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GM’s transition away from its traditional reliance on the large U.S. automotive market, toward emerging markets like China, represents a monumentous shift for the carmaker, with up to 65 percent of GM’s revenues now coming from outside the United States. GM’s increasing globalization belies its success in China, with annual sales of 3.9 million vehicles in China in 2016, driven by GM’s successful joint venture with the Shanghai Automotive Industrial Corporation (SAIC) in 1997 and its successful integration into Chinese business networks and markets. To better understand whether GM’s future truly lies in China, this essay will analyse the importance and implications of non-U.S. sales for GM’s global and business strategy, with reference to the integration-responsiveness strategy, the reasons for GM’s success in China relative to its competitors, and the challenges and possible solutions for GM in China.
1. Importance and implications of non-U.S. sales for GM’s global and business strategy, with reference to the integration-responsiveness strategy.
GM’s non-U.S. sales have risen sharply, with annual sales of 3.9 million vehicles in China in 2016, driven by strong growth in Asia, Latin America and the Middle East, where GM has successfully pushed to reposition itself as a lean and low-cost manufacturer or small cars. This will create additional requirements for GM to effectively cater its products to the demand of XXXXX markets, XXX to localise XXXXXXXX, design XXX XXXXX XXXXXXXXX to penetrate XXXXX XXXXXXX XXXX effectively.
The XXXXXXXXXXX-responsiveness framework XXXXXXXX XXXX XXXXX XXXX to both integrate XXXXX chain activities on an international XXXXX, and also XXXXXX XXXXXXXXX XXXXXXXX and XXXXXXX XXXXX are highly responsive XX local XXXXXX XXXXXXXXXX. XXXXXX integration XXXX XXXXX companies to XXXXX XXXXX through XXXXXXXXX of XXXXX, standardise consumer trends XXX XXXXXXXXXXXXX XXXXXXXXX, ensure a XXXXXXX XXXXXXXX XX XXXXXXX XXXXXXX, XXX access XXXXXX XX XXXXX. XXXXXXXXXX, XXXXX responsiveness XXXXXX the company to XXXXXX XXXXX XXXXXXXXX to local XXXXXXXX differences, XXXXXXX and XXXXXXXXX, XXX will XXXXX the XXXXXXX to respond XXXX effectively XX XXXXX XXXXXXXXXXX XXX XXXXXXXXXX requirements, XXXXXXXXX ensuring XXX XXXXXXX. X XXXXXXX can take XX XXXX XXXXXXXXX positions XX inform XXX XXXXXXXX strategy. XXXXXXXX, it XXX choose to replicate XXX home model if it has XXX cost XXXXXXXXX and XXX XXXXXXXXX XX respond XX local conditions. XXXXXXXX, it can use a XXXXXXXXXXXX strategy if it XXXXX high pressures XX respond to XXXXX XXXXXXXXXX, XXXXX XXXXXX low cost XXXXXXXXX. XXXXXXX, it can XXXXXXXXXXX XXX XXXXXXXX XXXXXXXX XX it XXXXX high cost XXXXXXXXX but XXX local XXXXXXX XXX XXXXXXX XX XXXXXX its products as they are. XXXXXXX, a XXXXXXXXXXXXX XXXXXXXX is XXXXXXXXX XX XXX XXXXXXX XX facing XXXX pressures on XXXX the cost XXX XXXXX XXXXXX XXXXXX.
Based XX the XXXXXXXXXXX-responsiveness frameworks and the XXXX pressure XXXX the local XXXXXXX XXX XXXXXXXXXX XXXXX XXXX GM XX facing, it XX XXXXX that GM XXX XX adopt a XXXXXXXXXXXXX strategy which allows it a XXXXXXXX degree XX centralised control, XXXXX XXXX delegating and XXXXXXXXXX a significant part of XXXXX XXX functions, XXXX XX XXXXX, XXXXXXXXX, production, XXXXXXXX XXX XXXXXX, to the local team. This XXX XX XXXXXXXX in how GM responded XX the heavy XXXXXXXXXXX XXXX XXXXX players such XX the Shanghai XXXXXXXXXX XXXXXXXXXX Corporation, Great Wall XXXXX Co., Geely and BYD XX choosing to invest more XXXXXXX in XXXXXXXXXXX and XXXXXX XXXXXXXXX in China, XXX in building a leading X&D hub in its Shanghai XXXXXX XXXXXX.
2. Analysis XX XX’s success in China XXXXXXXX XX its XXXXXXXXXXX
XX XXX XXX XXXX XXXXXXXXXX in XXXXX XXXX competitors such XX Ford, XXXX XX holding XXXXXX XX XXXXXXX XX XXX Chinese automotive XXXXXX share in 2016, XXXXX Ford only XXXX X percent. GM’s XXXXXXX was XXXXXXXXXXXX XX XXX XXX XX local XXXXXXXX, its cost competitive production strategy, XXX XXXXXXXXX XXXXXXX XXXXXXXXXXXX XXX XXX XXXXX XXXXX XXXXXXXXXXX.
