Chevy Volt
Closing Case: Planning for the Chevy Volt 1. What does the Chevy Volt case tell you about the nature of strategic decision making at a large complex organization like GM? From the Chevy Volt case, we can see that GM is a large complex organization and has a lot of processes to make any decision in changing their strategic plan. Moreover, they sticked to the past failure that they had experienced. Therefore, they moved too slow and missed the opportunity to change or adapt themselves to the external trend or a better opportunity.
2. What trends in the external environment favored the pursuit of the Chevy Volt project? Gas price was increasing sharply because of growing demand in developed countries including China and India Global Warming become a significant concern so people trend to use the car which produce less Carbon Dioxide. The cost of Manufacturing lithium ion batteries was falling and new technology make them more powerful Demand for fuel efficient car like Prius (Toyota) that utilize new battery technology
3. What impediments to pursuing this project do you think existed within GM? GM already spent a huge investment in developing fuel cells Many decision makers in GM didn’t want to suddenly switch gears and focus on lithium ion batteries instead Technology in a large lithium ion battery production was difficult Failure in the past was the experience that GM still remembered and was afraid to invest in new project
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 a. What does this tell you about the nature of strategic plans?
The nature of strategic plan is effective to the current situation but when the external environment or trend change, strategic plan should be changed and adapt to the external factor as well.
b. What do falling oil prices mean for the potential success of the Chevy Volt?
2. What trends in the external environment favored the pursuit of the Chevy Volt project? Gas price was increasing sharply because of growing demand in developed countries including China and India Global Warming become a significant concern so people trend to use the car which produce less Carbon Dioxide. The cost of Manufacturing lithium ion batteries was falling and new technology make them more powerful Demand for fuel efficient car like Prius (Toyota) that utilize new battery technology
3. What impediments to pursuing this project do you think existed within GM? GM already spent a huge investment in developing fuel cells Many decision makers in GM didn’t want to suddenly switch gears and focus on lithium ion batteries instead Technology in a large lithium ion battery production was difficult Failure in the past was the experience that GM still remembered and was afraid to invest in new project
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 a. What does this tell you about the nature of strategic plans?
The nature of strategic plan is effective to the current situation but when the external environment or trend change, strategic plan should be changed and adapt to the external factor as well.
b. What do falling oil prices mean for the potential success of the Chevy Volt?