GM Failure in India(1)

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Swinburne University of Technology *

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30020

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Business

Date

Nov 24, 2024

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docx

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Uploaded by department23

INB30020 – Sustainable International Business Strategy Week 3 Brief Topic: GM’s India Failure General Motors is an American car manufacturer company and once the world's largest car manufacturer had failed to operate in the Indian market. General Motors enter the Indian market in 1954 and abandoned the market which later re-enter in 1994. Two decades later, they decided to pull out of the Indian market again due to many factors that affect their profitability. There are various major elements that contributed to this failure. The first issue is a lack of leadership in the organization. During their two decades in India, they had almost nine different CEOs, whereas Suzuki had only five in the previous 35 years. The problem is not the changing of leaders, but the style of working in the company, which is created by the fact that working at GM is highly bureaucratic, and individuals do not assume leadership or their own judgments fast. Second, GM does not adequately respond to the Indian market. This means that GM does not do market research to determine market demand and market environment. They had eight models in their product line, but none of them are fit for the Indian market since they do not adjust to market circumstances. Customer service and servicing parts also played a role, since they have extremely poor customer service and highly expensive aftermarket parts, which discourage customers from purchasing the brand. The theme that I would be looking into is leadership, and how the outcome would be different if the leadership structure and style were planned and chosen correctly according to the environment of the market. Analysing the communication of the leader from the top of the organization and their market research approach on what went wrong. Lastly, exploring the Indian government's policy and regulation on FDI, whether they have any support and encouragement for foreign companies or not.

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