Foremost, GM strategically chose to pursue a XXXXX XXXXXXX XXXX XXXX in 1997, XXXXX XXXXXXX XX to XXXX a valuable partner in XXXXXXXXXX difficult local XXXXXXXXXX XXXXXXXXXX and uncertain consumer XXXXXXX ahead of its XXXXXX. (XXXX, XXXX) XXXXX XXXXXXX XXXXXXXXXXXXXX allowed XX to navigate XXXXXXX XXXXXX networks and win XXXXX from XXXXXXX XXXXXXXXXX and partners, XXXXX XXXX essential XX GM’s early success. Conversely, XXXX did XXX use a local XXXXXXX in XXXXXXXX XXXXX. Secondly, GM was able to XXXXXX a XXXX competitive production XXXXXXXX XXXXX XX XXX XXXX labour in XXXXX, without XXX need for onerous XXXXXX XXXX XXX XXXXXXX XXXXXXXXXXXX (XX XXX the case with XXXXXXX in the XX). GM was XXXX able XX invest ahead XX demand XX build XX its production XXXXXXXX. XXXXXXX, XX was able XX offer effective XXXXXXX XXXXXXXXXXXX across a XXXX XXXXX XX XXX products. For example, XXXX (2008) XXXXXX out that GM XXX able XX XXXXXXX innovative XXXXXX architectures XXX its vehicles, such as XXX functional XXX XXXXXXXXXX XXXXXX Sunshine micro XXX, XXXXX sold 2 million XXXXX in XXXX. (Wang, 2008) XX XXX XXXX able to XXXXXXXXX its XXXXXXX SUVs in XXXXX, XXXX as XXX XXXXXX XXX XXX Buick XXXXXXXX, XXX XXXX XXXXXXXX its XXXXXXXX XXXXXX XXXXX XX a XXXXXX symbol XXX XXXXX’s XXXXXXXX middle class. Finally, XX XXXXXXXX XXXXXXX in XXXXX engineering XXX XXXXXX XXXXXX in XXXXX, and built strong local capabilities XXXXX anchored it strongly in China. (XXXX, 1998)
The key XXXXXXXXXX XXX GM’s XXXXXXXX in XXX Chinese automobile XXXXXX XXXXXXX XXXXXXX XXXXXX XXX GM’s products, and increasing XXXXXXXXXXX from XXXXX XXXXXXX XXXX XX SAIC XXX XXXXX XXXX XXXXX Company. Foremost, the case XXXXX XXXXXXXX a XXXXXXXX in XXX XXXXXXX economy and XXXXXXXXXX devaluation in Chinese yuan XXXXX 2014, which XXXXX make XXXXXXX exports increasingly cheap XXX reduce XXX buying power of Chinese consumers for GM imports. XXXXXXXX, the XXXX study mentions a price war among XXXXXXXX XXX manufacturers, and heavy XXXXXXXXXXX from XXXX XXX Great Wall XXXXX XX. Thirdly, there is XXXXXX to be aggressive competition in the XXXX XX XXXXXXXXXX development and X&D in XXXXX’s XXXXXXXXXX market. As XX XXX Mu (XXXX) point out, Chinese XXXXXXXXX XXXX also XX XXXXXX in acquiring XXX XXXXXXXXXXXX technology XXXX incoming foreign firms, either XXXXXXX XXXXXXXXXX talent acquisitions, mergers or partnerships, XXXXX XXXX XXXX increase the XXXXXXXXXXXXXXX of XXX XXXXXXX XXX XXXXXX. XXXX is XXXXXXXXX by XXXXXXXXXX (XXXX), XXX notes that GM’s XXXXXX joint XXXXXXX XXXXXXX eventually became a XXXXXXX XXXXXXXXXX XXX XX.
GM could consider the XXXXXXXXX XXXXXXXXX to sustain its presence in XXX XXXXXXX automobile market. XXXXXXXX, XX XXXXXX continue XX XXXXXXXX XXXXXXXXX XX XXX XXXXXXX XXXXXX XXX launch localised XXXXXXXXX XXXXXXXXX XXXXXXXXX Chinese celebrities. Secondly, GM XXXXXX XXXXXXX its market more XXXXXXXXXXX, XXX XXXXXXXX XXXXXXXXX XXXXXXX XXXXXXXXX to the lower-XXXXXX, XXXXXX-XXXXXX XXX XXXXXX XXXXXXX segments XX the Chinese XXXXXXXXXX XXXXXXXX market. Thirdly, XX XXXX with XXXXXX XXXX XXXXXXXXX, GM should invest in new technologies XXXX as XXXXXXXX XXXXXXXXXXXXX, robotics and XXXXXXXXX XXXXXXXXXX lines XX reduce cost margins. XXXXX XXXXX allow XXX XXXXXXX XX cope XXXX XXXXXX labor costs XXX XXXXXXX XXXXXXX in XXXXX. Finally, in the XXXX-XXXX, XX should XXXXXXXX XXXXXXX XXXXXXXXX XXXX relatively untouched XXXXXXX such as XXXXX XXXXXXX.
Conclusion
XX’s XXXXXXX in XXXXX XXXXXXXXXXXX the importance XX XXXXXX local partners, XXXXXXXXXX and product localization in emerging XXXXXXX, XXX XXX current presence XXXX demonstrates that any XXXXXXXXXXXXX seeking a XXXXXX foothold in emerging markets will need XX innovate XXXXXXXXXXXX to sustain its growth.
XXXXXXXXXX
XXXXXXXXXX, G. (2007). XXXXXXX Lane: GM’s Chinese Partner Looms as a New Rival.XXXX Street XXXXXXX, A1.
XX, X., & Mu, X. (XXXX). XXX XXXXXXX firms XXXXX technology from transnational XXXXXXXXXXXX: X XXXXXXXXXX XX XXX telecommunication XXX XXXXXXXXXX XXXXXXXXXX.XXXXXXX XX XXXXX Economics,23(3), 270-XXX.
XXXX, X. (2008). Innovation in XXXXXXX architecture&XXXXX;A study of XXX Chinese XXXXXXXXXX industry.XXXX XXXXXXX Journal of XXXXXXXXXX,25(3), 509-535.
XXXX, John X. "XXX XXXXXXX factors XX XXXXXXXXXXXXX firms in China."XXXXXXXXXXX XXXXXXXXXXXXX Business ReviewXX.6 (1998): XXX-XXX.
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