International Business Strategy Report: GM and Ford Case Analysis

This report provides an in-depth analysis of the international business strategies employed by General Motors (GM) and Ford. It begins with an executive summary outlining the key areas of focus, including GM's joint venture with SAIC in China and Ford's global platform strategy. The GM section examines the company's entry into the Chinese market, the rationale behind the joint venture, its success factors, and GM's increasing commitment to China. The report discusses the potential risks associated with the joint venture and the reasons behind GM's decision not to license its technology. The Ford section explores the company's pre-Alan Mullaly regional strategy, the benefits of a standardized car manufacturing platform, and recommendations for Ford's future strategy. The report also considers the drawbacks of platform standardization and the importance of sharing building platforms while protecting patented technologies. The analysis recognizes the significance of global strategy for maintaining growth, competitiveness, and firm strategy in the market. The report concludes by emphasizing the importance of a global approach for success in the automotive industry.

Running head: Management
INTERNATIONAL BUSINESS
By (Student's Name)
Class
Teacher
Name of the School
City
Date

Management 2
Executive summary
International business strategy requires various factors that put into consideration before
deciding on the strategy to use. The global strategy of General Motors and Ford motors
companies are the key focus of the paper. Firtsly, the paper provides overview of GM motor joint
venture with SAIC in China that has largely contributated to success of the company in Chinese
the largest car market. The joint venture global business strategy is an area that gives the benefits
and potential risk expected from the venture of GM into Chinese market. Continous comitement
of GM to Chinese market and personal reflection are two other areas that the paper discusses in
detail. Secondly, the paper also explores the Ford Global Platform Strategy that increase
company’s growth differentiating from the previous regional strategy that had many limitations.
Benefits of standard car building platform for competetiors and personal reflection are critical
issues that are also evaluate based Ford Global Platform Strategy. The paper conclude by
recognising the importance of global strategy that maintains growth, strategy and competitivenss
of firm in the market.

Management 3
Table of Contents
A. General Motors and Chinese Joint Ventures...................................................................................3
Case overview..........................................................................................................................................3
1. GM entered the Chinese market when demand was very limited..................................................3
2. Why GM entered the Chinese market through a joint venture with SAIC.......................................4
3. Why GM did not license its technology to SAIC...............................................................................5
4. Why joint venture has been successful...........................................................................................5
5. GM increase commitment to China.................................................................................................6
B. Ford Global Platform Strategy.........................................................................................................7
Case overview..........................................................................................................................................7
1. Strategy Ford used before Alan Mullaly...........................................................................................8
2. Recommendation for Ford strategy.................................................................................................9
3. Sharing building platforms to standardize operations...................................................................10
Reference..................................................................................................................................................11

Management 4
A. General Motors and Chinese Joint Ventures
Case overview
The case scenario gives an overview of the GM motor joint venture with SAIC in the
Chinese automotive market that has ensured the success of the company in the international
market. The company was attracted to China’s potential market created with its 1.4 billion
population and other investment opportunities. The company has a result has increased its
manufacturing capacity in the country to match the high demand and is expected to increase
production due to forested increase in demand. The demand for the vehicle in the Chinese market
is expected to increase from 28 million to 35 million in 2022. This requires the company to
increase its production capacity and GM motors are building more factories in China for this
demand.
1. GM entered the Chinese market when demand was very
limited
The GM motors company entered the Chinese market at the time when the demand was
limited since the company was attracted to the potential market. The population of the country of

Management 5
1.4 billion people was a potential market that attracted the GM motors company to venture into
the Chinese market. In addition, the company was also attracted to the growth that China was
experiencing at the time of investment into the country. This offered enormous potential for the
company’s vehicles (Naughton, 2013).
2. Why GM entered the Chinese market through a joint
venture with SAIC
GM motors entered the Chinese market through a joint venture due to two main reasons.
Firstly, the company lacked knowledge and connection in China to enter the market alone.
Entering the market through a joint venture with a Chinese company would, therefore, ensure
that the company has connection required for successful business operations. Secondly, the
Chinese government regulations made it impossible to enter the market without a joint venture.
Entering the country’s vehicle market through joint venture made the company allowed to
operate in the country freely by the Chinese government (Krisher, 2017).
There is some potential risk for the joint venture strategy that GM motors used to enter
the Chinese market. The company risks losing financial capability since it have limited
knowledge and connection in the country that was necessary for investment. Knowledge and
culture that ensure international business pose a risk to GM motors venture with SAIC.

