Global business strategies and implementation

Global Business Strategies

Strategy of GM

a) General Motors is one of the most powerful brands on international level. But the company had to deal with strong competition during the 1990s from Japanese car makers. Therefore, the company was forced to modify its strategy in order to counteract the effects of its competitors' actions. The Gulf War and the recession that followed significantly reduced GM's profits. The company had to focus its strategy on its SUVs and its pick-up trucks lines that seemed to be more efficient for the company's customers in the U.S.

On the European market, GM's most important competitor was represented by Volkswagen. But the technological developments made by Japanese car makers made Toyota an even bigger competitor on the U.S., European, and Asian markets. The lower prices and the high quality of Toyota vehicles helped this company create competitive advantage. The job of Toyota in increasing its market share was easier because of the significant investments reductions made by U.S. car makers.

Therefore, the strategy that GM developed in order to improve its position on the market is represented by automation. The automation strategy was intended to reduce production costs, which allowed GM to invest in technological developments, supply chain management, and quality management. In addition to this, the strategy was intended to allow the company to introduce smaller prices for its products and services. But GM's managers did not properly evaluate the situation. The automation strategy determined a series of other higher costs that did not allow the company to reach the objectives of its strategy (The Global Mechanism, 2011). The company's strategy was strongly criticized by people within the company and by specialists in the field. The company and its managers did not understand the necessities of the global market and the opportunities determined by the process of globalization.

b) General Motors is one of the companies that had to modify their global strategy as a result of the actions of competitors. This is the case of GM's strategy as a response to the threat of Toyota. Although GM benefitted from a leadership position, it was not difficult for Toyota to increase its market share during the 1990s. The reason behind Toyota's success on the international market relied on the lower prices, better supply chain management, and higher quality management.

Toyota threatened the U.S., but also the European market, where Volkswagen was GM's most important competitor. Therefore, General Motors had to modify its strategy in order to respond to the actions of Toyota. The company's managers established that the best strategy they could use in order to improve their position on the market was based on a significant reduction of costs. This production costs reduction was intended to help the company allocate these resources to other activities and processes, like technological developments (Muller, 2009). The company thought that automation was a good idea that could be used in reaching this objective. The problem with this strategy was that it determined higher indirect costs that the company did not take into consideration when making this decision.

c) General Motors is one of the most successful U.S. companies. But GM was forced to modify its strategy because the global competition conditions. This is mostly the case of Toyota, which developed into an important competitor of GM on the European, U.S., and Asian market. The numerous advantages of Toyota and its products and services include: lower prices, better supply chain management that is based on Japanese methods, and higher quality management (Klum, 2011).

These advantages helped Toyota become the leader of the Asian market. This helped the company also improve its international position. In addition to this, General Motors' sales and profits significantly reduced. Therefore, the company had to modify its strategy in order to reduce its costs. The company's managers considered that this situation was attributed to the high production costs of GM that did not allow the company to reduce the prices of its products and services, in comparison with Toyota. The company developed a strategy based on automation. This process was intended to help develop a production process that required lower levels of resources and that allowed the company to reduce its production costs and prices.

d) The strategy developed by General Motors in its attempt of becoming the leaders in the international vehicles market is analyzed by specialists in the field. This is because the company had to modify its strategy in order to address the actions of Toyota. The Japanese car maker had conquered the Asian market and threatened the position of GM in the U.S. And European markets. The company's success relied on lower prices that were attributed to the reduced investments required by the efficient supply chain management and higher quality management.