The joint venture between General Motors (GM) and Shanghai Automotive Industry Corp. (SAIC) in 1997 was regarded as the largest single foreign investment ever made in China. The joint venture was considered by many as a high-risk investment for GM at that time. Eight years after signing the joint venture, GM proved to the world that its investment in China was justified, with its growing market shares and successful partnership with SAIC. Attempts to understand the strategic alliance between GM and SAIC and how the relationship contributes to the success and rapid growth of GM in China. Also analyzes the strategies adopted by GM and the potential threats and challenges imposed on foreign automobile companies in China. Sheds light on devising viable strategies for foreign companies to enter emerging markets. General Motors is primarily engaged in automotive production and marketing and financing and insurance operations. GM designs, manufactures, and markets vehicles worldwide, have its largest operating presence in North America. The core competence of General Motors is innovation. This is the driving force behind its $190 above turnover. General Motors has been utilizing innovation in service ad technology to secure itself a dominant position in the automobile industry, since 1908.
The main problems faced by General motors are declining U.S. automobile market share, high pension costs, rising fuel prices, lack of differentiated products, inability to generate revenues from its core activity (manufacture of cars), over dependence on its financing division and its inefficient use of assets. General Motors can adopt several strategies and tactics to overcome internal weaknesses and external threats. Some of these are: 1. Introducing self managed creative work teams to improve and speed- up product development of new technologies in emerging markets such as China and Europe. 2. Reduce dependence on GMC and focus resources on core products i.e. cars and SUVs to...
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