Will Gm’s Strategic Plan Lead to Future Success?

1. It appears that GM showed traits of being both prospectors and reactors. Prospectors are known for creating their own opportunities and being bold and going after an opportunity, not sitting back and waiting for something to happen. After taking the bailout from the federal government, GM set out to make an unprecedented profit of $10 billion dollars. Prospectors often put fear into the hearts of their competitors and that is what GM is trying to do by going after the “ best in class” peers. They are targeting the high class markets like the BMW and Hyundai markets which are known for higher return on sales.

I believe that’s exactly what GM was trying to do by “calling out” the other companies, similar to Babe Ruth pointing to the outfield and calling where he was going to hit his homerun. It was showing a confidence in something unknown, which could backfire and cause them to suffer in the long run. I believe GM also showed traits of being reactionary in their planning. They apparently were in a lot of debt and couldn’t go forward without the government bailout, they waited until they were forced to do something about the problem to actually confront it.

The other piece of the case that leads me to believe they were reactors is two cuts that were made by GM. The first was the idea to offer incentives in 2011. While sales jumped they actually had a profit loss in North America. This was a reactionary move spurred by the need to get sales off to a quick start. The second cut they made was to workforce. They cut their global workforce by about 50,000 jobs in reaction losing profits. I will also say I struggled with whether or not to also say that GM has shown traits of being analyzers.

I think that by looking at what other companies have done with lowering platforms (Ford and Volkswagen) and by changing the plan with the incentives they were really taking a look at what has been working for others and putting in into their own plans for success. 2. According to General Motor’s website their vision is quite simple “To design, build, and sell the world’s best vehicles”. From the case study I can find several places that back this up. GM has set out to make an unprecedented goal of $10billion a year thus making them the “world’s best”.

They also plan to take on the best in class peers such as Hyundai and BMG, these are the companies making over a 10% return on sales! GM has also have the goal to raise profit by having few platforms, or simply to build vehicles that use the same general parts and use the same type of construction so that they can reduce costs. In the past GM was focused on just selling the most vehicles and now they want to focus on a healthy profit margin. The recent numbers show that the vision is actually realistic as GM has overtaken Toyota as the world’s largest auto maker.

3. Two of the SMART goals that GM has used are the goals of being specific and also being attainable. GM set out specific goals of $10billion in profit and to have fewer auto platforms. Both of these goals are specific in nature, they set out to do a detailed thing, they were not vague in nature. This goal is loft, but I believe attainable since they are already showing a raise in profit after cutting incentives. The attainable goal goes along hand in hand with the specific. They have set the goals that already appear to be attained or at least in their sights.

They are already taking back the title of world’s largest producer from Toyota and they are turning a profit. 4. The planning/control cycle is a continuous loop of planning and reevaluating that keeps a company heading in the right direction. GM appears to be following this by stating their plans (step 1) “We are going to make $10billion in profit” then they carry out the plan (Step 2) along the way they then need to look at results (Step 3) in their case they already have a higher profit margin and then they control the direction (Step 4).

In GM’s case they have decided to cut their workforce and drop the previously offered incentives which is correcting a deviation in the plan. This will allow them to continue to go towards the goals they have set out but with a little different set of plans which they will again be able to reevaluate on a regular basis. The other option GM would have had was to totally re-do their plan if they had found that things were not working. They could have improved their future plans and restarted from the beginning. 5.

I have learned a few things about planning from reading the case study on General Motors. The first thing I learned was that SMART goals are actually very common and once I knew what they were I can see how almost all businesses use them. Seeing them put to use in this case study was very helpful and practical. Goals that may seem unattainable at first can be very attainable as you set out further goals and use the planning/control cycle to tweak your initial plan. GM wanted to boost sales so they offered big incentives, this was how GM worked prior to their federal bailout.

Once they realized they wanted to change their goals and switch the company’s main focus not from sales but to profit, they deviated from the plan and restarted with implementing with new goals. I’ve also learned to identify the different strategy types and apply that to the company I work for currently. I‘ve found that a company can react in one or all four of the strategy types all within in one planning cycle. I’ve also learned that there are pros and cons to each of the types.