General Motors Business Innovation and Sustainability Report

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MGMT
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Table of Contents
Executive Summary.....................................................................................................................................4
Introduction.................................................................................................................................................5
Problem Statement......................................................................................................................................6
Problem Insight...........................................................................................................................................6
General solution Portfolio...........................................................................................................................6
Solution Selection........................................................................................................................................7
Business model description.........................................................................................................................7
Value proposition deliveries........................................................................................................................8
Financial value capture................................................................................................................................9
Uncertainties..............................................................................................................................................10
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12
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Executive Summary
Innovation in business is very important to take the business at a higher position and also beat
the other competitors in the market. Business is a field in which there are lot of problems that
takes place and every day. And it is very crucial to take important decisions m the management
of the company to resolve the issues and problems. Issues related with finance, goodwill,
production functions and other issues might hinder he processes of the company. The
management of the business must analyze the business environment and then take suitable
decisions to have effective business decisions so that there is innovation and sustainability in the
business operations. To expand the business and take it to higher levels, the management of the
business must innovate its processes so that the company can have sustainable development and
can run in a long run.
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Introduction
Business innovation and sustainable development is important for the business but there are
some problems and issues that are encountered by the business and can hamper the operations of
the business.General motors is the company that is generally referred to as GM. The company
has its headquarters in Detroit. It is a company that has its operations all over the world. It is the
largest American Automobile producer. The company is now ranked the 10th position by the
fortune 500. The company has high revenue generation and it is a public company. As it is
known that businesses face various problems, GM is also the company that has various issues in
its operations. This report will present insights about the issues and problems faced by the
company an also the probable solutions that can make the company to create innovations and
sustainability in the business. The report will also throw light on the profitability of the new idea.
The report will also describe the financial value of the business innovation idea and he strategic
fit of the idea (Goolsbee & Krueger, 2015).
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Problem Statement
The main problem faced by General motors is that the dealer network of the company is too
large. This is a great issue for the company because the company is unable to handle such a huge
network of dealers and there is lack of management of all the dealers. Another problems faced by
the company is that consumers are complaining about the off balancing issue in the cars
manufactured by the company (Motabar, et. al., 2018). The consumers are also complaining
about the increased level of oil consumption by the cars produced by GM. All these issues are
degrading the goodwill of the company. There is a strict need for the company to think about the
innovative methods that the company can use to solve the issues (Kaur & Sharma, 2018).
Out of all these issues stated above, the main big problem that the company is encountering is the
increased oil consumption by the vehicles of GM. This is reducing the sales and profitability of
the business. The company has to implement some innovative business idea in the company to
resolve this issue (Yu, et.al. 2014).
Problem Insight
The core business problem is the production defect in the cars that is leading to the increased oil
consumption by the vehicles (Froggatt, 2017). This problem is dangerous for the company as it is
leading to decreased demand of the cars by the consumers. The problem is also not good for the
sustainable development of the environment. Petrol and diesel are the resources which are less
and in case of increased oil consumption, this can be a threat to the environment and natural
resources (Sulaiman, et. al., 2015).
General solution Portfolio
Given below are the probable solutions to resolve the core business problem:
 Change in production system: The Company can make changes in the existing production
process and make some innovative changes in the production process so that the oil
consumption by the engine of the vehicles can be reduced.
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 Production of electric vehicles: Another innovative solution to this core issue is that the
company can start producing electric vehicles. Electric vehicles will be beneficial to solve the
environment and business (Eades & Eades, 2017).
Solution Selection
Solution Desirability Feasibility Financial viability
Change in production
system
High Medium Medium
Production of electric
vehicles
High High High
The selection analysis shows the desirability, feasibility and financial visibility of the innovative
business idea. As per the selection analysis, production of electric cars will be the most suitable
solution for solving the business issue (Martinez, et. al., 2016).
Business model description
This process helps the business organization to develop the brief overview of all the essential key
factors which are very necessary for ensuring & enhancing the long term sustainable
development within the competitive business environment (Wilson & Ali, 2014). The business
model should be effectively created & developed by General Motors to effectively develop &
execute the innovative business strategies along with establishing the higher level of
coordination among innovation & the operational strategy (Talonen & Hakkarainen, 2014).
Key partners
Chevrolet
Opel
GMC
Key activities
Production
Platform
Problem solving
Value
preposition
Brand/ status
Usability
Customer
relationship
Personal
assistance
After sales
Customer
segments
Mass market
Products are
being sold in 120
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Holden
FAW
Key suppliers
Design
Performance
Risk reduction
Mass
Newness
Customization
services countries around
7.5 million
vehicles
Key resources
Physical
Financial
Intellectual
Human
Channels
Customer rebates
Financial support
Cost structure
Capital investment for improving technological
innovation
Earning long term profits & enhancing
competitive advantage
Incurring of costs in automotive operations &
labor operations
Revenue streams
Sales of the organizational products
Fixed prices
Innovative features of the products
Value proposition deliveries
 The selected business idea will be very beneficial for the business as it will be a great
addition to the products of the company (Ehsani, et. al., 2018).
