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Alternatives Gm

In: Business and Management

Submitted By daand
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Alternatives One alternative for GM would be to re-evaluate their partner selection process. In the case, it seems as if most GM’s partner firms gained more from the partnership with GM than did GM gain form the partnership. In most cases, foreign firms allied with GM to gain access to a new or expanded market for their automobiles. GM’s goals although fundamentally were anticipated to gain knowledge from foreign firms ultimately became directed solely at gaining profits. GM needs to re-evaluate not only how they select their partners, but for what precise reasons. GM needs to select partners that help the firm achieve its strategic goals. In this case gaining access to critical core competencies that Japanese manufacturers possessed. Second, to be a good partner for GM, the firm needs to share the firm’s vision for the purpose of the alliance. Most of GM’s alliances do not seem to share the same agenda, greatly increasing the chance that “the relationship will not be harmonious, will not flourish and will end in divorce.” Lastly, GM needs to identify whether its partner firm is trying to opportunistically exploit the alliance for its own ends, exploiting the partner firm while providing little in return. This seems to be evident in many of GM’s alliances where foreign firms retain all control over the company and its decision making, while taking on GM mostly as a financial partner; these are trying to exploit GM’s knowledge of the US distribution and operational practices while providing little in return.

Another alternative for GM is to re-evaluate their reasons for entering into a strategic partnership as well as how they utilize their strategic alliances. GM historically seems to have viewed alliances mostly as “cost-sharing or risk-sharing devices, rather than as an opportunity to learn how a potential competitor does business.” This is evident in the NUMMI case. Partnering with Toyota to build a plant in Southern California, GM was poised to be in a terrific opportunity to learn a great deal about the Japanese production process. The goal of the partnership was to gain quick access to the small car market and to learn about the Japanese production process. They had a unique opportunity to learn about quality control techniques and worker productivity methods. Instead however, GM used the partnership to gain only a new product instead, the Chevrolet Nova, which was not a particular success any ways. In this case GM had the chance to benefit on two levels. One benefit would be the diffusion of Japanese methods, policy and work culture, and secondly the production of a successful product. However GM failed on both fronts. They learned only a fraction of what they potentially could have from the Japanese and the Nova was more or less a failure in the US market. Comparatively, the Nova, sold as the Toyota Corolla, was very successful for Toyota. The opportunity to gain invaluable knowledge form Toyota was sacrificed in an effort to gain immediate success in a new car market.…...

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