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How Loss of Market Focus Reduced the Cash Flow of General Motors

   

Added on  2019-09-30

7 Pages1982 Words406 Views
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Table of Contents1. Introduction and Problem Identification:.....................................................................................32. Discussion on the problems of GM:............................................................................................33. Conclusion andRecommendations:............................................................................................6References:......................................................................................................................................72

1. Introduction and Problem Identification:Sustaining the market share and obtaining a solid cash flow has become difficult in thecontemporary market. The situation becomes even more difficult for the organization which doesnot focus on market and generate sustainable revenues from there (Goolsbee & Krueg, 2015).General Motors or GM is one of the organizations that have been affected severely due to its lackof focus on the market (More, 2009). Although management of the organization is making theglobal financial crisis responsible for the mishap, actually, during the time of financial crisis,other major players of the automobile industry managed to have a solid cash flow. It is evidentthat the reason of reduced cash flow for GM is not the business environment, rather the problemlies within their business strategies. The purpose of the current report is analyzing how loss ofmarket focus reduced the cash flow of GM. The report also focuses on finding out solutions toimprove the solution for GM. Scope of the report includes identification and analysis of theproblem that resulted in reduced cash flow for GM. The scope of the report also includesrecommendations for the GM management so that the cash flow for the organization can beimproved.Analysis on the activities of GM indicates that the organization gives the maximum focus onincreasing the market share only. Because of this culture, the organization has focused onlaunching a number of new products (Wesseling et al.2015). Currently, GM has a portfolio of 95products listed in its website. However, the organization has not given importance on earningsustained revenue from each of the product categories. Product diversification is one of thestrategies that helps the businesses to market development. Because of the continuous focus ofthe management on product diversification and new product development, the organization haslost its focus on increasing the cash flow. In order to remain profitable, the businesses need tobalance between the market development strategies and the product diversification strategies.2. Discussion on the problems of GM:Analysis on the problem faced by GM indicates that the organization lost its market focus .Focusing on product diversification helps the organizations to increase their market share.However, along with it the businesses also need to have strong cash flow. If the product3

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