 The idea will also be beneficial for the customers as it will help to reduce the use of
vehicles run by oils.
 This business idea will save the environment from the increasing level of pollution in the
environment (Lu, et. al., 2016).
 The customers will be benefitted s environment will be saved and their money invested
on oil will also be saved as oil prices are also increasing day by day.
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Financial value capture
Figure: Statement showing profit/ loss of General Motors to stockholders
Source: Annual Reports, 2017
The above statement will help all the shareholders & other stakeholders to review the liquidity &
effectively measure or monitor the overall organizational performance of the company. With the
help of this statement, the potential shareholders can determine about whether they can
effectively invest in the company or not (Beiker, 2016).
The chosen idea of manufacturing the electronic cars will help the company to earn the larger
amount of profits in the effective manner. Along with this effective idea, the company is
recommended to also implement the larger system of dealer management for enhancing the
sustainable development (Rauniar, et.al. 2014).
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Uncertainties
Huge level of uncertainties is being faced by the whole business organization of General Motors
in relation to the advanced technologies, resources as well as the market. The newly advanced &
updated technologies reduce the demand for all the manufactured or produced cars, because of
which the business suffer from the major fear of suffering from the huge amount of loss (Debye,
2014). Therefore, in consideration to this major uncertainty, the idea of manufacturing the
electronic cars is being enhanced. The business managers of General Motors should effectively
implement the sustainable strategies for reducing the higher level of uncertainty related to the
technological advancements & up-gradation (Teece, 2014).
Other level of uncertainties is also being found related to the resources. All the technological,
human & financial resources are available with the business organization in the limited manner.
The effective as well as the efficient utilization of all these resources is very necessary because
the ineffective utilization may lead towards the major problem of lack of resources to be faced by
the business organization (Cochrane, 2014). The business managers should effectively develop
& execute the innovative business strategies for not only enhancing the standard utilization of all
the resources but also retaining the employees within the business organization for the longer
period of time (Cascio, 2014).
The company may also suffer from the wide level of uncertainties because of the ups & down
within the competitive business market. The whole business market is completely uncertain
(Kruss, et.al. 2015). Therefore, in order to enhance the competitive advantage from other
profitable business organizations, the business managers of General Motors should develop
effective business strategies & it should also develop the strong relations with all the potential
customers for reducing the uncertainties (Delucchi, et.al. 2014).
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Conclusion
It has been concluded that the business organization of general motors should implement &
execute the business idea in an effective as well as in efficient manner. All the types of
uncertainties are being identified along with the implementation of effective recommendations
for reducing the increasing level of uncertainties.
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References
1. Eades, K. M., & Eades, K. M. (2017). General Motors: 1991 Equity Financing. Darden
Business Publishing Cases, 1-14.
2. Ehsani, M., Gao, Y., Longo, S., & Ebrahimi, K. (2018). Modern electric, hybrid electric,
and fuel cell vehicles. CRC press.
3. Froggatt, D. (2017). Motor components: locational issues in an international industry.
In Restructuring the global automobile industry (pp. 156-168). Routledge.
4. Goolsbee, A. D., & Krueger, A. B. (2015). A retrospective look at rescuing and
restructuring General Motors and Chrysler. Journal of Economic Perspectives, 29(2), 3-
24.
5. Kaur, A., & Sharma, P. C. (2018). Sustainability as a strategy incorporated in decision-
making at supply chain management case study of General Motors. International Journal
of Sustainable Strategic Management, 6(1), 56-72.
6. Lu, J., Chen, Z., Ma, Z., Pan, F., Curtiss, L. A., & Amine, K. (2016). The role of
nanotechnology in the development of battery materials for electric vehicles. Nature
nanotechnology, 11(12), 1031.
7. Martinez, C. M., Hu, X., Cao, D., Velenis, E., Gao, B., & Wellers, M. (2016). Energy
management in plug-in hybrid electric vehicles: Recent progress and a connected
vehicles perspective. IEEE Transactions on Vehicular Technology, 66(6), 4534-4549.
8. Motabar, P., Gonzalez, H. E., Rundle, P., & Pecht, M. (2018). How poor reliability
affects warranties: an analysis of general motors’ powertrain warranty reduction. IEEE
Access, 6, 15065-15074.
9. Sulaiman, N., Hannan, M. A., Mohamed, A., Majlan, E. H., & Daud, W. W. (2015). A
review on energy management system for fuel cell hybrid electric vehicle: Issues and
challenges. Renewable and Sustainable Energy Reviews, 52, 802-814.
10. Talonen, T., & Hakkarainen, K. (2014). Elements of sustainable business
models. International Journal of Innovation Science, 6(1), 43-54.
11. Beiker, S. (2016). Deployment scenarios for vehicles with higher-order automation.
In Autonomous Driving (pp. 193-211). Springer, Berlin, Heidelberg.
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