General Motors' Operations Strategy and Value Creation | Free Essay Example

General Motors’ Operations Strategy and Value Creation

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Topic: Business & Economics
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Nowadays, General Motors is a widely known corporation, which has the offices and services present in the different parts of the world. The company was established in 1908, and since then, it aims towards the constant innovation and development of the new products (Pelfey, 2006). Today, it is present in 120 countries around the world and continues opening the offices and dealerships worldwide (General Motors: About GM, 2016).

General Motors change the flow of history and business processes in the automobile world by making it a multinational corporation. Currently, it has a vast variety of the sub-brands including Chevrolet, Buick, GMC, and Cadillac, which specialize in delivering the best vehicles to the customers (General Motors: Vehicles, 2016). It could be said that offering an extended range of cars explains the ability to maintain its market share due to the ability to satisfy the needs of different consumer groups.

The primary goal of this paper is to analyze the operations strategy of General Motors by determining the overall strategy and customer value creation process while assessing whether the mission and vision of the company are supported and highly cherished in the operations strategy. In turn, the sand cone model and performance frontiers will be utilized to determine the impact of operations on costs, performance, and quality of the products and services. Furthermore, the transformational processes will be described. In the end, the conclusions are drawn.

Industry and the Overall Strategy of General Motors

The automobile industry is a highly competitive market nowadays, as the companies tend to grow due to the constantly growing demands of the consumers. The technological progress and computerization cannot be unnoticed, as they become important features of the cars. In turn, the cars have to correspond with the currently rising customer’s needs, as the individuals consider a car as an essential attribute of the everyday activities (Rubenstein, 2001).

It could be said that these aspects imply that these aspects imply that the producers need to focus more and more on the technological capabilities of the car and on the appearance of the new marketing instruments, which are the consequences of globalization and introduction of innovations in the society. In this case, the ability to adapt to the constantly changing environment and establish new strategical approaches to innovation will help the company stay competitive on the market.

As for the overall strategy of General Motors, firstly, it focuses on the building the long-term customer base, as they pursue the idea of earning “customers for life” (General Motors: Investors, 2016, para. 1). In turn, the company tends to pay attention to the modern technologies while enhancing customer’s experience of using their vehicles. Additionally, it aims towards the improvement of the local communities by creating the perception of being ecologically friendly, as the corporate image has a vehement influence on the revenues. In the end, focusing on innovation and technological improvement while building trusting relationships with the customers could be considered as the primary strategy of General Motors.

Customer Value Creation

Firstly, the operations strategy of General Motors is aimed towards the improvement of the operational performance by enhancing the relationship with suppliers, increasing profitability, and focusing on delivering high-quality, innovative products (GM outlines strategic plan, 2014). In turn, the overall strategy tends to focus on the similar aspects. It could be said that the operations strategy helps reach the primary objectives of the overall strategy by prioritizing the quality and innovation to be able to comply with the customers’ needs. In turn, the company tend to eliminate the number of brands to improve the quality, design, and speed of the manufacturing processes (This is the new GM, 2010).

It could be said that focusing on these aspects of the operational strategy helps create the loyalty among consumers, as the trusting relationships are built with the assistance of high-quality, innovation, and sufficient flow of the processes in the supply chain. A combination of these factors assists in creating value for the consumers, as it helps build the sufficient image of the company and provide the exceptional offers to the customers.

Nonetheless, the primary mission of the company is to “earn the customers for life” while providing them with a wide product range (General Motors: Investors, 2016, para. 1). As for the vision, it is highly focused on designing, creating, and delivering the best automobiles to the world (This is the new GM, 2010). It could be said that these values are highly incorporated in the operations and corporate strategy since both of them tend to pay high attention to customers’ relations. Furthermore, vehemently underlining the quality and innovation are the essentialities for the customers’ loyalty and are considered as the critical aspects from all perspectives.

