Ask Question, Ask an Expert


Ask Strategic Management Expert

Read the following case and answer the following

GM Europe Gets Traction 

It actually turned a small profit last quarter, but it's not out of the ditch yet there was a time when the execs at General Motors Corp. could expect nothing but trouble from their European operations. GM Europe piled up $3.9 billion in losses over the precedent five years, a result of lacklustre styling, quality problems, and high labour costs. But now the beleaguered Detroit auto maker is at last getting some traction on the other side of the Atlantic. GM Europe, which comprises the German Adam Opel unit and Swedish Saab, posted a $36 million operating profit in the second quarter of this year, on sales of $8.5 billion. Analysts anticipate GM Europe to just about break even this year.

That's just one sign GM Europe Chairman Frederick A. "Fritz" Henderson's restructuring plan -- GM's second in four years is finally yielding dividends. Opel and its sister company, Vauxhall Motors Ltd., have successes to brag about. The latest generation $19,600 Astra compact, introduced in 2004, is closing in on the VW Golf in race for title of best-selling car in Europe, and the new $24,000 Zafira compact van is off to a strong start. These new models -- along with strong sales of Korean-made Chevrolets -- nudged up GM's share in Europe to 9.7% in third quarter, from 8.6% three years ago.

Next year, GM will launch an Astra convertible, an athletic-looking crossover sport-utility vehicle called the Antara, and a Corsa subcompact to replace a boring model that lost out to sharper-looking competitors. "The products coming to market now and those in pipeline show the true spirit of GM," Vice-Chairman Robert A. Lutz told the crowd at Frankfurt Motor Show on Sept. 12.
After losing $2.5 billion in North America in the first half of year, GM sure could use a pickup in Europe. But don't call this a full-fledged turnaround yet. GM is challenged by resurgent French carmakers PSA Peugeot Citroën and Renault, fast-growing Toyota (TM), and Korean upstart Hyundai.

What's more, the American giant is weak in the luxury market. "The second-quarter profit is nice, and it's a start," says Henderson, who successfully patched up Isuzu Motors Ltd. (ISUZF) and stanched the bleeding in GM's Latin American business. But, GM's Mr. Fixit adds, "We have a lot more work to do."


At least Henderson can count on spruced-up models to rev sales. GM had been losing ground in Europe since the mid-1990s due to slipping quality and dull Page 3 of 4 styling. But quality is up across the board, according to J.D. Power & Associates, and the styling on the new Astra compact -- which has a sporty stance sculpted with a dash of avant-garde edginess -- has won converts. The 240-horsepower Astra OPC performance car also has added spark to GM's image.

The launch of the new Astra Twin Top convertible -- a popular segment the company joined late -- could drive sales of the Astra to well over 500,000 next year, says GM President Carl-Peter Forster, the executive who initiated the face-lift for the European line up. That's 25% higher than the previous generation sold in its previous year.

The car has the Astra's edgy looks and a hard top that automatically retracts at the push of button.

One area to watch is GM's efforts to promote Cadillac in Europe, where sales of the luxury marque number only a few thousand. Cadillac will have a serious European entry next spring with launch of the BLS, a new midsize sports sedan with brash American styling and the lithe frame and diesel engine Europeans crave. Says GM'S

Forster: "We have to build the brand step by step." If GM can sustain its momentum in Europe, it may generate enough profit to build the brand even faster.

Source: Businessweek

problem1. Identify key internal and external factors impinging on GM in Europe.

problem2. Select 2 objectives from the case and discuss how SMART they are.

problem3. Identify key strategies pursued through GM in Europe and use material from the case to support your answer.

problem4. describe potential measures that GM could undertake to address key internal and external factors.

Strategic Management, Management Studies

  • Category:- Strategic Management
  • Reference No.:- M96540

Have any Question? 

Related Questions in Strategic Management

Write a 1400- to 1750-word paper in which you include the

Write a 1,400- to 1,750-word paper in which you include the following: • Create an implementation plan o Objectives o Functional tactics o Action items o Milestones and deadlines o Tasks and task ownership o Resource all ...

Questionwhen programs or modules are unit tested only

Question: When programs or modules are unit tested, only developers engage in the testing tasks. The developer selects the test data, creates and submits test cases, and performs the actual test. During module integratio ...

Assignment lasa-strategic analysis organizational amp

Assignment: LASA-Strategic Analysis: Organizational & Competitive The goal of conducting a competitor analysis is to gather information about the company's competitors and systematically formulate a strategy to become th ...

Assignmentthe implementation of a goalstrategy follows an

Assignment The implementation of a goal/strategy follows an estimated timeline. Even though it is an estimate, it is important to be as realistically accurate as possible. Instead of providing activity estimates as a dis ...

Introductionin this assignment you need to prepare a

Introduction: In this assignment you need to prepare a research report which will categorise and critique a topic from games. Your research will appreciate how this topic applies to video game design and development. Thi ...

Strategic planstrategic plan assignmentthe ability to think

Strategic Plan Strategic Plan Assignment The ability to think strategically and make choices based on solid analysis and evaluation, in order to capitalize on achieving optimal results when applying limited resources of ...

Crowdsourcingfor your midterm you are to write an abstract

Crowdsourcing For your midterm, you are to write an abstract on crowdsourcing. Background: Today it is not unusual to see entrepreneurs rely on the crowd to seek financial assistance to support their business idea instea ...

Business assignmentcourse textbook david f r amp david f r

Business Assignment Course Textbook: David, F. R., & David, F. R. (2015). Strategic management: A competitive advantage approach, concepts and cases [VitalSource Bookshelf version] (15th ed.). Retrieved from https://www. ...

Read Read more:

Read more: In addition, read the article below on the importance of "free" in online commerce: ...

Strategy implementation and strategic controlssimulationin

STRATEGY IMPLEMENTATION AND STRATEGIC CONTROLS Simulation In Module 4, you will continue with the CVP analysis you completed in the Module 3 SLP. Scenario Continuation: It is still January 2, 2012. You have just complete ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

A cola-dispensing machine is set to dispense 9 ounces of

A cola-dispensing machine is set to dispense 9 ounces of cola per cup, with a standard deviation of 1.0 ounce. The manuf

What is marketingbullwhat is marketing think back to your

What is Marketing? • "What is marketing"? Think back to your impressions before you started this class versus how you

Question -your client david smith runs a small it

QUESTION - Your client, David Smith runs a small IT consulting business specialising in computer software and techno

Inspection of a random sample of 22 aircraft showed that 15

Inspection of a random sample of 22 aircraft showed that 15 needed repairs to fix a wiring problem that might compromise

Effective hrmquestionhow can an effective hrm system help

Effective HRM Question How can an effective HRM system help facilitate the achievement of an organization's strate