GM Must Have Directive Oversight on Production Worldwide

The goal is to maximize profits for GM. The additional goal GM has is to keep costs down while achieving maximum sales of the product.The controlling details are the existing production facilities in many countries (50) and sales in almost 200 countries around the globe. Internal and external factors that are relevant to the economics must be examined.

The major factors deemed important are controlling GM's pricing and production as related to areas of market development, product development, market penetration, potential restructuring, retrenchment as necessary and/or localized liquidation. But additionally all other costs of doing business including overhead and legacy costs must be included in this evaluation. It is also necessary as part of the entire process to evaluate the existing production facilities in these 50 countries worldwide for a number of factors including cost-benefit efficiency in production and ability to continue to produce consistency of margins.

Thomas (2009) writes that any future planning must include a review of the ongoing competitive strategy. This would relate to these diverse locations around the globe with production facilities.

Porter's five forces framework and GM's applicable concentration ratios in an industry like car manufacturing should also be part of any evaluation for planning for future actions (CF.info, 2010). Saturation levels for sales in many markets globally may be close to maximum. Overall globally GM's output must correlate to the level of demand for the product. GM must continue to make products that consumers want now and in the future and are willing to buy (in most all of these countries) despite the continuing global economic uncertainty. Demand analysis is also essential to the correct answer. Forecasting will be required. Relevant statistical marketing information is a part of the prerequisite evaluative data needed for consideration in determining the choice between planned alternatives. The use of traditional analysis using predictive probabilistic models will help to give design structure to all this data so that a reasonable judgment call can be made after consideration (Samuelson & Marks, 2010, pp. 11). In addition, a sensitivity analysis should be performed to consider variations of "what if" scenarios for potential application after the fact if it becomes necessary to change course to improve outcome. The sequential evaluation of the relevant data with final consideration of a small number of applicable alternatives can then be considered by management.

References

CF.info. (2010). Automotive Industry External Factor Evaluation (EFE) Matrix . Retrieved December 8, 2010 from http://www.carfreaks.info

Samuelson, W.F., & Marks, S.G. (2010). Managerial Economics (6th ed.). New Jersey: John Wiley & Sons, Inc.

Thomas, C. (2009). General Motors' Strategic Analysis. Retrieved December 8, 2010 from http://www.scribd.com/doc/7456626/General-Motors-Strategic-Analysis.pdf