General Motors
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1. Analysis of Value Chain Models Used by GM
Prior to know value chain model, the meaning of value chain should be understood. Value chain is in which total revenues minus total costs of all activities undertaken to develop and market a product or service yields value, including activities such as obtaining raw mat-erials, designing products, building manufacturing facilities, developing cooperative agree-ments, and providing customer service(David (2003), "Strategic Management, Concepts and Cases", 9th Edition, Pearson Education, Inc., United States of America, p. 177.). Thus, in this case, value chain models used by General Motors (GM) was both efficient and inefficient. In production, the auto producers start by making an estimate as to the amount of each of model to produce each year and in what color and with what options. In turn, dealers decide which of these vehicles they think they can sell prior to make purchases. This causes GM to maintain about a two-month inventory of new vehicles and the value of inventory is about $40 billion...