1

Acknowledgement














2


COMPANY PROFILE

Well known as GM, General Motor is a multinational corporation from the United
States of America. The company designs, manufactures, markets, and distributes
vehicle parts and promotes financial services. It is headquartered in Detroit,
Michigan.
General Motors produces vehicles under 13 brand that consists Alpheon,
Chevrolet, Buick, GMC, Cadillac, Holden, HSV, Opel, Vauxhall, UzDaewoo, JieFang,
Baojun, and Wuling. These brands are being manufactured in 37 countries and
operate through wholly-owned subsidiaries. However, in China, it operates through
ten joint ventures.
Currently, General Motors is among the worlds largest auto-manufacturer in the
world and has been controlling vehicle sales for 77 years (1931-2007). General
Motors was also one of the worlds top five largest initial public offerings (IPOs).
3


General Motors holds several joint ventures around the world. There are
Shanghai GM, GM Uzbekistan, General Motors India, General Motors Egypt, SAIC-
GM-Wuling and FAW-GM in China, GM-AvtoVAZ in Russia and Isuzu Truck South
Africa. The company employs around 212,000 workers and performs its business in
157 countries.
There are five business segments of General Motors which includes GM North
America (GMNA), Opel Group, GM South America (GMSA), GM Financial and GM
International Operations (GMIO). The company holds a major stake in GM Korea of
a whopping 96% and in a 20% stake in IMM (International Monetary Market).






4



Table of contents
NO. CONTENTS PAGE
1 Acknowledgment 1
2 Company Profile 2
3 Table of Contents 4
4 Contents
a) Internal Audit
b) Porters Diamond Model
c) Strategic Response
5
5
9
13
5 Conclusions 15
6 Recommendations 16
7 Bibliography 17
8 Appendices 18






5





Internal audit
a) Conducting an Internal Audit (BCG Box, Benchmarking or Value Chain Analysis).
Choose only one (1) of this internal audit.
Value Chain Analysis

Primary activities
The primary activities for General Motors consist of logistics, product
development, marketing and brand portfolio, and dealer support and customer service.
6

Logistics
Every year, General Motor improves its productivity by global sourcing process
that integrates 27 different central purchasing agencies. In 2000, General Motors
decided to create an organization with a logistics company to deal with the logistics
networks. Moreover, a new had been developed by General Motors called the Build
Transfer Operate Model. This system functions to reduce administrative as well as
operational costs and improve the coordination concerning supply chain and distribution
channel which saved $3,600 for every vehicle sold. Furthermore, the company unified
the distribution channel for GMC, Pontiac, and Buick. This action is to lessen the costs
of brand management and overlap. Then, in 2005, General Motors implement apply a
model called Retail Inventory Management. The model is a centralized information
system that builds an interactive communication for the back-office with the front-
office.
Product development
In 1995, General Motors subsidiary, namely OnStar, concentrated in high-tech
car accessories and has been continuing its development and launching annual high-
tech car technology programs such as navigation systems, security systems, wireless
systems and more. Correspondingly, the company acquire a new engineering
organization focusing in electric and hybrid vehicles in its aim to develop green
technology.
Marketing & brand portfolio
Given its restructuration, General Motors decided to change its marketing
strategy and to focus on its five most valuable brands consisting Cadillac, Chevrolet,
Buick, Opel/Vauxhall and GMC. The change is to reduce its brand portfolio substantially.
Therefore, in order to restore and call attention to its brand image, the company spent
a great amount of cash in marketing at $500 million.
Dealer support and customer service
7

In 2008, J.D. (James David) power survey verified that General Motors customer
service as one of the satisfactory in the market. This is because the company has
among the largest dealers networks globally. In 2006, to boost satisfaction among its
customers, a campaign was launched to promote and improve General Motors car
dealers customer service.
Support activities
Leadership
With the creation of new General Motors, the board of directors was renewed.
The resignation of Rick Wagoner, former chairman and CEO, and the retirement of Bob
Lutz, former vice-chairman, have paved the way for new vision and strategy. The
successful come-back of General Motors in New York stock exchange was a very good
point for the Daniel Akerson, the current chairman and CEO. In a way, leadership has
found back part of its credibility what should lead to new positive perspectives.
Technology
General Motors is pioneer in many technological programs, for instance,
telematics systems, advanced propulsion technology, electronic controls and software.
In addition, General Motors is getting ahead of competition regarding its own green
technology, specifically with a lithium ion battery program designed for electric vehicle.
Human resource development
General Motors implemented a successful human resource program a few years
ago called GoFast. This social initiative was awarded in 2004 and has been designed to
simplify the bureaucratic organization, and thus enhanced its effectiveness through
three tools consisting of facilitating the emergence of new talents, made the reach of
top positions easier for employees and notably women and improving training
programs.
Information system
8