Management 6
Moreover, the lack of assets protection in the country also poses risk to GM motors as a result of
a joint venture. These potential risks may lead to loss of money or capital that is invested in the
Chinese market (Neal & Terlep, 2010).
3. Why GM did not license its technology to SAIC
GM motor did not license the technology to SAIC due to a number of reasons. Firstly, the
company was anticipating some risk in the Chinese market. Secondly, GM motor was complying
with the government regulation that required joint venture. In addition, the company designed
cars that match the market demand as opposed to SUVs that were sold in America (Naughton,
2013).
4. Why joint venture has been successful
The GM motors and SAIC joint venture has been successful due to the car design of the
company that meets the Chinese market demand. The company designed car especially the
Wuling sunshine minivan that is light, consume little fuel and meet the market demand. The care
has made the company sell more cars under this model within the country making the company
successful in the market. The cost of the car is also relatively low as compared to other products
produced by the company or its competitors in the market (Bomey, 2012).

Management 7
5. GM increase commitment to China
GM motors are increasing its commitment to China due to some market forecast
potentials. Firstly, the market forecast indicates that the Chinese vehicle market will experience
an increasing demand for more vehicles. TheChinese vehicle market is booming and demand is
expected to increase from 28 million to 35 million by 2022.Secondly, the low vehicle market
penetration in the Chinese market still create demand for the future market. The Chinese market
statistics show that for every 1000 people the number of vehicles is 85 as compared to the United
States where every 1000 people there is 800 vehicles. This show that the number of vehicles that
is still need in China is high as compared to GM country of origin, the United States (Burden,
2017).
I think the GM motors company is doing the right thing to increase its investment and
commitment to building more factories in China. Firstly, the company attraction to the high
demand ensures growth and this is also part of success. Investment is a promising market to
ensure that the company grows to compete with other producers such as Volkswagen. Secondly,
profitability is a primary goal of every global company and GM motors investing in the
profitable Chinese market is the right thing to do. The booming car business in China symbolizes
profitability and this makes the company continueinvesting in the market. Thirdly, being
successfully come out of bankruptcy state through investing in the Chinese market needs

Management 8
continuous expansion. The company has experience bankruptcy protection prior to venturing in
the Chinese market and success in the Chinese market ensures that the company continues to
stabilize its operations (Kwong, 2017).
In conclusion, I think GM motors still has the potential to increase its production capacity
and profitability within the Chinese market under the joint venture with SAIC. The demand and
market penetration in the Chinese vehicle market which is currently the largest car market in the
world still has the potential for growth. I think the company; therefore, need to maintain its
business strategy to avoid a disruptive business in the market.
B. Ford Global Platform Strategy
Case overview
Ford Global Strategy case scenario give the strategy that Ford motors used prior to the
Alan Mullaly as its CEO and other strategies that have been used to ensure the company remains
competitive in the market. The company changed its regional model that focuses on
manufacturing cars under two different platforms, one for Europe and another for the United
States of America. The strategy was changed to bring standard building platform that ensures

