Report to CEO (GM)

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Toronto Metropolitan University *

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800

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Management

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Apr 3, 2024

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Report to the CEO Introduction General Motors operates in the automotive industry. Relying on its extensive manufacturing capabilities, brand recognition, and historical presence, it has chosen a strategy of transitioning towards an all-electric future (electric vehicles (EV)). But certain factors have raised the issue of effectively competing in the electric vehicle (EV) market and achieving market leadership. These factors include: 1. Intense competition 2. Charging infrastructure 3. Range and battery technology 4. Regulatory environment 5. Equity and inclusion This report provides an analysis of the issue, suggested alternatives to addressing that issue, and a recommended alternative for General Motors to pursue. Analysis 1. Intense Competition The automotive industry, especially the EV segment, is highly competitive. Tesla, as a well- established leader in the EV space, has set high standards for innovation, technology, and brand appeal. Moreover, traditional automakers like Volkswagen and Ford have also invested heavily in EVs and are aggressively expanding their EV portfolios. GM needs to differentiate itself in this competitive landscape by showcasing unique selling points, such as technology innovations, diverse vehicle offerings, and a strong commitment to sustainability and ESG goals (Case, 5-6) 2. Charging Infrastructure The lack of a comprehensive charging infrastructure can hinder EV adoption and customer confidence. GM must take an active role in addressing this issue by investing in charging networks, collaborating with charging solution providers, and working with governments to promote the expansion of charging infrastructure. By ensuring convenient and accessible charging options, GM can alleviate customer range anxiety and increase the appeal of its EVs (Case, 4) 3. Battery Technology and Range Battery technology is the backbone of EV performance and cost-effectiveness. GM's success in the EV market heavily relies on developing and utilizing advanced battery technology that offers improved range, quicker charging times, and lower costs. Staying ahead in battery innovation will enable GM to offer compelling EV models that meet or exceed customer expectations, leading to higher market acceptance and improved market share. (Case, 4) 1 | P a g e

4. Regulatory Environment Environmental regulations play a significant role in shaping the future of the automotive industry. As governments worldwide push for stricter emissions standards and offer incentives for EV adoption, GM must align its strategies with evolving regulatory requirements. Embracing these changes will not only help GM avoid potential penalties and compliance issues but also position the company as an environmental steward and a responsible corporate citizen. (Case, 4) 5. Equity and Inclusion GM's pursuit of sustainability and EV leadership should encompass a commitment to equity and inclusion. The company needs to ensure that its EV initiatives consider the needs and access of all communities, including those in rural and lower-income areas. By proactively addressing disparities in charging infrastructure and EV adoption, GM can demonstrate its dedication to inclusivity and social responsibility. (Case, 8) To address these obstacles, GM should prioritise constant research and development, strategic collaborations with battery suppliers and charging infrastructure providers, and using existing manufacturing skills to effectively produce EVs at scale. Furthermore, the corporation should spend in marketing and branding to showcase its commitment to sustainability and position its EVs as dependable and desirable solutions for consumers. By addressing these issues as part of its overarching strategy, GM can better position itself to achieve its vision of a world with zero crashes, zero emissions, and zero congestion, while becoming a leader in the rapidly evolving electric vehicle market. Alternatives Alternative 1: Focus on Battery Technology Advancements General Motors can prioritize research and development efforts to make significant advancements in battery technology. By investing in next-generation battery technologies, GM can improve the range, charging times, and cost-effectiveness of its electric vehicles (EVs). This would enable GM to offer competitive EV models that appeal to a wide range of customers. The company can collaborate with leading battery manufacturers or acquire battery start-ups to accelerate innovation. Pros:  Cutting-edge battery technology can give GM a competitive advantage over rivals, making its EVs more attractive to consumers.  Improved battery technology would lead to longer ranges and quicker charging times, addressing common concerns of potential EV buyers.  Advanced batteries with higher energy density could lead to cost savings in production, driving down the overall cost of EVs. Cons:  Developing new battery technologies is complex and costly, with no guaranteed outcomes.  Significant R&D efforts could delay the launch of new EV models.  Other automakers and technology companies are also investing heavily in battery research, intensifying the competitive landscape. 2 | P a g e

