General Motors - Management Team Decisions - Case Study Example

Management Team Decision General motors has been in operation for many years and have been widely known for its high-quality products and hence their market domination over the years. They began their operation in the USA and hence their immediate market was USA. The market was satisfying to the company but with the increment in competition, the market has become quite insufficient to sustain and maintain the company’s growth rate. In their initial years of operation, sales were high but have continually reduced over the years. The reduction in sales and experiencing losses would have been brought about by many factors or a combination of certain factors. The top most reason for the company experiencing losses was the emergence and growth of other motor companies. The United States market was not sufficient enough to keep all the competitors in the market. The company failed to react immediately to the competition and hence they experienced losses in the year. Another factor that contributed to the company’s losses was failure to align to the demands of the market. The consumer needs keep changing and hence the manufacturer should adjust their products with changes in consumer needs. The kind of vehicles they produced was not fitting the market requirement. General motors were also reluctant to internationalization, and hence they over depended on the USA market. Over dependence limits the companies supplier power and hence, the company is always at a disadvantage. The sales of general motors rose after their venture in the China market. The amount of sales made in the china market was higher than those in the USA market. The higher volume of sales in china is enough proof that the company has more chances of growth in china as compared to USA. The volume of sales in china has been increasing as opposed to the sales in the USA market that have been drifting negatively. A continuous increase in sale in important for a company since it shows that the company is growing and have a chance of getting better and more profitable (Dess, Gregory and Miller 14). General motors, therefore, require considering various ways of dealing with new markets so that they can have a chance of regaining their position as the world’s leading automobile company. In dealing with a new market, the company requires to understand what other similar companies are doing in the market in question. The only way to beat competitors or to match them in a new market is by doing what they do and doing it much better. Automobile companies that have been in the china market for a long time can act as a case study for the company. General motors can study the failures of fallen companies in the china market and as well study the strategies of successful automobile companies in the market. A study of fallen companies will guide the company on the various ways of dealing with the market in order to avoid failing. A study on successful companies will ensure that the company has the secrets of succeeding in the market. Being aware of the two situations, the company will be able to devise its own strategies that will ensure that they can prospect the future and navigate through its business experience. The company requires studying the china market in depth so as to understand the needs of the consumers. The economic activities in the area and the tastes and preferences of consumers will guide the company on the kind of products to produce and the specifications to include in them (Dess, Gregory and Miller 17). Producing the correct kind of products required by the market is necessary in terms of increasing the sales of General motors and promoting the market dominance. The company also requires to understand the economic charts and cycles so that they can know when to manufacture and in what quantities. This technique will avoid the tendency of the company having dead stock and reduce the possibility of losses resulting from high production with low demand. Being new in the china market, the company requires investing a lot in advertising so that they can become popular. Advertisement costs may seem to be very high initially, but they give the company long term irreversible services. Advertising makes the company well known to all the consumers and increases the confidence of existing customers. Research has shown that a customer feels prouder when they see a product they use being advertised, and it increases the chances of the customer being loyal. Advertisement will, therefore, improve the loyalty of the many numbers of general motors customers and hence foster market dominance. Constant and appealing advertisement catches the attention of the market and hence it’s worth the high cost. The population in the china market is very high and hence the market needs are diverse. General motors would, therefore, diversify the number of products they have available for the customers. Having a variety of options for a customer increases the chances of purchasing the products at your company. The number of vehicle models produced should be increased with respect to the market needs so as to heighten the satisfaction of the customers. Having a variety of products increases the competitive nature of the company in the market and hence promotes the company’s resistance to forces of competition (Hill, Charles, and Gareth 77). Being more reactive to the needs of the customers promotes customer loyalty and hence increases the chances of growth in the market. The company should understand the china market cultures and conform to them so that it can increase its acceptability by the customers. Employing more people from the region is necessary in attracting new customers. General motors should, therefore, ensure that a good percentage of the employees and management is from the china population. General motors have found a good market in the china but that should not limit them from focusing on much growth. Markets keep changing, and the company requires having a variety of markets in order to remain competitive even when one market fails. General motors should keep their focus on establishing new markets so that their dreams of internationalization are achieved. The company should invest in looking for virgin markets so that its total global sales can keep increasing. Operating in many markets brings together a lot of people with one focus and hence the innovativeness of the company is deemed to skyrocket. Operating in many areas increases the company’s economies of scale, and hence, they have the capacity to venture into new industries in future (Mahajan 25). General motors should avoid fixed business strategies since different markets require specialized strategies. Being flexible to a variety of business strategies increases the adaptability of the company in many markets. General motors should not leave the USA market despite the challenges they have been experiencing. They should reflect on adjusting their strategies so as to fit the market demands on the USA market. They should establish new methods of dealing with the stiff competition so that they can regain their former market position. They should place the demands of the market first in determining the kind of products to produce and keep adjusting with changes in consumer’s tastes. New manufacture methods should be employed so that the production costs are minimized (Sen 129). Low production costs enable the company to be flexible in terms of responding to price competition. Therefore, general motors should seek to revive they position in the USA market rather than quitting the market. The USA market is the largest automobile market and hence the company will have high chances of growth is they respond to its demands effectively. Decentralization refers to spreading out of various roles and duties, and it involves employing more managers and bringing up new business units closer to the customers (Rao 47). Decentralization ensures that the top management has minimal duties, and their main roles become overseeing the company’s overall running. Decentralization of general motors in the china market will bring decision closer to the customers and hence promote responsiveness of the company to local circumstances. The number of customers served per employee will be small, and hence customer service will be improved. Training of the employees will be easy and rotational training on the various departments and shops will be made easier. It makes every employee more responsible and hence employees realize their importance to the company and they feel motivated to work harder. On the other hand, decentralization may also have negative effects towards the company. In a decentralized organizational structure, it is difficult for the management to implement policies since all people are not working under one manager. It creates a risk of duplication of roles and hence the company may experience diseconomies of scale. Decentralization will expose the company to a situation whereby it will be difficult to operate under tight budgets and financial controls (Rao 49). However, despite having a few disadvantages, decentralization will be essential in the china market since it will help many customers and improve the quality of service they get. It is, therefore, necessary to implement it in a bid to control the high competition that is expected to emerge in the market. Works Cited Dess, Gregory G, and Alex Miller. Strategic Management. New York: McGraw-Hill, 2003. Print. Hill, Charles W. L, and Gareth R. Jones. Strategic Management: An Integrated Approach. Mason, OH: South-Western, Cengage Learning, 2013. Print. Mahajan, J P. Business Organisation and Management. Mumbai [India: Himalaya Pub. House, 2010. Print. Rao, P B. Business Management and Organisation. Jaipur, India: Vital Publications, 2007. Print. Sen, Mridul. Business Management. Jaipur, India: Oxford Book Co, 2008. Print. Read More