Table of Contents

Executive Summary

Introduction

One:

Mission statement

Two:

Key Business Processes

Three:

Environmental Factors

Four:

S.W.O.T. Analysis

Five:

Information Systems

Conclusion

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Executive Summary This report presents an analysis of the mission statement of General Motors as well as its key business processes. It also illustrates how the key business processes integrate with the information systems and our suggestions and recommendations to those processes that would better suit General Motors. The report also identifies the environmental factors which affect the company in terms of political, economic, social, ecological and technological factors and the impact that these factors have had on General Motors and the strategic diversity the company has had to adopt to accommodate these changes. For any business to sustain its survival and maintain a market edge over its competitors it must maximise on its strength and available opportunities, re-evaluate its weaknesses and determine was on how to aptly handle its threats. This report outlines our S.W.O. T. (Strengths, Weaknesses, Opportunities and Threats) analysis of General Motors briefly indicating how each element plays an integral part in the day to day operations of the company. Finally the report explores ways on how new information systems can help General Motors create great efficiency by automating and streamlining parts of its business processes. The report concludes by incorporating our recommendations of appropriate information systems for each department within the company.

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Introduction General Motors is the worlds largest automaker with 386,000 employees in over 50 years. Despite this sheer size, its auto sales have declined from about 60 percent of the U.S. vehicle market in the 1970s to only 28.3 percent today. This decline is attributed to stiff competition from Ford, DaimlerChrysler and the Japanese all of whom enjoy lower production costs, have a reputation for cars with better styling and quality than General Motors. General Motors adoption of a vertically integrated corporation which at one time manufactured up to 70 percent of its parts, as a power source of competitive advantage, enabled the company to build cars at lower costs than its rivals. However, over time, these policies worked in favour of General Motors competitors who were then able to make motor vehicles at much lower costs because they could purchase their vehicle parts from outside vendors and also bargain on pricing. For the past 15 years, General Motors has struggled to overcome the above legacy, inefficient product processes and thousands of outdated information systems that could not communicate with each other. Although the company has now become much leaner and more efficient by shedding off tens of thousands of workers, closing dozens of plants and squeezing costs of motor vehicle parts by scouring the globe for the lowest prices much still needs to be done. It is our recommendation that General Motors use Internet and other leading-edge information systems technology to reconstruct its entire value chain, transforming itself into a customer-focused business that provides many different electronic services to consumers as well as motor vehicles.

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Mission Statement General Motors mission statement states that GM is a multinational corporation engaged in socially responsible operations, worldwide. It is dedicated to provide products and services of such quality that our customers will receive superior value while our employees and business partners will share in our success and our stockholders will receive a sustained superior return on their investment. We analysed the above mission statement using Druckers five questions namely:What is our business? Who is the customer? What is the value to the customer? What will our business be? What should our business be?

We arrived at the conclusion that there was a need to modify General Motors mission statement since the above questions were not fully exhausted. The current mission statement does not indicate that GM is a producer of motor vehicle; neither does it take into consideration the Global Sullivan Principle. As a marketing tool, it does not mention that it is dedicated towards providing products and services to customers who are targeted in 200 different countries. Our recommended General Motors mission statement should read as follows: GM is a multinational producer of motor vehicles engaged in socially responsible operations worldwide and committed to achieve the best in every facet of our business. Under the aspects of Global Sullivan Principles, GM is dedicated to provide products and services of such quality that our customers who are targeted in 200 different countries will receive superior value while our employees and business partners will share in our success and our stock-holders will receive a sustained superior return on their investment.

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Key Business Processes Key business process is defined as the execution of a series of activities that work together to produce a well defined set of products and services which leads to the achievement of a measurable business result. They also represent unique ways in which organisations coordinate work, information, and knowledge, and the ways in which management chooses to coordinate work. Integration between Business Process and Information Systems Although each organisation has its own set of business processes, many other business processes are cross functional, transcending the boundaries between sales, marketing, manufacturing, research and development. These cross functional processes cut across the traditional organisation structure, grouping employees from different functional specialities to complete a piece of work. Information systems can help organisations achieve great efficiencies by automating parts of these processes or by helping organisations rethink and streamline these processes. By integrating these processes, organisations can become more focussed on efficient management of resources and customer services. Suggestions and recommendations of key business processes Functional Area Manufacturing and Production Sales and Marketing Finance and Accounting Human Resources Business Process Assembling the product, checking for quality, producing bills of materials Identifying customers, making customers aware of the product, selling the product Paying creditors, creating financial statements, managing cash accounts Hiring employees, evaluating employees job performance, enrolling employees in benefits plan Environmental Factors

