General Motors, an American-based automotive manufacturer with a large global presence, has long held a large share of the worldwide automotive market. Despite its market position and reputation for quality, the company has recently begun to struggle with new competitors in the Asian Pacific region, which has pushed their needs to develop new manufacturing technologies, as well as to better control costs and quality in its American manufacturing facilities.

Beginning in the 1970s, several nations of the Asian Pacific region, most notably Japan and South Korea, emerged as economic powerhouses. As their manufacturing bases matured, they entered the automotive industry and began to present new challenges as well as new opportunities for General Motors. GM would need to find a successful formula for doing business in this region, as well as develop and adopt innovations that would help it improve its manufacturing operations elsewhere.

In this Case Study, we will examine the facts, the problems, identify the core problems in how General Motors has managed its business alliances in with Asian partner companies, and offer our recommendations how General Motors can best master the challenges of doing business in the East and fully benefit from its joint ventures.

I. THE FACTS

Toyota and NUMMI: In Japan, Toyota was the heavyweight of the automotive industry, controlling over fifty percent of the entire Japanese auto market, and eight percent of the total world market, making it the world's third largest automotive manufacturer, behind only Ford and General Motors. Toyota presided over a tight confederation of companies, known as a keiretsu where a major manufacturer, such as Toyota, presides over a "pyramid" with the primary ma ...