To improve its communication, General Motors redesigned its information
systems. First, with GM BuyPower, General Motors has made the search for vehicles
easier for customers, while collecting marketing information. Second, with the new B2B
web platform and the renovation of its global manufacturing information system, GM
has made its production and supply chain management more dynamic and interactive.
General Motors engineers closely monitor the trends of warranty parts repairs in
order to make crucial decisions about parts requiring analysis. The logistics are
challenging. The company receives parts from approximately 9,000 dealers in the
United States and Canada as well as additional parts from other countries.
Previously, General Motors dealers had to package the parts, address them to
the designated supplier at one of more than 200 locations, take them to a post office
and pay the shipping costs up-front. This process required the company to repeatedly
call the dealers to determine if they had shipped the parts, and then contact the
suppliers to verify the parts had been received. UPS (United Parcel Service) Supply
Chain Solutions offered General Motors a total materials recovery solution from door-to-
door package delivery to inventory management, as well as the advanced technology
needed to streamline and control the companys supply chain.












9




Porters diamond model
b) Identifying four determinants of national advantage by using Michael E. Porters
Diamond Model.

Factor Conditions
Factor condition is the nations position on factors of production that is necessary
to compete in a given industry.
10

General Motors acquire high cost labors both skilled and unskilled. In 2006, a
typical UAW-represented assembler at General Motors earned $27.81 per hour of
straight-time labor. A typical UAW-represented skilled-trades worker at General Motors
earned $32.32 per hour of straight-time labor. Between 2003 and 2006, the wages of a
typical UAW assembler have grown at about the same rate as wages in the private
sector as a whole roughly 9 percent. Part of that growth is due to cost-of-living
adjustments that have helped prevent inflation from eroding the purchasing power of
workers wages.
It has an efficient research and development workforce. The U.S. Department of
Energy's National Renewable Energy Laboratory (NREL) and General Motors are
partnering on a multiyear, multimillion dollar joint effort to accelerate the reduction of
automotive fuel cell stack costs through fuel cell material and manufacturing research
and development (R&D). General Motors have made significant progress in the
development of fuel cell electric vehicles, but achieving commercial deployment with
global impact will require further cost reductions. NREL and General Motors will focus
on critical next-generation fuel cell electric vehicle challenges, which include reducing
platinum loading, achieving high power densities, understanding the implication of
contaminants on fuel cell performance and durability, and accelerating manufacturing
processes to achieve the benefits of increased economies of scale.
The company develops appropriate infrastructure. An IT Senior Mainframe
Infrastructure architect is responsible and accountable for the quality and cohesion of
solution architecture components within the Mainframe domain and their conformance
to approved General Motors IT standards and alignment with the future state enterprise
and Mainframe Infrastructure architectural goals. This includes both hands-on
development of IT technology solution architectures as well as management of various
architectural initiatives.
Demand Conditions
11

Demand conditions can influence the creating of specific factor conditions which
can affect the direction of the innovation and advancement of product development.
Sophisticated buyers demand high quality products of General Motors. General
Motors of Canada informed that it would extend the life of its consolidated plant in
Oshawa, Ontario through the year 2016 to meet rising demand for its Chevrolet Impala
and Equinox. General Motors had planned to close the consolidated plant in June 2014,
putting at risk about 650 jobs. However, a rise in demand for new vehicles will extend
the life of the plant for another two years. As a result, the consolidated line is now
anticipated to cease production in 2016.
Firms Structures, Strategy and Rivalry
The firm structure, strategy, and rivalry are the conditions governing how
businesses are shaped, managed and deal with domestic rivalry in a nation.
The following table represents General Motors competitors according to
NASDAQs stock market.
12





Related and Supporting Industries
A related and supporting industry is when one globally successful manufacturing
company can create advantages in other similar manufacturing companies.
General Motors is in an especially undesirable position, with 55%of the suppliers
that had been surveyed characterizing their relations with General Motors as "poor to
very poor," up from 48% from the year before. Suppliers gave General Motors low
marks on all kinds of key measures, including its overall trustworthiness, communication
skills, and protection of intellectual property. The suppliers also said that the company
was the least likely to allow them to raise prices to recoup unexpected material cost
13

increases. However, when the list of car makers was expanded to include the three
German auto companies, which have a far less significant market share in the US,
suppliers said Daimler AG's, Mercedes-Benz and Volkswagen were even harder to deal
with.










Strategic response
c) Analyzing the strategic response that had been applied by the company
Defensive Strategy
General Motors used the following defensive strategies which consist of
signaling, entry barriers, pre-emptive strike, and holding the ground.
The first is signaling. General Motors warned its competitor to not penetrate the
market with the purpose to gain triumph without a fight. General Motors issued new
14

alerts of changing its prices where potential competitors feel that they would face
difficulties when meeting the challenge to achieve own profit.
Second is entry barriers both fixed and mobile. General Motors created a lot of
barriers to make it hard to overcome and at the same time discourages competitors
from penetrating the market segment by introducing a range of new models in the
market to protect its position.
The third is pre-emptive strike. General Motors took aggressive action before its
competitors grasp what had actually happened. In order to protect its position in the
automobile industry, the company introduced Hybrid and Electrics cars in the United
States of America, the United Kingdom and European Union.
Lastly, the fourth is holding the ground. General Motors allows its competitors to
enter the market and actively competing with the company itself in order to maintain
position in the market. This is because General Motors has Sustainable Competitive
Advantage (SCA) and a noticeable amount of market shares particularly in the
European Union market.


