General Motors Corporation Case One – Internal Analysis
Keith Bergh Justin Lefkovitch Stephen Scotti Blair Warner February 3rd, 2009 BA 497.04
EXECUTIVE SUMMARY MEMORANDUM
TO: Richard Wagoner, Chief Executive Officer of General Motors Inc. FROM: Keith Bergh, Justin Lefkovitch, Stephen Scotti & Blair Warner, Consultants DATE: February 3, 2009 RE: Internal Analysis and Recommendations BACKGROUND: General Motors Corporation is the second largest auto manufacturer globally, manufacturing cars and trucks in 34 countries. The company is also engaged in financial and insurance operations. GM is headquartered in Detroit, Michigan and employs 266,000 people as of December 2007. In 2008, 8.35 million GM cars and trucks were produced, reaching 140 countries. GM currently controls eight brands as well as strategic joint ventures with other automotive brands worldwide. GM operates under the core competencies of technology, leadership, large scale operations, and product/research development. CRITICAL ISSUES: Despite the large scale operations of the company, GM has multiple areas of concern that need to be addressed in order to sustain long term value for both stakeholders and shareholders. GM suffered a net loss of $38.7 million in FY 2007, in comparison with a net loss of $2 million in 2005. 1 This loss is the result of poor product quality, lack of consumer appeal, lag in alternative fuel technologies, inefficient plant production, and a saturation of similar car models amongst their brands. Due to these factors, consumer perception has plagued the company‘s sales, resulting in a steady decrease in market share across all platforms. RECOMMENDATIONS: In order to overcome poor quality perception and realities GM must continue to improve upon product reliability and plant oversights. Due to the consistent underperformance of certain brands, there is a need for consolidation and divesture in GM‘s portfolio. This will allow GM to funnel budget into... [continues]
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