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How Much Can The Internet Help Gm ?

1176 words - 5 pages

1. Analyze GM using the competitive forces and value chain models.GM is operating in a highly competitive environment. Since the 1970s, the company's auto sales have declined from about 60 percent of the U.S. vehicle market to 28 percent today. Its competitors, Ford, Daimler Chrysler, and the Japanese, have lower production costs and reputations for better styling and quality.GM's original top-down control and decentralization model, as well as it being a vertically integrated corporation, hampered its ability to compete. GM's competitors could obtain parts at lower prices from outside vendors; GM could not update its selection and style as fast as its competitors; and GM's quality was not deemed to be as good as its competitors. GM's bureaucracy, production processes, and outdated information systems were causing the corporation to spend more time and money than its competitors to produce a car.GM is using information technology to offer innovative products and services, as well as develop its e-business. GM wants to "intensively weave Internet technology into all of its business processes."2. Evaluate the current business strategy of GM in response to its competitive environment. What is the role of Internet technology in that strategy? How successful is that strategy?GM realized that its top-down control and decentralized execution model was fast becoming an impediment to the corporation's success. So, in the face of stiff competition, GM is transforming itself into a customer-focused business and offering its customers many electronic services and vehicles.GM has developed its e-business capabilities and now sells vehicles online, builds vehicles to order, provides online services, and streamlined its internal processes.GM is "intensively weaving Internet technology into all of its business processes."GM hoped its new strategy would enable the company to become smarter, leaner, faster, and more customer-focused. By eliminating supply chain inefficiencies, the corporation hoped to reduce the required time to design, engineer, and manufacture a new vehicle from 24 to 12 months and eliminate about 10 percent of the cost of making a vehicle.GM's restructuring and reorganization have provided the corporation with numerous benefits, including reducing the time to produce a car from 48 to 18 months, reducing engineering costs by $1 billion, developing online sales channels and sources of revenue, and improving its quality and quality ranking.3. Evaluate each of GM's e-commerce and e-business initiatives describe in this case. How much benefit can they bring the company?GMBuyPower.com, GM Owner Center, DealerWorld, and GMAC SmartAuction are several of GM's e-commerce and e-business initiatives for selling its vehicles online. As the article points out, GM does not directly sell its cars to customers. It uses its various e-commerce sites to provide its customers and dealers with a range of services.For instance, its GMBuyPower.com site allows...

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