EXECUTIVE SUMMARY
General Motors Corporation was founded in the year 1908 with its head quarters based in the United States of America. It’s the world’s largest automaker manufacturing over 35 different brands and generally ranked the fifth largest company worldwide with a work force of over 280000 employees the world over. As part of corporate social responsibility G..M has given millions of dollars in computers to Engineering colleges.
It has also created joint ventures dedicated to quality of life needs of employees through offering of medical care and other social services.
In terms of marketing strategies, the company has embarked on large scale productions to minimize capital under utilization. Secondly, its diversity on automobile make also spreads the risks thus lowering chances of totally risky ventures. Branding has also been the secret behind their prosperous undertaking mostly with the introduction of trendy sports utility makes. Not to be left behind technologically, G.M has also kept up with the technological advancements with the manufacture of electric vehicles as well as the G.
M auto racing models.
INTRODUCTION
Marketing strategy is when an organization designs the best combination or package of the traditional 4ps and extended 5ps in an attempt to influence the target market appropriately. There is need to review the current marketing strategy as the marketing environment is dynamic. An effective strategy requires a rich and current database. An organization should therefore invest in continuous marketing research. General Motors has used various strategies in its growth. Among them are the generic strategies and grand strategies as discussed below.
DISCUSSION
The General motors company has used the above strategies to maximize diversification.
The company has used a strategy of using new technology in the market so that it can be competitive in market for better performance and facing new challenges coming up in the world market, like, before the 1970s the motor vehicle manufacturing companies in Europe regarded themselves as competing largely in a home market in which they were dominant. However, the subsequent changes in the motor vehicle industry were dramatic. The motor vehicle industry in general was faced with the problems of an increasingly competitive market in a changing business environment; the need was to match the organization’s activity to this environment in such a way as to take advantage of such opportunities that might be provided and overcome the many threats that could arise.
Since the environment is continually changing the company makes strategic decisions for better growth of the organization. Strategic decisions often have major resource implications for an organization. These may be decisions to do with the disposal or acquisition of assets of substantial value. The company decides as part of the rationalization of its operations to close a plant that is not doing well. Also the company adopts strategy of using new technology so as to achieve economies of scale in production. In other words, strategic decisions may result in major changes in the resource base of the business. Strategic decisions are likely to affect operational decisions, to set off waves of lesser decisions.
For example, if the firm decides to rationalize its operations and cut back on manufacturing capacity and the workforce, this may give rise to industrial relations problems. Similarly, strategic decisions about rationalization, which lead to a revised product or manufacturing plan, will inevitably mean that the sorts of day-to-day problems faced by a production manager, or a sales manager, in the company turn out to be different. Again, then, it is important to understand that strategic decisions have wide ramifications across the organization. The strategy of an organization will be affected not only by environmental forces and resource availability, but also by the values and expectations of those who have power in the organization. According to M.E. Porter (1980) corporate strategy is concerned with impact of external environment on the firm.
In some respects, strategy can be thought of as a reflection of the attitudes and beliefs of those who have most influence in the organization. Whether a company is expansionist or more concerned with consolidation, or where the boundaries are drawn for a company’s activities, may say such about the values and attitudes of those who most strongly influence strategy. Making organization mission clear to member, this will serve as strategy. The company uses its mission statement as a strategy which states that it will stand the best in producing motor vehicles, standing against competition, in terms of technological advances and in terms of its role in society.
The company uses this strategy with specific aims as to where the organization is conceived to be throughout. Strategic decisions are likely to be concerned with the scope of an organization’s activities: does the organization concentrate on one area of activity, or does it have many activities? For example, should the firm focus? On a small range of products or, as in the past, have a very diverse range? To what extent should it be integrated backwards into manufacturing or forward into distribution? And should it attempt to compete widely in international markets, indeed would it survive without a wider international role?
General Motors uses a strategy of matching organization’s activities with its resource capability. It also uses a strategy of countering environmental threats and taking advantage of environmental opportunities; by matching organizational resources to threats and opportunities. Before the company takes any strategy it looks at the long term implication it will bring to the firm before implementation is done. The decisions taken now by the management of the company will have long-term implications on the health of the business in later decades, for instance, a decision to close a plant that is not doing well or to move into another area of activity. Strategic decisions therefore tend to have long term horizons and or implications, strategic decisions are often complex in nature.
General Motors has managers who look cross-functional and operational boundaries to deal with strategic problems and come to agreements with other managers who, inevitably, have different interests and perhaps different priorities. This problem of integration exists in all management tasks but is particularly problematic for strategic decisions. Strategic decisions are likely to involve major changes in organizations. The company has a team of experts who make sure that before a strategy is implemented, it has to be developed, and that there should be a strategic vision. The strategic vision is a view of an organization’s future direction and business course.