Proactive Strategy
In the past, based on the old General Motors way of operating, Chevy Malibu
would become the subject of deep discounts and rental car company sell-offs rather the
focus of engineer improvements. However, that is not the case in 2013 for a company
that considers consumer sentiment as important as sales figures and overall automobile
performance. Hence the new look of the 2014 Malibu, out just eighteen months after
the last version bombed.
The new version of the Malibu addresses what critics considered its signature
weaknesses which are lack of backseat space, poor fuel economy, and lackluster style.
15

The 2014 will feature a grille with notes of the Impala, have slightly more legroom for
passengers in the back, handle better on the curves and get better mpg (a 5 percent
improvement overall).
It is more like a necessary move to compete with the Honda Accord and Ford
Fusion, both of which have outsold the 2013 Malibu by heavy margins this year.
Compared to 71,000 Malibus, Ford has sold 36,000 more Fusions (107,000), while
Honda had an even bigger output with 122,000 Accords. Though changes often take
several years to roll out, General Motors 1.5 year response reflects a far better strategy
than many are used to seeing from the top U.S. automaker.
The Malibu reboot is a proactive move by the company that would have reacted
otherwise pre-bailout. Specifically, General Motors would have been unlikely to revamp
the Malibu and simply upped its discount policies to move more vehicles, a strategy
which costs car makers millions.




Conclusions
In conclusion, General Motors is one of the leading automaker in the world and
has been an industry leader for more than seven decades, until it discovered its
European operations facing all kinds of problems. Among them are huge financial
losses, a dissatisfied customer base, competitors with superior management and
production techniques. These problems are due to General Motors having a poor
corporate strategy plan. The company mainly focused on becoming reactive rather than
proactive. It missed clear trends within the market.
16

Furthermore, the automobile industry is going through a major transformation
due to the rising oil costs and the need to become more concerned about the
environment. With this in mind, it seems alternative fueled vehicles will be the driving
force in the industry. It is only reasonable for General Motors to look into this setback
to overcome future financial implications.
In order for General Motors to succeed, the company must continue to
development and implement a strategic plan that will place the company in the best
position to deal with the trends and forces within the auto industry. The company
should know how to seek opportunities in the automobile industry in order to gain a
huge market share in any countries it penetrates.






Recommendations
In my opinion, General Motors should implement several strategies of liquidation,
product development, and market development. If General Motors does the product
development, this would allow the company to sustain the speed of rivalry environment.
For instance, General Motors produces Hybrid SUV vehicles, which matches the
company continuing production of the portion of SUV (sport utility vehicle) ensuring the
company to keep up with trend models.
17

Other than that, General Motors should reevaluate the market. Global market is a
market that which changes frequently. The companys vehicles had its own customized
style. However, among the changing industry, they started to produce big cars,
especially for the US market. Therefore, they need to produce ultra-modern vehicles. If
they manufacture futuristic cars before Honda or Toyota, they would have gain an
advantage in the automobile industry.
Lastly, it is crucial for General Motors to perform liquidation. The reason for that
is its assets are much more than its incomes. If General Motors can get the assets
through the cash, than they could be more financially available. Moreover, if the
company achieves that process, General Motors do not have to only rely on the US
market as they could be independent in the global industry.






Bibliography
Bibliography
The automobile industry value chain analysis. (2013, November). Retrieved September
26, 2014, from UKEssays: http://www.ukessays.com/essays/business-
strategy/the-automobile-industry-value-chain-analysis.php
18

Damond Model. (2014, July 21). Retrieved September 26, 2014, from Wikipedia:
http://en.wikipedia.org/wiki/Diamond_model
Chaplin, T. (2014, July 25). General Motors . Retrieved September 26, 2014 , from
Prezi: http://prezi.com/nnxupbdv9mqi/general-motors/
Javed, R. (2014, January 30). Strategic Management. Retrieved September 26, 2014,
from Slideshare:
http://www.slideshare.net/rashidjaved925059/gmworkfinalreport-
140129104656phpapp02

Kelleher, J. B. (2014, May 12). GM ranked worst automaker by U.S. suppliers: survey.
Retrieved September 26, 2014 , from Reuters:
http://www.reuters.com/article/2014/05/12/us-gm-suppliers-survey-
idUSBREA4B01I20140512
leye02. (2009, April 29). GM Competitive Advantage and Market Analysis . Retrieved
September 26, 2014, from Scribd: http://www.scribd.com/doc/23232458/GM-
Competitive-Advantage-and-Market-Analysis-PDF



Appendices
19



20






21