Alternative 2: Investment in Charging Infrastructure This alternative involves GM taking a more active role in developing and expanding charging infrastructure. By partnering with charging solution providers, investing in charging networks, and collaborating with governments, GM can help build a comprehensive and accessible charging infrastructure for its customers. This would address the range anxiety issue and increase consumer confidence in adopting GM's EVs. Pros:  A robust charging infrastructure would make EV ownership more convenient, attracting more customers to GM's EV offerings.  Strong commitment to charging infrastructure development can demonstrate GM's dedication to sustainability and customer-centricity.  A reliable and widespread charging network could lead to increased customer loyalty and retention. Cons:  Building and maintaining a charging network requires substantial financial resources.  Collaborating with various stakeholders and governments may lead to coordination challenges and delays in implementation.  The success of this alternative is dependent on the growth and development of the charging infrastructure market, which is subject to uncertainties. Alternative 3: Strategic Partnerships and Acquisitions GM can explore strategic partnerships or acquisitions with established EV start-ups or companies specializing in advanced EV technologies. By acquiring or partnering with these entities, GM can gain access to cutting-edge EV technologies, expertise, and existing customer bases. Pros:  Partnerships or acquisitions can fast-track GM's entry into new markets and segments.  Teaming up with specialized companies can provide GM with invaluable insights and expertise in the EV industry.  Strategic partnerships can allow GM to diversify its EV offerings and cater to different market segments. Cons:  Merging different corporate cultures and operations can lead to integration challenges and disruptions.  Acquisitions can be costly and may not always yield immediate returns.  The success of the partnership relies on the performance and stability of the partner companies. 3 | P a g e

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Recommendation Q1. What is our recommendation and what major issues does it address for CP Rail? The recommended strategy is to concentrate on battery technological developments. GM can handle the major issue of supplying competitive electric cars (EVs) with greater ranges, faster charging times, and cost-effectiveness by investing in research and development to improve battery technology. This strategy is consistent with GM's vision of an all-electric future and has the potential to differentiate its EV offerings in the market, drawing more customers and increasing profitability. Q2. How does our selected strategy (alternative) fit with certain external/internal variables, especially with the financial resources of CP Rail? This strategy is related to the growing significance of battery technology in the EV market. As environmental legislation and consumer attitudes trend towards sustainability, better battery technology will become increasingly important. GM's financial resources enable them to spend in R&D and form alliances with battery manufacturers or start-ups, allowing for the development of revolutionary battery solutions. Furthermore, GM's successful post-bankruptcy turnaround has allowed it to wisely manage resources, which supports this possibility. Q3. How will this strategy (alternative) contribute to achieving a competitive advantage and enhanced profitability over time? This strategy will give GM a competitive advantage by supplying EVs with greater battery performance, addressing important buyer concerns. Advanced battery technology has the potential to increase the range of GM's EVs, decrease charging times, and reduce production costs, making their vehicles more appealing to buyers. As GM continues to innovate and polish its electric vehicle lineup, it will be able to acquire a larger market share, resulting in increased profitability over time. Q4. Why not pursue the other alternatives? The other alternatives are not recommended for specific reasons:  Alternative 2 (Investment in Charging Infrastructure): While charging infrastructure is essential, GM may find it more effective to focus on battery technology advancements first, as it directly addresses the core issue of improving EV performance and range.  Alternative 3 (Strategic Partnerships and Acquisitions): While partnerships and acquisitions can be beneficial, they may not provide the same level of control over technology development as focusing on internal R&D. GM's strong R&D capabilities make it a viable option to prioritize internal battery technology advancements. Q5. How can the con identified for the recommended alternative can be mitigated? The drawback found is potential R&D risks, which could be avoided by careful planning and budget allocation. GM can conduct extensive market research, cooperate with top battery 4 | P a g e

specialists, and set clear targets to track progress. Furthermore, a staged approach to R&D allows GM to review outcomes and alter its strategy as needed, reducing potential risks. 5 | P a g e

Report to CEO (GM)

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