Strategic Management Plan and Recommendations for General Motors

The first section in this strategic plan involved visiting General Motors' vision and mission statement, which lacked some of the characteristics for a vision statement. The new vision statement focuses on what type of business the company engages in, what it wants to become, and putting it into a customer perspective. The new mission statement places in characteristics that identify General Motors customers, products, services, markets, current technology, philosophy, public image, distinctive competence, commitment to survival, growth, and profitability, and the value it holds for its employees.

The next section was performing an external assessment for General Motors with an External Factor Evaluation Matrix and Competitive Profile Matrix to identify the company’s external opportunities and threats and to see how it ranks compared to its two main competitors. The EFEM reveals that the company could face a hit from greater tariffs on US auto imports, difficulties in reducing the cost of manufacturing electric vehicles, urbanization impacting vehicle ownership, the slowdown in sales growth during medium-term and hike in input costs. From the CPM, it was shown that General Motors ranks the lowest out of its two main competitors, Ford and Toyota. The company’s low-ranking stems from falling behind in 6 out of 12 critical success factors and they are; Product Quality, Global Footprint Expansion, Financial Position, R&D, Automation/Technology and Top Management. However, it is the largest player among them.

After the external assessment, an internal assessment was created by looking at the company’s financial statements, ratios and creating an Internal Factor Evaluation Matrix to identify the company’s strengths and weaknesses. From looking at the financial statements and ratios, General Motors is in a profitable position after the closedown of the non-performing business in Europe, but the company seems to be struggling with stagnated revenue, operational inefficiencies have led to poor gross profit and operating profit. Further, liquidity position was weak, interest cover is deteriorating with increasing debt financial leverage. The IFEM also reveals that the company’s concentration on US and China, marketing and brand positioning is weak, company faces continuing market, operating and regulatory challenges in a number of countries across the globe and A segment centric approach might hit the bottom line particularly when there is a downturn in the economy. A strategy analysis was then conducted by creating a Strengths-Weaknesses-Opportunities-Threats Matrix, Boston Consulting Group Matrix, Internal-External Matrix, Strategic Position, and Action Evaluation Matrix, Grand Strategy Matrix, and the Quantitative Strategic Planning Matrix. All of these Matrices give a deeper look at General Motors’ position with each of its segments and create and show the best strategies that the company should take. They revealed that General Motors should be more aggressive and focused on its market development, market penetration, and its product development and that it should improve its integration, either horizontal or vertical by expanding operations internationally or focusing on production processes.

The organizational structure for General Motors was then studied. It was identified that limited support for branding consistency at the international level. Therefore, it is appropriate to have a strong marketing campaign that establishes consistency in General Motors’ branding. The plan also presents a perceptual map that shows General Motors' position with its all products are in the high priced high-performance segment. The company is the most popular compared to its competitors with its pricing and performance. Measurements of the value of the company against its major competitor Ford were also taken and done in a company valuation table. The table shows the value of the company well above four corporation value methods and their averages. The results show that General Motors is higher by over $14 million in its value and should focus on maintaining and improving it.

A recommendations list that stretches over the next three years was then created and entails investing R&D skills can improve products with multiple technologies, AI and IoT capabilities, using company’s Electrification strategy to cater the global requirement, economies of scale of electric vehicles- Improve the mass production facilities with modern technology, market development- New manufacturing facilities outside of US and China, Import substitution, invest in new channels to boost small vehicle sales and strong marketing campaign focusing youth and company branding. In order to see how the recommendations would be financed, and EPS/EBIT analysis was conducted to see whether the recommendations would be financed by common stock or debt. Neither common stock nor debt showed any differences in their EPS, so the decision was a 20% stock to 80% debt ratio for historical purposes and to make sure there was little dilution of ownership.

Lastly, projected financial statements and ratio tables for the next three years were made to see the effect these recommendations would have on General Motors' financial position in the future. The results revealed good news for the company such as that net income would increase by over $11 billion, cash and equivalents would increase by $20 billion, retained earnings would increase by $20 million and that the operation metrics from the ratios are good so that the company can successfully expand its operations and improve its global presence, brands, products, and current systems over the three-year time period. All in all, this is the strategic plan for General Motors to take and the projections, but it is still difficult to know what the future truly holds for this company since we are not part of the board and because of uncertainty in the financial market.