Introduction
The history of General Motors (GM) is characterized by periods of growth, stagnation, bankruptcy, and renewal. Between 2000 and 2014, GM encountered one of its worst moments when several recalls were reported. The corporation recorded unprecedented losses that set the stage for it to become bankrupt. The absence of transformative leadership during these years led to such a dismal performance. However, the entry of Marry T. Barra presents a new approach to management that can take GM closer to its goals. This paper outlines this corporation’s leadership approaches, competitive advantages, possible challenges, and the most appropriate strategies for future growth. Since GM currently has transformational leadership in place, it can on its business model and professionals to pursue market penetration and concentration diversification growth strategies.
Effectiveness of GM’s Leadership
The studied case study presents several occurrences and issues that could reveal several issues about the leadership promoted at GM between 2000 and 2014. To begin with, an internal report released in 2014 indicated that GM was lacking accountability and responsibility. This malpractice had led to around 84 separate recalls for most of its car brands (Witcher, 2020). Marry T. Barra decided to implement new strategies that could address the experienced challenges and maximize sales in the coming years (Witcher, 2020). This scenario is a clear indication that the years before Barra’s entry were characterized by poor, uncoordinated, and non-visionary leadership.
As noted in the selected case, Richard Wagoner chose to restructure GM to eliminate some plants and retrench thousands of workers. Despite such efforts, the company continued to record additional losses from 2000. Such outcomes were recorded due to the absence of proper guidelines and support mechanisms to meet the demands of all key partners (Witcher, 2020). These attributes could be linked to ineffective leadership. Those occupying top positions failed to consider new ways of ensuring that the company continued to record increased revenues.
Fortunately, things started to change when Dan Akerson took over leadership in 2014. This new management triggered some changes that would prevent the company from becoming bankrupt again. The new CEO, Barra, realized that GM’s brands were straining its supply chains and overall performance. This reality made it hard to improve the production line and meet the demands of more clients. Some of the brands GM considered for discontinuation included Hummer, Saturn, Pontiac, and Saab (Witcher, 2020). The new focus was now on Volt, Cadillac, and Chevrolet. Consequently, the company had a transformative, courageous, inspirational, and charismatic leader in place. She was also keen to identify the challenges of the past and consider the best ways to address them as the company tried to pursue its future goals. A sense of visionary and effective leadership was now evident at GM.
Competitive Advantage and Potential Challenges
Despite the leadership problems and the subsequent bankruptcy, it is agreeable that GM had specific competitive advantages that could continue to support its business model. To begin with, the entry of Barra was a new strength capable of improving GM’s future competitiveness (Witcher, 2020). The new leader directed the existing engineers to work with original car models while empowering designers to develop better features and processes. This assertion presents the second competitive edge whereby the company had skilled professionals capable of undertaking numerous procedures to improve production (Odom, 2017). The third notable competitive strength was the presence of a powerful business model that had been tested for decades. Additionally, some of the existing brands were admirable in the wider global market (Ali & Islam, 2020). The most important thing was for the new CEO to trigger a renewed approach to standardization since it was lacking before. Barra’s move to reconstitute the top management team and promote key product development decisions at GM was also a notable competitive advantage.
Despite the presence of these competitive advantages, various issues existed that had the potential to affect GM’s overall business strategy. For example, Barra’s tenure presented additional mechanisms to analyze the issues that led to previous recalls (Buss, 2021). The identified team observed that there was a problematic issue of accountability. Failure to address it could have detrimental implications on the company’s future performance. The case also indicates that the wasted years in brand improvement and revenues led to the emergence of more competitors associated with superior brands (Witcher, 2020). The emerging level of rivalry could affect the efficiency and speed of its renewed approach and recovery. The absence of a proper organizational culture capable of empowering all workers and ensuring that they focus on revolutionary brands could also disorient the overall strategy.
Most of these concerns compelled Barra to consider a powerful model that could deliver much-needed results. The emergence of new competitors and the safety concerns emerging after the recorded recalls earlier were strong reasons for transforming the overall strategy (Witcher, 2020). Failure to introduce new changes could disorient the overall performance and increase the risks of recording another bankruptcy shortly (Weber, 2017). However, the able leadership of Barra appears transformative and capable of addressing most of the recorded challenges.
Recommendable Growth Strategies
After going through the presented case study, it is evident that Barra has been keen to address the slow rate of growth recorded over the past 14 years. She has identified some of the challenges and cases of unaccountability that led to numerous problems at GM. The professional was also concerned about the corporation’s decision to continue supporting and producing numerous car brands that were not even delivering the much-needed results. She had gone further to create strategies for compelling all key partners to focus on the idea of continuous development (Witcher, 2020). Such a journey would allow all participants to offer additional ideas for improved production, profits, safety, and stock prices. Such attributes would set the stage for transforming the company and making it a recognizable brand in the global automobile industry.
Based on these growth goals, there is a need for GM to identify and pursue growth strategies that are reasonable and capable of delivering sustainable results. The first approach capable of supporting the existing business model is that of market penetration (Bigley, 2018). Such a strategy revolves around the inclusion of additional structures and methods to increase the overall percentage of sales. With GM having more competitors at the global and regional level, Barr can go further to recruit a skilled marketing manager to segment and identify new customers for the available products. This kind of growth strategy is plausible since it will support the current initiative aimed at cutting down some of the car brands (Le, 2019). The remaining ones would also receive additional improvements to deliver the much-needed features for comfort and safety.
The second growth strategy capable of supporting GM’s key objectives is diversification. Currently, this corporation is associated with several car brands that are capable of meeting the needs of most of the targeted clients. However, the challenges experienced in the past have presented a powerful reason for pursuing new strategies. The diversification choice will allow the company to improve the retained brands and improve the existing production lines (Le, 2019). Specifically, the concentric form of diversification could be the most appropriate choice since it will guide GM to add new features to some of the existing cars and make them more comfortable, safer, and acceptable to the targeted customers. GM can merge this approach with the market penetration model described above to identify more clients for such car brands. The idea of continuous improvement would need to be linked to the strategy to ensure that all products meet the legal requirements while fulfilling the demands of the customer.
Conclusion
GM remains one of the widely recognized car brands in different parts of the world. The past few years have presented various challenges that have made this corporation less profitable and incapable of delivering high-quality cars. The reported recalls and the eventual bankruptcy is critical indicators of poor strategic, leadership, and growth options at this company. The new leader would, therefore, need to consider the nature of these issues and address them from an informed perspective. Barra should capitalize on the outlined competitive advantages and her leadership abilities to implement the concentric diversification and market penetration growth strategies outlined above.
References
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Buss, D. (2021). Barra already ranks as GM’s most important CEO since Alfred Sloan. Forbes. Web.
Le, H. (2019). Literature review on diversification strategy, enterprise core competence and enterprise performance. American Journal of Industrial and Business Management, 9(1), 91-108. 08. Web.
Odom, K. (2017). General Motors strategic audit [PDF document]. Web.
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Witcher, B. J. (2020). Absolute essentials of strategic management. Routledge.