Will GM’s Strategic Plan Lead to Future Success Essay
Will GM’s Strategic Plan Lead to Future Success
(1) I would have to say that GM is a defender. Even though they downsized a lot of their operations, the company still managed to re-claim their title from Toyota. General Motors are experts at what they make and I am sure they would use the slogan “We’re sticking with the basics.” GM is focusing their planning on cutting down the number of platforms they use in order to better save money. They can save money because with fewer platforms, they are able to cut out more of the engineering aspects of the company. Fewer platforms, I would also imagine would mean for much more stable and consistent work meaning more precise works. When a company makes a conscious decision about what strategy they are going to use and they choose Defender, they are signaling to the world and their competitors that they are confident in their product. When GM made the decision to use a Defender Strategy, they took a huge weight on their shoulders because since they focus on ‘what they know best’ then there product had better be the best. (2) Based on the reading, I would think that GM’s vision is to make fewer platforms but use the same basic parts for each car. The goal: “One goal is fewer auto platforms” is even stated in the essay itself.
This essentially means that GM is going to try to accomplish to build vehicles all over the world in their various plants. They want to make these cars with the same basic parts and assemble these cars in plants that use the same tools. By doing this, GM is for all intents and purposes, will be thus “wringing savings out of its massive engineering budget.” Like any goal, the main point of them is to achieve them and find a way to do such. Because GM is already taking action on these goals and finding ways to implement then, this particular vision plan is a very realistic one. I think it is realistic because GM already has all of the resources needed to implement their vision, they just have to learn how to use accomplish that goal GM could run into a number of problems one being that it could have issues opening companies in different countries because of how much they will have to pay for labor. Another problem would be making sure that, even in another country, the product would still be made well enough to have the GM “stamp of approval” on it.
(3) One SMART goal that GM used in this case would be the “R” or Result-Oriented. To justify this answer I will quote a passage from the essay: “It aims over the next several years to raise its profit margin- the portion of revenue left after paying expenses- to 10%, Daniel Ammann, chief financial officer, said in the interview.” Another place that Result-Oriented goal is stated is in another passage where it said: “It aims to reduce this total to 24 by 2014 and to 14 by 2018. . .”
Another one of the SMART goals I saw in this piece of writing would be “S.” Specific. In the analysis GM was very specific in how they wanted to change their ways and also in how they wanted to accomplish that task. In the writing it is stated“One goal is fewer auto platforms.” GM aims to build vehicles all over the world that are made from the same parts. This is a very specific goal because they are stating exactly what they will do in order to help cut down costs.
“Besides cutting costs, GM needs to change its culture. For decades the company focused on selling as many cars as possible, and propping up its U.S. market share, sometimes at the expense of the bottom line.” Though it is not stated definitely, you can tell that change their way of thinking and culture was another goal GM had set for itself. As you read further down in the writing, it talks about how top sales executives met up to discuss possible solutions. After much discussion, the executives decided to not offer any incentives. GM ended up not only being the only automaker to not report an increase, but they in fact report a decrease in sales. Though this was a problem, GM used this as a way to prove their change in culture. “It is so important for the company to guard against focusing on [market] share over profitability,” as stated by Harry Wilson ‘who was a member of the Obama administration’s automotive task force when it oversaw the restructuring of GM.’
(4) GM used the planning/controlling cycle in a way that they thought would be best. In my opinion, GM made a plan when they stated “ (GM)… has set its sights on a once-unthinkable goal: making more than $10 billion a year” Though it is stated as goal, to be able to reach a goal, a plan must be laid down in steps to achieve that goal. The best laid plans are the ones that are reaching towards the finish line of a goal. The second step in the cycle, which is to carry out the plan, is stated as such: “Behind the gain… are growth in China and strong profits in North America, where GM has shed billions of dollars of costs and lately has been able to command higher prices.” This means that to reach their goal, by carrying out their plan, GM had to grow their companies in China and North America. It is clear they were in fact at least partially successful in carrying out their plan because they were able to reach “…about 8 billion”
Moving along in the cycle, we reach the third step which is: control the direction by comparing the results with the plan. Though I believe I covered this in the paragraph above, I will restate is again. I think GM is controlling the the direction in the by controlling the results because when they compare the results, they are achieving their plan. When comparing their results to the plan, GM is clearly succeeding in their plan because they were able to acquire “nearly twice 2010’s $4.7 billion”. The fourth and final step in the planning/controlling cycle is: Control the direction by correcting any deviations or improving future plans. GM is controlling the direction of the plan by trying to find newer way to cut costs. GM is accomplishing this by trying to “achieving a healthier margin is becoming the company’s main focus. For salaried executives, for example, annual bonuses are based largely on the company’s margin.”
(5) From having to really examine this case, I learned a lot about planning. For example, I leaned that to change a culture, you sometimes have to take a hit in sales. By that, I mean that in order to do the greater good and change the way you are viewed, a company needs to sometimes take a hit to prove that they are serious about their change. I also leaned that sometimes, the best laid plans can either come out as planned or go horribly wrong. When plans go wrong, that is why there is step 4 in the planning/controlling cycle. This case did prove to me that a plan is always needed when trying to reach a goal. GM set a goal to achieve a certain amount, and they nearly doubled that since the two years before. In that respect, GM’s plan went nearly according straight to the plan.