The task involves visualizing the firm’s future position in five to ten years. The task is to inject sense of purpose into a firm’s activities, provide long-term direction, give the firm a strong identity and decide, who we are, what we do, and where we are An example of a strategic vision of an airline business us “We want our airline to be the worldwide airline of choice.” The strategic vision of General motors is communicated and shared by all those working for the company. After strategy vision has been done, organization move to the next level that is developing organization’s mission.
The company mostly uses its mission statement so that it does not get out its main aim. An organization’s mission represents management’s customized answer to the question; “what is our business?” A mission statement broadly outlines the organization’s future direction and serves as a guiding concept to what the organization is to do and become. (Cole, 1996). It reflects management’s vision of what the firm seeks to do and become, provides a clear view of what the firm is trying to accomplish for its customers, indicate the intent to stake out a particular business position.
Developing an organization’s mission as the strategy which will involve defining: who, what and where. According to Thompson and Strickland (1990) who suggested that there are tasks of strategic management which they see as bringing together: setting of the overall mission or goals of organization, the establishing of business objectives and the strategy required to achieve the two above.
It helps managers avoid losing focus on the firm’s direction to achieve what its aim that to expand and to grow in the market. Another strategy is setting objectiveness of the organization. The purpose of setting objectives is to convert the mission into performance targets, create yardsticks to track performance, establish performance goals and push the firm to be inventive, intentional and focused. Setting challenging but achievable objectives guards against the following: complacency, drift, internal confusion and status quo performance. Objectives provide a direction to the firm in its quest for realizing the vision and mission and benchmarks for judging organizational performance. The company employs qualified staff as strategy since qualified staff can be able to increase production and high quality hence making the firm to grow and increase its market share.
It uses lower costs than its rivals as a cost leadership which will Help to reduce expenses charged against profit, making a firm to have high profit comparing with other firm, by increasing profit the company grow and increase the market share. The company does a thorough research as strategy that is becoming the leader in new product introduction to the market, this will Help to increase sales since no other firms will be selling such new product in the market.
When one firm is selling a product in the market and no competitor, this means the firm will be selling at abnormal price hence making super profit and this will lead the firm to grow and increase market share. Overtaking rival firms on quality or customer services strategy will make business to grow. Customer service as strategy involves treating customer with very high respect and integrity, making customer to feel cared for and given good service, this will make the firm to increase the number of customers comparing with other firms and retaining those who have visited the firm, this will increase sales hence organization growth.
The company uses the satisfaction of customer needs as its main strategy. Total Quality Management is used as strategy for organizational growth and increase of the market share to achieve this. Once customer requirements have been identified, they need to be translated into standards which can be interpreted and understood easily by employees and clients.
One of the major quality difficulties facing service organizations is the defining of service quality standards. According to Ansoff (1984) redefined strategic management as a systematic approach for managing change which consists of positioning of the firm through strategy and capability planning, real time strategic response through issue management and a systematic management of resistance during strategic implementation.
Once client requirements have been identified and standards of service defined, it is necessary to define systems which will enable the standards to be translated into achievable processes. To provide a service which satisfies and even delights clients, professional firms need to recruit and train their staff to achieve the required standards throughout the service process. The recruitment and selection of appropriate staff can be used has strategy by organization, as these are the foundation of any quality-conscious firm. The client-centered firm should take into account all relevant criteria and consider recruitment as the first stage in retaining loyal, well-motivated and happy employees. Proper training can also be a good strategy to organization.
A professional employee, like any other member of staff, has a limited set of skills which require continual updating in the face of changing market demands and technology. Only by updating these skills using well-developed programs, can professional firms ensure that they equip their staff with the skills needed to respond to future client expectations. Internal communication methods is another important strategy organization can not do without. To ensure that staff members are aware of the importance of clients, it is essential that management communicates, on a regular basis, the need for continuous and organization-wide quality improvement to their staff.
To achieve this, there are various internal communication methods available, which include: newsletters; team briefings; meetings; internal customer-supplier workshops; and training key interfacing departments in the main processes and procedures of the supplier and customer activities. To modify client interaction behavior, professional firms can introduce performance-related rewards and recognition systems as strategy to beat their rivals, which encourage client-satisfying behavior, recognizing and praising employees for work well done is not superfluous, but rather confirmation of accomplishments and a reinforcement of commitment.
The company also uses financial objectives as strategy. Financial objective are those outcomes that relate to improving the firm’s financial performance such as: – a) Increase earnings growth from 10% to 15% per year. b) Boost return on equity investment from 15% to 20%. For the objectives to have values as a management tool, they must be stated in quantifiable or measurable terms and specify a deadline for achievement. Objective-setting process should be a top-down process in order to achieve unity and cohesion throughout the organization. Because all managers need objectives the process should be top-down and should follow the following pattern: Start with organization-wide objectives, next, set business and product line objectives.
