General motors project

A car for every purse and purpose

Submitted by :Dhananjay kumar 318 Sartaj ahmad 341

Vinay kumar 358

1. Company: History & Heritage

History
The company was founded on September 16, 1908, in Flint, Michigan, as a holding company for Buick, then controlled by William C. Durant. GM's co-founder was Charles Stewart Mott, whose carriage company was merged into Buick prior to GM's creation. Over the years Mott became the largest single stockholder in GM and spent his life with his Mott Foundation which has benefited the city of Flint.  In 1909,it acquire, Oldsmobile, Reliance Motor Truck Company of Owosso, Michigan, and the Rapid Motor Vehicle Company of Pontiac, Michigan.  General Motors has 284 operations in 35 states and 158 cities in the United States. In addition GM of Canada operates 21 locations, GM de Mexico operates 5 locations, and GM has assembly, manufacturing, distribution or warehousing operations in 49 other countries, including equity interests in associated companies.

Acceleration: 1910-1929
As demand for automobiles grew to unexpected heights in the 1920s, General Motors set the pace of production, design, and marketing innovation for others to follow.  With the philosophy and strategy of a car for every purse and purpose, GM added Chevrolet, Vauxhall and Opel.  GM changed a series of landmark innovations that changed the automobile itself, GMs vehicles went beyond transportation, becoming statements and aspirations in their own right.  During these years GM also opened more than a dozen new plants outside the United States. It was during World War I that GM, for the first of four times in its history, would turn its facilities and experience to the production of war . Between 1917 and 1919, 90 percent of GMs truck production was directed to the war effort. GMs truck operations supplied the Army with a variety of models; Cadillac supplied Army staff cars along with V8 engines for artillery tractors and trench mortar shells; Buick built Liberty airplane motors, tanks, trucks, ambulances and parts; By 1941, GM accounted for 44 percent of total U.S. sales, compared with 12 percent in 1921. From 1940 to 1945, GM delivered defense material valued at $12.3 billion. GMs contribution spanned virtually every conceivable product from the tiniest ball bearing to massive tanks, naval ships, fighting planes, bombers, guns, cannons,and projectiles. GM alone turned out 13,000 airplanes and one-fourth of all U.S. aircraft engines.

2.Drivers & Differentiation

 Decline trade and investment :- The start was not so good. Home
country was not beneficial. So, GM decided to go to international market. The first international move was to CANADA and MAXICO.

y y y

Soon, GM expand their business to 41 country outside .

North America account about to 17% of vehicle sold worldwide. Now,GM had started their business to 170 countries around the world.

 Technology change :- it was until the 1920s,when the new concept of

product emerge, that GM really begin prosper. This new technology has change the market share of GM. The sold 8.3 million car and trucks worldwide with a net income of $6.9 billion.

y
y y y y

In 1911,GM set its own laboratory Today,it covers field like Design, Engineering, manufacturing, research, labour relation, Environmental & energy activity. Introduction of the electric self-start.etc GM R&D was the world s first automotive research centre. It was organized in 1920 by inventor Charles F. Kettering. Now, GM R&D is working on the next generation of fuel efficient and gasoline free vehicles to help reduce the impact of the vehicle on the environment.

Competitor
The major competitors of General Motors are domestic companies like DamilerChrysler & Ford Motor and foreign companies like Toyota Motor & Honda Motor.

Ford Motor Company

Ford Motor Company is a global company with two core businesses: Automotive and Financial Services. The Automotive business consists of the design, development, manufacture, sale and service of cars, trucks and service parts. Ford has been focusing on cutting costs to increase margins more than its competitors. It has used reverse engineering in the development of their products. Thus Ford has been an innovator in the auto industry.

3. Focus on various routes adopted for Globalization

Although General Motors was always active internationally

 Turn key project (Improvement in efficiency) :- The 1980s and 1990s

brought a new urgency for GM to operate as a single global company, to improve the efficiency of its operations and better compete with global competitors. GM also began a series of reorganizations in North America that led to a single business unit there.  Green field investment :- In 1982, GM marked its largest single production expansion outside of North America with the opening of the new complex in Zaragoza, Spain.

