American Express

How Much Can the Internet help GM?

1. Analyze GM using the competitive forces and value chain models.

Porter's competitive forces model

Porter's value chain model

2. Evaluate the current business strategy of GM in response to its competitive environment. What is the role of Internet technology in that strategy? How successful is that strategy?

The current business strategy of GM in response to its competitive environment is based on the belief that by intensively weaving Internet technology into all of its business processes, GM could become a smarter, leaner, faster company, more in tune with customers. This technology would help GM reduce from 24 to 12 months the time to design, engineer, and manufacture a new vehicle, cutting up to 10% of the cost of making a vehicle by eliminating supply chain inefficiencies. Internet technology could be the catalyst for GM to reconstruct its entire value chain, transforming itself into a customer-focused business that provide many different electronic services to consumers, as well as cars.

Two decades of restructuring and reorganization have brought about deep changes in GM, paring down the waste and overbloated bureaucracy. The company has slashed the time required to produce a car from 48 to 18 months, eliminating $1 billion in engineering costs. It has also developed new online sales channels and sources of revenue. GM is becoming highly skilled in selling over the Internet.

3. Evaluate each of GM's e-commerce and e-business initiatives described in this case. How much value can they bring the company?

Selling Vehicles Online

GM does not actually sell vehicles directly online but provides Web sites with a range of services for both customers ...
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