this basis, these products are lagging behind in the company’s sales statistics (Schmuck, 2013). The other reason of removing the production of Hammer is that the car represents a life of excess, and it does not reflect the company’s policy of fuel efficiency, and promotion of green initiative. On this basis, it is not a viable project for the company. In promoting and improving its brand name, General Motors seeks to conduct aggressive marketing, through the internet, newspapers, radio stations, televisions, and other channels of advertising. This is for purposes of maintaining their market share, acquiring new markets, and providing information on the company’s abilities. The company also seeks to improve on its brand name by promoting other green initiatives for purposes of protecting the environment. These green initiatives involve producing cars that conserve fuel, hence facilitating the protection of the environment. In as much as producing cars that are fuel efficient aims conserving the environment, it is a business strategy aimed at improving the sale of the organizations vehicles. Over the years, companies such as Toyota and Nissan have produced fuel efficient cars, as a result increasing their market share (Crumm, 2010). This is because most people prefer vehicles that have the capability of preserving fuel, due to economic recessions. On this basis, to catch up with competition, General Motors sought to produce cars that are fuel efficient. Cost cutting measures are also another business level strategy of General Motors. For purposes of increasing its profitability, and reducing its operational costs, the company sought to reduce the production of capital intensive vehicles, which did not provide good returns. For example, the company had a provision of stopping the production and manufacture of hammer vehicles (Calabrese, 2012). This will in turn lead to a reduction of the company’s dealership, leading to a reduction of costs. The company also seeks to reduce the compensation package of its top executives, which usually amount to millions of dollars. In return, the company seeks to introduce a compensation package that is modest, and affordable. The best business strategy that is viable in the long term is improving on the brand name of the General Motors. Having a strong brand name in the market is a very important factor that most business organizations need to put under consideration. A positive brand name will ensure that the customers trust the business organization under consideration. This will in turn increase the amount of sales that the business organization will make (Crumm, 2010). Having a negative brand name is detrimental to the organization under consideration. This is because customers will not trust the products of the organization, and this might lead to a fall in the sales of the organizations products. This is no matter the advertising campaign that the company might engage in. Corporate Level Strategy: The corporate strategy of General Motors is based on the following elements, design, building, re-investing, selling and formation of alliances. General Motors focus on designing, building and selling of vehicles that reflect the needs and requirement of their customers. Under design, the company aims at producing very few brands, but of high quality (Shimokawa, 2013). This is through the use of various resources found in the international sphere to produce a vehicle that reflects the needs of its customer. For example, the company would design a vehicle that is cheap, and has the capability of conserving fuel, for purposes of attracting the middle class of the society. The company also seeks to build best-in segment vehicles for purposes of attracting new customers, building its brand name, and hence improving its profitability (Calabrese, 2012). Under selling, it is the objective of the company to use its strong brand name for purposes of improving it sales revenues. The company also re-invests most of its profits in new technologies and research. This is for purposes of developing new technology, for their automotive products. Research is also useful for the organization, because they will manage to research on the viability of their products, their existing markets, customer needs, and on their competitors (Schmuck, 2013). Having knowledge on the organizations competitors is essential because it will help the company to develop a strategy aimed at countering the policies of its competitors. The company also engages itself in strategic alliances, and an example is its alliance with Peugeot-Citroen that occurred in 2012. This alliance is aimed at increasing the market share of the company, and its competitiveness in Europe. In my own opinion, the building of alliances is the most suitable for the long term viability of General Motors. This is because an alliance with Peugeot will help the company to use the facilities and resources of Peugeot for purposes of increasing its profitability in Europe (Crumm, 2010). Specifically the distribution channel and resources of Peugeot in Europe can play an important role in increasing the market share, and profitability of the company. It will also cut on the organizations costs, because the company will not need to invest on other resources for purposes of creating distribution channels in Europe. This will in turn improve on the profits that General Motors makes. Competitors of General Motors: General Motors operates in an environment whereby there are a number of competitors that the company faces. These competitors include Nissan-Renault, Mercedes Benz, BMW, and Toyota. In as much as these are the main competitors of General Motors, but its major threat emanates from Toyota. Toyota Company is the second largest producer of automotive vehicles, this is after General Motors (Shimokawa, 2013). The headquarters of the company is in Tokyo, Japan. It is important to denote that Toyota is the largest manufacturer of vehicles in Asia, and it has a significant market share in Asian countries, rivaling that of General Motors. One of the business strategies of Toyota is to build up on its brand name. The company recognizes the need of creating a strong brand name, and hence the need of developing automotive vehicles that are of high quality, and reflect the needs of its customers. To achieve this objective, the company uses the KAIZEN strategy, which refers to a continuous improvement on the quality of the organizations automotive products (Crumm, 2010). The company also produces vehicles that are less pollutant, and thus conserve the environment. This strategy is similar to that of General Motors. General Motors also aims at improving its brand name through developing cars that conserve the environment and ones that carter for the needs of its customers (Shimokawa, 2013). Toyota also values innovation, and it constantly encourages its employees to come up with innovative ideas aimed at promoting the sales of the organizations products. This is an aspect that General Motors does not do. Amongst its business strategies, General Motors does not have a provision of allowing its sales people and manufacturers to come up with innovative ideas aimed at satisfying customer’s needs and requirements (Shimokawa, 2013). The company mainly focuses on research to come up with ways and means of satisfying customers. On this basis, Toyota is likely to surpass General Motors in terms of sales, and being the largest producer of automotive products in the world (Schmuck, 2013). The corporate strategy of General Motors is to promote its corporate value, through maintaining the company’s position as a market leader in the field of automotive industry. This is by increasing its growth through the use of advanced technology, and its global operations. Toyotas corporate strategy relies mostly on developing new products based on research and development. In fact, Toyota has invested heavily in research, being a leader in advanced automotive technology. This is an area that Toyota is superior over General Motors, and this plays a big role in making the company to be better off than General Motors. On this basis, due to a strong research background of Toyota, and the use of the KAIZEN policy, the company is most likely to succeed in the long run. It is important to denote that strategies employed by Toyota are successful in fast cycle markets, as opposed to a slow cycle market. Conclusion: In conclusion, General Motors is a company that aims at regaining its leading stature in the automotive industry. This is because the company has been hit by a series of recessions. This forced the American government to initiate a policy of helping the company to come out of recession. On this basis, General Motors has initiated a business strategy that is customer focused, and aimed at satisfying the various needs of the customers. Under its corporate strategy, the company has come up with ways and measure that will guide it in coming up with policies that can make the company successful in its endeavors. However, Toyota remains the biggest threat to the operations of the company. On this basis, the company needs to develop a strategy that will counteract the strategies developed by Toyota. References: Calabrese, G. (2012). The greening of the automotive industry. Basingstoke, Hampshire: Palgrave Macmillan. Crumm, T. A. (2010). What is good for General Motors? solving Americas industrial conundrum. New York: Algora Pub.. Schmuck, M. (2013). Financial distress and corporate turnaround an empirical analysis of the automotive supplier industry. Wiesbaden: Springer Gabler. Shimokawa, K. (2013). Japan and the global automotive industry. Cambridge: Cambridge University Press. http://www.gm.com/company/investors/corporate-strategy.html Read More