 Joint venture :- With joint ventures in China and India to the GM family, the company expanded both the reach and variety of vehicles sold worldwide. y 1995 was a big year for GM. Annual vehicle sales outside North America exceeded three million units for the first time. Five million vehicles were sold in the United States that year and GM entered into its first joint venture agreement in China.

By the end of the 90s, the foundation for global growth in the new millennium had been set. During this period, GM also formed NUMMI, a joint-venture with Toyota, and Saturn, a wholly new company focused on creating a new small car and a new way of doing business.

 Export and import :- As general motors operates in many other company it also export and import the vehicle.like it imports the car made in china to united states.
Lessons from these and other innovations were spread throughout GM, and the company benefitted from a truck boom that saw millions of Americans adopt SUVs as their family transportation.

4. Porter s diamond theory

Porter has given a model that attempt to determine why some nations succeed and others fail in international competition.

 Factor condition :- when GM motors has started its operation, they don t
had much technology, but they had a good combination of skilled labour, and infrastructure to produce motor cars.

 Demand condition :- The demand was not so good at the start. many other
car manufactures find difficult to survive but GM-motors continue with their production and in long run when the world war-I started, it gave a immense demand for the motor car. The were mainly demanded for transport the arms. 

Relating and supporting industry :- General motors has started it

journey with William crapo Durant,know as the king of carriage market . This crapo Durant give an idea of the shaded car to general motors. Give had all the basic require industry with them only,like production of engine, car designing, etc.

 Firm strategy, structure, and rivalry :As we have already discussed the strategy and structure , here we are describing the rivalry . With the rise of foreign competitors like Toyota, Honda and Nissan in the 1970's and 80's, rivalry in general motors has become much more intense. y Firms compete on both price and non-price dimensions. y price competition erodes profits by drawing down price-cost margins y while non-price competition (e.g., new car rebates and interest free loans)

5.Focus on Economic/Political/Technological Issuesin IB Economic

The automobile industry has a huge impact on every country s economy. According to various studies this industry is the major user of computer chips, textiles, aluminium, copper, steel, iron, lead, plastics, vinyl, and rubber. The study also showed that for every autoworker there are seven other jobs created in other industries. These industries include anything from the aluminiums to lead to vinyl.

Political
Laws and government regulations have affected this industry since the 1960s. Different countries have their own set of rule and regulation which a MNCs must keep in mind while setting the business. Political forces affecting international corporations include
y

y y y y

Governments, political parties, and ideological beliefs (communism, capitalism, socialism, liberal, conservative, etc.). Nature of government-business relationships. Laws and attitude toward business. Tariffs and quotas. Currency controls (limits on the amount of money entering or leaving a country).

Technological
when the general motors has started in 1908,there were not such developed technology. To remain in market competitive(specially the international market) general motors faced many problems, some of the problems are y To developed an electric self-start car y At the time of world war, GM turn from a civilian to war product manufacturer. This was a huge challenge after GM. y To produce a better fuel efficient car.

6.Company's FDI history

Mergers & Acquisitions :- GM actually traces its early identity and
growth to mergers and acquisitions. Since its creation in 1908, GM has added dozens of companies and brands to the family through merger and acquisition -- most of them automotive, but many in other fields ranging from refrigeration to aviation. some of them are     In 1909- Cadillac Enters the family. In 1916-sloan joint the general motors. In 1918 G.M started in Canada. In 1919 GM entered in airplane business. In 1925 vauxhall joint the family.

These are some mergers and acquisition happened in the history of general motors.

Joint ventures :- GM has a long history of joint business ventures

around the globe. In the past few years alone, major new ventures have been established in the Asia-Pacific region and Russia. The first joint venture was happened in korea in 1972.  In 1975, with Kenya.  In 1983, GM joint with Toyota to create NUMMI.  In 1986, a international venture in Canada. General motors has many joint ventures with china . starting from 19922005. The first venture setup in 1992,then in 1999(in shanghai),in 2001,and the latest in 2005.

7. Emphasis on Cross-Cultural Issues in Managing Operations

As general motors is a global company working with different countries all over world. Some problem may faced by the company are  Cultural :- GM faced many culture problem whenever it moves to outside the country, but they able to adopt the culture of host countries.  Woking time :- country s like india is very particular about the office timing, the employee must come to the job by time, whereas in country like U.S there is not such restrictions.

