Case Study : Problem And Key Issues

1367 Words Jun 30th, 2016 6 Pages
Anthony Rivard. case. MBA 676
Problem / Key Issues.
What is the main problem to be solved?
How should GM develop their strategy in China to respond to the uncertainties in the business environment?
What are the key issues (sub-problems) that need to be analyzed in order to solve the main problem?
1. How competition is expanding and strategizing both foreign and domestically.
2. How will potential Gov’t restrictions affect the auto market in China?
3. How do other regional and strategic opportunities provide more potential benefit to GM’s overall vision and strategy?
What case data / facts helped you resolve the Key Issues?
Sub-problem 1
Flood of investment is causing concern of overcapacity.P.1 PAR.2
2004 Chinese market: sedans 44%;GM had 40% of sedan market P.5 PAR.2
GM and partners net profit about $2,267 per vehicle sold in China. In North America $145 per vehicle.GM China 15 times more profitable. P.5 PAR.7
In 2004, China had more than 200 carmakers.P.6 PAR.3
Competition :2001-2004 period, prices had fallen 25 per cent. expected prices to to fall at a rate around 10 per cent a year.P.6 PAR.4
China’s auto sales 2 million units in 2000 to 4.4 million units in 2003.P.6 PAR.5
China’s economic growth, income distribution. Exhibit 2 and Exhibit 3
Overcapacity: Average car prices in China have fallen 7%.P.7 PAR.7
August 2004: decrease in car production of 20%.P.8 PAR.1
Late-comers not being able to lock in business relationships P.8 PAR.3
Concerns:Not appreciating…
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