Then, establish functional area and department objectives, individual objectives come last. Strategy-making concerns how to achieve desired strategic and financial, objectives out-compete rivals and win a competitive advantage, respond to changing industry and competitive conditions, defend against threats to the firm’s well-being, grow the business, among other things. A firm’s strategy will actually consist of making decisions about the following: How to satisfy customers, how to grow the business, how to respond to changing industry and market conditions, how to best capitalize on new opportunities, how to manage each functional piece of business and how to achieve strategic and financial objectives.
Ansoff suggested a matrix of product market alternatives which has become widely used in basic terms the matrix offered the following alternatives: market penetration, product development, market development, and diversification any strategy to work it has to be implemented. Implementing strategies involves creating fits between the way things are done and what it takes for effective strategy execution, executing strategy proficiently and efficiently, and producing excellent results in a timely manner.
Proficient strategy execution will depend greatly on competent personnel, adequate skills and effect internal organization. There are three types of organization actions that are very important: Selecting able persons for key positions, making certain that the organization has the skills, core competencies, managerial talents, technical expertise, and competitive capabilities it needs and developing an organizational structure that is conducive to successful strategy executioner can be done by: allocating ample resources to strategy-critical activities. Organizational units need enough resources to carry out their part of the strategic plan. This includes having enough of the right kinds of people and sufficient operating funds for them to do their work successfully, instituting best practices and programs for continuous improvement.
A strong commitment to adopt best practices, especially for those activities where the potential for better quality performance or lower costs can translate into a sizable impact on the bottom line, is integral to effective strategy implementation, installing support systems that enable company personnel to carry out their strategy execution. Strategies cannot be executed without a number of support systems to carry on the business operations. For instance, an airline may not hope to provide a world class passenger service without a computerized reservation system, a system for accurate and expeditious handling of luggage and a strong aircraft maintenance program, tying reward structure to achievement of results: the company needs to enlist commitment, throughout the organization, to carrying out the strategic plan by motivating and rewarding people for good performance, creating a strategy-supportive corporate culture.
The beliefs, goals and practices called for in a strategy may or may not be compatible with a firm’s culture. When they are not a company finds it difficult to implement strategy successfully. The management should stay focused as to what they are trying to achieve in the face of a changing environment and customer needs; otherwise they will not remain competitive in the industry, lowers management’s threshold to change. The management are made to understand that the environment is changing and thus the need to do things in a different way so as to have a competitive advantage in their area of operation, provides basis for evaluating competing budget requests and steering resources to strategy-supportive, results-producing areas, unites numerous strategy-related decisions of managers at all organizational levels.
The managers are made to stay focused on one objective and not to make conflicting decisions, creates a proactive, rather than reactive, atmosphere; with the environmental scanning the organization is aware of changes in the environment and hence will take action to take advantage of the changes and prevent any adverse effects on itself, enhances long-range performance; the organization is always to plan for the long-term and its performance is focused on the achievement of long-term objectives and fewer resources and less time devoted to correcting erroneous or ad hoc decisions; this is because all the managers will be making decisions aimed at achieving the set objectives only and there will be enhanced coordination among them due to the existence of strategic management process.
CONCLUSION
The role of strategic management cannot be downplayed, given the need to align the organization with the changing environment with a view to realizing the long term objectives of the organization to the future with success. It is critical that all departments in the organization be involved in strategy formulation to ease the implementation process. Proper communication of the vision and mission serves to inspire challenge and motivate the workforce hence making organization grow and increase the market share. The General motor company as used the above strategies to grow by obtaining its objectives, increasing market share and market it to stay in the market. No company can grow or stay in the market if it does not use strategies to face challenges which face market industries
RECOMMENDATIONS
From the above we can say that due to changes in the environment it necessary to change ways of carrying out business. Any company to continue in business it has to change to new strategies, which will include ways of marketing, using latest technology, for example marketing using internet, having qualified staff in business that will be in appositions to employ new skills. It is very important for any company to look the welfare of employee since this will promote employees morale towards the work.
Strategy should be seen as the continuous improvement of accompany so it should not forgotten at all costs, it should be seen as the backbone of the company. Since the company is seen as going concern it must be able to implement all strategies for it survive, this can be seen from the above company that General motors. Last but not least every company to compete in the industry must have clear vision and mission statement for its reference when doing business so that the company can stick to them.
REFERENCES
1)Cole, G.A. (1994), Strategic Management, DP Publications.
Chandler, Alfred D. (1962), Strategy & Structure, MIT press.
Andrews, Kenneth R. (1987), The concept of corporate strategy, 3rd edition, Richard D. Irwin.
Ansoff, H.I. (1965), Corporate Strategy, McGraw-Hill.
Ansoff, H.I. (1964), Implanting Strategic Management, Prentice Hall International
Porter, M.E. (1980), Competitive Strategy: Techniques for analyzing industries and competitors, The Free Press.
Thompson, Arthur & Strickland, A.J. (1990), Strategic Management: Concepts and Cases, Richard D. Irwin.