 Language :- the biggest factor of the communication, its very important to the senior level manager to know the host country language.

 Compensation :- general motors have to think about the salary of the expatriates working in host country, because the host country currency would be different from the parent country.

 Individualism vs. collectivism :- Asian country believe in group work while west countries believe in individual work and assessment.

 Uncertainty avoidance :- Asian are thought to be risk-avoidance while people from west consider to be more risk-taking.

8.Strategies/Structures adopted for their various Productlines

Aftere the 1920 nationwide crisis the general motors adopted various strategies like

Decentralized operation and responsibilities with coordinated control:At the individual level, his policy was simple: "Give a man a clear-cut job and let him do it."

 Modernization:- Prior to World War II, they included the first all-steel one-piece roof, two-cycle diesel truck engines, independent front-wheel suspension and automatic transmission.  Quality leadership :-The policy led to different kinds of vehicles for different customers. People were buying more than just basic transportation. They also wanted comfort, good looks, performance that was better than just adequate, and above all, periodic improvement. The company also offered a six year, 60,000 mile powertrain warranty with six year,100,000-mile corrosion protection, showing GMs commitment to produce high quality cars and trucks.  To produce better fuel efficiency car:- In early 1970s, the fuel efficient car was in great in demand and the research team of GM was working on that, which lead them to produce cars which were fuel efficient. The idea was to reduce the weight anh exterior size,the first downside car was about a foot shorter and 700 pounds lighter than their predecessors.


market,GM in 1990 introduce a new concept of electric car. The electric car produce by GM was a great success in the market due its high efficiency and performance.

lobal competition for technology :- Due to high global competition in

9. Benefits/Motives behind International Business

Benefits
1. There is creation of more jobs for the populace 2. There is advancement in technology as the companies bring in state-of-the-arttechnology for their businesses 3. Friendliness between and among nations in trade i.e. it strengthen international relation 4. The balance of payments of nations in trade are improved on 5. The living standard of the people is boosted 6. The demand for training and retraining and advancement in the people's education becomes absolutely necessary. This will in turn help strengthen the economy of the nation

Motives
The conduct of international operations depends on companies' objectives and the means with which they carry them out. The operations affect and are affected by the physical and societal factors and the competitive environment.

Operations


Objectives: sales expansion, resource acquisition, risk minimization

Means
  

Modes: importing and exporting, tourism and transportation, licensing and franchising, tu rnkey operations, management contracts, direct investment and portfolio investments. Functions: marketing, global manufacturing and supply chain management, accounting, finance, human resources Overlaying alternatives: choice of countries, organization and control mechanisms

Physical and societal factors

   

Political policies and legal practices Cultural factors Economic forces Geographical influences

Competitive factors
  

Major advantage in price, marketing, innovation, or other factors. Number and comparative capabilities of competitors Competitive differences by country

In today s global economy and highly competitive auto industry GM has no time to procrastinate. As stated, GM has just too much at risk in not becoming an industry leader in alternative fuel technology. Fuel-economy legislation is sparking the race. This is a critical time in auto industry with many threats, but opportunities as well. The next several years will redefine GM.

10. conclusion of overall company performance and future initiatives in International Business :-

Mission statement
Drive improvements in market share, revenue, brands, people, responsiveness, and cost effectiveness through the implementation of global common metrics and best practice sharing. GM will become an industry leader, not a follower . To regain lost market share that was lost to foreign competition, and once again be the auto industry leader in sales and market share in today s global market.

Vision statement
GM s vision is to be the world leader in transportation products and related services. GM will earn our customers enthusiasm through continuous improvement driven by the integrity, teamwork, and innovation of GM people. For GM to become the automotive industry leader in alternative fuelled vehicles and providing superior quality products that global consumers call to mind when they think of quality and innovation. My vision for GM is to be the industry leader in innovation, and where all other industry competition strives to imitate.

Thank you Sources :www.Google.co.in www.wikipedia.com GM motors official website Books :- course book Notes of ibm Ppt s