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There are numerous factors which affect organisations in each sector of the environment. Each of these factors interact with each other and for purposes of analysis, this report looks at how political, economic, social, ecological and technological factors affect General Motors. Political Factors USA foreign policy: The negative perception by the society about President George Bushs administration has brought about lack of interest in buying vehicles manufactured by American car producers. This perception has heightened with the war in Iraq and has had a negative impact on sales figures for General Motors vehicles around the world. Government regulations issued with a view to protect, promote and develop local vehicle manufacturers limits imports of vehicles and enables General Motors sustain its sales growth. Economic Factors The state of the economy at present and in the future can affect the fortunes and strategy of any organisation. The specific economic factors that affect General Motors are: The stage of the business cycle When the economy is in a depression, recession, recovery or prosperity stage, the purchasing power of potential customers is lowered thereby restricting purchases to only what is absolutely necessary Inflationary or deflationary trends in the price of goods and services If inflation is very severe wage and price controls may be imposed. Again, this becomes a deterrent which would make potential customers shy away from buying General Motors Fiscal policies New tax rates imposed by the government to organisations have the effect of making them increase their selling prices thereby making what would probably be an affordable vehicle, beyond the reach of most customers. When imposed on individuals, it means less income and as a result less money to spending. Monetary policies, interest rates and devaluation or revaluation of the currency In relation to other countries, fluctuation in exchange rates has effect of

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giving others an unfair advantage. If the currency of one country becomes stronger or improves against the US Dollar then the cost of purchasing a General Motors vehicle becomes affordable. Social factors Demography - Urbanisation, growth rates, household size, population distribution and rural/urban migration depending on age, location and race all have the effect on contributing towards increasing or decreasing sales of General Motors vehicles. Housing A high population creates room for more sales. This is on the assumption that more people that make the population are inclined towards buying GM vehicles Social preferences Life style changes determine the demand of GM vehicles Values and attitudes Strategy of GM is adversely affected by different values and attitude of its customers and employees. Educational and social levels Peoples perceptions are different and vary from country to country. Success of promotions carried out by General Motors marketers is dependant upon the societys perception Technological factors Changing technology Affects the product or service life cycle. Whilst the product at first may experience remarkable sales growth, when it matures it finally declines. However, the receptive attitude of General Motors customers can sustain their volatility. Amount spent on research and development Spending more money on research and development can help General Motors ensure that it meets the changing values of its customers, ensure that it manufactures vehicles that are in line with changing trends in preference including styling and brand type. Raw materials New technology can enable General Motors produce vehicles using materials such as plastic and fiberglass hence reducing the cost of manufacturing Internet This technological change can enable General Motors sell their vehicles through the internet. With the advent of e-GM, a web service for its customers, GM has been able to establish a long-term business strategy which

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can ease business-to-business and business-to-customers through online services. S.W.O.T. Analysis Strengths Worlds largest vehicle manufacturer with production in 32 countries Worlds sales leader since 1930s with a 15% global vehicle market Leadership in America controlling a third of the entire US market Trucks and SUVs vehicles sales record in North America - increased market share Sales in over 190 countries with a strong position in emerging economies Technological potential, global partners and ventures with other automakers GMAC Major GMs subsidiary specialising in financing GM vehicle purchases Averages a profit of US $ 701 per vehicle up by 108 % from 2001 GMs share of the automobile market has fallen. (Automakers stock has stumbled 70% in the last five years) Second lowest productivity average with 24 labour hours per vehicle Under utilisation of its plants and technology Cost structure Pension liabilities and cost of health care for all employees currently stands at US$24 per hour at GM compared to $12 at foreign factories Peace with the labour union (United Auto Workers) has decimated GMs pension fund since the GM family of 7.5 million is comprised of employees, retirees and their respective family members Bureaucratic culture where each unit markets to the same consumer separately and differently with almost the same product Low profitability due to inefficient production processes Inefficient investments addressed emission standards cost GM US $ 2.2 Billion compared to Hondas US $ 53 Million Opportunities Use of knowledge gained from its subsidiaries, partnerships, buyouts, joint ventures Daewoo, Saab, Isuzu, Fiat, Opel, Vauxhall, Toyota (Nummi) Expansion of their global presence - having their own European model operation Expand in emerging economies especially Eastern Europe

Weaknesses

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Use of substitutes in the production (plastic and fiberglass) and component manufacturing operations in countries with cheap labour cost Leadership in environmental investigation and safety Product differentiation through options and name recognition Lead on growing light truck sector GMAC financing to increase US sales Create new model types and styles to change consumers demand Reduce costs of inventory and sales incentives by finding ways to make cars that customers have actually ordered. Build to order can generate production cost savings of US $ 20 billion per year

Threats Future cost have environmental and safety regulations US Federal Legislation and Regulations as well as Foreign Legislation and Regulation Declining quality of the infrastructure in the country Stiff competition from domestic and foreign automakers that enjoy lower costs Global economy which affects customers purchasing power Macro economy Incomes, unemployment, inflation, interest rates, recession The permanent increase in oil prices force potential customers to venture into buying other motor vehicles with less fuel consumption Industry Analysis New technology is changing manufacturing process and product design There is a worldwide stagnation in demand which leads to a decline in sales Create mega dealers and auto supermarkets to bring services closer to consumers Demand for excellent world class product in every respect is high Evident worldwide overcapacity of different models of vehicles Sheer size and market share make new entrants an unlikely to be a threat Vertical integration of GM does not encourage purchases from suppliers hence they lose out on price bargaining Ford, DaimlerChrysler and Japanese manufacturers have better styling and quality; an approach which GM should consider adopting to sustain its competitive edge

