Question

What type of international strategy does General Motors use? Justify your answer. (Short Essay)

Answer 1

There are three main international strategies available:

1) multidomestic,

(2) global, and

(3) transnational .

Each strategy involves a different approach to trying to build efficiency across nations and trying to be responsiveness to variation in customer preferences and market conditions across nations.

General Motors is the largest automotive company in the world. GM has adopted a strategy used by many car manufacturers. Instead of creating vehicles that are targeted to a specific location or type of consumer, they are developing global platforms that will appeal to multiple countries. With these global platforms comes the opportunity to manufacture the vehicles in some of the countries around the world that are selling the most vehicles. This is an example of direct investment. General Motors is sticking to a different international marketing strategy. Rather than focus on one brand, it wants consumers to be able to choose from a fleet of them.

Analysing the GM’s internal and external environments, there are many different frameworks and models exist. By having some strategies enables the firms to get better understanding of the critical factors for their future success. Some of the strategic analysis methods are Dunning’s Eclectic Paradigm , Porter’s Diamond and Five forces, Directional Policy Matrix, Mintzberg’s School of Thoughts , Value Chain Analysis , SWOT analysis , etc. The suitable frameworks choosing is depends on what the GM needs to address and in what circumstances it needs to do so. This is because many firms today operate both on a national, regional and global basis and as such need appropriate strategy for each individual environment.

The multi-dimensional structure of GM, combined with ongoing uncertainties about the decomposition of its domestic divisions, has strongly influenced GM's global strategy.

GM announced today that it would wind down sales, design and engineering operations in Australia and New Zealand and retire the Holden brand by 2021. The company will focus its strategies for the market on the GM specialty vehicle business. The company also announced that it had signed a binding term sheet with Great Wall Motors to purchase GM's Rayong vehicle manufacturing facility in Thailand; and would withdraw Chevrolet from the domestic market in Thailand by the end of 2020.

Overall, General Motors has an impressive presence in the global market that will only continue to grow over the years. Even after the company was forced to file bankruptcy, most of the global market was not shaken too much.