Management Information System at General Motors and Toyota Motor Corporation - Case Study Example

Management Information System Name of Student: Name of Course: Name of Instructor: Date of Submission: Management Information System Introduction The ability of an organization to manage in the modern organization is bestowed in its ability to provide value to its customers and also to stay ahead of its competitors in the market. The following paper gives an assessment of the General Motors and Toyota Motor Corporation, both of which are big automobile manufacturers in the world. The assessment will use Porters value chain and porters five forces to analyze the two companies. The two frameworks were proposed by Michael Porter to explain how organizations are able to provide value to their customers and also to stay ahead of their competitors in the market. Toyota Motor Corporation Toyota Motor Corporation was found by Sakichi Toyoda in 1937. Prior to the establishment of Toyota Motor Corporation, the Toyoda had ventured into several manufacturing ventures key among them being automatic loom (Toyota Motor Corporation 1). Currently, Toyota Motor Corporation is the largest automobile manufacturing company in the world. The company is used as a benchmark by other organizations in the world with regard to its great manufacturing and organizational management policies. Key to the development of the company over years is its commitment to innovation, creativity, quality and providing value to the customer. The Just in Time and lean manufacturing policies in addition to the supply chain management systems of the company are renowned and adopted by organizations across the world owing to their ability to place the company above the rest in the market. The organizational departments at Toyota Motor Corporation are divided according to the various functional areas of the company. The company owns or partially owns stakes in various companies which are crucial links in its supply, manufacturing and distribution network. For this reason, the departments in the organization are divided according to the functional areas (Toyota Motor Corporation (b) 1). General Motors General Motors, commonly known as GM has for a long time enjoyed being the largest car manufacture in the world before it was recently overtaken by Toyota. The history of GM dates back to 1897 when there was a fuss in the American market with regard to the manufacturing of automobiles in the world. General Motors was founded in 1908 by William ‘Billy’ Durant (General Motors 1). Initially, GM owned the Buick Motor Company but has over the years acquired more companies to become a large automobile manufacturing conglomerate. This was the creation stage of GM motors. GM outlines its history and development in other five stages; acceleration, revolution, globalization, innovation and challenges and rebirth (General Motors 1). Currently, General Motors is the second largest automobile manufacture in the world. Among the products of the company are Chevrolet, Isuzu, GMC, Opel, Cadillac, Buck, HSV, Vauxhall, Jie Fang, Wuling and UzDaewoo. The various automobile brands are manufactured by various companies which form the largest GM Conglomerate. Therefore, the management of General motors’ is organized according to the various companies making up the GM. The same departmental organization is used in the various distinct companies making up the GM family. Porters Five Forces According to Michael Porter, there are five forces which shape the strategy of an organization. The Porter’s five forces are used to analyze the state of a market. Two of the forces include the bargaining powers of the suppliers and the customers. This power should be on its minimum low in favorable markets. The third force is the threat of new entrants in the market which should be equally low in favorable markets. The fourth force is the threat of substitute products which should also be low. Lastly, the level of competition of in the market/ industry should be low (Karagiannopoulos, Georgopoulos & Nikolopoulos 67). The Porters five forces model can be used to analyze the automobile manufacturing industry in which both Toyota and GM operate in. firstly, it can be acknowledged that the threat of substitute products s high owing to the many cars manufactures in the world. This makes the level of competition in the market very high, hence explaining the rigorous activities by both companies to increase their market shares. The threat of new entrants into the market is low since investing in the automobile manufacturing is very costly in addition to other threats to entry. The bargaining power of the buyers is relatively low; which is appropriate for the market (Karagiannopoulos, Georgopoulos & Nikolopoulos 67). The bargaining power of the suppliers in the market is relatively high hence necessitating the need for the players in reduce their power. This explains the great supply chain management system adopted by Toyota. This strategy has enabled the Toyota to overtake GM in automobile manufacturing industry. Porter’s Value Chain The Porter’s value chain is a model which is used to analyze the way in which organizations source for raw materials, add value to them and take them to the specific companies. According to Porter, a good value chain enables an organization to be able to offer quality to its customers at a reduced cost as compared to their competitors in the market. In integrating a value chain management in the market, an organization is able to gain a competitive advantage in the market. According to Porter, the value chain is made up two main activities; support and primary activities. The following figure illustrates the value in according to Porter. The Value Chain (Mind Tools 1) Primary activities are focused on the creation selling, maintaining and supporting a service or product. Inbound logistics is focused on storing, distributing and receiving raw materials (inputs). In bound logistics, it is important to establish good relationships with suppliers so as to gain competitive advantages (Mind Tools 1). With its Just in Time and Lean supply & manufacturing policies, Toyota has been able to outdo its competitors by establishing good relations with suppliers; hence being able increase its efficiency in its manufacturing processes. Operations are involved in the transformation of raw materials into finished products. In this aspect, the manufacturing operations of the Toyota Motor Corporation are better as compared to General Motors. Outbound logistics are concerned with the delivery of products and services to the final customer (Mind Tools 1). The supply chain of Toyota also stand out on this aspect; hence its ability to meet the market demands and supply forces. Marketing and sales is concerned with increasing the market share of an organization in the market. Lastly, services are involved in providing the market with value addition and support services in the use of the products sold. The many assembly plans installed by Toyota throughout the world stand out as both distribution and service centers. Support services are responsible for providing an organization with the capacity to undertake its operations. The firm infrastructure, technology development, human resource management and procurement are the elements involved in support activities (Mind Tools 1). As seen from the value chain , Toyota performs better than GM hence its ability to gain a margin over GM, hence overtaking it as the largest car manufacturer in the country. Information Management Systems Both General Motors and Toyota Motor Manufacturing have invested heavily in information management. Both companies have an autonomous information management system which enables them to manage the information resources in the companies. General Motors has an executive manager who is responsible for the managing information resources in the company as seen in the organizational structure above. On the other hand, Toyota has a standardized information management system which enables the company to standardize its operations in the world (Toyota Motor Corporation (c) 1). Concluding, this assessment was successful in giving an insight into Porters five forces analysis and Porters value chain with respect to General Motors and Toyota Motor Corporation. From the analysis of the automobile manufacturing industry, it was identified that the market is highly competitive hence the need to come up with a good value chain so as to stay ahead of the competitors. Toyota has been able to integrate in a good value chain system which has empowered it to emerge better than GM. The assessment has also analyzed information management systems in both companies. From the assessment, it can be concluded that a good value chain management system has the ability to increase the competitive advantage of an organization. Works Cited General Motors. Company: History & Heritage (2013) http://www.gm.com/company/historyAndHeritage.html Karagiannopoulos, G., Georgopoulos,N., & Nikolopoulos, K. Fathoming Porter's Five Forces Model In The Internet Era, Info. 7. 6. (2005); 66 - 76 Mind Tools. Porter's Value Chain Understanding How Value is Created within Organizations. (2013). http://www.mindtools.com/pages/article/newSTR_66.htm Toyota Motor Corporation. History of Toyota. Toyota Motor Corporation. (2013) http://www.toyota-global.com/company/history_of_toyota/ Toyota Motor Corporation (b). TMC Announces New Organizational Structure and Executive Changes. Toyota Motor Corporation. (2013) http://www2.toyota.co.jp/en/news/13/03/0306_1.html Toyota Motor Corporation (c). Information Systems, (2013) http://www.toyota-global.com/company/history_of_toyota/75years/data/company_information/personnel/information_systems/business_data_processing_systems.html Read More