343282 - Corporate and global strategyIntroduction: This assignment consists of two sections. Section A of the paper seeks to answer assignment questions related to General Motors which requires and to carry out extensive research into the company from the company websites and from other sources such as newspapers, article, trade journals and associations. Section B is based on the residential to Prague, Czech Republic in March 2007, where three themes were chosen to reflect what things were learned from experience and with application of theory covered on the module to in the Czech Republic.
The three themes chosen are: (1) MNE and FDI activity in the Czech Republic (2) Internationalization paths: triggers, methods and strategies of Czech MNEs’ and (3) National Competitive advantage of the Czech Republic. Section A2. Analysis and Discussion: 2.1 Identify and evaluate internal and external internationalisation triggers and methods used by GM at different stages. (30 marks) The internationalization path taken by the General Motors in their entry of key overseas markets are not much different as those other players in the global automotive industry. The path is where it will lead the company to attain further economies of scale (Gottinger, 2003; Thorson and Moore, 1996) and further reducing costs while improving its aiming to regain its profitability.
The internal triggers include the very cost of production in the US where the company had to lay off thousands of its employees due to its inability to sustain profitability as compared to its competitors particularly the Japanese car makers namely Toyota and Honda which has penetrated the US Market. The external triggers include the mergers that had happened earlier in the global automotive industry particularly that of Daimler and Chrysler where the merger would have to attain the 4 million-units mark in order to survive the competition in the industry.
Trumbull, Mark (2006) which recognized the ailing situation of General Motors (2007) reported about an exploratory deal with France's Renault and Japan's Nissan. ” He opined that the GM “stands at the brink of a make-or-break choice: whether its extreme corporate makeover is best managed from within or with foreign help. ” He added that the consideration of this global plan to internationalize is “designed to save costs and thus help GM return to profitability” which came from the urging of GM's largest shareholder, who is reportedly not happy with the speed of change under the present management.
It is clear therefore from the foregoing that what triggers the proposed alliance among the bog car manufacturing is the synergy (Mullen and Lick, 1999) that would be created in the alliance thereby enhancing further cost control or improving economies of scale (Trumbull, Mark, 2006). From the point of view of GM, Trumbull (2006) believed that the alliance is not meant to attain to have global dealership presence since the company has already major brands on the market from different parts of the world include Beijing, China, Berlin, Germany and Mexico City.
The trigger was mainly “about reaping global efficiencies in production and product development. ” (Trumbull, Mark, 2006) As the company was in an ailing position, the strategy (Bird and Beechler, 1995; Raghuram and Arvey, 1994) sounded like restructuring strategy to allow the company to reduce its big labour cost. The company posted stunning losses of $10.6 billion in 2005 and while it remained the world's largest automaker as of the same year there is a great chance that Toyota could soon claim that same title given the current development in the industry (Trumbull, 2006)