Management 9
different cars can be built on the same platform. As a result, Ford will increase its production
cost and an increased number of cars that are produced from 3.9 vehicles per platform to 5.7
vehicles per platform by 2020 (Treffis, 2017).
1. Strategy Ford used before Alan Mullaly
The strategy that Ford used prior to the coming of Alan Mullaly was the regional model
that has some characteristics. Firstly, the strategy has two platforms for different regions that
were used to produce different Ford care for different regions. Secondly, platforms that were
used in car production were different and care was equally different. Thirdly, the strategy
considered customer taste from various regions (Dee-Ann & Krisher, 2014).
There many different benefits of a standardized car manufacturing strategy. Firstly,
standardized car manufacturing strategy ensures the transfer of knowledge and technology from
one factory to another. Ford indicates that standard platform will reduce cost by $50 billion
annuallyhence reducing the overall cost of $1 billion by one third. Secondly, the standard
platform is beneficial for cost reduction as car parts from one factory can be used in another
factory for the speeding car production process. Thirdly, increase car production as many
different car models can be built on the same platform thereby increasing production from initial
3.9 vehicles to 5.7 vehicles per platform (Isidore, 2010).

Management 10
The drawback of platform standardization includes possible duplication parts by other
companies that are not Ford. The transfer of knowledge from one Ford factory to another due to
the standard platform poses a risk of duplicates or counterfeit as many factories parts match. This
is a drawback and risk that Ford needs to consider (Martinez, 2013).
2. Recommendation for Ford strategy
I would recommend that Ford need to maintain or continue with its platform
standardization to ensure more benefits of the strategy. The company has witnessed growth in
production and meeting the vehicle market that is growing in demand. This needs high
production that is enhanced through standard car manufacturing platform that was put in place.
In addition, under the standard platform strategy car parts can be used to produce different cars
cutting the cost while increasing the production output (Neal & Terlep, 2010).
Mark fields were expected to bring a more competitive strategy that would see the
company realizing the huge impact in the global vehicle market. Instead, the CEO advances a
strategy that says low knowledge of the automotive international business strategy. At the long
run, the company's share dropped by 40 percent while Field is in charge (Brady, 2014).
3. Sharing building platforms to standardize operations

Management 11
I think car manufacturers should share building platform but with panted technologies.
Car manufacturers should share car building platforms as this will help increase the output while
reducing cost. Secretive technologies and invented technologies that are linked to the specific
manufacturer can remain patented to reduce the risk of counterfeits in the automotive industries
(Vlasic, 2011). This will also enable companies with secrets to sell technologies to other
companies to increase the transfer of knowledge from one company to another. Intellectual
property right and trademark laws can be used to control possible counterfeit or duplication of
technology without prior knowledge of the owner. Ford can become competitive since the
company will be the standard platform where a non-car person such as Jim Hackett needs to
learn general business knowledge to manage the company. Under standard building platform car
manufacturers will hire any person that can manage the business and has leadership skills to lead
car manufacturing company and realize profit (Aaron, 2017).
In conclusion, I think the standardization of car manufacturing platform requires mutual
agreement between various industry players to ensure that all companies benefit from the trade.
Competition has been intensive with companies increasing innovativeness and inventing their
own technologies. This can also be licensed to other companies within the automotive industry
under mutual agreement. I think this will ensure that young companies have fair ground to
compete with well-established companies such as Volkswagen.

Management 12
Reference
Aaron, S. (May 22, 2017). NewFord CEO’s Resume Include Furniture and Football, CNN
Money.
Bomey, N. (April 18, 2012). GM regains 50% stake in its largest Chinese partnership. The
Detroit Free Press.Retrieved from
http://www.freep.com/article/20120418/BUSINESS0101/120418050/GM-China-partner-
Shanghai-automotive-deal
Brady, D. (May 2, 2014). How Ford Helped Mark Fields Win, Bloomberg BusinessWeek.
Burden, M. (January 5, 2017). GM Sells Record 3.87 Million Vehicles in China, The Detroit
News
Dee-Ann, D. & Krisher, T. (January 8, 2014). Mullaly puts the focus back on Ford's cars, trucks.
ap.org. Retrieved from http://bigstory.ap.org/article/mulally-puts-focus-back-fords-cars-
trucks-0
Isidore, C. (June 2, 2010). GM, Ford sales gains outpace Toyota. CNNMoney.com. retrieved
from http://money.cnn.com/2010/06/02/news/companies/auto_sales/index.htm