Friday, May 26, 2017

Technology at GM - Changing Strategies

In "Building Your Company's Vision," we understand that major corporations have a core ideology.  For GM, their ideology and official Corporate Strategy today is as follows: "GM’s purpose begins with a few simple but incredibly powerful words: We are here to earn customers for life. Our purpose shapes how we invest in our brands around the world to inspire passion and loyalty. It drives us to translate breakthrough technologies into vehicles and experiences that people love. It motivates the entire GM team to serve and improve the communities in which we live and work around the world. Over time, it’s how we will build GM into the world’s most valued automotive company."[1]

There is a fundamental difference between this strategic statement and the statement they made just a few short years ago: "To design, build and sell the world’s best vehicles,"[2].  They've adjusted their strategic statements to incorporate their prior statement, but include innovation in where they see the auto industry is headed.

In "What is Strategy?", we know there are various competitors that make the same products, but what can differentiate you from the rest of them?  In the case of auto makers, there are many in the world, so what can GM do to differentiate themselves from the others?  Technology.  In 1996, they created OnStar, the first 'technology' solution for customers in cars since the car-phone.

Referring back to "Your Strategy Needs a Strategy," we see GM continuing with their changes from the Classical environment of predictability, to a more Visionary environment using technology for the future connected-cars of tomorrow.  In doing so, GM is able to deliver a game changing service to their customers, by offering predictive alerts/issues with vehicles and consumer based services for their customers (GPS, 4G LTE Internet, Real-Time Advertisements/Offers).  By linking OnStar, that used to be a nice-to-have feature of GM Cars, to core business and strategic functions, GM made a decision to ensure that OnStar fit their strategy and allowed them to put their Vision in place for the next iterations of vehicle telematics. 

With the auto industry changing to include autonomous cars and automakers, which all make similar cars, competing for customers, it’s the automaker with the extra features who will have the competitive advantage.  Essentially, it’s no longer about “designing, building and selling the world’s best vehicles,” but rather creating an experience provided by technology.  It is for this reason GM decided to match their vision with their culture and in-source their Information Technology groups, instead of sticking with their historic method of mass outsourcing. [3] Seeing IT as a core/fundamental piece of their product line, GM decided it was best for the company to in-source those resources, making it fit their strategy.  GM is determined to stay competitive in the auto industry and adapting their corporate ideology to include IT as a fundamental core purpose, which was part of their envisioned future (as Collins and Porras display in "Building Your Company's Vision).


[1] https://www.gm.com/investors/corporate-strategy.html
[2] https://stonybrook.digication.com/est_32512/Corporate_Level_Strategy
[3] http://www.engineering.com/Blogs/tabid/3207/ArticleID/7469/GM-Pursues-IT-Insourcing-for-Better-Alignment-and-Economics.aspx

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