Week 3 Case Analysis Paper: General Motors (GM) Company (Essay Sample)
I gave you my username and password last week to access the textbook.
Choose a case from the textbook for this assignment from the following list.
Case 7 - United Way
Case 8 - General Motors
Case 10 - McDonalds
Case 12 - Yahoo
Case 13 - QVC
Case 17 - Reader’s Digest
Case 18 - Ford
Case 20 - Apple
Case 21 - Southwest
Case 24 - Nintendo
Case 34 - Dippin’ Dots
COMPANY NAME, WEBSITE, and INDUSTRY
State the company name, website address, and industry.
BACKGROUND and HISTORY
Briefly describe the company in the case analysis. What is their primary business, who were the officers or key players described in the case study? If the case study company is currently in business, list the company’s current CEO, total sales, and profit or loss for the last year where data is available. Identify key events or phases in the company’s history. Describe the performance of this company in the industry. Visit the company’s website and use http://finance.yahoo.com and/or some other financial search engine to find this data. (15 points)
NOTE: Make sure to use APA citations throughout the paper. The textbook should be cited if it is the source of information. If you are not familiar with APA citation, check out the tutorial APA Guidelines for Citing Sources at the end of the course Syllabus. There are videos to help you with the APA format and business research in the Week 1 Lecture.
ANALYSIS VIA PORTER’S FIVE FORCES MODEL
Analyze the competitive environment by listing the threat of new entrants, the bargaining power of buyers, the bargaining power of suppliers, the threat of substitute products and services, and the intensity of rivalry among competitors in the industry (Chapter 2). Summarize your key points in a figure. (25 points)
How does this company create and sustain a competitive advantage? What strategy from the readings was undertaken by this company? Were they successful? Can all companies use this strategy? How is the strategy affected by the life cycle in the industry? Remember to reference Porter’s generic strategies identified in Chapter 5 of the textbook, THIS IS CRITICAL. (40 points)
Choose two specific strategies from this list.
- Ensuring Coherence in Strategic Direction (pages 26–32)
- Value Chain Analysis (pages 81–93)
- Resource View of Firm (pages 93–104)
- Industry Life Cycle Strategies (pages 187–195)
- Portfolio Management (pages 214–220)
Apply them in detail to the organization. Be sure to think strategically and show the results clearly. Use the strategy as a sub-header for each section so it is clear what is being applied. (40 points)
COURSE OF ACTION RECOMMENDED
If you were in a position to advise this company, what strategy would you recommend to sustain competitive advantage and achieve future growth? Be specific and list the steps the company should take for successful implementation of your course of action. (15 points)
What do you think of this case study? Describe what you believe are the lessons learned from this case. (10 points)
When you have completed the paper using the above sections, insert a page break and have a separate reference page. The references should be listed in accordance with the APA guidelines as shown in the tutorial. (5 points)
• Use a title page.
• Font: Use Times New Roman, 12 point.
• Place your name in the upper left hand corner of the page.
• Each section of your paper should be headed by the bolded, capitalized item described above.
• Indent paragraphs.
• Insert page numbers bottom right.
• Paper length should be four to six double-spaced pages not including title page, references, or illustrations and tables.
• Use APA citations throughout the paper. If you are not familiar with APA citation, refer to tutorial, which is contained in the last section of our course Syllabus.
• Include a separate reference page at the end of the paper.
• Please prepare reference page as follows.
Dess, G., Lumpkin, G., & Eisner, A. (2012). Strategic Management (6e). Boston: McGraw-Hill Irwin.
BACKGROUND AND HISTORY
General Motors (GM) company is an American multinational company based in Detroit, Michigan. The company is in automotive industry where it designs, manufactures, markets, and distributes vehicles and vehicle parts. William Durant, Charles Stewart, and Frederic Smith founded the company in 1908. Previously the companyâ€™s name was General Motors Corporation, but changed to General Motors Company in 2009 after bankruptcy restructuring (Bosco & Plante, 2013). The bankruptcy happened after the government pushed the company to slash costs and in return provide 50 million US dollars emergency funding. Government intervention led to resignation of the chief executive officer Richard Wagoner and replaced by Frederick Henderson on temporary basis. Months later Edward Whitaker who served up to September 2010 replaced him. Daniel Ackerson was appointed to run the company for a long period. General Motors current Chief Executive Officer is Mary Barra, Barra has served as the company CEO since January 2014. The company brands include Chevrolet, GMC, Cadillac, Buick, Opel, Wuling, Holden, Jiefang, Vauxhall, and OnStar. The automobile company global sales increased by 0.2 percent in 2015 to 9.8 million vehicles. In addition, the company reported a profit of 9.7 billion US dollars (General Motors, 2016).
Founded in 1908, the GM has had many key events throughout the years it has been in operation. Some key events include a 54-day strike in 1998 by the United Automobile Workers (UAW) that cost GM about 2 billion US dollars in profits. GM reported to have lost 38.7 billion US dollars in 2007. In 2009, the company receives government funding for restructuring, the company name changed from General Motors Corporation to General Motors Company. In 2011, the company reported its first profit since 2004 of 4.7 billion US dollars. Finally, in October 2015, the company reported a third quarter earnings of 3.1 billion US dollars before tax and interest (General Motors, 2016).
GM company gross profit margin declined from 2013 to 2014, however, improved from 2014 to 2015 above 2013 level. The operating profit margin declined from 2013 to 2014, but improved from 2014 to 2015.The GM net profit margin declined from 2013 to 2014, although, progressed from 2014 to 2015 beyond 2013 level. The company Return on Equity (ROE) declined from 2013 to 2014, but improved from 2014 to 2015 greater than 2013 level. In addition, the company return on Assets (ROA) declined from 2013 to 2014 but then improved in 2015 exceeding the 2013 level (General Motors, 2016).
ANALYSIS VIA PORTERâ€™S FIVE FORCES MODEL
Threats of new entrant
There are high barriers to entry in automobile industry, making the threats of new entry low. The high capital required for setting production equipments and distribution network locks out new entrants. Moreover, GM major competitors gaining from economies of scale, makes it hard for new firms to offer lower prices. In addition, GM benefiting from government funding is a cost disadvantage to potential entrants (Dess et al., 2012).
Competition from substitutes
Threats of substitutes exist in automobile industry. For instance, increase in fuel prices has pushed some people to use public transportation. In addition, in some cities, such as New York, the subway is the best means of transportation (Dess et al., 2012).
Bargaining power of buyers
The bargaining power of buyers in automobile industry is high. The manufacturer depends on consumers to continue operating. Buyers having low switching costs and can easily switch to competitors, if not satisfied with the company pricing. However, the buyers being few in number and not able to integrate bac...
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