Chapter 12 MCQ Flashcards
Follow the link to read the article which serves as our practice case GM Buyout (CNBC):
https://www.cnbc.com/2018/11/28/heres-the-buyout-gm-offered-before-announcing-14000-job-cuts.html
What is the industry in this case? Is there more than one industry in this article? If so, explain the difference in the industries with case examples?
The main focus of the article is on the automotive sector, with the restructuring efforts of GM including factory closures, job cuts, etc. However, GM’s decisions are influenced by economic factors such as rising commodity prices, rising interest rates, global trade complexities, etc. While GM is part of the automotive industry, their strategies and responses are influenced by these economic factors which impact not only the automotive industry but also various industries dependent on global trade and overall economic stability. The automotive industry revolves around manufacturing vehicles and competition between major players such as Ford, Toyota, Volkswagen, etc. While the broader economic factors include global trade dynamics and currency fluctuations, as well as trade policies affecting multiple sectors outside of the automotive industry. GM’s restructuring efforts are a response to challenges in the automotive industry and economic environment, aimed at looking for uncertainties and securing its competitive position.
What stage of the industry lifecycle model is each industry in? Explain the theory and provide examples.
Generally speaking, the automotive industry, including GM, is in the “Maturity Stage” of the industry life cycle, which is characterized by stable growth, saturation of the market and intense competition between established players. GM, like other large automakers, is operating in the mature market, where vehicle demand has leveled off in many regions and competition is driven by brand, price and technological innovation rather than substantial market growth. GM’s restructuring efforts can also be seen as a sign that the industry is adapting to new trends and adapting to the future (i.e., autonomous vehicles and EV’s), which could be a sign that the automotive industry is going through a transition or adaptation in the mature stage.
Generally speaking, the automotive industry, including GM, is in the “Maturity Stage” of the industry life cycle, which is characterized by stable growth, saturation of the market and intense competition between established players. GM, like other large automakers, is operating in the mature market, where vehicle demand has leveled off in many regions and competition is driven by brand, price and technological innovation rather than substantial market growth. GM’s restructuring efforts can also be seen as a sign that the industry is adapting to new trends and adapting to the future (i.e., autonomous vehicles and EV’s), which could be a sign that the automotive industry is going through a transition or adaptation in the mature stage.
Who are the stakeholders of GM and how might they be impacted by GM’s actions?
The stakeholders are the employees, customers, and investors. The recent changes made by General Motors may have a wide range of impacts on different groups of individuals. For example, workers at GM may lose their jobs as a result of the restructuring, leaving them jobless and uncertain about their future. Investors, such as shareholders, may see their investments decrease in value as GM restructures, impacting their bottom lines. For consumers, GM’s changes may lead to a decrease in the number of cars on the market, the cost of those cars, or the quality of those cars. For companies that sell to GM, the changes may result in them buying less from GM or changing their business model. For local businesses, GM’s restructuring could lead to factories closing and job losses, impacting local economies. Governments may be concerned about the effect of GM’s changes on the number of people employed and the health of the economy in various regions. Finally, other car companies may also change their operations in response to GM’s changes, impacting the entire car industry
