General Motors' New Strategy in India

 
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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:

Price:
Case Code : BSTR410 For delivery in electronic format: Rs.400;
For delivery through courier (within India): Rs. 400 + Rs. 25 for Shipping & Handling Charges

Themes

International Management / Strategic Alliances / Competition
Case Length : 20 Pages
Period : 2000-2012
Pub Date : 2012
Teaching Note : Not Available
Organization : General Motors India
Industry : Automotive
Countries : India; China

Abstract:

This case is about the strategies followed by General Motors India (GMI) to increase its performance in the highly competitive Indian automobile market. In January 2012, Lowell Paddock (Paddock) took over as President and Managing Director of GMI from Karl Slym (Slym). GMI struggled to establish itself in the Indian market and face up to the heavy competition from the Japanese and Korean automobile companies. The failure to understand the Indian market properly led GMI to neglect the small car segment which was crucial in India. Subsequently, GMI released two small cars, the Chevrolet Spark (Spark) in 2007 and the Chevrolet Beat (Beat) in January 2010.

The Beat proved a success in the market after its diesel version was released in the market in July 2011. During his more than five-year tenure, Slym was responsible for improving the performance of GMI considerably, providing it with a foothold in the Indian market. Paddock had the responsibility of further consolidating GMI's position and taking it through to the next phase of growth. GMI was planning to introduce more small car models as part of its portfolio to consolidate its position in the Indian market. GMI planned to use its partnership with Shanghai Automotive Industry Corporation (SAIC) to introduce more small car models in the Indian market. The question being asked was whether GM would be able to replicate its China success story in India. This case is meant for MBA/MS students as a part of the International Management/ Business Strategy.

Issues:

» Understand the issues and challenges faced by multinational companies when operating in international markets.
» Appreciate the importance of multinational companies understanding the local market conditions when operating in new markets, especially in emerging markets like India.
» Analyze GMI's strategy to gain a foothold in the highly competitive Indian automobile market.
» Examine whether GMI will be able to leverage on its alliance in China to achieve its growth objectives in India.
» Discuss the challenges before Paddock as he takes up the reins of GMI and explore ways in which he could overcome the challenges and achieve GM's ambitious objectives of doubling its market share in India.

Contents:

  Page No.
Introduction 1
Background Note 2
GM in India 3
The Second Entry into India 4
Enter 'Beat' 5
A Warm Reception 6
Leveraging on its Alliance in China 7
The Road Ahead 8
Exhibits 10

Keywords:

International Management; Business Strategy; Competition; Emerging markets; BRIC countries; Indian automobile market; Alliance; joint venture; Chevrolet Beat; understand the preferences of Indian customers; brand awareness; Replicate Chinese success story in India

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