The Sand Cone Model and Performance Frontiers

The primary goal of this section is to utilize the sand cone model and performance frontiers to determine the influence of the operations on cost, performance, and quality of the products. It remains evident that all of these aspects have a high effect on the value creation (Meredith & Shafer, 2013). The sand cone model tends to provide the hierarchy of the aspects, which the company has to maintain to become cost-efficient (Takala, Leskinen, Sivusuo, Hirvela, & Kekale, 2006).

In this case, General Motors pays high attention to the quality of the products, and it remains evident that aiming towards the achievement towards the cost reduction is easier due to the illumination of waste and the customers’ complaints. In turn, maintaining the quality of the products helps reach better organizational performance, as the distribution of the resources is determined efficiently. In the end, it could be said that the operations affect the ability to reach the cost reduction due to the interdependence of these factors.

Performance frontiers determine the maximum performance, which can be reached by the manufacturing or operations business unit (Vastag, 2000). In this instance, this fact implies that General Motors sets the particular paths and ways towards achieving the organizational goals. It could be said that it is beneficial, as it helps maintain the speed of the performance and quality on the high level. In turn, it contributes to the sufficient distribution of the resources and aims towards developing the efficient approach to reducing costs.

The Transformational Processes in General Motors

The primary goal of this section is to describe the transformation processes, which take place in General Motors. One of them is the changes in the purpose of information, as currently the company aims towards the involvement of the customers in the interaction with the company in the social networks by actively utilizing the content marketing and having conversations with the car users online (Goel, 2014). This aspect contributes to the generation of the loyal customer base due to the cultivation of the value of trust. It could be said that this process took place due to the technological innovations globally.

In turn, aiming towards the computerization of the processes and development of the IT sphere changed the interactions with the customers, suppliers, and manufacturing. Consequently, IT innovations took place in all the departments in General Motors due to the necessity to keep up with the competitors and enhance the speed of interactions and product quality. In turn, the innovations helped enhance the principles of supply chain management, as the suppliers receive the information about the required parts of the products rapidly.

In turn, the location of the customers is also expanding, as currently General Motors is focused on operating in China and other Asian countries (GM outlines strategic plan, 2014). This aspect occurs due to the significance of the globalization, and a requirement to be present in various locations. In the end, the transformational processes in these areas improved the overall organizational performance of General Motors, as the key values correspond to the company’s vision, mission, and corporate strategy.

Conclusion

It remains evident that critical alterations occurred in the operations of General Motors due to the developing trends and global aim towards innovation and development. Nonetheless, focusing on aspects such as customers’ loyalty, high quality, and innovation explains the significant market share of General Motors in the automobile market. In turn, all of the strategies of the company actively support the vision and mission of the company of creating life-long relationships with the customers. In the end, the analysis of the interdependence between operations, costs, performance, and quality revealed that maintaining the quality on the high level assists General Motors in reducing operational costs and improve the company’s recognition on the market.

References

General Motors: About GM. (2016). Web.

General Motors: Investors. (2016). Web.

General Motors: Vehicles. (2016). Web.

GM outlines strategic plan. (2014). Web.

Goel, V. (2014). G.M. uses social media to manage customers and its reputation. The New York Times. Web.

Meredith, J., & Shafer, S. (2013). Operations management for MBAs. Hoboken, NJ: John Wiley & Sons. Web.

Pelfey, W. (2006). Billy, Alfred, and General Motors. New York, NY: American Management Association. Web.

Rubenstein, J. (2001). Making and selling cars: Innovation and change in the U.S. automotive industry. Baltimore, MD: The Johns Hopkins University Press. Web.

Takala, J., Leskinen, J., Sivusuo, H, Hirvela, J, & Kekale, H. (2006). The sand cone model: Illustrating multi-focused model strategies. Management Decision, 44(3), 335-345. Web.

This is the new GM. (2010). Web.

Vastag, G. (2000). The theory of performance frontiers. Journal of Operations Management, 18, 353-360. Web.