GM In China Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Q.2. The case study provides GM with important indicators for formulating a strategy for China. Which analysis should GM make for the Chinese market? Also explain what each analysis contributes to gaining the necessary insights. The case study must be used.

Solution No.2

Chinese Industry Analysis

The automotive industry is one of the main industries in China due to the growing economy and demand of the business in the region. Since still holds the reputation of being the largest producer of automobiles in the world since 2008. China gained a competitive advantage for several players, including the European Union and Japan. China encompasses the biggest and largest population in the world, and the demand for types of automobiles increasing rapidly. There are several units produced by the Chinese manufacturers in order to meet the needs and demands.

Domestic companies in China hold a high percentage in the automobile production. Some of the leading local manufacturers in the region are Dongfeng Motor, FAW Group, SAIC Motor and Rowe etc. The rest of the portion of the production share is owned by joint ventures with foreign players in the market. As a result of this factor, the competition among the foreign investors have increased significantly in order to enter into the Chinese market. The overall impact of it becomes favorable for the entire Chinese automobile industry and there is rapid increase in the global exports in the region. Though the rapid increase in the automobile sector favors the industry, but it also creates some of the big challenges for the government to cope up with. Government needs to focus on how to manage the fuel consumption and pollution caused from it.

GM Market Analysis for China

General Motors has created many ventures in China during the last couple of years. GM has been earning a significant amount of profits in the Chinese market at the end of 2004. Though they have faced several issues, but later on overcoming the issues quite smartly. The Chinese government also imposed various restrictions to the foreign investment and bound the investment to 50 percent government enterprise to have the power and control of it. General Motors has to utilize the opportunities in the industry and should make use of the increasing demand for electric vehicles. The Chinese economy is growing, it is one of the most favorable factors for GM to focus on. Due to the increase in buying power and change in the life standards, GM needs to concentrate to consider it to increase the market share. General Motors can also utilize global import and export opportunities in the long term.

There are several other opportunities within the automotive industry and overall in the country as well. General Motors can also utilize their brand image in order to grab the opportunities in a positive manner. The biggest opportunity in order to increase the market share is the rapid increase in the demand for electric/ hybrid vehicles. General Motors need to invest in that technology at a rapid pace, as a result, it will enhance the customer base. The brand image of General Motors also can play a vital part to increase the profit in the industry.

Strategy to Overcome the Issues

There is no doubt that General Motors has suffered from several rules and regulation as posed by the government. They need to focus on how to overcome these problems and issues in order to grow rapidly in the automobile industry. They need to redesign their strategy as per the standards of new legislation supposed by the World Trade Organization and Government. GM needs to organize their strategies as per the government and WTO regulations to better survive in the industry. If they will be able to do it, they will be grown in the long run because it will permit the organization to invest on its resources and capabilities in a professional manner.

The other thing that General Motors should do, is to focus on its technical expertise in order to gain competitive advantage in the automobile industry. The demand for electric and hybrid vehicles are increasing rapidly, General Motors need to take this opportunity and utilize the resources to increase the market share. General Motors also need to concentrate on the inventory management, they can practice tools like Just in Time (JIT) to enhance the performance of business by reducing wasted inventory and minimize the cost element. In order to remain competitive in the market, it is significant for General Motors to establish these values added operations that will give them a competitive edge and manage the pricing in a dignified manner in the market.....................................

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