Business-Level and Corporate-Level Strategies
Donald E. Baker
Dr. Nicole Ortloff
BUS 499-Business Administration Capstone
Nov 12, 2014
General Motors (GM) is a public company based in the United States that is headquartered in Detroit, Michigan. In the year 2011, the company was able to acquire the title of the largest automaker in the world by achieving the highest number of vehicle unit sales since inception (General Motors, 2012). General Motors led global automobile unit sales for 77 consecutive years from 1931 through 2007; however, the company lost its position to Toyota, which has continued to dominate the market with GM standing at second. The core competencies of a corporate corporation are focused on ensuring that the business entity is able to satisfy the needs and preferences of their customers. This stands as the main determinant in realizing above average returns especially in a highly competitive business environment. This is achieved through business level strategies, which are strategies that outline the various actions to be taken in order to ensure that the company is able to provide value to its customers in addition to gaining the critical competitive advantage by utilizing its core competencies in specific, service markets or individual products. Business level strategy therefore pertains to the corporation’s firm position in its operating industry compared to its main competitors and the five forces of competition. One of the fundamental business level strategies that General Motors has employed is cost leadership. The company has been able to employ this strategy effectively in order to effectively compete with its main industry rivals. Cost leadership as a business level strategy that capitalizes on the fact that corporations mainly compete based on price. In this way, the ability to provide goods and services at minimal costs enables a given company to attract customers in a given market. Using this strategy, General Motors has delivered products and services at minimum costs compared to its competitors in the automobile industry like Toyota and Ford. General Motors has intensively enhanced its operational efficiencies through the effective allocation and utilization of its limited resources in developing and producing each unit of automotive product (Olson, Slater & Hult, 2005). In this way, General Motors has been able to achieve and sustain above average sales returns that offer effective floor from its products at less cost. In addition, the company is now engaged in minimizing the number of brands in the market. Although this goes against its original approach as indicated by the company’s former CEO of the 1920s Alfred P. Sloan who stated that, GM makes “a car ‘for every purse and purpose’,” this approach is not sustainable as it conflicts with the cost leadership strategy. The company is restructuring its brand by either closing or selling some of its non- core business brands. This is highly plausible since the more brands an automobile manufacturer produces, the more it is forced to spread its capital resource around in order to develop each brand and market it effectively. As a result, each of the brands suffers since there lacks a particular brand that attains the required amount of attention or resources. Product differentiation is the other critical business level strategy that General Motors has employed. Through the provision of unique features and characteristics of its products, the company has also been able to provide value to its product and consequently attracting and maintaining customers as opposed to merely relying on price. This has been achieved through rapid product innovation, image management advanced technological features, high quality, features, and high customer service. An analysis of some of the company’s main brands reveals this. Cadillac is considered as a luxury brand. The brand...
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