Planning for the Chevy Volt (CC1)
What does the Chevy Volt case tell you about the nature of strategic decision making at a large complex organization like GM? Decision making at the top management level at a large complex organization is not straight-forward and is quite complicated in nature as many stakeholders come into play. To make a convincing proposal, it requires supporting evidence from both macro and micro level. However, sometimes it takes too long time that other rivals implement a similar plan resulting in the failure to gain competitive advantage.
What trends in the external environment favored the pursuit of the Chevy Volt project? The surging oil prices and people’s attitude toward green energy favored the pursuit of the Chevy Volt project as customers can save more on future energy spending and Toyota Prius, a similar car model proved to be successful.
What impediments to pursuing this project do you think existed within GM? First, the gone-by failure of EV1 model makes this similar plan unattractive in the minds of top management. Second, it is still skeptical about the viable technology for producing lithium ion batteries. Finally, huge investments (sunk cost) in fuel cells were already made. Without taking any step further, this amount of money is wasted with no returns on the project.
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 strategic plan is based on the current situation. In other words, it is not long-term focused. To sustain in the market, the company must come up with emergent plan when new circumstances emerge.
What do falling oil prices mean for the potential success of the Chevy Volt? When falling oil prices occur, people may switch to fuel engine car and the lithium ion model may not...
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