Competitor Analysis

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Cost of GM motor vehicles is perceived as being too high Buyers are nowadays inclined to buy sport utility and pickups which are not manufactured by General Motors GM enjoys a healthy product line and segmentation in pricing and functions

Information Systems Using information systems at each part of the organization creates great efficiencies by automating and streamlining parts of the business. We recommend the following information systems at each department within General Motors: 1. Human Resource Information Systems These are systems that maintain employee records, track employee skills, job performance and support planning for employee compensation and career development. LEVEL Operational RECOMMENDED I.S. Employee Records Track PURPOSE employee skills and

training, Knowledge Management Career Path Compensation Analysis

performance appraisal Designs career paths for employees Monitors the range and distribution employees of wages,

Strategic

Human Planning

salaries & benefits Resources Plans the long-term labour force needs of the organization

2. Finance and Accounting Systems These are systems that keep track of the firms financial assets and fund flows. LEVEL Operational Knowledge Management Strategic RECOMMENDED I.S. Accounts Receivable Portfolio Analyses Budgeting Profit Planning PURPOSE Track outstanding debts Designs portfolios investments Prepares short-term

budgets Plans long-term profits

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3. Sales and Marketing Systems These are systems that help the firm identify customers for its product or services. They also assist to develop product or services that meet customer needs, promote and sell them as well as providing ongoing customer support. LEVEL Operational Knowledge RECOMMENDED I.S. Order processing Market Analyses PURPOSE Enters, processes and

tracks orders Identifies customers and markets using data on demographics, trends Determines markets, consumer behaviour and

Management Strategic

Pricing Analyses Sales and Forecasting

prices

for

products and services Prepares 3-5 year sales forecast

4. Manufacturing and Production Systems These are systems that deal with planning, development, production of products and services and controlling the flow of production. LEVEL Operational Knowledge Management RECOMMENDED I.S. Machine Control Computer-Aided Design Production Planning PURPOSE Controls the actions of machines and equipment Designs new products using the computer Decides when and how many products should be Strategic Facilities Location produced Prepares and where to decides new

locate

production facilities

In addition to the information systems mentioned here above, we also recommend the following office automation systems:

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E-mail System: Improve GMs internal and external communication, creating an effective and efficient service Word Processing System: Office system technology that facilitates the creation of documents through computerized text editing, formatting, storing and printing Document Imaging System: System that converts documents and images into digital form so that they can be stored and accessed easily by the computer Timesheet System: - Enables employees to fill in the timesheet forms online so that management can approve and track the timesheet online.

Conclusion Whilst it would be make a lot of business sense for a company like Ford to close down more plants and accept a smaller portion of the U.S. market this strategy would not work in favour of GM because then the company would produce and sell fewer vehicles, meaning less income for those big pension and health-care costs. GM has to maintain its cash flow to cover these costs until a future date when it is hoped that the elderly retirees diminish in number whilst also making improvements in quality, efficiency, design and brand appeal. Although GM has cut the time to assemble a vehicle from an average of 32 hours in 1998 to 24 hours in 2003, Japanese competitors are still faster in getting new models into the market. Hondas new vehicle development cycle is only 14 months and the company is working towards compressing development time down to 12 months. GM should look at this as a challenge to embrace and strategise with a view to improve its development cycle to match its competitors if not exceed them. Whilst these recommendations provided are meant to help GM sustain its market share, they cannot be fully appreciated until they have been put to test and the results obtained critically analysed to create room for adjustments where necessary and where applicable.

REFERENCES/BIBLIOGRAPHY

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Bocij, P., Caffey, D., Greasley, A., Hickie, S. (2003) Business Information Systems Technology, Development and Management for the e-business, 2nd edn, FT Prentice Hall, pp. 8 32, 43 58, 514 545 Curtis, G. and Cobham, D. (2002) Business Information Systems Analysis, Design and Practice, 4th edn, FT Prentice Hall, pp. 1 40, 45 69, 331 370 Laudon, K. C., and Laudon, J. P. (2005) Essentials of Management Information Systems Managing the Digital Firm, 6th edn, Pearson Prentice Hall, pp. 74 113, 40 72, 444 483 Laudon, K. C., and Laudon, J. P. (2003) Essentials of Management Information Systems Managing the Digital Firm, 5th edn, Prentice Hall, pp. 36 67, 70 103, 380 410 McLeod, R. Jr. and Schell, G. P. (2004) Management Information Systems, 9th edn, Pearson Prentice Hall, pp. 14 21, 25 44, 75 96 Obrien, J. A., and Marakas, G. M. (2005) Management Information Systems, 7th edn, McGraw Hill International, pp. 4 38, 39 60 INTERNET SOURCES http://www.gocfi.com/resources/CFI-tradeline04-gm.html http://www.ollie.dccd.edu/mgmt1374/book_contents/3organizing/org_process/org_pr ocess.html

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