Will GM S Strategic Plan Lead To Future Success
1. Which of the four basic strategy types were used by GM? Explain your rationale.
GM employed the use of establishing the grand strategy, and formulating strategic plans. In this case, it used the growth strategy as the means of carrying out its restructuring. My reasoning behind this choice is that establishing the grand strategy is the level at which a company makes a “rigorous analysis of the organization's present situation to determine where it is presently headed.” After that, the next step is to “determine where it should be headed in the future.” In GM’s case, its present situation was a bailout by the federal government due to debt and bankruptcy. Its goal for the future was to make more than $10 billion a year, raise its profit margin by 10%, and reduce cost drastically by using fewer auto “platforms.” GM also formulated the strategic plan by setting goals to reduce the total number of auto platforms from 30 in the year 2010, to 24 in 2014, and to 14 by the year 2018. According to the textbook, a growth strategy is a grand strategy that involves expansion, such as sales revenues, market share, number of employees etc. Since GM’s goals and objectives fall within these categories, it is reasonable to arrive at the conclusion that it is using the grand strategy.
2. Based on the case, what is GM's vision? Do you think it is realistic? Explain.
GM’s vision and main focus is to achieve a healthier margin and profit. Although this vision may not be very easy to attain, is a very realistic one. In spite of the fact that it seemed to be a “once-unthinkable” goal, GM reported its highest-ever net income of about $8 billion in 2011. This was a massive increase from the previous year’s net income of $4.7 billion, and was in accordance with its vision of achieving higher profit. A short while after that, GM also released figures of its global sales, which showed its reclaim of the ‘world's largest auto maker’ title from its rival, Toyota. Based on these facts, I
GM employed the use of establishing the grand strategy, and formulating strategic plans. In this case, it used the growth strategy as the means of carrying out its restructuring. My reasoning behind this choice is that establishing the grand strategy is the level at which a company makes a “rigorous analysis of the organization's present situation to determine where it is presently headed.” After that, the next step is to “determine where it should be headed in the future.” In GM’s case, its present situation was a bailout by the federal government due to debt and bankruptcy. Its goal for the future was to make more than $10 billion a year, raise its profit margin by 10%, and reduce cost drastically by using fewer auto “platforms.” GM also formulated the strategic plan by setting goals to reduce the total number of auto platforms from 30 in the year 2010, to 24 in 2014, and to 14 by the year 2018. According to the textbook, a growth strategy is a grand strategy that involves expansion, such as sales revenues, market share, number of employees etc. Since GM’s goals and objectives fall within these categories, it is reasonable to arrive at the conclusion that it is using the grand strategy.
2. Based on the case, what is GM's vision? Do you think it is realistic? Explain.
GM’s vision and main focus is to achieve a healthier margin and profit. Although this vision may not be very easy to attain, is a very realistic one. In spite of the fact that it seemed to be a “once-unthinkable” goal, GM reported its highest-ever net income of about $8 billion in 2011. This was a massive increase from the previous year’s net income of $4.7 billion, and was in accordance with its vision of achieving higher profit. A short while after that, GM also released figures of its global sales, which showed its reclaim of the ‘world's largest auto maker’ title from its rival, Toyota. Based on these facts, I