Chevy Volt Case Study

1. The Chevy Volt case tells me the nature of the strategic decision making at a large complex organization like GM can be difficult and challenging due to having to convince other managers to agree with the ideas for new strategies. In the case it states that the two persons, GM’s vice chairman and the head of RD&D had already proposed to make the Volt in 2003 but were turned down by the other managers. However, in 2007 with the changes in the external environment the other managers agreed to back the project for the Chevy Volt. 2. The trends in the external environment that favored the pursuit of the Chevy Volt project are surging oil prices, Telsa Motors introducing their lithium ion sports car to the market, increasing concern for global warming which may lead to tighter regulations designed to limit carbon emissions, the costs of manufacturing lithium ion batteries was falling, and Toyota’s best selling hybrid called the Prius. The rise of oil prices leads to increased gas prices and as a result consumers demand for fuel efficient cars increased which was proven by the number of Prius’ sold by Toyota. 3. The impediments to pursuing this project that existed within GM are the costs needed to fund this project, the difficulty in obtaining the technology to produce a large lithium ion battery for the car, and the fear of failing again at producing another electric car. Their first failure was the EV1 electric car introduced in 1990s. 4. The plan for the Chevy Volt seems to be based partly on the assumption that oil prices would remain high and yet in late 2008, oil prices collapsed in the wake of a sharp global economic slowdown. This tells me that the nature of strategic plans was based on the current market situation and anticipated trends. Falling oil prices may potentially affect the success of the Chevy Volt because if oil prices are falling then the price of gas is falling as well. The rising price of gas is a primary reason